hello, hello. How is everybody doing today?
Tesla talk is that you, uh, you mister, uh, Omar's missing. You mister Stocktok?
Cool. We'll get my account up here, too, in a second.
But I appreciate everyone for joining in. It is a very exciting day.
It is Tesla earnings day, and we're all really excited for it.
We have a huge panel of people coming, and we got Omar's and Sawyer joining us.
We got a bunch of other Tesla people, a lot of our normal friends joining in as well.
So this should be a fantastic spaces that I am very much excited for.
So I hope you guys are all ready for it as well.
Yes, I can hear you, mister Wolf Financial. How are you doing today?
Good, I'm good. Me and Joyce joined at the same time, so.
Okay, cool. I think we got everything going in here.
We should be having Kalki jump in.
Let's make sure that we are bumping this link out.
Let's talk through some of the stuff, the news that we got going on today.
Let's talk through some of the news that we have, and then we'll focus in more on that Tesla talk
as more of our friends come in and join.
Some of the bigger news stories that I saw was, it was actually kind of a slow day.
There were rumors around the DraftKings and Barstool partnership.
There's some talks around Netflix doing a second season of Squid Games this year.
I know some people love that one.
There's also a lot of market cap milestones today.
We had Facebook getting over $1 trillion.
We had Microsoft becoming the second company in the world to get over $3 trillion.
Nvidia is now just $100 billion behind Amazon, so all that stuff to keep an eye on.
But obviously the big news we'll be focusing on today is these Tesla earnings.
We have a lot to talk about.
One rumor that came out last night, and I see Sawyer coming in and joining us up here.
We will talk about more as we go forward, and I saw his tweet about it.
But Tesla might be getting ready to release a new EV model in mid-2025.
Reuters was saying that they could be describing it as a compact crossover,
and apparently it's codenamed Redwood right now.
So, I don't know, something that we can keep an eye on, and we'll definitely watch more
as we get closer to that release date.
Sawyer, I feel like if that report came out a couple days ago,
we might have been getting a say.com question about it,
but I think overnight it might be a little bit tough.
Yeah, I think all those questions were sort of solidified a few days ago,
and once you get enough votes, it's sort of hard to upvote a new question.
That's why you've got to be really quick when you submit your questions initially
But I don't think they'll address it much today.
I just think they'll probably say we're progressing forward with the plans
or things are going well, and then they'll probably just leave it at that.
I don't think they want to risk Osborneing anything.
As I sort of posted a couple hours ago,
I think they're taking a new approach with this product launch,
and I think it's the right one.
Instead of unveiling the vehicle, let's say two years before it starts production,
I think they're doing it much, much closer to production.
Before, you would have needless speculation among customers and investors,
which could cause disappointment if the specs or pricing change
in the final product that shipped,
which is what happened with the Cybertruck.
Of course, a lot of those delays were unintentional,
but they happened nonetheless.
If they wait until let's say three to six months beforehand
to unveil it before it started production,
then I think that's a better move.
That's what most, let's say, tech companies do with their products.
That way, we know if it's only three to six months before
started production happens,
we know that there won't be any major price changes or spec changes.
That would be a big shift in everything that they've done in the past.
Do you think that there's stuff around the Cybertruck
I don't really remember when the Model 3 and Model S and X
were announced, how long it took for production to come out.
Do you notice those timelines extending out
as we got to the more extremely different models?
They even said that the Cybertruck is nothing else they've ever built,
and I'm sure the Cybertruck is the same thing.
Is that a theme that you're starting to see out
that it's taking more time from when they announce the product
to when it actually comes out?
Yeah, well, the Cybertruck was unveiled in late 2019,
and then, of course, the pandemic hit.
Then you got rapid inflation,
causing prices to skyrocket for battery materials, for raw materials.
So this just created this situation that was really difficult for Tesla.
And then, of course, their 4680 battery cells
that they unveiled in late 2020 and during battery day,
those took a lot longer to produce and come out in volume.
So all these different force majeure events
were sort of not entirely under Tesla's control,
but having said that, I think it is the right approach
to not unveil vehicles like years beforehand.
It just creates pointless speculation, honestly.
I think there's more stuff that we could talk about on that one,
but I'll shelf that conversation right now
and kind of let us throw it around at the start here
and just, first of all, everyone down below,
I would like to wish all you guys a merry Tesla earnings day
Hopefully, you get some really nice presents instead of coal.
That's what we're all hoping for here.
Maybe we'll get a Tesla bear up here,
so just in case it goes the wrong way,
they can laugh at all of us and it can make it a good time.
But we're all here hoping that we get some big numbers out here.
But I would love to hear, if you are down below,
if you're a listener, if you have any questions,
if you have any thoughts,
please throw them in that spaces chat right now
in the bottom right of your screen
and I'll make sure to get to some of those questions
and lead some of the topics in that direction.
But I see we got Omar also up here.
How are you doing, Sarah?
Merry Tesla earnings day.
I hope you're ready for a great one
and just kind of just the intros here on how you're feeling today.
Hey, happy Tesla earnings day.
I'm excited to get some numbers, even if they're bad.
I've been testing the new full self-driving version 12.
I got a call this weekend.
And there's a few more things before it goes out to everybody,
but it looks like a breakthrough version.
So I'm excited to hear more about that on the call.
I'm excited to hear about guidance.
Elon may be addressed his comment about his 25% voting rights,
which has been controversial.
And just for any sign that we're seeing some COGS decline
that could cause automotive gross margin to stabilize
and really a plan for how the company returns to earnings growth.
I think the strategy around pricing is going to be key for investors.
There's a major sort of divide among investors
really about their pricing strategy
with many institutional and sophisticated investors
looking at the scenario and saying,
look, we've got higher levels of inventory.
We've got a lot of different EVs in China,
a lot of different competition,
a lot of different models kind of driving prices down,
squeezing automotive gross margin, squeezing earnings.
We've got higher interest rates, lower credit availability,
all of these things sort of weighing on the auto market.
And are we going to see a continuation in 2024
of the pricing just sort of continuing to come down
and earnings being compressed,
or what really is the strategy here?
And the other side of that is really,
okay, should we maybe take down production
and try and preserve the pricing,
or should we focus on actually expanding production,
And a key number there I think is going to be the guidance.
A lot of investors are going to be looking at the guidance.
Last year they guided to 1.8 million.
They said they thought they could do two.
If things went well, they ended up doing 1.8 right on the nose there.
So people will be looking closely, I think, at their guidance.
If they guide really to a higher number,
it may also be kind of actually perceived as kind of bearish,
in that perhaps it suggests we're looking at a lower margin target for the year.
But I think really with Tesla,
and some of the questions on Say are really about growth.
The waves of growth at this company in the automotive business
are really driven by new product introductions.
The S and X platform, the 3 and Y platform,
and now we have this next-gen platform that Reuters is saying
is going to be starting production in June 2025,
which cuts half the cost out of the 3 and Y platform.
So I think in terms of sort of maintaining their long-term growth target,
the next-gen platform is going to be key to that.
And I expect this to be sort of a slower growth year as they prepare for that,
sort of in transition between these two product segments.
So that'll be interesting to hear management sort of address that
and set expectations and how they're looking at 2024.
Definitely something that we will be looking forward to.
Do you think that will be coming mostly on the earnings call,
or do you think we'll get anything in the numbers
with kind of talking about what they are expecting delivery-wise?
It feels like an earnings call thing. I could be wrong.
I could see them putting it in the deck.
I think they did put it in the deck Q1 of last year, did they, Sawyer?
The 1.8 million guidance for the year.
Yeah, they put that in January of last year.
Yeah, in the deck, right.
Interesting. Definitely something that we'll be keeping an eye on.
But I got a bunch of questions to come back to you, Omar.
I just want to bring Sawyer into it officially as well.
I prompted you with a question or something earlier to get you into it,
but I would just love to hear your general thoughts, Sawyer,
how you're feeling today.
What's some of this type of stuff you're watching?
Is there anything you really want to start us out here with?
I'm not expecting anything crazy from earnings.
I think sentiment in general heading into earnings is quite bad.
Probably the force that's been in probably a year or so.
I think people are worried that Elon will be sort of negative
like he was in the previous earnings call.
So we'll have to see how he views the macroeconomic situation right now.
I think that's sort of what drives his mood a lot of the time.
It seems like on these calls.
I've said on some other spaces, I'm looking forward to Drew Baglino's
update on the 4680 progress.
He does a great job providing us actual numbers and yields and the
So it would be interesting to hear those.
That's really important for, of course, the Cybertruck,
but also the next gen vehicle hopefully coming next year.
And then I'd like to hear Tesla Energy, Megapack Progress.
We'll see that number of installs in the actual deck,
but I just want to hear how LatheRip is doing,
if it's still ramping up or not.
And then I don't expect much color on the Cybertruck,
I think they'll be pretty quiet about that,
nor will they give any guidance, I think, to what they expect for the whole year.
I think it's too difficult to predict.
But yeah, you know, I think there's a lot of different things
that'll be addressed on tonight's call, hopefully.
So a couple months ago, a couple quarters ago,
maybe even more than a year ago,
Elon kind of made those mentions that he might not come on
every single earnings call,
just unless there's something big that has happened.
And obviously, we've been in a lot of crazy, you know,
one-time circumstances and then launches and all this stuff.
From what I've heard so far,
this doesn't feel like the biggest of obviously every call is big.
this is the most important call of your life.
That's always the right, the next one.
But would you be surprised if this was a call
that Elon chose not to come on?
I find it hard to believe that he won't be here.
do you think it would have made sense for this to be one that he doesn't come on?
After Elon said he wasn't going to be on calls going forward,
he only missed one call, and that was the next call.
And then Zachary Kirkhorn, the CFO at the time,
Tesla, ran that call mostly.
and Elon never missed a call after that call.
And it's been like, what, two, two and a half years.
So I think Elon will continue to be on calls.
I don't think Tesla, the new Tesla CFO,
I think he did an okay job on the last call,
but it was his first time.
So I think he was a little bit nervous.
I think he said something.
I forget exactly what he said,
but Elon disagreed with it during the call.
So I don't see him, you know,
Elon leaving and then him taking up the mantle on the calls,
not anytime soon, maybe long-term,
but arguably there's still a lot of important things
So Elon will be on there.
Yeah, I think it was maybe some wishful thinking by Elon that,
you know, somebody else could run the earnings calls,
things were smooth sailing.
But, you know, he's too attached
and is too much of a control freak, I think,
if he were able to let go of it,
this would be one that he would miss in your opinion?
I think it's really crucial,
especially with his comment about
wanting 25% voting control,
his comments about his next compensation plan
that he show up and reaffirm his commitment to Tesla.
that I think would be perceived as an extremely negative signal.
So I definitely would expect him to be there.
Yeah, you have this narrative out there that
Elon is not as focused on Tesla as he used to be.
If he weren't on this call,
that narrative would only grow louder.
Stocktalk, we'd love to bring you into the conversation.
I know you're the third member of this Tesla Talk team.
Fantastic weekly spaces, always love listening into it.
I would love to hear your intro initial thoughts here on
what you're expecting, what you're watching
the type of conversations that you think we'll be having
over the next couple of hours.
Yeah, I think the backdrop has been laid out for us
in the past three to four months in various ways,
primarily through the lens of legacy auto.
All the media we've seen around
slowing down investment in the industry,
around the pace of growth slowing,
around all of these legacy manufacturers
like Ford tailing back their plans.
We've seen stories about battery plants
that were supposed to launch this year
that have been postponed on and on and on and on.
and I'm talking about outside of the Tesla specific news,
we've seen this narrative already developing
And I anticipate that climate to be a headwind for Tesla
I've talked about this many times before,
the stock has had a terrific five year run
and stocks don't go up in perpetuity
in a vertical line 1000% every five years.
