Neil on musk is here we're in the lobby of the giga factory here in Austin. Last time I was here was your annual meeting a couple of years ago so thank you for having us back. Welcome back. Got a robot taxi right behind you. We do? Yeah, you can see it right there. Obviously the meaning of the Transportation Secretary.
Yeah. Are you going to have full autonomous on the roads of Austin by the end of June? Yes. You are. What gives you that confidence? We have a cars driving 24-7 with drivers in the cars and we see essentially no interventions. So we want to be very careful with the first introduction of unsupervised fuel self-driving meaning that the car is driving around with no one in it. So we're going to be. No one behind the drivers. Well yes and sometimes no one in it at all. Right. It's going to fix someone up. So the car seems to be incredibly safe. So we're just being.
We have thousands of cars that are being tested which is creating some strange situations where we're just driving. There's just a bizarre number of Tesla's driving past people's houses. They're like what's going on. I think we've been saw one last night coming from the airport. Yeah. Driving at night alone. So it just. It just looked very lonely. It's just. You're a little. Look a little lonely.
Yeah. So yeah, yeah. So you're going to have to go to the horse to the next one. Yeah. You know, some estimates have been that you're only going to have 10 to 12 of them on the road initially. I mean, it's going to be a very small amount. Is that correct? Yeah, yeah. For the first week. First week. How do you see it ramping up? Well, we'll have to see how well it does but.
You know, I think it's pretty much to start with a small number. Confirm that things are going well and then scale it up proportionate to how well we see it's doing. Right. And what's going to be a judge of how well it's doing? Are there any incidents? Are there any interventions? And. But we want to be. We want to. It's deliberately taken slow. And we could start with a thousand or ten thousand a day one. But I don't think that would be prudent. So we'll start with probably ten for a week then increase it to twenty thirty forty.
And I think by say, you know, it would probably be at a thousand within a few months. And then we'll expand to other cities. So expand to the. It's going to just go to California. Los Angeles. Is that a real possibility in the not too distant future? I mean, Texas. Yes, of course. Very different. I don't need to tell you then, California when it comes to regulation. They don't really have much here in terms of dealing with autonomous.
But it's a different story in California. Yeah, but California has already approved way more than what we've been doing autonomous driving. I know that. I know that. But approval or is it somehow? Right now the approval process is very haphazard and sort of state by state and sometimes city by city. We were talking to the Secretary of Transportation about that very fact a moment ago.
Right. So it's going to be important to have a unified set of national regulations for self-driving cars. Otherwise, you're going to get into a weird situation where if you're driving from Maine to New York, you're going to go through ten different sets of regulations. Cars going to hit behave differently. It's going to not make any sense. So one set of regulations that just like there is for highway driving, that's what I think makes sense for the country as a whole.
But my prediction is that probably by the end of next year we'll have probably hundreds of thousands, if not hundreds of thousands. If not over a million Tesla's doing self-driving in the US. Those are not okay. But the percentage of those are going to be, well not the cyber cab, you're just talking about on full self-driving level four. I'm super-vice full self-driving. You do not need to pay attention.
For me, if I own a Tesla and I have the software, the capability of doing it. Yes. But we'll have a model which is kind of like some combination of Uber and Airbnb. So if you're a Tesla owner, you'll be able to add or subtract your car to the fleet. So just like an Airbnb, you could like rent out your spare bedroom or rent out your house when you're not using it. And the same thing will be available for Tesla owners. So it's a way for Tesla owners to own revenue.
Instead of having your car in the parking lot, your car could be earning money. We talked to you and I talked about that a couple of years ago. Which takes me back a bit because of course, you remember 2019 you were talking about 2020, the introduction of autonomous. And now you just introduced a fairly somewhat ambitious target. Why do you have the confidence now that, and what was it in a year? There'll be a million available.
Well, and by the end of next year, I think. End of next year. So it's just born in 2018 months. 26, okay. Yeah. I think that's, I mean, these things happen slowly, but then all at once. So, you know, it's a Peter Tiel has a book, zero to one. Once you make, once you have a proof point, once you have it working, then scaling up is, you know, at just a matter of time. So once it's working well in Austin, then, you know, we'll make sure it works well in other cities. I mean, there are obviously some unique cases like downtown New York, like, you know, if you're, and that's highly unusual situation. Most cities in America are like, what's it? So. Right. Although you can go on full self-driving right now in New York, I mean, you can, obviously, have to sit there behind the wheel. Yes. And it'll do it. Oh, yeah. No, it'll navigate the traffic. I've seen it. Yes. Even a Tesla that you buy right now, and the self-driving just costs $99 a month.
