You’ve increased the value of that by 5, but it still costs the same, like you have something — then we’re a hardware company with software margins.
Martin Viecha: Pierre, do you have a follow-up?
Pierre Ferragu: Yes, I have actually a follow-up on different topic for you that I have if that’s okay. It’s about like your gross margin in the quarter. Could you give us a sense of like in how the gross margin evolved sequentially, how much was the impact of idle cost? How much was like the sequential benefit, I imagine, of production ramping at Berlin and Austin? And then I saw like this massive jump in energy storage, very strong positive surprise. So, if you can give us the background on that and tell us how we should think about that gross margin going forward.
Vaibhav Taneja: Thanks for the question. So, in terms of — you have few different aspects of your question. So if I just look at from Q3 perspective, obviously, factory idle time had an impact. It did impact by — and I won’t give you the exact percentage, but it had a decent impact for the quarter. And when you look at the other pieces, which we are trying to do, we did see certain of our other factories ramping up pretty well, right? And they actually contributed pretty well to the margin for this quarter. In fact, one of the factories came pretty close to in terms of per unit cost to where we are for our other established factory, which is Fremont. So that was a positive in the quarter. When it comes to energy margins, Megapack deployment was the key driver there.
And that product has done well. I mean, on the cost curve also, we’ve been able to do a lot there. But I do want to caution that Megapack deployments are a bit lumpy. So yes, we had a great quarter this period. But depending upon where we are trying to deploy that product in different markets, you would see periods where there would be downward pressure on deployment because of us trying to get the product to that base way…
Unidentified Company Representative: Yes, product in transit. Yes.
Vaibhav Taneja: Yes.
Martin Viecha: Okay. Thank you very much. Let’s go to Rod Lache from Wolfe Research.
Rod Lache: Really nice to see the rate of vehicle cost improvement despite the downtime that you took. You’ve taken now about $2,000 out of the average vehicle costs over the past year. Can you give us maybe a sense of the rate of improvement that you see from the changes that you alluded to, the factory changes you alluded to? Is there a way maybe to convey the speed of improvement on your existing product from here? And then related to that, can you share the timing of your next-gen — the lower-priced product that you talked about earlier this year?
Vaibhav Taneja: Yes. So just in terms of product margins, there are lots of puts and takes when you look at this. There are certain things which we control, and there are certain things which we don’t control. We get — we expect that we’ll get some benefits from our cost reduction efforts, which are all underway. So on the other hand, we just finished our factory upgrades late in Q3. Some of these factories are still in the early ramp phase in Q4. We’re still not up to where we want those factories to be. So, they will impact in the near term. Plus, like Elon mentioned, we’re going to be ramping Cybertruck, which is going to be another headwind, which we will be dealing with. On top of all that, there’s overall uncertainty in the macroeconomic environment, which even makes it harder to predict precisely as to where we land. But yes, this is something which — it’s an evolving thing which we’re observing every day and reacting to it on a daily basis.