And so I think there will be challenges for Tesla this year,
both from an earnings standpoint
and from a volume growth standpoint.
Now, I'll be pleasantly surprised to the upside
of neither of those categories.
But when I zoom out of the business,
there's a couple of things I want to see change,
or not even really change,
but a couple of things I want to see develop
in the next four or five years,
which is the way I'm looking at companies like Tesla.
Contrary to the stocks I'm trading on a weekly basis,
those stocks I care what happens
on a very short term perspective.
With Tesla, not so much so.
For me, it's about the narrative developing
And the two really big things I want to see
are continued deployment acceleration
and continued, I would say,
above auto gross margins in the energy business.
And secondarily, and this is probably more important,
I would like to see a greater mix of the revenue
And I've talked about this in the past,
but I think that in the long run,
that's what will be important for Tesla
to maintain its multiple.
that's where the focus of the business should be.
And where everyone's mind goes
when we talk about Tesla improving software mix
That's the product that's at the forefront
And when we talk about that product,
a lot of people like to talk about the idea
of it becoming federally approved.
And I'm not sure that the improvement
of monetization has to be at that juncture.
I think there are ways that Tesla can find
to monetize FSD prior to federal approval,
whether it's licensing with other OEMs
or another route that they can do
prior to that being a benchmarked goal.
And so if those two things start happening
and the ball starts rolling in both of those directions
more fluidly and in a more transparent and obvious way,
I think that'll not only improve shareholder sentiment,
but I think it'll be a good thing
for the business in the long run.
But in the very short term, look,
yeah, I think there are headwinds,
but for most businesses in the auto space this year
And I think Tesla, if anyone can,
is in better position to navigate those problems
than their counterparts for a variety of reasons.
You can allude to the UAW agreement
that happened late last year,
but you can also allude to all of the practices
and supply chains that Tesla has put in place
when it comes to electric vehicles
that their legacy counterparts don't have.
So this isn't the most exciting year
from my perspective about expectations for Tesla.
Like I said, I expect them to potentially struggle
on earnings and volume growth,
but happy to be surprised to the upside.
And I just think it's important
to sober the shareholder base
when we're in years like this,
when we may not have the types of exciting events
or the type of volume growth we're used to
or the type of earnings growth even that we're used to.
So yeah, that's kind of my 360 view on it.
Beautiful. Thank you, Stock Talk.
Tarek, I want to get you into the conversation
and get your updated thoughts
on how you expect these earnings to go.
I'm also going to get a post up while you're talking
so people can see some of these markets
that we're going to be referring to.
I'll just do a quick intro.
I'm Tarek, I'm the founder of CalShea.
It's the first regulated exchange
where you can trade on any event.
So things like the New York Stock Exchange.
But instead of trading on stocks like Tesla itself,
you can trade on any event that relate to the stock.
One of the main events that we're watching today
is we're going to see the number of deliveries
that Tesla will put out in Q1
and how it's going to compare to the guidance.
But yeah, thanks for having me,
I'm happy to take this in any direction.
I think what the market is expecting right now
and you can check it out at CalShea.com slash markets slash Tesla.
It seems like the market has turned a bit more bearish
on whether they're going to hit
the 484,000 deliveries or not.
It was pricing it at around 75% chance
that they're going to hit their target in early January
and now it's actually more of a 50-50 coin toss.
And so based on the recent event,
it seemed like people are not as optimistic
about Tesla's deliveries numbers
as they were at the beginning of the year.
I don't know if there's any specific question
So I'm pinning this to the top of the space
just so that everybody can go ahead and see it.
But you guys have also created these markets
where investors can actually see
what other investors are thinking in real time
and I've been looking at them
for all different types of stuff, right?
Harvard presidents and Bill Ackman
and all different types of stuff,
but you have some Tesla ones up.
I just pinned to the top of the space.
The main Tesla one is going to be
Tesla deliveries this quarter.
How do these markets work real quick?
Because we have tons of people.
I mean, Jaguar has been on these spaces,
speaking about how he's made money on these
and we have a lot of interest, I think,
more than ever from people that want to invest
and make educated bets, to be quite honest,
on different things that are happening more than just,
hey, is the company stock going to go up and down?
They want to know, are they going to beat?
Are they going to supply?
So can you break down what you created here
And while he's doing that, I do encourage everybody,
I pin this to the top of the space
to go check out that tweet.
So I think let me just give a little bit of context
and history on the company and how we started it.
So I spent some time at large banks,
large financial institutions, as well as hedge funds.
So I worked at Goldman Sachs.
I also worked at Citadel and a few others.
And what we saw at the time is, you know,
the smart money, those types of funds, you know,
sure they trade on the stocks,
some of the prevailing markets,
but they also oftentimes try to take position
on some, you know, components of the stocks.
And it could be, you know, what will the Fed do?
It could be, you know, will Brexit happen or not?
But it could also be, you know, what will, you know,
the earnings report look like?
And what are some of these subcomponents of the stock
And it could also be things like, you know,
Elon, stay as CEO of Tesla this year.
So all these kind of different events
that are not exactly the stock,
but are essentially things that relate to the stock
or relate are important basically
for the economy or other things.
And the core thing is we saw that a lot of the, you know,
the trading flow was actually oftentimes these hedge funds,
and obviously it's also the case for individuals,
they have a view on deliveries.
I think they're going to hit or miss their delivery target
or they're going, you know, they're going to,
Elon is going to leave us, you know,
and then they figure out how to basically make money
off of that in traditional markets.
So they maybe they buy the stock or they short it
And so the nugget was like,
how about we let people trade directly on those types
of news or events or this data directly.
And so what Cauchy is, is, you know,
we're the first regulated exchange in the United States
that really creates a tradable asset.
So think of it like a commodity, a derivative,
out of anything that you can think about, really.
And so we have a broad range of markets from, you know,
Fed and economics, also weather, climate, politics.
And we've recently launched our new category,
which is a category called companies,
which is about metrics or data that relates to companies.
So which CEOs are going to leave?
So we have a number of things around the CEOs
of various airlines being ousted over the next year.
Obviously the airlines have been told news and Tesla.
So we have a series of markets on Tesla.
And the first one that's been really kind of in the spotlight
right now is deliveries, where people are actually
trading under deliveries.
Like, what will the number of deliveries be
and how high versus low, will they hit or miss deliveries?
And the beauty of these markets is we actually,
because you have a market-based mechanism
where people with real skin in the game and money,
you know, where their mouth is,
they're putting real money on the line,
you get very accurate forecasts about what's going to happen
You know, I know Jaguar uses these forecasts sometimes
to make money directly on the platform, on the exchange,
but also some people check these forecasts to go and trade Tesla
because obviously if they're going to hit or miss
their earnings report or their deliveries,
that is going to have a material impact on their stock.
And so you can use that data to inform yourself
Yeah. Yeah, I love looking at them
and just continuing to see things move.
And it feels like this is perfect timing
for this technology as well.
I mean, especially for Tesla stuff,
do you see yourself putting up more Tesla-oriented markets
We're expanding all the Tesla-oriented markets
and just because of, you know,
just the sheer amount of demand we saw for these markets.
Because, you know, look, I mean,
people have a view on the stock,
but oftentimes there's a number of things.
Like when earnings had people own the stock
and they're worried about what the earnings impact
So they can put on a hedge on some of these things.
You know, if you own Tesla stock
and you're worried about earnings making the stock go down,
you can basically hedge that by putting a bet directly
on the earnings and where the earnings are going to be.
And so that's a big series of markets.
I mean, other people just have a view.
They just think, like, look,
I think deliveries are going to be higher than Elon is saying
or lower than what Elon is saying.
Like Elon is over-inflating or under-inflating numbers.
A lot of people actually have that view right now.
And that's actually a big part of how people are positioning
in Tesla today, at least from what we see.
And so they come in and put on that trade,
which is basically I think it's going to be above
than expected or below than expected.
And, you know, right now,
I think a lot of people are thinking below than expected.
So we'll see how that works, how that evolves.
That's what I'm seeing here that I just got.
I'm taking the over on that one.
It actually just moved in real time.
It seems like, you know, I don't know what's been going on
and, you know, I think it would be interesting
to see if there's any new piece of news on Tesla.
But when we started the market, actually, it was at 55%.
And it just dropped to 40 over the last few minutes, I think.
I think the market is turning bearish.
If anyone thinks that, you know, 40%.
So right now, for every $1,000 or $100 you put in in that market,
you basically get a, you know, $2,500 if you're right.
So, you know, if you think that Tesla is still going to hit delivery targets,
you can make a 2.5x return relatively easily.
Yeah, I went in for the over on that one.
484, $508 is the one that I took the over on.
I would love to hear just kind of exactly how it works,
So it says 53% is on the yes right now.
Does that mean if it's correct, I get the $0.47 in between that one
and then it goes up to $100,000.
Is that kind of how it works?
So right now, at 50%, you know, approximately 50% you're 2xing your money
if you end up being in the money, if you end up being right.
Well, I kind of, well, you can go with yours first.
I wanted to see if Omar and Sawyer have any thoughts on this market.
That's literally where I was going with it.
I would love to hear the tin foil hat, the gambling hats on.
Do you think next quarter they get over 500k deliveries?
And obviously, I'm excited to hear today.
If they say 2 million, that's something I'm going for.
How are you feeling for, I might say 200k, I'm at 500k deliveries next quarter
for Q1, the one we're currently in.
Do you think that's a good possibility?
I mean, I think Q1's a seasonally weak quarter, so that poses some headwinds.
But if you just look at the rate they've been producing at,
they've been demonstrating an actual production rate of around 500,000 cars.
So if they're going to guide for 2 million or more, I think they can do it.
They were just within a hair of it in the Q4 numbers.
So you're taking the over on this one?
The over feels too easy, which scares me and maybe wants me to take the under.
Sawyer, is 484.5k, is that too low of a bar?
Do you think that's an easy beat?
Or like Omar was saying, seasonally weak Q1 can make it a little bit more difficult.
I think it'll be over 484, but I don't think it'll be over 500.
I think Omar's right that Q1 is seasonally weak.
And we still have the new Model 3 ramping up at Fremont.
So yeah, I think it'll be under 500, but I think above 484.
So you're basically doing a yes and a no.
You're taking the yes and 484 and a no on 500.
I mean, we had 484 in Q4.
You've got the introduction of the new Model 3.
That's got to be good for what, maybe 10,000 units or something like that if we're lucky.
I think there's a chance they could go for 500k.
So if I was to, I'm kind of going to take a little bit myself here as well.
I like what Sawyer was saying there.
If I was going off what Sawyer was saying, you said it was interesting.
He said yes on the 484, no on the 500.
Yeah, I think Sawyer is actually sort of agreeing with our markets.
Right, Sawyer, if I'm not correct?
And I think it's still pinned.
I think I just spent a new tweet where it shows the kind of market forecast right now.
And it seems like, yeah, our market is saying that there's a 53% chance it's hitting the 484.
It's just a 38% chance that it's going above 500.
So I think it's pretty much aligned with Sawyer.
It seems like Omar, you're a bit more bullish, at least from what I'm seeing.
Omar, if you think he gets over 540, that could be like, what is that?
More than a 10x return if they get over 540 somehow?
Yeah, you're getting a 10x on this one.
I think Elon has proven to be a very bad idea over the last 10 years, but I don't know.
Really quickly, and then we can do whatever.
Tariq, I went on the app versus the website.
Can I see on the website, there's those four different markets, 44, 500, 520, 540, but I'm not seeing it on the app.
Is there a difference between them, or am I just not seeing something correctly?
No, on the app, you can look into the market.
We have a simpler version of the market, which is all about whether it's going to be above or below,
but then you can also go into the advanced view where you can see all the...
It's at the top right that you hit the electricity.
