STATIONARY STORAGE Part 1:
Colin Michael Langan - UBS Securities LLC
Just as a follow up. Any update on stationary storage? I think your original target for $400 million to $500 million for this year and the $5 billion for next year [the correct 2017 target was $3 billion to $5 billion], any just color on how that's trending?
Elon Reeve Musk - Chairman and CEO
Heavily engineering and production constraints. We've got some next-generation technology and we're going to split up that production line. So, it's going to be heavily concentrated in Q4 and probably even heavily in November and December. But I think it's going to be really exciting when people see it. So, that's why I expect kind of exponential growth from there. I think it's really going to go ballistic.
Jonathan McNeill - President-Global Sales & Service, Tesla Motors, Inc.
Yeah, and we have been making quite a few background investments in the markets where we're growing, setting up the teams and setting up to get ready for expanded product installation and distribution, especially in places like Australia and Germany. So, some of that takes a bit of time but it's laying the infrastructure for faster growth.
STATIONARY STORAGE Part 2:
Rod Lache - Deutsche Bank Securities, Inc.
Thanks. I had a couple things. One is just following up on Tesla Energy, can you talk a little bit about the business pipeline, what's the mix of customers you're selling your product to? And is there a significant contingent of solar? And I wasn't clear on – there was an earlier question on whether the business is still tracking to around $500 million this year. Could you just elaborate on that business line?
Elon Reeve Musk - Chairman and CEO
Yes, it's heavily dependent on the production ramp in the last few months of the year. So there's definitely nothing even remotely close to demand constraints on the Tesla Energy side. It's entirely getting the engineering done, getting it validated, getting UL certification, scaling up all elements of the supply chain and being able to produce in volume.
So the reason it's tricky to predict is because the volume ramp looks like an exponential and so if you move the dates around even a little bit, it can quite significantly change what occurs in a quarter just because the production ramp is an exponential and shifts up a couple weeks, it can make the quarter look low, but actually it's in vertical climb mode. So the following quarter will look amazing. So what I'm highly confident of is that the next generation of stationary charge is head and shoulders above anything else that I've even heard announced as future plans from other companies.
Elon Reeve Musk - Chairman and CEO
So we've just got to build those damn things.
Rod Lache - Deutsche Bank Securities, Inc.
Yes, the customers that you're anticipating, are there significant renewables in there? Is it commercial, residential?
Elon Reeve Musk - Chairman and CEO
Everything.
Elon Reeve Musk - Chairman and CEO
We've just got to scale up production, and production is a hard thing. It's real hard.
Particularly when it's new technology. If it's some standard technology to make for one time, it's fine. It's cutting edge technology, it's really hard to scale up production, because you've got to design the machine that makes the machine, not just the machine itself. But the results can be amazing. Like I said, it's going be head and shoulders above anything else. It's better than anything I've heard anyone even announce that they will do in near future, AND WE WILL DO IT IN THE PRESENT.
INVERTER:
Charlie Lowell Anderson - Dougherty & Co. LLC
Thanks. And then for my second question, I wonder if you could clarify comments made on the last call about inverter technology. You mentioned having some of the best in the world for power electronics. So I wonder if you could just comment if indeed that's the case that you will be making your own inverter, and if so, what would be the benefit to the overall system with your inverter technology versus what's used today?
Elon Reeve Musk - Chairman and CEO
Yeah, there's no question Tesla's going to do integrated inverter. It's the logical thing to do. I think we've got the most advanced inverter engineering team in the world, and so it makes sense to, just as we do the inventers on vehicles, to do it with solar as well and have it in a very tight package at a cents per watt level that is I think probably twice as good as anyone else. I think maybe better than that.
So, that's like the obvious move there, and as part of what we're referring to as kind of an integrated product, I mean, if you place yourself in the consumer's shoes, you just want it to work. You don't want to know how it works. You don't care about the details. It's just got to work reliably, look good, not take up a ton of space, the buying process has got be easy. You can check up on it with the app on your phones. There's only one phone app. You want it to be easy. You want it to just work. You want it to be affordable. You want it to look good. So, that's what we're going to do.