We'll give you autonomous driving anywhere in the country right now. The question is when is it unsupervised? Right. Where that's where we want to sit. Were you sitting in the back, so to speak? Yes. Were you like asleep and the car, you wake up at your destination? Yeah. In order for that to be the case, we want the autonomous car to be much safer than a car during firepose. Right. Are we, you know, again, I'll come to Waymo because even though they only have about 700 cars, they obviously are on the market. They're in Beverly Hills all over the place. It's a proof of concept. They've got 28 cameras that got LiDAR and Radar. You've had a different approach. Sixth, I think, eight to nine cameras and the neural network. Why do you feel that that is going to be the equivalent in terms of safety profile? Oh, I think it'll be better. Why? Because the way that the road system is designed is for AI. It's basically, I should say, it's for intelligence, biological neural net and eyes. That's how the whole road system is designed.
So what will actually work with the road system is artificial intelligence, digital neural nets and cameras. And we'll also have the microphones that are here emergency vehicles and that kind of thing. You are going to have the microphones to hear the… Yeah, you need to hear… Yeah, you need to hear… That was a question. Right. You need to hear a fire engine or a police car. Yes, exactly. Right. So, but that's how the whole road system is designed. It's not designed for shooting lasers at your eyes. So, and what we found is that when you have multiple sensors and they tend to get confused, do you believe the camera or do you believe the light are? And if you get confused, that's where you can… That's what can lead to accidents. So we used to have, for example, radar in the car, but we found that the radar and the camera would suddenly disagree and then you don't know which one to believe. So it wasn't about expense, it was just about… No.
Yeah. You've seen the data right… In fact, we turned off the radars in the cars. You turned off the radar. Yeah. Are you comfortable right now if I were to say to you, all right, let's go. You think that you're there in terms of the safety profile you're seeing right now? Yeah, we could take a ride today, if you want. Sure. Yeah, I'm happy to take a ride with you on your turn, you want, wherever you want. Logistics capability to operate sort of a ride hailing fleet at scale, because you mentioned obviously, let's call it the end of 26. Are you going to have an app? Are you there? Do you have that ability? I think we can figure out an app. So, it tells me. You're not worried about it? Which is already has an app. Yeah, I know. But so, is there going to be a ride hailing? I'm going to have to introduce a ride an app.
You know, that's really not the… It's not too hard. No. XAI can probably do it for you in like an hour. Which is like an ride apps just fine. Do you ever consider licensing the technology at some point? I mean, there are a number of major automakers that have talked us about licensing self-driving and are very much open to that. So I think the more we demonstrate the capability of self-driving the more that they will want to license it. And we're happy to help. You know, back to the safety profile because it's going to obviously be something of key focus. Business insider, take it for what you want. But I saw this over the weekend. They did a test between Weimo and Tesla. And they weren't critical. The business insider is not a real publication. No, but it did seem…
They're afraid. Regardless of whether we want to have a debate about their journalist sitting integrity, which I don't. The test itself, let me just share it with you and get your reaction, which was the Weimo ultimately they said proved better in part only because it avoided with its geofencing, one very difficult intersection that the Tesla chose to go through. It stopped at a red light, but then it went through the red light.
What's your reaction? Look, I'm not going to comment on some business insider article. But is that a concern at all? Because in a way, there's no geofencing. So it's like you're happy to go on the highways in a way that perhaps Weimo's not. I guess my question is, is that a concern at all for you in terms of it encountering things that are still sort of a crucial test and perhaps it fails? No, the first one that was that actually should have been a test of supervised unsurpriving.
It's a supervised self-driving, not unsupervised self-driving. So the assumption there is that you have a person who is going to take over. So their test made no sense. When we deploy the cars in Austin, we are actually going to deploy not to the entire Austin region, but only to the parts of Austin that we consider to be the safest. So we will geofencing. You will. Yeah, of course.
Yeah. So it's not going to take intersections unless we are highly confident it's going to do well with that intersection. It will just take a route around that intersection. But there won't be a safety driver in the car. Correct. Right. There's not going to be somebody sitting there. But you did have ads for vehicle operator auto pilots. What was that about then?
Are there going to be people who are remotely sort of monitoring the performance of the fleet? Yeah. And what will they do? They'll just be. We're going to be extremely paranoid about the deployment as we should be. We foolish not to be. So we'll be watching what the cars are doing very carefully. And as we find, as confidence grows, less of that will be needed.