I just also just took the yes on 44 or more.
That feels like it should be down at like 40% or 30% odds.
Come on, they're going to be 44, but we'll see.
I think that the guidance today will play a big part and move these markets a lot.
I will be watching for after, but if they say 2 million, it feels like a difficult one.
But if they come out with 2.2, 2.3 million, which I think...
You think there's any possibility we get a number over 2 million, a 2.2, a 2.3 kind of guidance in there?
They probably will just...
It's tough to say, because if it were to follow the 50% Gager from like 2020, I think,
it would be like 2.5, which is what I do not think it will be this year.
I think the street's at 2.1 right now, which that sounds more realistic to me.
If we hear that 2.1, all right.
I may need to come in and hammer more, but we'll see.
So what we're going to do...
So once they set up their guidance, once the guidance is out,
we're going to release the market immediately on whether they're going to hit guidance or not this year.
And I'll be very interested in...
That will be very interesting to see.
I encourage you all to check out that market.
I'll tweet about it, and maybe we'll do for the audience.
But it'll be very interesting to see, because what I'm curious about is,
I just want to see what the overall sense of the crowds is.
Like, are they kind of buying the guidance coming out of Tesla and Elon or not?
And it'll be very, very interesting to see what the initial pricing,
what that market opens at.
You know, if it's going to be kind of a 50-50 unsure if they're going to hit it or not.
Or people are mostly going to be like, well, you know,
we're trusting the sort of guidance that they're giving us this year.
How many times have they missed that guidance?
I know this year they squeaked ahead of it.
I don't think it's happened too, too many times,
and maybe that's a little bit of a recency bias.
I hear one more stock talk.
How often do they miss their full year guidance?
Is that something that actually happens?
I don't even remember the last time they missed it.
They're definitely going to come in with a safe number.
Maybe in the early days of product launches or something like that.
I know we're going to keep rolling here with the convo,
so I just wanted to give a quick comment on the couchy side
because I got a few DMs from the tweet that I put up.
Just two quick clarifications.
One of them is, if you would like to trade these markets with us,
Understand, don't invest more than you can lose,
and of course, do your due diligence.
I think you have some great folks on stage that are sharing.
I'm obviously taking stuff based on a little bit of what I'm hearing
and things along those lines.
If you are going to actually place a bet here,
you do need to make an account.
This is basically the same as a brokerage.
You're going to have to go through the signup process,
It's relatively quick, but yes, you do need to actually get that done.
If you can't find the link and you are interested,
you can DM me directly to my account.
Just DM me the word Tesla.
I'll know what you're talking about.
Try to do it in the next minute or two,
so I do know what you're talking about.
I'll make it nice and easy for you.
Number two, again, there's more of these coming up constantly.
I recommend just continue to double check and you can go through.
There's a million other markets on here
that you can also play around with in the meantime.
Tarek, did you want to give any other comments on it
before we roll into a little bit more of earnings prep here?
I think the thing I would say is whether you trade or not,
obviously, if you have a view,
I think you should try to test it out and put on a trade.
But whether you trade or not,
I think the interesting thing is it's interesting
to keep an eye on the market.
If you have any Tesla position or you follow Tesla at all,
it's just constantly giving you a real-time view
of what the crowd was and what the market thinks about their guidance
and what the market thinks about Tesla's current ability
or how Tesla is tracking towards hitting its delivery goals
and its goals more broadly.
So that could help inform your trading more broadly.
But yeah, that's it for now.
Evan, I'll turn it back over to you.
Let's keep getting some thoughts.
We got some great folks on the panel here
and we're going to, as we get further into this,
we're going to cover some more updates on these markets
But yeah, I'll turn it back to you, Evan.
Gotcha. Yeah, I appreciate that.
I do want to, we're going to keep this Tesla conversation
Omar, I would love to throw it back over to you, actually,
really quickly and kind of talk through that FSD update
I know there was also a big announcement.
I believe it was a Sawyer tweet kind of talking about.
And also, by the way, all of our other friends up here,
please join into the conversation.
Raise your hand or just go in after they're talking.
We would love to hear everyone's thoughts,
and we appreciate all of you guys joining in.
But there was that conversation about FSD.
For me, that is the big thing that I'm very focused on.
And maybe that's more of an earnings call announcement
as opposed to during the release.
What are you kind of expecting for total mileage driven?
I know there was a nice inflection point
a couple of quarters ago,
so would you expect that to continue?
And then what's your thoughts on that FSD12?
I know you mentioned it pretty briefly,
but would love to hear if there's any additional thoughts
and how excited you are for it
and what you kind of think the next steps might be.
it's really become more crucial now than ever
as we look at the story with pricing,
with automotive gross margin contracting,
and the earnings of the company falling year over year
as a result of these price reductions
that have sort of gone faster than COGS reductions.
FSD, if you can get sort of any meaningful attach rate,
you know, let's say 50% or so,
you could double the profitability of the auto business easily
and return the company to earnings growth.
So to the extent that you can do this, it's huge.
You don't need any regulatory approval.
We're talking about a feature that customers are using
in their car supervised by a human.
So the autopilot feature comes standard on every Tesla.
It keeps you in your lane on the highway, simple stuff.
A lot of cars have that type of feature.
But the full self-driving feature is a feature
that no other car really has,
where it can do an entire drive for you point to point
with no intervention potentially.
And they've had this for a while,
but the version 11 was very robotic.
It was very unnatural in many of its driving maneuvers.
It could create a lot of discomfort, harsh braking,
even though it worked amazingly well.
You know, it could sometimes drive me for hours
without me touching anything.
So this new version is trained end-to-end.
Think of it like chat GPT.
It sort of just looks at how humans handle different scenarios.
It looks at what the human did, and it just trains on that.
And it's a breakthrough version.
They've been working on this for over three years.
People have been buying it, paying for it.
Goldman estimates that FSD and autopilot generated $3 billion
in revenue for the company in 2023
at a much higher margin than the auto business, of course,
due to the nature of all the costs being fixed and softer.
I mean, the costs are substantial.
They're spending $2 billion on training chips from NVIDIA
and their own Dojo supercomputer this year.
But I think this has the potential, really,
to create a much more comfortable driving experience,
a much more human-like driving experience,
and to allow the company to scale to more regions.
They've thrown out 300,000 lines of planning and control code.
That's 300,000 lines that you don't need to make sure
You just show it data, and it can adapt to those areas.
So if they can do that, forget about robo-taxis,
which, by the way, here in San Francisco,
people are taking driverless cars.
It's working great seamlessly with Waymo.
And I think this is definitely coming a lot faster
than people think, but forget about that.
And just look at people buying the FSD package.
It sells for $12,000 with your car,
or you can subscribe for $200 a month.
And if you use somebody's link, you'll get three months free.
They give you, like, a free trial.
And, you know, if they basically get any meaningful attach rate,
there's sort of an inherent seasonality to the auto business,
and I think a lot of what Tesla's experiencing,
are really just due to the ups and downs of the business cycle.
You have a higher amount of inventory during the pandemic.
They didn't have any cars being produced.
So there's going to be ups and downs in the auto market.
But if you can build a strong base
of recurring subscription revenue,
or not only are you generating earnings from selling new cars,
but you've got a large base that's building up over the years
of subscriptions that are coming in,
and that softer becomes more compelling.
It feels more comfortable.
You're having a lower churn rate on that.
That, I think, is the one thing that if they could do this year,
could return the company to a trajectory of earnings growth
in a way that nobody expects.
And this is really, I think,
the core of management's decision on pricing.
They believe that we need to maximize volume
because we need to maximize the amount of training data
and we need to essentially maximize the TAM of the software.
If there's more cars out there,
then that's more people we can sell it to,
the faster we can keep this flywheel going.
And it actually makes sense to take a few thousand dollars hit
on gross profit if we're potentially generating
$12,000, $20,000 in recurring revenue down the line
from this vehicle being out there
and consuming these softer services.
So I think this, along with really the humanoid robot
they're building, which is making amazing progress,
is probably one of the things that could really surprise
Wall Street in terms of what the earnings expectations
Like I said, I just got this softer this week.
It seems like a breakthrough version.
It looks ready to roll out to users in the United States
And if they can do that and expand internationally
I think it could be the one thing I see
that provides a meaningful surprise to earnings growth.
Yeah, I can just say like having FSD11 on my car right now,
I don't think the demand for it is there
only because I don't think it meets everybody's
But I think if they can turn FSD12 into something
more than that, which judging from your videos
that I've seen, it does look to perform
I think like just driving my own vehicle,
I notice like we're stopping for a long time.
There's all sorts of issues still.
But if they can get FSD12 up to something that kind of meets
some of the expectations of the, I guess,
the person who thinks that self-driving cars
are going to be here sooner rather than later,
I think that the service revenue will surprise
$200 a month and how many cars are out in the market
right now, what's the potential market for that?
And I wouldn't be surprised if they eventually
dropped that price once this software is adopted
Do you think that FSD12 is the biggest improvement
yet for these versions of self-driving?
Yeah, I do think it's the biggest update yet.
I've been testing it since the first version
went out in October 2020.
And I've never seen a single update
with so many improvements, so much more natural driving.
This end-to-end approach where it's completely deep learning
from end to end, there's 300,000 lines of code
they eliminated, it's clearly the future.
And I think there's a major disruption here
that's kind of going under the radar.
With Waymo, Google's driverless cars,
people are taking them around San Francisco.
They can do any trip, no issue.
That's only in a pre-mapped area, of course,
but I think self-driving is being solved a lot more
We've seen things like chat GPT, LLMs.
That's moving over into AI and robotics too.
And really, you have these people all across the country,
quietly, hundreds of thousands of people, Brian, myself,
using the software to drive around,
using a computer to navigate around
instead of driving themself, at least part of the time.
And you have, I think, around half a million people at least.
I think they're going to cross a billion miles in Q2.
So you have this quiet disruption kind of happening,
and you can get a Model Y now for $36,000
worth of point-of-sale credit,
and every single one they sell has this software.
And now they're working on a $25,000 car
that's supposed to start production next year.
That'll be under $20,000, $17,500, assuming it qualifies
for the point-of-sale credit.
And that same car will be able to run this software as well.
So really, when you look at the Tesla story today,
you know, why do they have a market cap
that is 10 times higher than BYD,
that's larger than Toyota, that really is larger
than many of these major automakers combined?
How does that make any sense?
Well, I don't think it's because the market really expects them
to just make a ton of money selling cars
more than everybody else combined.
But I think when you look at the licensing of this software,
because it's so unique in the fact that it has such few dependencies,
no pre-mapping required, no sensors required, no LiDAR.
And you can just sort of throw it on any car
for probably less than $2,000 and it works.
You look at, you know, really the mass production of cars
with the software that's going on,
it's a really underappreciated disruption that's happening
and kind of explains why the company is trading where it is.
I mean, without this, you just look at the auto business,
they could do extremely well and grow to 10 million units
and still see their valuation contract significantly
just to be valued fairly.
But if you actually believe that this is going to play out
the way that they have been expecting or giving guidance for,
then it actually looks pretty cheap by comparison.
I mean, I think this business could generate
a trillion dollars in revenue for the company by 2030.
Kevin, you got your hand up.
You got any Tesla thoughts?
We have about 17 minutes until the numbers come out.
Yeah, I just wanted to jump in here real quick
because I'm going to pop out and I'll pop right back in.
I just wanted to let everybody know I put in
or did have up there and I can post it again.
Just the earnings expectations that people wanted to follow along
as we start talking about automotive growth margins
and things of that nature.
Sometimes it kind of gets a little bit, you got to go back
and forth, so provided that summary there.
I think the biggest thing that I'm going to be focusing on
is hearing any commentary about potential India expansion
and what that could potentially look like.
