00:00You take a look at shares right now, higher by 3.4 percent. We were expecting good numbers.
00:04We got good numbers. Would love to hear your first blush reaction here.
00:10Well, top level first. Congratulations to Tesla for beating numbers, even if it's by a small amount.
00:15But the profitability numbers help. But the big picture here, sales are flat.
00:19It's the third year in a row. Tesla is going to have relatively flat revenues.
00:24They sold 368,000 units ish, but down 14 percent for last year. Inventory is piling up.
00:30And look, 22.4 billion this quarter. That's good. But it puts on a run rate for about 90 billion
00:36for the year.
00:37You know, they have been up at 96, 97, 98 billion. So they still need new revenue sources.
00:43Now, Tesla says it's a robotics and AI company.
00:46And if that's the case, they're going to have to start driving more sales in those areas.
00:51Because today, 90 percent of revenues are still coming from cars.
00:56Silver lining here, which is an interesting one.
00:58Raiders leaked a story about two weeks ago saying that Tesla is now recommitting to build the Model 2.
01:05I was waiting to see if Phelan speaks about that in the earnings call today.
01:09But they really haven't launched a new vehicle product in five years.
01:14I think that's what the market's clamoring for.
01:16The big question is, is that true and how quickly can they get a Model 2 to market?
01:21By the way, that's particularly important in the rest of the world where markets like India, Indonesia, Mexico, Brazil, etc.
01:28are looking for a $25,000 car to compete with BID.
01:32That's where the market is. I hope Tesla can fill it.
01:34Yeah, it's interesting to see that, you know, that reporting that they are working on a cheaper vehicle.
01:41Given you think about 18 months ago, Elon Musk himself said that those plans for a $25,000 vehicle were
01:48pointless.
01:48That's a quote from Elon Musk.
01:50So maybe a bit of a turn of face here.
01:53But, Steve, let's say that that reporting didn't turn out to be true.
01:56That, you know, Tesla was going to hold the line and not necessarily go down into that part of the
02:01market.
02:02I mean, what would that mean going forward?
02:05Look, on the short term of going forward, high gas prices are going to spark a surge in EV sales.
02:11And we saw a little bit of that at the end of Q1.
02:13I think that's part of why Tesla beat their numbers.
02:16But longer term, you've got to ask how long can they keep up, as Ed pointed out.
02:21You know, 183 price earnings multiple.
02:26That defies a lot of logic and history.
02:29What they need is low product.
02:31They need the Model 2 out there.
02:32The energy division, which has been their saving grace for the last three years, showing really meteoric growth the last
02:38few years in a row, came up short this quarter.
02:41About $2 billion relative to $3 plus billion they've seen in the last few quarters.
02:46So energy demand is high.
02:48I'm still not sure why that fell off of it.
02:50Big question.
02:51Does Tesla still want to be a car company?
02:53Because they need to get that Optimus out there.
02:58And even if they sell 1,000 units, that's not going to provide the billions they need to get back
03:02to growth that they're desperate for.
03:04We'll see.
03:05Yeah, I mean, it's a great question.
03:08Does Tesla want to be a car company?
03:10It seems like most people would say no.
03:13When it comes to Optimus, we did hear that first generation production lines for Optimus are being installed.
03:20But, Steve, it feels like the problem when you take a look at shares is that we're talking about vastly
03:25different timelines right now.
03:27Right now, even if they don't want to be, they are a car company.
03:30And then you think about some of the big ambitions that they have when it comes to self-driving vehicles,
03:35when it comes to Optimus humanoid robots.
03:38We could be years away from, you know, wider commercial adoption.
03:44Well, look, that's exactly why I think Tesla may be taking a second look at that model, too.
03:50Look, investors bet on Tesla for their ability to revolutionize industries.
03:54If you look at what Musk has done with SpaceX and so on, Starlink, hard to argue against that.
03:59But, you know, they're just modestly expanding robo-taxi operations to Houston and Dallas.
04:05That's nice.
04:06They've added two new cities beyond Austin and San Francisco.
04:09But they've got fewer than 50 robo-taxis in any one of these cities.
04:13That's far behind where Waymo is with 2,500 in service.
04:16They're going to be at 3,500 by the end of the year.
04:19They're rumors they may be signing a 50,000-unit deal with an Asian manufacturer.
04:26They've got a long way to go on this full self-driving issue.
04:29And I think the punchline is Tesla's facing tough competition, whether it's in robotics or autonomous vehicles.
04:36And they need new revenue sources to now.
04:39Now, great Q1, good to beat plan any time you do it.
04:43But how are investors, how long are they going to be supporting this 183 earnings, price-to-earnings ratio?
04:53That's going to be tricky.
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