You know, again, you spoke about it and we spoke about it a couple of years ago. And obviously, your investor base, many of whom are watching right now, are interested in the revenue and profitability of this ride hailing auto-rotaxing and autonomous driving opportunity. EYD, I believe at this point in China, is now offering levels of autonomy for free.
I mean, are you confident you're going to be in a position to continue to get a premium for that particular level? Well, interestingly in China, we're not out of chain train on videos in China. So when we released full-stop driving, it was actually just trained on the rest of the world, but not in China. And the tests by local Chinese publications, I think, concluded that even without training on local Chinese roads, the Tesla self-driving was the best.
It was the best. Yes. But again, I mean, it's the technology. In fact, there's some pretty wild videos where people are like doing self-driving, which we don't recommend, obviously, on like narrow mountain roads, including one where there's a sharp precipice on either side and no barriers, and they're doing self-driving across that. They have more confidence.
I have to have more confidence in China. Yeah, we don't recommend this, but I saw the video. Are you regulated to have full? Where are you in China right now in terms of your ability to offer that product, though? Well, we have. We have to get to technology right. Understood. Unsupervised. Supervised full-salt driving, where there's a person in the car, it has approval in China.
But as we. Whenever we release a new version, we have to get an incremental approval. And at times, we do have to battle other car companies in China who are trying to stop us from applying. It's incredibly competitive market. It's a new. China is the most competitive market. This isn't BYD, which is neck and neck with you, I think, in the EV race.
I think it's fair to say. Worldwide, correct? I don't really follow that. You don't? No. Well, they're willing, again, my question is they're willing to seemingly offer different levels of autonomy for. I don't want to call it free, but part of the cost of the car. You see that as a possibility for you, or is it always going to be that add-on and therefore that significant revenue stream conceivably?
I don't really think about competitors. I just think about making the product as perfect as possible. You don't think about competitors at all. I don't know. I just think about making. What we want to achieve is the platonic ideal of the perfect product. And as long as you focus on that, you will have a compelling product, obviously.
All right. Well, there's a potentially compelling product right behind you, which is a robot taxi. So when are we, you know, in five years are they going to be all over the place? Yes. They will. You're confident in that. Yeah. Talking about Tesla, obviously, you know, takes me to a certain extent to what someone would say is the brand damage done by your government service. I don't know. You would agree with that.
Test on pros and cons. There have been some pros and cons. We sat here two years ago upstairs and you famously said when I asked you about this very subject, I don't care. I'm going to say what I want to say and so be it. Do you regret that? No. No, why not? I believe that we want to live in a free society where people are allowed to say what they want to say within reasonable bounds, like, you know, you can't advocate for the murder of somebody. But free speech is the bedrock of a functioning democracy. That's why it's the first amendment. Without a doubt.
But I guess my question is more about your work at Doge, for example. Was that worth it, you know, to the extent you are now Elon, you were somewhat divisive and you were just figured two years ago, but now you really are. I mean, there are people who love you, but there are a lot of people who dislike you. Some of whom were your customers. And I wonder was it worth the undertaking at Doge and everything else that you've done and how it's spoken you've been in terms of the things you believe in to antagonize so many potential buyers and or users of things like a robot taxi?
Well, I mean, unfortunately, what I've learned is that legacy media propaganda is very effective at making your belief things that aren't true. What would an example of that being? That I'm a Nazi, for example. And how many legacy media publications, talk shows, whatever, try to claim that I was a Nazi because of some random ham gesture at a rally where all I said was that my heart goes out to you and I was talking about space travel.
And yet, the legacy media promoted that as though that was a deliberate Nazi gesture. And in fact, every politician, any public speaker who's spoken for any length of time has made the exact same gesture. And yet there are still people out there. And I've never harmed a single person. I was, you know what, Elon, I was not. Now, you asked for an example. I was, I was even going to talk to you about it because in fact, I hear a number of people who are close to you and I call them afterwards and all of them to a person who are like, no way, no way.
Of course not. But that isn't necessarily the perception. The work you've done for Doge has also come obviously into the spotlight in a great deal. And people are upset about USAID being put into the wheelchair. People are upset about AmeriCorps disappearing. People are upset about, and this isn't even on your side, the NIH. And so many other areas that they feel rightly or wrongly are being cut as a result of your efforts.
And I just, I guess I wonder as you start to transition now back to Tesla in a more significant way, was it worth it? Yeah, first of all, any program in USAID that had any semblance of merit was retained and folded into the state department. So, and if there's some exception to that, we're all ears and we'd love to look at it. We just want to see the evidence that the program was doing actually doing good and not just funding for after DC and warlords in some country.