And then also the effects of their shipping issues
If the drawdown in Berlin is going to have a material impact
on production and reaching these production targets,
which I think that's probably what's going to kind of move
that needle that you guys were talking about.
And then overall, like Stocktalk was talking earlier,
their energy business and if they are continuing to see demand
from fuel operators in order to install their charging stations,
if that's the case, if they plan on trying to expand
that business out, because I think the key thing for Tesla
is we're talking about all the key features
We also have to have that infrastructure in place
and I think they have a really great opportunity right now
to ride that wave and that might be an area
where they can see, maybe it's a small portion of sales,
but maybe that's something that they can expand over time
as we do have a pretty large network
when it comes to gas fueling stations around 2,700
right now in the United States.
So those are the areas I'm kind of keeping my eye on.
I can repost it, but is it cool if I post those estimates
so people can check them out?
Throw it in the spaces chat and we'll get them to see it
and we'll read some of them out.
I just also put out a tweet.
EPS is expected to be $0.74.
That'd be down 37.8% year over year.
Wall Street is expecting revenue of $25.8 billion.
That would be up 6.1% year over year
and I would love to see some more of those estimates
and expectations in that spaces chat
at the bottom right of your screen.
We got about, what, 15, 16 minutes left
until these numbers come out.
We'd love to throw it over to you very quickly
and just hear some of the stuff that you are expecting
on this earnings release versus the earnings call,
what type of announcements you'll be expecting
to get out in the next 14, 15 minutes or so.
Automotive gross margin is obviously a very important one
and has been a discussion for the last couple quarters
and we know the headline numbers, revenue, EPS, et cetera,
but what else will you be watching
in these numbers that are coming out?
I mean, you kind of named all the categories, right?
But yeah, I mean, for me, obviously,
we need to see automotive gross margins
bottoming at some juncture soon, in my view,
especially if we're expecting a resurgence in volume growth
which they are pretty widely expected to come down
anywhere from four to six cuts this year,
depending on the expectations you look at.
If you look at the CME FedWatch tool,
those odds have changed a lot,
but I think Tesla's volume growth expectations
are going to hinge a lot on the rate path, in my view,
and that's kind of what we need to be looking forward to.
I think if you want to see unit growth
go back to what it looked like three or four years ago,
and on top of that, I think you need to see margins
bottoming more so to reassure the street
that they aren't headed lower.
I think that that's also very important.
I mean, even the numbers you just alluded to earlier, right?
We've already looked at a pretty significant
compression in earnings per share,
and despite the fact the revenue's up
and they've weathered a storm for the automotive industry,
and they may not be coming down as soon as people expect,
so we need to see some kind of outlook on that.
Hopefully it's not too rate-centric.
I mean, that's one thing in previous calls
that have kind of bugged me.
I think it's just an assumption that anyone
who's thinking about the environment is already making,
so I don't think Elon should or has the need
to emphasize the rate environment again,
although he very well may,
based on the way he discussed the last two calls.
So I don't want to see too much commentary on that,
but Kevin kind of alluded to this as well.
I do want to see some commentary on India expansion.
You know, a lot of people have discounted India
I'm firmly in the other camp.
I think India is probably a decade worth
of infrastructure and great investment away
from being a very, very serious full-size vehicle market.
They're growing faster than any of the other top five
vehicle markets in the world.
I've mentioned that before,
but they're growing at a 20% to 25% clip annually
in full-size vehicle sales,
and a lot of that is cannibalization
of the light vehicle market or the small vehicle market,
you know, rickshaws, two-seater bikes, scooters, et cetera.
So I think India is a huge opportunity.
I'd like to see some talk about that.
I know we've also gotten some recent news
about them appointing a head of regional
or country or continent-wide affairs,
whatever way you want to phrase it,
and so I'd like to see some commentary on that potentially.
But yeah, we'll see what happens.
Like I mentioned, I think this is going to be,
you know, a tricky year for Tesla,
and I think that strategic decisions
are going to matter a lot.
So we'll see what updates we get
in that direction on the call.
I'm looking forward to it.
Penny, you got your hand up?
Your mic is a little choppy for me.
Maybe you want to switch off of...
Yeah, or just switch off the Wi-Fi.
While we're talking, maybe it got better there.
Penny, if you want to try one more quick time
and then we can go from there.
I don't know if that works.
We'll circle back around to you.
We always appreciate the Penny insights.
I love seeing the reveal as well.
Funny, my Wi-Fi sucks compared to my cell coverage.
So the question that I have,
Tesla Talk was talking about rates,
and I agree I personally don't expect
any major movement up in the Tesla stock
until we see those rate drops.
I wonder if taking longer for the rates to drop
is better for Tesla long-term.
What do people think about how it affects
the competition versus Tesla?
And if we're looking at, say, two, three years from now,
how does it affect Tesla's market share
if it takes a year or longer for the rates to drop
versus what's expected currently?
I don't think it's a market share conversation
as much as it is like a conversation
about the company in a vacuum.
Because the reason I don't think it's a market share
conversation is because I actually think
the slowing of wider industry adoption, if you will,
or really a better way to put it,
is wider industry investment,
the announcements we've seen from GM,
Ford, Volkswagen, et cetera, in the past six months.
I think that's actually a positive
for Tesla's market share argument,
because I think it implies
slower penetration from competitors.
But when you look at rates as a whole,
I mean, look, people have made an argument
about overall vehicle sales
and how they haven't fallen materially
in the face of higher rates, et cetera, et cetera,
and they think that's an argument against higher rates.
I think it's a very, very simple
consumer psychology argument,
which is that with rates where they are,
a consumer is less inclined to purchase a vehicle,
And I think looking at those markets
and saying, well, the volume doesn't reflect that change,
to me, it doesn't dismiss the argument
that from an individual consumer's perspective,
I think rates matter for big ticket items.
And so I do expect that volume to inflect.
I don't think it's a market share concern
for Tesla yet, but if rates do inflect
and then you see all of these guys
I mean, yeah, there's factually more competition
for Tesla today than there was 10 years ago,
but I still don't think that competition is in the place
to deliver electric vehicles at the volume
that they will need to be competitive.
Just to add super quickly,
because I thought that was really, really well thought out,
but wanted to add one more thing.
I think, like, looking at comparative margin profiles
between Tesla and every other EV program in the world,
it's very clear that affordability for them is a lot easier,
and margin maintenance is a lot easier for them
at this point in time than for pretty much everyone else,
and high rates make affordability more difficult.
I mean, intuitively based on interest payments
for nearly every single car maker.
So I actually sort of agree with you, Penny,
That this actually could be a positive
for their market share just because
they have so much more leeway
within their even gross margins to maintain affordability
while interest rates are kind of extremely elevated,
and I don't think anyone has that kind of flexibility
besides them just really simply looking at margin profiles
for every other competitor,
and I just want to say one more caveat.
I don't know Tesla shares.
I just feel like I always have to say that,
but that is sort of how I see it,
and I guess maybe agree a little bit with both of you.
Yeah, I wasn't so much thinking about market share of EVs
more just total auto market share out a few years.
It seems to me like these rates hurt all car companies equally,
and I expect that Tesla would be able to deal with it
better than the other car companies.
So it's like if you're going to put the squeeze on
all of the car companies at the same time,
and some of them are going to react better than others,
then the longer that the squeeze is on,
the better that the most well-equipped companies
will come out in the end,
and the more suffering that the more sub-optimal companies
So my sense is that although I don't love these rates,
and although I believe that they are choking
whether or not competitors are still selling just as many cars,
it feels a lot like in the long run,
it could actually be positive.
and that argument's fair.
I mean, the way I think about it,
if I wanted to put a really rudimentary analogy on this,
and there's many parts of these industries that are different,
so don't come after me when I do this,
but if you think of the legacy automakers
as makers of landline phones,
and you think of Tesla as a maker of a cell phone,
and you think about that inflection in that industry,
it's like to me that the growth or the market share
in landline phones is irrelevant, frankly.
I think all of the growth in the next 50 years in cars
will be in electric vehicles, almost all of it.
Now, you're going to have population centers that get bigger,
and as a result of those population centers getting bigger,
they'll buy more internal combustion engine cars,
but if you look at individual population centers
and you look at their current distribution
or their current mix of electric vehicles
to internal combustion engines,
I think that the number that makes is inevitably
going to go in the direction of EVs
in every market in the world.
So, yeah, I just think the mix of overall auto
The only reason that I brought it up
is that I think it's really important
for the health of those legacy companies, right?
If they're suffering, they can't invest in their EVs.
They can't grow their EVs,
and then Tesla has more time to continue to evolve
and grow the company that's already in that next stage,
that's already the cell phone, not the landline, right?
I don't really look at it that way competitively.
I don't think it's really kind of an us versus them
It's more of an EV versus ICE thing.
So, if legacy automakers suffer
and they continue to sell ICE cars,
that probably delays the transition.
If we move as an industry towards electric vehicles faster,
then Tesla will probably take a broader share
of the overall auto market
because of their experience as an EV leader.
So, probably what's beneficial to Tesla the most
is an industry-wide transition
where you have broad-based acceptance of electric vehicles
and many legacy automakers
actually being able to produce them profitably.
I think that's the best, absolutely,
if you're considering it from a mission perspective,
which I am a mission person,
if the legacy auto companies transitioned as well.
But strictly from a competition or a business perspective,
I don't think it's good for the legacy automakers to advance.
I think if Tesla and Elon were being selfish,
they would rather squash the EV plans
of all the other companies.
I just don't think that that's who the people that work at Tesla are.
Are you seeing something that I'm not, Omar?
Why is it good if Ford makes a bunch of EVs?
If we're going towards EVs anyway,
it seems like if all the legacy stop growing their EV side
and Tesla continues to grow it rapidly,
that can only be good for Tesla in the long run,
is sort of the sense that I have.
Really interesting thing I'm seeing real quick.
This market that we were all talking about earlier
has been going crazy since we started talking.
It's flying all over the place,
and it's headed down right now
from what I'm seeing with just an expectation.
People are getting bearish on the number of deliveries,
so I just wanted to point that out.
I've been watching it just fly all over the place.
So let's see what happens.
I'm still on 484-508 or more.
If you haven't checked it out, by the way,
if you don't know what I'm talking about,
go to the last tweet pinned to the top of the space,
and Evan, I think we've got some more stuff coming in here, right?
Yeah, no, I appreciate that conversation
that you guys got going on.
I see a couple people requesting as well,
and we're pretty full up here.
I'll try and rotate some people in.
We should be getting these numbers out in two minutes or so,
so definitely keep an eye.
We will get them the second that we have them,
Sawyer or anyone else, if you guys see them first,
feel free to go out and read them out.
But we've got about one or two minutes.
I would also love to hear in the spaces chat
down below that purple 51.
Give me a thumbs up, thumbs down, a good, a bad.
What do you think Tussle's going to do
after these earnings video, an up or down?
We'd love to hear what everyone down below is thinking.
Omar, I don't know if you have any final thoughts on that one,
what Penny was talking about there.
The problem today is that when a consumer goes out to buy a car,
they think, OK, I need a car.
And they probably don't think EV,
unless there are a certain segment of the market,
about 10%, 25% here in California, that's switched.
But most of them, they think, let me go buy a gas car.
So as long as that is the default, let me go buy a gas car.
Tesla is a niche part of the market.
And you've seen a lot of people cast doubt on the future EVVs.
If the consumer starts from a decision point of, OK,
I want to buy an EV actually, not an ICE car,
then I think Tesla is going to take a major share of that market.
So the most critical thing is really to shift the consumer mindset
to the point where they're buying EV instead of ICE.
And to really do that, we need broad-based support.
71 cents, missing expectations of 74 cents.
I haven't seen the revenue yet though.
Waiting for the deck to be up.
But yeah, EPS was a small miss on that one.
