Tesla Unveils New Models for Under $40,000

Bloomberg

Watch Tesla Unveils New Models for Under $40,000 - Bloomberg on Dailymotion

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00:00You heard all of the reporting. I'm sure you've been on Tesla's website and looked at the vehicles.

00:05The story here is the impact that a $7,500 federal tax credit was having on the EV market in America,

00:13is it not? Well, it's going to have a big impact. And look, the big question here is,

00:19this is a step in the right direction. Tesla's bringing prices down. But at $37K for the Model

00:263, is that low enough to attract a new class of buyers? And step back a bit, $37K, it's less than

00:32the average US internal combustion engine vehicle, which today stands at $48K. But can Tesla's new

00:38model compete with the EV from Volkswagen and Hyundai and the US at $27,000? And how are they

00:47going to compete with those $20,000 Chinese EVs that BYD is bringing into Europe? So I think there's

00:54a chance, the new slimmed down Model Y, it's going to bring in some new buyers for sure.

00:59But how much is it going to cut into the premium market? And are they going to end up ahead at the

01:03end of the day? Looking forward, battery prices are going to continue to drop. This may be a stopgap

01:10measure, but Tesla, I believe, still needs that $25,000 Model 2 to get into new developing markets

01:19and attract first-time entering buyers in the US. You know, Tesla considers itself a technology

01:25company and the leader in global engineering, right? When you were at Tesla, it was about Model

01:31S principally. And like, that was value for money because it was so performant and had all of these

01:37bells and whistles with it. I guess the root of my question is, why would they release this vehicle?

01:44You know, to many people, it doesn't live up to that engineering or technology value that Tesla's

01:50given historically. I think you put your finger on the problem. Look, Tesla's a premium vehicle.

01:55They charge a premium, and people expect it to have the latest and greatest. And I don't think

02:02they're really seeing that. You see these other brands like BYD with 12 models and Volkswagen and

02:10eight, I think, and General Motors with 10. Gee whiz, Tesla's only had five models in its history,

02:19and the Cybertruck barely counts because that was a flop. People want to see new technology,

02:24new products coming into market. I really think they need that $25,000 car. But they've got to do

02:30both. They not only need to bring new models and lower-cost cars to market, at the same time,

02:34they have to deliver on this promise of getting full self-driving out there, staying competitive

02:39with Waymo. They've got some things to prove. Steve, that is the technology that they're now

02:45betting on. The innovation cycle moves towards robotics and moves to automation. How integral is

02:50the cash cow of car sales to you? Well, again, they've got to do both. When you have a company

02:58that's trading at a 250 price-to-earnings ratio, that's nosebleedy high. I mean, gosh,

03:08NVIDIA is only at 50 to 1. So they've got to show that they can not only bring new products to market,

03:13stay in the ballpark price-wise. I'm not sure a 4K reduction really gets them there,

03:18and get licensing in new cities so they can show that their full self-driving is going national and

03:25hopefully international, and that they're going to be able to deliver on this humanoid

03:28robots. They've got a tough road ahead to show that they can stand up to the valuation they

03:36currently have. Now, hard to argue with $1. trillion market cap, but I'm not sure investors

03:41will buy that for long. I mean, briefly, you just mentioned the valuation difference between

03:46NVIDIA and Tesla, but we know that Jensen Wang is saying, I wish I put more money into XAI,

03:51for example, in the SPV, because he wants to back anything Elon does. Steve, what would it take

03:55for you to be interested in buying back into Tesla as a shareholder?

04:00Well, what you'd want to see is real progress with full self-driving. You know, just as the world's

04:04going all-electric, it's going autonomous faster than people realize. You're going to see that in

04:10the next year with way most growth. The question is, is Tesla going to be right in there as a major

04:15competitor or not. At the same time, you're absolutely right. We're heading into this new

04:20world of autonomy in everything from the factory floor to vehicles, and people are going to want

04:26to see this new humanoid robot. Can Tesla be cutting edge at new areas? Now, who wants to bet against

04:33Elon Musk for all he's developed at SpaceX, Starlink, and frankly, you got to give him credit for reinventing

04:40the auto industry. But the last two, three years have been lean, and you look at three years of

04:45flat revenues, people need to hear that new story, and I think they need to hear it soon.

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