Because over and over again, we saw not, so sympathetic sounding programs. Right. And we actually said, well, please show us pictures of the recipients of the aid. We just, or let us get into contact with them. No pictures were forthcoming. They didn't give us any contact information. And we're like, look, we're not going to send money to DC, grafters, and warlords. That's not a good use of money.
So that's what we're going to do. Now, invariably, when you stop waste and fraud, it's not like the fraudsters admit their guilt. They don't say like, oh, isn't it so great that the money we were getting, fortunately, has been stopped. They will obviously come up with a sympathetic sounding claim, but that claim has no merit. That all may be true.
I guess what I would come back to, because I talked about economics all day long, is, you know, to your point you've been making, we have a deficit that's running at about 6.7% of GDP. Right. We have interest costs that are going to be above a trillion. It's not going down next year. You entered this thinking you could cut as much as a trillion dollars. You're nowhere near that. It's not really making the dent, I think, you may have thought you might have been able to achieve in terms of a true problem, would you agree?
Well, first of all, it would obviously be ridiculous to assume that we're going to achieve that on day one. So it's only been for what, four months. And we've done a fire calculations, people may disagree, improve the deficit by 160 billion dollars. Right. That's your number that's out there. A lot of people take issue with it and say, well, you know, taxpayers' expenses such as paid leave, that's 135 billion that's got to come back. IRS collection may go down as a result of cuts there. We have an S-Grock. It's said between five and 32 billion is what you've actually said. You need to ask, the right question to ask is, what is the bit for the actions of Doge? What would the incremental expenditures be in FY26? Yep. Because, for example, we offered, we offered severance and early retirement to a lot of government employees. Many of them took us up on that. But that severance went all the way through to September. So there's not going to be any savings until October.
Because the severance goes through September. Understood. So the Delta really is, what is the spending difference? FY25, of course, is FY26 as a function of Doge's actions. That's how we calculate the number. And we'll see if that turns out to be true or not. Aren't there more effective ways we ultimately could have gotten at it? And by changing the retirement age or really going after some other parts of the budget? We're trying to go after every part of the budget. That's just some personal boring. You're about efficiency. You're about efficiency. I mean, that would take an act to Congress, obviously, to really make change. Yeah. Significance, I'm talking about that.
First of all, so I think in our opinion, we've created a $160 billion Delta FY25 to FY26, very significant, that 16 percent of the way towards the trillion in five months. And in order to make progress, we need the consent, obviously, of the, not just the executive branch, but also the legislative branch and the judicial branch. So if we, you know, and we are advisors, we're not, we're not, we're not, uh, kings here. I get it. So why are you attacking this given that we've made so much progress? You mean the weight, not me, not me. I'm not attacking. I'm just asking questions. In fact, I want to ask a lot more about Tesla. I'm told you have a call at 130. I don't know if you'll be able to come back or, but let me, let me, let me, well, that would be great.
Um, because I, I do want to talk about Tesla. I mean, I was talking about brand damage and what you're seeing in the market. You did an interview earlier this morning where you seem to indicate you're starting to see a rebound. Yes. And you know, automotive revenue was down 20% last quarter. I think 50,000 fewer units were sold in the Q1 versus Q1 a year ago. What is giving you confidence in the automotive business? Or is it all about robot taxes as you've been saying? And people can't quite see them behind me. The robots as well. Well, really, the only things that matter in the long term are autonomy and optimists. Those overwhelmingly dominate the future financial success of the company.
Um, that's for Q1. We had a global factory changeover for the Model Y. So there's a new version of the Model Y that came out, which required factory shutdown across the world. Model Y is the number one selling car of any kind of number one in the world. I know. I watch your presentation during your last, right here, I think during your last earnings. Right. No one selling car in the world. So we can't make cars if the factories are retooling. So we, the right time to retool is the first quarter since generally that's when the least demand occurs. But we've seen a major rebound at the moment. I feel comfortable with it.
You have seen or major rebound in demand. You really believe you have seen that. Yeah, absolutely. I mean, look, but for most people, right? I mean, when you buy a product, I mean, how much do you care about the political views of the CEO, or even know what they are? No, you don't, but you've made it, you know, frustratingly, Elon, I know you have a 130 call. We promise to get you out in time for it. I hope you'll come back perhaps if you can afterwards. I'll have to wait here and sit and talk to you some more, but I want to let you go because I know that's an important call. All right. Thank you for taking this time. I hope we get to talk some more on the other side about this very issue. Elon Musk, obviously joining us hosting us here at the Gigafactory. And perhaps we'll come back as well in a little bit, but I will end it there for now. Kelly, back to you.