Missing revenue, EPS, and gross margin.
OK, so revenue was $25.17 billion.
Wall Street wanted $25.9 billion.
So that's a small to medium-sized miss.
Free cash flow was $2.1 billion.
Wall Street was expecting $1.5 billion.
So there is a beat there.
Tesla, one-time non-cash tax benefit of $5.9 billion recorded.
Cybertruck production delivery is ramped throughout the quarter.
Vehicle volume growth may not be notably lower than 2023.
I'll have to take a look in a second.
What was the volume growth in 2023?
I'm looking through the numbers right now. Hold on.
Yeah, there is a regular EPS of $2.27.
So that is that $5.9 billion one-times charge.
Wolf, what's the stock doing right now?
Yeah, watching the stock right now, it dropped about 5% so far.
It's been a little jerky all around.
But right now, it's sitting at $197.
It just cracked pretty hard through that $200 level.
And yeah, $199 right now.
I'll keep you guys updated if there's any big moves.
But obviously, more of it's going to come during that call.
I'm trying to find out how many they deliver each year.
Why is the gap net income so much larger than?
There was a one-time non-cash tax benefit of $5.9 billion.
That's exactly what that is.
Cyber truck production delivery is ramped throughout the year.
Gross margin was 17.6%, below expectations of 18.1%.
So I know that's a big one that people focus on.
Let me get this in front of me.
Most of the numbers come in and below.
You think any thoughts on the move?
I missed across the board here in most categories,
except for free cash flow.
We'll have to see what to say on the call about the guide.
But yeah, I mean, pretty much just flat out missed.
Expect the stock to be down on that.
We're seeing 17.2% auto-GPMX credits.
That's what I'm getting, but I want to make sure.
Those are not words that I look into.
But yeah, I just see the gross margin is what I'm seeing here.
Where is the FSD miles out?
I know that's something you watch, Omar.
Ooh, nice inflection point.
Looks like it's over almost at 800 million cumulative miles with FSD.
Yeah, it looks like it's at about 750 million miles,
which would put it on track to cross a billion in Q2.
Ooh, that's pretty, Jesus, that's pretty quick.
I'm also, I'm double-checking the annual vehicle capacity,
Let me just double-check that.
100, 550, 950, 375, 250, 125.
Okay, so they did not change that.
The only wording that has changed was,
pilot production for the Cybertruck has been changed to production.
Sawyer, I know you're going through and digging into everything,
so I don't want to take too much out of it.
We'll come back to you more a little bit later,
but any initial thoughts on what you're seeing in these reports?
I mean, mostly a miss across the board for a lot of the numbers,
but I've got to dig deeper to get a full view.
Yep, and I look forward to coming back to you on that one.
I'm looking at the storage deployed right now.
I know that's a lot of things people like to look at.
It's down pretty aggressively from the last three quarters.
It was around 3.9 million megawatts per hour in Q1.
Q2 was 3.6, Q3 was 4, and then this one was 3.2 million.
It's still up 30% year-over-year,
but it seems like there is a step back overall in the storage,
solar, and that whole department of it.
I'm seeing Yaman saying their Tesla energy revenue was 6 billion.
Oh, yeah, Supercharger stations was 5.9 billion.
No, that's not the revenue.
That's how many they have.
Production did grow slower than the Supercharger stations,
did grow slower than the mobile service fleet as well.
This is one of the first quarters where I've seen
the kind of ancillary things, the charging stations,
the service fleet growing faster than deliveries.
All right, Wolf, I know you messaged me something.
Well, if we have a minute here,
I kind of wanted to just get based on the items
that we just saw, updated thoughts on the deliveries,
and I think it makes sense.
Just curious if there's any update thoughts on the panel.
I know some people are running through numbers,
but Stocktalk, seeing some of the information that we have now,
is your opinion at all changed on that market,
the caution market that we talked about?
I don't really have a forecast of delivery
on where I expect them to be by the end of the year,
but Tesla did note right here that they expect volume growth
for 2024 to be notably lower than 2023,
and I think that kind of goes back
to what I was saying prior to the call.
This is going to be a hard year for volume growth.
That 50% number we talked about,
or I don't want to say we talked about,
but that Tesla was talking about a few years ago
as an average volume growth expectation,
gets harder and harder as the market in front of you
becomes more and more saturated,
and that needle, that vacuum of available new market share,
The whole thing that we've been talking about,
about the pace of accelerated growth,
It's not the same every year.
It's not as high as it was in 2019 or 2020
when you had basically free credit
and everyone was just going and buying cars hand over fist.
It changes, and in the face of that changing
and the face of them running out of leash to lower prices,
I think they still probably have some,
but they're running out of leash to just endlessly lower prices,
and that's going to put them in conflict
with the available vacuum for new markets.
So yeah, I think the growth will be lower this year,
and you may see that market come down even more
Tarek, would you be making lower levels in that market
if there was demand for that?
Yeah, I think we're honestly considering it.
I think we might need to add lower levels.
So right now our lowest level is 484,
which is really kind of their core.
Well, they grow from last quarter.
And so, I mean, it's still priced at 60%.
It's actually slightly more bullish than it was before the release,
but I do think we're probably going to end up
having to add some lower markets.
How low we're going to have to see,
but I think maybe a 460,000, 440,000, and 420,000.
Interestingly, actually, in the comment thread,
I've seen a few people expecting somewhere between 420 and 450,
which I was kind of surprised by.
So yeah, I think we're going to have to add some new markets.
But it seems like above 500 has gotten cheaper,
and the rest is largely constant.
So the moves happen mostly before the release.
Before the release, the market has been relatively stable.
Sawyer, I know that you are digging through some of this stuff.
What do you think is really the...
You know, looking at a market like this,
what do you think is the lowest end
that they really should be offering?
Right now, it's that 44, 508 or more.
What would you say, you know,
if you were kind of creating some lower levels here?
In terms of like vehicle offerings?
This is going to be Tesla deliveries for the quarter.
So I'm looking at the Outlook part of the slide deck,
our company is currently between two major growth waves.
Their first one began with the global expansion
of the Model 3Y platform,
and the next one we believe will be initiated
by the global expansion of the next-gen vehicle platform.
So this is the interesting part.
They say, in 2024, our vehicle volume growth
may be notably lower than the growth rate achieved in 2023,
as our teams work on the launch
of the next-gen vehicle at Giga Texas.
In 2024, the growth rate of deployments and revenue
in our energy storage business
should outpace automotive business.
So basically, they're not giving us a number,
which I suspect might happen,
because I figured they just wouldn't even want to address it almost.
And one thing I'll just...
This is a little off-topic,
but one thing I'll notice is
Tesla's cost of goods sold per vehicle
dropped to about $36,250 in Q4,
and that's down from $37,500.
So down to roughly $1,200, quarter over quarter.
And it looks like it'll continue to go lower,
but their price decreases are outpacing.
Their cost decreases, it looks like, still.
So we'll see how that trend continues.
So I think AutoGPM Max Credit
was actually a pretty comfortable beat,
which is a very important metric for them.
So unless I'm seeing that or calculating that incorrectly,
I'm pretty sure it's 17.2%,
versus sell side consensus was 15.7%.
So that's pretty good, yeah.
Sorry, Brad, would you say those numbers were again?
And I saw Beth posted this yesterday,
which she had the same estimates I did,
but I had AutoGPM Max Credit estimates at 15.7%,
and they came in at 17.2%, I think.
The stock has recovered here pretty substantially.
We'll see what happens on the call, but...
No, it's back above $203 now.
The stock was down almost 5%, it's down about 2% now.
It looks like it's waiting for the call here.
We'll see what happens on the call.
The call's at $530, and we will be listening to that call.
Omar, I see you got William, my boy,
I will definitely get it up here.
I can play the call if you want,
but also, always nice to have my time.
So we'll talk about that as we get forward.
But I was doing some quick math on...
So this 2023 vehicle growth was around 37%.
They had 1.81 million in 2023.
They had 1.31 million in 2022,
so you can do the math for yourself.
So I think the question now is,
what does substantially lower mean?
I put in a 20% growth as opposed to 38% growth,
which I personally think would fit into that,
and that gave me a 2.172 million delivery number.
So the first initial rough thought there
is that's where my estimates are getting.
I don't know, and they definitely, definitely did not say
that it would be going down.
Or, I don't know, how do you read what they were saying
in their stock talk in that language specifically?
Do you think that still means a growth?
Is there any chance that volumes go down in this estimate,
just the way they worded it,
that they think that 2024 will see significantly...
Vehicle volume growth may be notably lower than 2023.
Is there any world where you think that type of language
means they're thinking of your negatives?
I'll take the language at face value, right?
So at face value, it says that they'll still have a growth rate.
It'll just be a low growth rate.
So until I have a reason to believe otherwise,
now I'm going to take what they're saying at face value.
I think they're definitely going to get a question
about this on the earnings call.
And like I said, we're going to be listening
to the earnings call live in here, so definitely hang with us.
We've got a couple of other speakers
who we might cycle in and out to.
And we also have the say.com questions,
So there's still a lot for us to look in and focus in
and we still got a lot coming.
I always love looking at these pictures they have in here.
I'm sure we'll get some sort of tweets about any of these.
I don't know exactly everything I'm looking at.
What do we think about that?
I noticed that the collage had a significant drop.
I'm curious what people think about that.
Is that more or less than we were expecting
in terms of the cost of goods per vehicle sold?
Sorry, what was that drop again?
What was it on a percentage basis?
I don't know on a percent.
It went from 37.5 to 36.2.
So like a 1,250 drop, basically, per vehicle sold.
That's like a 3% drop, it sounds like, to me.
That's pretty significant.
But how in line is that with the previous quarters?
I'm trying to find that on here.
Do we have any thoughts on that stock talk?
What kind of the quarter-to-quarter just mix and everything they got going on?
Yeah, I mean, it could be a combination of a lot of things, right?
I mean, it could be a combination of materials.
It could be a combination of some of their production efficiency inputs.
I mean, the justification for it, who knows?
But yeah, it's a nice drop, 3.7% drop.
Again, I don't know what that compares to to previous quarters.
That'd be an interesting question.
So maybe that's something we can find out relatively easily.
But yeah, it's a nice drop.
I mean, look, for me, either way, I think this conversation that was had
around price cuts and margins last year was a pretty fierce conversation,
like within even the Tesla community.
But also, obviously, outside of the Tesla community as well,
this idea of weaponizing margin for volume growth and market share
and how tenable of a strategy that is and how effective it is.
And in my view, and this is a business strategy debate that can be had,
and both sides can be taken on this argument,
but in my view, in emerging industries, it's particularly effective.
And I think what Tesla did to ensure volume growth last year,
I think, was an acceptable strategic decision.
I think it was probably the right decision in light of the business environment.
But I think going forward, as the rate environment changes,
I should say my amenable to that strategy will change.
So if rates go down, and I'm just spit falling here,
rates go down, let's say a percent by the end of the year this year,
which some people might think is too aggressive,
some people might think is not aggressive enough,
I'm just throwing out a hypothetical scenario.
But if rates drop a percent this year,
and we find that Tesla still has to cut prices to ensure volume growth,
that'll be concerning to me.
But we're not at that juncture yet.
We haven't seen a single cut yet.
There are speculations on the rate path.
But for me, before I make my decision on what should or shouldn't be done
I would like to see the business environment change.
And if the business environment doesn't change,
then yeah, we may end up in a scenario where Tesla has to cut prices again.
I wouldn't like to see that happen.
But if rates do not materially change,
intra-year or by Q1 of next year,
then they may have to come to that same decision-making process again,
come to that same fork in the road proverbially, if you will.
So do I hope that that happens?
But is there a real possibility that rate cuts are far further out
Yes, there is a possibility that that happens.
