It was a low take rate. We brought a product which is far more compelling and much more competitive with other cars.

Rod Lache (Analyst - Deutsche Bank):

Great. Thank you.

Operator:

Our next phone question will come from the line of Colin Rusch with Northland Capital Markets.

Colin Rusch (Analyst - Northland Capital Markets):

As you look at the growth of the organization, the entirety or -- of the culture and the workforce, I know that your employees are extremely motivated. Could you talk about how, as you grow, how that's grown and changing and what you're doing to maintain that integrity as you go forward?

Elon Musk (Chairman & CEO):

It is tricky as companies grow to maintain a consistent culture. I think we're doing okay as measured relative to most companies.

We do need to get people to think differently and have an expectation of innovation. I think we are doing okay on that front.

Jeffrey Brian Straubel (CTO):

I think having a general mix of people that have been here for a very long time and have seen multiple programs and seen the Company when it was even much smaller than today and more scrappy and had to go through even tighter financial difficult launches, things like that, really helps maintain that culture. And we try and pair different managers up with new groups so that that culture sort of infuses throughout.

Elon Musk (Chairman & CEO):

Yes. Our growth rate -- like this year, personnel-wise, it's, let's say, leveled off. It's still fairly significant, but it's like -- our et personnel growth this year will probably be 20% to 30%, which is, I think, a manageable number for integrating with people that already have the Tesla culture.

It's already a pretty big improvement in productivity, because we're looking at, let's call it at the upper end of that 30% personnel increase, but 100% increase in vehicle volume. I think that's a pretty good indicator of productivity improvement, just like how many people do we have and how many cars are we making?

Colin Rusch (Analyst - Northland Capital Markets):

The second question is really around some of the choices that you made with the battery product and why choosing 10-KW and the size, and 220 pounds is actually pretty hefty for a garage wall. Then also the battery management system I think there's a lot of confusion around where it's located and what the real functionality is, as you look out at interfacing with utilities and the signals that you get from the market in terms of looking at demand charge-offset, demand response and some of the other advanced functionality that are going to be able to be monetized in business models with the product.

Can you clarify where that BMS system is where it resides and who owns that technology? And why you guys made those choices, along with the weight and size choices?

Jeffrey Brian Straubel (CTO):

Some of the different revenue streams you are talking about our mixed between Powerpack and Powerwall. The BMS system lives inside the battery pack in both cases.

But with the Powerpack and the more utility-sized installations, there we often will have a site master computer or master controller that controls multiple Powerpacks. That site controller is what then interfaces to the utility, or maybe a commercial customer, to run the schedule charge and discharge that would be appropriate for a given application.

On the Powerwall, it's a bit of a different situation. Still the BMS lives inside the battery pack, but in some cases the inverter, maybe the system that's deciding how to manage energy and the overall house. That can depend on which type of inverter we're using on how that works.

In terms of the size, we really, for Powerwall again, we optimized the size around what was the most common photovoltaic size and also what we felt was kind of the smallest modular increment for backup. It's pretty key to note here that you can install multiple Powerwalls together. Having 10 kilowatt hours doesn't mean that you can't very easily put in 20 or 30 or 40.

In many cases, I think people will to have the backup matching that they want to see. We felt 10 kilowatt hours was the lowest common elements. If you go smaller than that, you start to run into worse economies of scale and more of the system that's not related to storage.