00:04Well, I think we may. Look, it's another tough quarter for Tesla.
00:07Unit sales down 14% year over year.
00:10Q2 revenues coming in, we think at about $23.5 billion.
00:14That's down 8% year over year.
00:16On track for $97 billion in total revenues.
00:19So what we have here is flat growth.
00:22And when Tesla is hyping itself as a hot tech company, which I think it is,
00:28it's hard to sell the flat growth story.
00:30So they need to keep top executives in place.
00:34They need to get new product to market.
00:35That's the challenge for Tesla.
00:37We'll see if they can do it.
00:38They need to get new product to market.
00:40And it's not happening, certainly when it comes to the auto business,
00:43which very much still drives its top line.
00:46Do they have the talent in place to do that right now, Steve?
00:49Well, I think they have the talent, but they do need more stability.
00:53You just can't have this many of the top executives going out the door.
00:58And I think to the extent Tesla can play down the drama and focus more on executing it to win,
01:04they need to do four relatively simple things.
01:06First, they need the new $25,000 model that can compete with the lower-cost Chinese
01:12and also legacy makers like Volkswagen and Hyundai.
01:16They've got to get regulatory approval for the robo-taxi in Austin and San Francisco.
01:22They need that ASAP.
01:23They need to rebrand it, you know, less drama, less politics, more new products, lower prices.
01:28Then, and this is an important part of it that sometimes gets lost, any geographic expansion.
01:35You know, they've got to launch in emerging markets.
01:38And they finally launched in India.
01:39But to do well there, you need to do what BYD and Volkswagen and others have learned to do,
01:44is show up with that $20,000 to $25,000 vehicle that people in Vietnam, India, South America can buy.
01:53But if they can execute on any of those four things, their prospects are going to look a lot brighter.
01:59But now they need less drama, more execution.
02:01Right. Instead, we get a lot of focus on the robo-taxi and the humanoid robot as well.
02:07There's also a new focus on the Bitcoin holdings of the company, too.
02:11In the second quarter, Bitcoin actually rose in price.
02:14So that should be a net positive for the company.
02:17How much credit will investors give to Tesla on that Bitcoin angle?
02:21Well, you know, that is such a new one.
02:24Who's to say Bitcoin's real, it's the future, but it's still, are you investing in an auto company or a speculator?
02:31And I think that's going to be a hard one for people to get their arms around.
02:34At the end of the day, I think investors are going to be looking at, is this auto company providing growth for the future?
02:41Are they providing increased profitability or lower profitability?
02:44And are they at the front of the pack for bringing new models to market, cutting costs, providing better features, longer ranges?
02:53They were at the top of every category in 2021, 22, and 23 with the Model 3 and the Model Y.
03:00They need the next generation of new product with a wow factor to get back to where they were.
03:05We'll see if they can do it.
03:07Steve, what makes you think there's any kind of premium on stability, whether it be at the board level or in, you know, the executive C-suite?
03:13I mean, we've had, you know, people like Kimball Musk on the board for decades.
03:18James Murdoch is on the board, for example.
03:21You know, it's essentially a board that's kind of locked in.
03:24The only new board member is John Hartung.
03:26And as for executives, I mean, does it really matter?
03:28It's Elon Musk who calls the shots at the end of the day.
03:32Well, look, big companies like Tesla are more than one person.
03:36But it just doesn't help that they've had so many of the top people, especially highly respected folks like Drew Baglino leaving.
03:44That shakes up investors, and that's part of why Tesla's lost 20%.
03:47They would benefit by having stability in the top ranks.
03:51I don't know anybody that disagrees with that.
03:53But they have a lot of talented people.
03:56They own a lot of things that many people don't understand.
03:58They essentially own the North American charging network.
04:01That's a coup that's going to give them a profitability buffer.
04:04They were a leader of auto companies any place in the world to develop a robust energy division that's not only selling power walls for car users,
04:12but is selling $1.5 million gigapacks that they're selling to utilities around the world by the thousands.
04:19That's sort of the hidden hero in the revenue story.
04:22So, we've had a few misses, but they've got a lot of insurance policies, including their bets on Bitcoin.
04:29But at the end of the day, the whole world is going electric.
04:34Tesla and every legacy automaker needs a $20,000 vehicle in the developing world,
04:40and a $25,000 vehicle in the European and North American markets to win.
04:45And everybody's waiting to see whether Tesla's going to roll one out or not.
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