And I don't think product innovations outside of FSD, of course,
which I agree is the most important forward-looking part of the business,
I don't think product innovation on the vehicle side
will necessarily solve that problem if the environment doesn't change.
So that's my holistic view on it.
I mean, we'll have to wait and see.
I would just add to the input cost for whatever.
Sorry, you have your hand up.
So I'm going to make this like 15 seconds and pass the mic.
That could be the new battery pack costs kind of becoming more efficient
and flowing and it could be Austin or other factories ramping.
And then I would defer to other people who know the company better.
But in my mind, I'm looking at prior quarter notes
and that's kind of what they're saying input cost savings are coming from.
There was a question about how the drop compared to other quarters
and I haven't done the specific math yet,
but I did post the chart in the purple pill.
And if I draw a line from the left most column to the right most column,
it seems like it's a bigger drop in this most recent quarter
than the other ones, especially as compared to last quarter.
Wait, the purple pill, is that your thing for the spaces shot?
Yeah, that's what I call it, the purple pill.
No, okay, we'll go there.
But I'm looking at the market share.
There's always a lot of really interesting little charts in here
Omar, you have any thoughts on the cost of goods sold per vehicle?
I'm seeing that one going down.
There's a nice chart in here.
But just any thoughts in general that we haven't touched on yet,
anything interesting to you in this report?
Well, I mean, I think the COGS declines are nice,
but obviously it doesn't come anywhere close to the reduction we've seen in pricing.
So, margins have fallen because COGS haven't come down as fast as the price.
And maybe there is some value towards sort of putting the cart before the horse
and having them continue to bring it down.
I think commodities and certain other things have helped this year.
But really, I mean, I think kind of zoom out.
You can look at this and say, okay, look,
this is a business where automotive revenue has grown 1% year over year, right?
This is supposed to be the, you know, Tesla, one of the fastest growing companies.
And automotive revenue has grown 1%, despite them delivering unit growth of,
I think, what was it, you know, 36% or something like that year over year.
And you have margins contracting.
If you sort of really zoom in on the quarter, then you go,
God, what a terrible business. It's not growing at all.
You know, look at where it's trading.
But, you know, then I kind of zoom out and you see, okay,
Model Y sold 1.2 million units.
They're saying based on their preliminary estimates,
that's the best-selling vehicle in the world.
We've never had an electric vehicle be the best-selling vehicle in the world.
There's really, I think, a tremendous amount of disruption happening here
from these price cuts, from the market, having affordable EVs,
from the competition between Tesla and BYD and others.
And I think if you sort of look at the forest for the trees,
there's really an incredible EV adoption story going on here,
despite what a lot of people are saying in the media.
It may not necessarily result in earnings growth.
I mean, it's kind of hard to see where the earnings growth comes from
if they continue this strategy.
But maybe management can give us some more clarity on the call.
Sawyer, I just saw your tweet that was out in Yaman.
I know he's been talking about that, about Tesla Energy generating $6 billion
of revenue in 2023 that's up 54% year over year.
So, I don't know if there's some commentary we need to hear there.
But that's definitely stronger than the automotive revenues growing
at 15% in services and other revenue at 37%.
Now, this is the smallest segment.
So, you know, they need a...
The great thing about having a very profitable business
and the one that's growing really fast in revenues
is you grow revenues very fast.
The downside of it is some of these other great businesses,
while they're growing, can be overshadowed by those massive behemoths.
I think of an iPhone and any new product they launch.
You know, selling $100 billion of iPhones a year,
launch a Vision Pro, selling $295 million,
it really won't have an impact.
But maybe, do you think it's wrong to kind of make that comparison here
with the energy and storage revenue?
It's up 54% year over year.
Is that something that you think we'll hear more about going forward
as they get excited and it might be able to continue that growth?
Well, it's still a small business, relatively speaking,
to their automotive business, but it's growing rapidly.
Lightthirp is still ramping up,
and then you're going to have another factory,
Megapack factory, come online in Q3 of this year in Shanghai,
which they'll be able to use much cheaper batteries there,
and margin should be better.
In general, though, I think Tesla's going to...
At least, I think retail shareholders are going to call on Tesla
to be like, what are you guys going to do about...
How are you going to tackle better EV education?
Because I think a lot of people feel like,
and I certainly felt more and more like this over the last year,
is that if you just go out and ask a person
how much they think a Tesla costs or what they start at,
it's likely $10,000 to $20,000 higher
than what it actually starts at.
And a lot of people think they catch on fires all the time
or they're unsafe or they can be hacked or whatever.
These are all just things that just aren't really true,
or if they do happen, they're extremely rare.
So I don't know if Tesla's going to talk about
their advertising efforts in 2023.
They started advertising in June of last year
through Google Ads, and then on YouTube,
I think it was October or November of last year.
So they don't have a ton of data yet,
so I would be interested to hear their plans long term
for that for the rest of this year.
I think I had one other point, but I'm forgetting it.
Oh, yeah, for storage, energy storage.
The reason you can see a big drop or gain
quarter over quarter is because some of these projects
take a while to install and turn on,
so that's why you see it's sort of a lumpy trajectory
over time or in a short period of time,
but over time, the general trend is growth.
So quarter over quarter doesn't really matter,
as long as the trend is good, which it still is.
Do we know exactly what's in services and other revenue?
That one's doing pretty good.
Is that just superchargers?
Yeah, that's like merchandise, superchargers,
parts, stuff like that, wraps.
Guys, get us more beer steins.
And you sort of just look at the competitive landscape here.
You've had pullbacks from Legacy Automakers,
as these efforts have just been a huge cash burn.
You've got companies like Lucid, Rivian,
I mean, a lot of these EV SPAC bubble companies
have sort of run out of cash.
Even the more successful companies like Rivian,
they're drawing down on their cash pile fast.
Tesla has a record cash pile of $29 billion,
driven by $2.1 billion of free cash flow
and financing activities of $900 million.
So nobody's really talking about these guys
going bankrupt or really having any cash concerns.
Despite a major haircut where essentially
they took half the margin out of their vehicles
they're still making more profit selling electric vehicles
than any other company on Earth.
So when you really look at the competitive landscape,
it's pretty striking what they're able to do,
even at these price levels.
Yep, that does make sense.
Brad, I know you're a big numbers guy up here,
numbers nerd, some could say.
Anything interesting to you specifically?
I know you were saying something about some margin number
that I haven't really heard of.
But you have any other thoughts on any of these
advanced numbers and metrics that you're watching
that could have been good or bad?
Yeah, and if anyone has done the math,
I think I've calculated this like nine times now
just to make sure I'm doing this,
So if anyone disagrees, please unmute
and feel free to let me know.
Obviously, this is across the board for the most part,
but auto-GPM, X credits, so that means
auto-revenue, auto-leasing revenue
excluding all the regulatory credit noise,
It expanded pretty significantly sequentially,
and it was supposed to come in at 15.7%.
So that is among the most important margin lines
How profitable are the actual sales
of your actual automobiles,
which make up the vast majority of their business today?
For now, what is that looking like?
And in my mind, again, innocent bystander,
just really entertained by the company
and the smart people cover it.
That's pretty darn good, 17.2%.
I don't think we were expecting that kind of
sequential aggressive expansion,
and I keep looking around for estimates
to double, triple, quadruple check
and I'm pretty sure it was right around 15.7%,
15.8% for sell-side consensus.
I really apologize if I just said that wrong,
but I'm updating the Kaoshi markets,
and I see there is a couple new ones in here.
I could do $460K, I could do $440K
How does it work when the market first starts?
Do I just kind of pick what price I think I want to be?
Yeah, I think the market makers
are probably pricing right now,
and they're going to put up a price.
So I think it should be happening very, very shortly.
But you can also put up, yeah, you can pick a price.
If you have a view already, you can pick a price,
and then you put up what we call a resting order,
so you let it rest in the book.
Also something notable is since,
I would say in the last 10 to 15 minutes,
actually the market has turned quite a bit.
Everything is much more bearish now.
So now less than 50% chance that they're hitting the 480,
so that has moved quite a bit.
So we'll see how that evolved over time.
Yeah, no, I'm looking at that 484.
I think I got into like $0.52, $0.53.
So it's definitely gone down a little bit,
That's probably justified based on what we heard.
I still think that 484 number,
I still think we see some growth on it, but maybe I'm wrong.
Omar, can I throw it to you quickly
and just hear your thoughts on that 484.5K number?
Do you think we get over it?
Do you think there's an assistant?
Quarter over quarter growth is the sequential
was the number that I was looking for.
Or do you think based on what we saw here,
are you a little less confident in that?
Also given that Q1 is historically pretty difficult
I do think we're going to see sequential growth.
Personally, there is a chance.
You could see a sequential decline given the seasonality,
they have been able to deliver sequential growth.
And I think we'll see the same in this quarter as well.
You have some new product introductions,
like a new Model 3 in North America,
which they're saying is going to take a little bit longer
to ramp due to the manufacturing complexity.
So that'll probably be a smaller number of units.
But I think that given the pricing,
the lack of other affordable options in the market
and demand for FSD will drive them
to a sequential growth over Q4.
I'm going to jump in for a second right here
because I had another question for Tarek actually.
And I appreciate everyone that DMs me,
I got this all out to you
because there's going to be more markets
that continue to go up here.
So if you're trying to get an educated view
of what the public thinks is happening here
and where big money is actually going,
I encourage you one more time,
and I promise I will shut up,
But if you go to the top of the space,
both on desktop and on mobile,
it should allow you to see this.
In the top of the space, there's a tweet pinned,
and that has the market for the...
Ooh, wow, it just dropped.
Live on my screen, I just watched that drop to 467.ak.
So this is in real time right now
based on money coming in, market makers showing
where Tesla deliveries will hit this quarter.
There's more Tesla ones that are going to continue
So I do encourage people to check it out.
And if you're trying to find it,
literally just go right to that.
It's retweeted on a bunch of timelines,
my timeline, Sawyer's, Omar's, Evan's, Stocktalk.
So you can find it on any of these
to get a good idea of exactly what's happening here
and the data that we're looking at.
But super cool that it continues to update in real time
And Forkast is ahead of this.
He always loves trading these markets
and has a really good feel for it as well.
But, Tarek, I was curious.
You said the market makers are making this happen.
Who's market making this?
Yeah, I mean, I think there's a few market makers.
I think of it as some trading firms or hedge funds
They're usually on the smaller side.
There's a few big ones coming live this year.
But it's also a lot of market participants
because we put up the markets.
I think usually market participants
take a little bit of time to price
and they're probably updating their scripts
and just looking at what things are looking at.
And as you saw, I think the prices are up now.
Yeah, it seems like the market thinks that...
It's a 65, 70% chance that the 460 number
is going to be hit, which is interesting.
And definitely higher than 440,
it seems like that's what the market is thinking.
But yeah, there was a very, very sharp drop
literally like a few minutes ago in expectations.
So that was very interesting.
We'll see how that evolves.
And do you think that that's just the product
of bearishness coming off of earnings
It's interesting because there's a little bit
of a bearish feel in this conversation,
And the beauty of these markets is like a very good...
The markets do a very good job at aggregating
the overall sentiment, right?
And obviously, the Tesla stock price
should be doing a good job.
And Tesla stock price has so many other factors
that are involved that are not just purely deliveries, right?
Whereas this market that we have up there
is just about deliveries.
And so that makes a difference.
I think it's really adding the bearishness.
It just continues to intrigue me.
I mean, I'm a big file of the money person.
I wonder if we'll see this continue to fall.
Reminder, when we were initially running this space,
I mean, it got as high as 518 at one point today.
Right when we started this.
So that's a 50,000 forecast drop.
So Tesla's market's priced now for 400...
If you think Tesla will deliver more than 440K
cars, next quarter vehicles,
and Q1, the one we're currently in,
that is an 87% chance that it will get over that.
For 460K units, it's currently pricing in
a 67% chance that it's going to get over that.
And the number we started out with
got up to like 54%, and now it's down to 47%.
By the way, that is one of my favorite things here.
I'm sorry if you like it all.
No, you're good. Finish your point.
One of my favorite things, at a minimum,
you can really see what people are thinking
and get some sentiment going on.
And I think that's one of the best tools about this website
is really being able to see what people are trading in
and what real money is saying.
And then if you have a good feel for it.
I feel like a Troy Tesla-like could really come in here
and just absolutely clean up this market.
But if you're like him and you're doing all the research in it,
you can get some payout on that.
But yeah, I apologize to whoever I cut off.
I had one more question for Tarik here,
which is, these are not just someone buying and saying,
hey, I'm buying this and I'm holding it to the point.
It's consistently moving, right?
Can live trade these essentially, right?
Like if they bought in and they're up at this point,
they can go ahead and they can sell that contract, right?
Yeah, yeah, no, it's pretty, it's live trading.
So it's literally people are trading it like a stock
or an option, however you like to think about it.
That people are trading this thing,
literally like a stock trades, you know,
so they're entering an analogy you can buy
and then you can sell your position.
The thing I was looking at that was really interesting.
So more than 460,000 right now is priced at 68 cents.
So you can get a 42, sorry, 32 cents return out of buying this one.
I feel like this one might be a little bit under priced.
I mean, who knows, but it feels under priced to me
and you can get like a very clean, close to 40% return on your money.
If, you know, deliveries are about 460,000,
which seems to be that the market is already pricing that in.
So it feels like a very, very kind of cheap bond right now,
which I was thinking about.
And then obviously the other bond that's paying out,
you know, close to 10% right now, the 440 or more,
you know, I think of these as bonds
because you're buying something that's, you know,
pretty much going to happen.
And this one is paying like a 12% return
or 20% really the right way to think about it.
So that was interesting to see.
So if people really think that, you know,
at least it's going to be higher than 460, you know,
seems like there's quite a bit of sort of, you know,
juice up in this market right now.
Sawyer, what's your thoughts for the deliveries next number,
next number, next quarter?
Are you feeling a little bit less confident about that 484K number,
a little bit of a growth quarter over quarter,
or do you really kind of still feel how we were feeling before this?
And I'd love to hear your thoughts on that 460K and 440K.
Do you think those are locks?
I wouldn't say my view has changed on Q1.
Even though we still have the Model 3 ramping up in Fremont,
it was sort of the opposite in Q4, right?
Whereas like the Model 3, it was ramping up in Shanghai,
but they're much better over there ramping up things.
Fremont's sort of a mass layout-wise.
I still don't expect over 500 for this quarter.
I am still at, you know, anywhere from like 480 to 5,
somewhere in between there, that'd be my guess.
But long term, it's not really going to matter, right?
I think the most, probably the most notable thing,
Tesla said this entire earnings deck,
was that our vehicle volume growth rate
may be notably lower than the growth rate achieved in 2023.
So basically, their growth rate in 2023 was 38%, I think.
So if there was exactly the same this year,
it'd be roughly 2.5 million, I think.
But it's not going to be that.
It's going to be, they said, notably lower.
So we can probably assume like 2.1 or something like that,
maybe even lower, who knows.
I think we should keep our expectations low,
Yeah, I mean, I don't think that's really a surprise.
I think we're maybe looking at more of a 20% growth here.
But the emphasis for volume growth is really going to be on
when they can get that next-gen vehicle out.
They did call that out in the deck.
This is really going to be a transition year.
I think if they can squeeze an additional, you know,
10, 20, maybe 30% out of the Model 3 and Y, that's fantastic.
But in terms of really staying on the long-term guidance
for growth, they're going to need that next-gen vehicle
that's at a significantly lower price than the Model 3 and Y.
And I think this should allow them to then refocus the 3 and Y upmarket.
While we're continuing here,
I would love to just also give a really quick shout-out
to all our amazing speakers up here.
You guys should all be checking each and every single one of them out,
We really appreciate Tariq and the Tesla Talk account
for coming up here and co-hosting this one,
two accounts that you definitely need to be following.
And then we got Omar, we got Brad, we got Penny,
we got Sawyer, we got Stocktalk, Wolf, and so many others.
And we even got a lot of really great people down below listening,
a TSCR, a Frank, a Kevin, a Michael, a History and Memes,
one of my favorite accounts on this website as well,
So this is a fantastic space.
History and Memes gracing us with the presence.
That's probably why I waste a good hour a day.
My life is, those videos just catch me.
Throw up some Tesla videos today.
I'd love to see some of those.
But yeah, Evan, you're totally right.
This is the crew up here for people that are wanting to learn more
about stocks, learn more about Tesla,
learn more about all these different pieces.
I mean, you just really can't go wrong.
And obviously, Sawyer, Omar, really locked it and tied in
and just next-level crew with everybody that's up here.
So doubling down on what you said, Evan,
we're going to continue running these,
and we do these every weekday as well, 3 to 5 p.m. Eastern,
and we're about to get into the thick of earnings season.
So there's a lot of exciting pieces coming up.
We're in it, we're in it.
We're in the thick of it.
We're in the thick of it.
Can I add a note super quick, guys?
I appreciate the thumbnail you shared about Don and Edwards,
the best pouch football running back in the world today.
But I'm getting back to the topic
and not talking about Michigan football.
So solar deployed megawatt hours or just megawatts,
I wanted to point that out and highlight it
that we're both extremely cyclical,
but that are most heavily impacted by higher interest rates
and just making deployments wildly more expensive,
continue to shrink pretty aggressively quarter over quarter.
Not saying this, really, even for Tesla's sake,
just because, I mean, it's not the most important part
of the business right now.
It hopefully will become more important.
But for all these other residential
and commercial solar players,
this is a decent read-through for how they're going to look
And I think this is just telling you times are still very tough
for that sector, understandably so.
Can we bring it back to you on that one?
I think this goes back to the question that Penny
was talking about earlier.
And I know we talked about it a little bit
around the market is starting to slowly move away
from pricing in a March rate cut.
And we're slowly in the May one
and we'll see how that keeps shifting.
Do we end up thinking that's a good or bad thing for Tesla
and good because, you know, cars are an expensive purchase
and they tend to be leased, although majority of Teslas aren't.
But still, interest rates have a very big effect
on massive purchases and there's no way around
that cars are a big purchase for people.
Not quite at home, but still very expensive.
But on the other hand of it,
every single car company in this industry
is dealing with that right now.
And we know Tesla's game plan, which was laid out to us
live on these spaces in December of last year,
what is kind of around in this type of environment
they would be willing to bring their prices down
their ultimate goal is full self-driving
the AI aspect of it, get all that data
and really come out of this a stronger company.
Do you see rate cuts, rates staying where they are?
Although we might hear Elon Musk a little bit upset about it,
do we think that's a net positive
as it puts some of the other companies
who are at the same footing at a disadvantage?
Yeah, I mean, look, I'll put this really simply.
I mean, yeah, their cars are rate-sensitive products.
So yeah, the sooner rates come down,
the better it is for Tesla.
But, you know, the conversation,
this was something else that got brought up last year.
This idea of like, okay, making this assumption
that FSD will eventually be solved,
which obviously if you're a shareholder of the company,
I get why you would want to make that assumption.
But when you make that assumption and then say,
you know, that means that we have to deploy
as many cars as possible before that juncture.
I don't agree with that logic necessarily.
I think the cars will sell themselves, frankly,
if FSD is achieved in a way
where it could be used completely without intervention
I think once you get to that juncture,
I don't think you'll need to have volume deployment in place
That problem, I think, will solve itself.
So that's my view on that argument.
But as volume growth as a whole, look,
I mean, I think you can't expect the company
to grow 50% on volume growth in perpetuity anyway.
Even if this year was different,
and let's say they were closer in line
to like 38 or 40% this year,
I mean, eventually that buck is going to stop, right?
And so I think any common sense Tesla investor
who was forward looking would say,
look, once they're selling 10 million cars a year,
are you still going to expect perpetuity
There's only so many cars that can be sold in the world.
And so that's why I think the forward looking investors
should be asking themselves,
when is the product mix going to change
to a more software focused product mix?
And the answer to that question is whenever FSD comes out.
In the meantime, this is a simple matter
of trying to find a trough for margins,
trying to find a bottom for margins,
slowly revamping margins,
both through lowering COGS and just stabilizing prices.
And that'll take care of itself for the car business
in light of the rate environment.
But outside of that conversation,
if you want to look beyond the car business,
which I think frankly you have to look beyond the car business
if you want to justify the valuation of the company.
And this has always been my view.
I mean, this is my view for quite some time now.
I care very little about the car business, frankly.
I think the car business is much less relevant.
The car business will do fine.
I think it'll continue to post growth.
I think they'll continue to sell more and more EVs every year.
The percentage of that growth is debatable.
Some years it may be like this year where it's closer to 20.
Some years maybe be like last year where it's 40.
Some years may even be like 2019 or 2020 where it's 50.
That's one conversation about the business.
And the people who are now looking at Tesla and saying,
well, doesn't this prove?
Don't the developments last six months prove this is a car business?
I think that's a silly take because the reality is
is they still have a very promising software business
that may or may not live up to the expectations it has.
And they have a very promising energy business
which is frankly living up to the expectations thus far
and probably has a better runway for growth.
Even in that little remark that Sawyer cited, right?
we expect the energy business to continue to outpace growth
They said that last year as well.
They said that the year before as well, I believe.
So if that can continue to ramp and the energy business can go from
what did it do this quarter?
If it can go from that to $30, $40, $50 billion in revenue
in short order, that's promising.
But to me, my eyes are laser focused on software.
I'm less concerned about unit growth and how we get there.
And I think at the end of the day,
that story about pricing and volume growth
will be dependent on the broader rate environment.
And when rates are back at 3%,
I think people will stop talking about the volume growth story.
I think it'll become a non-issue all over again
when rates are back at 3% in my view.
So yeah, that's kind of my view on that whole topic.
I mean, the fact that the stock's going down like 2.4%
right now after hours, it indicates that
how low the expectations were heading into this report.
Having said that, usually the stock reacts more
to when the earnings call actually starts.
So we'll see what Elon says,
and that'll probably dictate what happens the rest of the week.
Sawyer, do you think he's going to come out
He seems like he's in a good mood lately.
I think things at X are improving
compared to the last call.
I think he's excited about the AI efforts at Tesla, V12.
I mean, it's kind of hard not to be excited about it.
Also, I want to call out a tweet.
I mean, it's kind of hard not to be excited about it.
Also, I want to call out a tweet.
Gene Munster wrote, he said,
the critical metric auto gross margin excluding regulatory credits
came in at 17% compared to the street at 17.3%.
While this missed the street,
it marks the end of four consecutive quarters of margin decline,
up from 16.3% in third quarter.
Overall, this is a positive.
That is very interesting.
I would have expected it to continue going down
just given the Cybertruck starting to ramp.
I guess maybe it didn't have a significant impact
just given how new it was.
I would have expected to see that COGS pick up a little bit as well,
but I guess it might be the same situation.
I think Tesla does have some factory shutdowns in Q3
that may have weighed a little heavily.
That could be part of it, as well as declining COGS, obviously.
You know, Omar, I think Elon got in a good amount of gaming this quarter.
I think maybe that calmed the stress levels.
If you look, his last reply was on a gaming tweet.
Maybe he'll come out a little bit happier for this one.
He can game and work. What a cool type.
He's going to be like the main character in Ballers
who is going to quit the NFL to become a full-time gamer.
Elon's like, yeah, I don't need 100 billion.
I'll just game full-time.
Somehow he's managing both of them.
I know Tarek has to jump here in a minute,
but we're going to keep this open.
We are going to run through the Tesla call.
Tesla call starts in about 40 minutes, a little bit less than that.
You can just stick around, chill with us.
We've got a great panel. We have some people coming up.
We're going to play it live through here.
We're going to have more discussions.
It's going to continue to be a great time.
Again, big thank you to everybody across the board that's been up here.
Special shout out to Tarek and the team over at Colshey.
I will send you the link to the market where you can see exactly
what people are predicting is going to happen with the Tesla deliveries
this quarter, currently sitting at 468.2, but consistently moving.
Something to keep your eye on, and there's more Tesla markets going up.
Plus, you can bet on a whole bunch of other stuff if you're an investor.
Stuff around the S&P, stuff around the Q, stuff around Elon.
There's always stuff around there.
Stuff around Linda Yacarino and a bunch of others.
Tarek, did you have any other comments on the market?
I know you've got to jump off here.
Yeah, well, thanks for having me.
I think I really enjoy doing this because it's an interesting mix
when we're live commentating and seeing the earnings,
and then seeing the move in real time and how things have updated.
Now we're going to start it.
We were at a very materially different level in terms of the forecast for deliveries,
which sort of dropped meaningfully.
But yeah, I'll just say, for anyone who is down to check out the market,
I'm also on Twitter, so you can DM me any time or ping me.
We have this Tesla market on deliveries.
There's going to be a lot of Tesla markets coming up over the next few weeks,
and you can access via both the website and the app.
Thanks for having me, Wolf, and Stocks, and hopefully we'll talk soon.
I know that we also have that call sheet count down there with brands
and brands that just hit that request to speak button.
We'll get you back up on stage.
Also, Tarek, I saw that you just won't be able to talk,
but you can stick around.
Appreciate everyone that can stick around.
Again, this Tesla call is going to be a fun one, in my opinion.
I think it's going to be interesting because we always learn so many new things.
With that being said, Evan, I'll turn it back over to you.
Yeah, I pinned it one more time up in the nest above,
the link that you can go in and see.
At a minimum, this is a great thing to go in and see what sentiment is that,
what real people are putting money behind and what the Q1 deliveries will be.
If you do actually put down money, comment underneath my post.
Tell me what you did because I put down for 44,
but maybe you have something else that you're looking at.
Life's too short for the unders, my motto.
Totally not stolen from someone else.
I'm looking at this Linda Yakarino market, Sawyer Omar.
There's a 44% chance that she leaves before 2025, according to this.
Would you take the overs on that?
Would you take the unders?
How do you feel about Linda Yakarino sticking around for more than a year or two
I think she'll stick around.
I think she's a supporter of Elon, recognizes her duty under Elon.
I think she's capable of pushing aside all the bullshit,
and not getting wrapped up in media narratives or BS.
I think ex is on a really good trajectory from a growth and profit standpoint.
Hopefully this year they become profitable.
I think late last year they were in the black or something.
I can't remember exactly, but no, I think she'll stick around.
If you think she'll be there in the start of 2025,
you can get 40% gain off of that.
If you're not interested, just search Linda when you go to that link up in the
nest above, and that will show up too.
I don't know if anyone else has any other comments on that.
I do see a couple friends down below.
You guys can feel free to link to requests, and we'll get you up here.
We are, one more time, wolfs did say it.
We're going to be listening to the earnings call through this spaces,
so definitely stick around and hang out with us.
If we don't have much else, I'd love to go through some of these say.com
What these are for anyone who doesn't know, these are questions asked by
There's a couple institutional investors, but they're all voted on by people.
These are six to seven questions that we 100% know will be asked on the
I feel like I might have cut someone off there.
These are six to seven questions that we know are going to be asked in the
If you do want the chance to ask a question on the call next time, go in and
get your question in nice and early so people can upvote it.
Who knows, you might get a call, a question on there next time.
This Michael G guy has the top two, so interesting there.
Omar Sawyer, these might be coming to you.
I know you've read them a little bit, but even stock talk too.
I would love to hear your thoughts on them.
Overall, the quality of the questions, we could talk through that one.
Given that you moved to the start of the next generation compact vehicle
production to Austin, has the timeline improved so that we might see next
generation platform vehicles in 2025?
I'm going to add that question, Sawyer.
Do you think that Reuters article coming out?
Do you think those two things are linked?
No, I think those are just coincidence.
I don't think they're going to dive much into this, I'll be honest.
I think they're going to reiterate what they said on the slide deck.
They don't want to Osborne anything.
They don't want to cause any disappointment.
Like I said earlier today, I think Tesla's taking a new approach with
this product launch, waiting much closer to the start of production
That way people don't, because the Cybertruck, four years beforehand,
before the pandemic, all the inflation, they gave you a price estimate
of what they thought it would cost when it came out two years later.
And all the specs, and of course, a lot of it ended up being different.
The dual motor actually ended up being, in terms of specs, better than
But the price was still much higher.
So I think they'll wait probably, my guess is three to six months
before start of production is when they'll unveil it.
I think that's a better approach.
Can you imagine like, let's say, Apple unveiling like a phone,
I don't know, half a year or a year beforehand before it starts shipping,
like the hype would be gone and people wouldn't be as excited
to draw in maximum hype and interest.
I think it's the right thing to just unveil it pretty close to production
Although the Cybertruck is unique in that regard,
where it could sustain hype for almost a half a decade
between unveil and start of production.
But nonetheless, I think they should wait.
Yeah, that was interesting.
There is so much hype for so long around the Cybertruck,
especially the last year or so.
I've definitely noticed it building up.
And I believe the Vision Pro, what?
Did they announce that in September, October, around that time?
So I think three, four months is about the...
Yeah, those are a little different.
When you have a brand new product that not a lot of developers are on,
you want to give them a heads up and give them time to develop apps.
So that's why they unveiled that earlier.
But future iterations will likely be unveiled a week or two before delivery start.
That definitely makes a lot of sense.
We all joke about Apple getting you to buy the same iPhone every single year.
So I feel like we kind of want to take some of their psychology behind it
and use it for the other products we got.
New Tesla every single year you're getting in.
So you're buying a new 30K Tesla every year?
But maybe they'll update the charging cord a little bit.
Yeah, we'll update the charging cord,
get it to something that everyone else is using,
and then you'll all be behind it.
Little USB-C jokes, but let's swiftly move on from that one.
Omar, first of all, I did send you a DM if you want to check that,
but what's your thoughts on that question
around the moving for the production of the next generation vehicle to Austin,
and if that might change that timeline from that platform coming out in 2025?
Well, building it in Austin as opposed to building it in Mexico
is obviously going to move up the timeline
because the Austin factory actually exists.
We've been in the factory several times.
It's very nice, very large.
And the Mexico factory has not been built yet.
So I think it's clear that that is going to move up the start of production.
They said in the slide deck,
we're working to get this out as soon as possible.
I think this is a major focus for the company this year.
And yeah, it would be interesting to hear any additional color
they can give on that as a result of this question.
Awesome. Anyone else have any thoughts on this one they want to add in?
All right, going on to the second question on here also from Michael G.
This guy got two questions and they're the most of voted ones.
We've got to find out who Michael G is.
But the second question is,
what has been the barrier to ramping 4680 cells
into the multi-million cells per week rate?
And when do you expect to get there?
Let's switch up the order. Stock talk.
What's your thoughts on the 4680 cells?
Are you watching anything on this one?
Is that something you're focused on?
Nice. I agree. That was some really insightful stuff.
Sawyer, what do you think about what stock talk just said there and then in general?
I think he's having connection issues.
This is the 4680 one you said?
what's the barrier to ramping 4680 to the multi-millions per week?
And what do you think you'll get there?
Well, it's hard for me to give unique insight to that
because I'm not an engineer.
But Drew Baglino will give all the insight we probably want on the call.
He's done that for many quarters now.
He gives us a scripted update, not off the cuff.
He gives us real numbers, real yield improvements,
quarter over quarter stuff.
And I think it was this quarter or maybe next quarter
that the third and fourth line of the cyber cell,
4680 cyber cell lines were supposed to go in or be turned on.
I can't remember. I got to go back.
But he'll probably update us on that too.
Yeah, so me being a simple non-engineer,
I love when we just say simple words,
small words, get the point across,
I can understand what's happening.
But I know a lot of the really technical people do love to hear a lot.
For example, that AI day they did was certainly not for me.
It was for all those other smart people
who can really understand what's happening.
Can I just make a general comment about just sort of this year?
I think 2024 is what will separate the true long-term
Tesla investors from the short-term thinkers.
I think if you look at Tesla's short-term results
and just the auto business, things don't look that great.
But if you look at Tesla in totality and all their businesses,
whether it be the energy business, that's going great.
If you look at their progress with the Tesla bot,
with FSD12 looks really promising.
There are a lot of these businesses and next-gen vehicles
that have yet to roll out.
And we're sort of in a waiting period right now.
Martin Viega has alluded to this in the past.
We're sort of in between periods.
And often that can instill a lot of uncertainty
and doubt into people about,
Is my investment going to be okay long-term?
As someone who's been in all in on Tesla stock since 2018,
I've certainly been through many rollercoaster drops
and then there's been a lot of great times on the way back up.
But I think in general, there's still a lot to be positive about.
There's still a lot to look forward to.
And for me, I think my investment thesis
in the Tesla hasn't really changed.
I would like to see Tesla address just general EV knowledge
out there in the general public better
because I think there's a lot of misinformation out there.
And there's a notion that Tesla started $100,000 in some cases.
My brother's girlfriend asked her the other day,
what do you think my mom's Model Y starts at?
She thought it was a $100,000 car.
But you can get these things for $36,000,
including incentives in the U.S. at least.
So I think some education will go a long way.
We've seen Tesla start to tackle that.
I would like to hear in the earnings call how they continue to evolve with that,
expand that, but nonetheless, hang in there.
We've been through so many tough times as Tesla investors
for those who've been in stock for the years.
The stock was flat basically from 2014 to 2019.
Short sellers were hammering that thing.
I remember I was down like 40% at one time on my investment way back then,
but I just continued to hold.
Of course, past performance is not an indicator of future performance.
But nonetheless, I think there's still a lot to be excited about.
And I hope Elon does a good job of conveying that
rather than just focusing on the short term stuff.
We got a million people to come in and tell us
how bad the macro environment is and how all this stuff is going on.
We got only one or two can be inside Tesla
and tell us all the great stuff that we have coming forward.
So I definitely do agree.
Before I go to Penny on that question,
you did spark something that I want to ask.
How do you think where Tesla is at right now
is comparative to that 2018, 2019 timeframe?
Maybe how is it different?
Obviously, Tesla in 2013, 2014, 2015,
and had some one of those years, had some pretty big run ups
and it went sideways for a long time.
And there was a lot of underlying growth.
And this kind of mimics a little bit of what's happening now
with that massive run up in 2020 and 2021
and then a little bit more of a sideways over the last little bit.
I would just love to hear your thoughts on how the stock,
the company, how it feels compared to when you were first getting into it.
If there's some comparisons, some very big things that are different,
just would love to hear your thoughts.
It goes over to you, Sawyer.
Sorry, my connection was really bad on that last second half.
Yeah, so what's your thoughts on what's some similarities
and differences between the stock price,
the company itself from when you were first getting in that 2018,
2019 time period to where we're at right now.
If there's any similarities you're seeing in maybe the community,
how it's feeling, some of the underlying company stuff.
I think when I went in all in in 2020,
I first invested in stock in 2015, 2016, went all in in 2018.
Back then, the retail shareholder community was much smaller
and it was really made up of really only true believers.
I think once 2020, 2021 came around,
this stock went up well over 1,000% if you include both years gains.
A lot of people came in for the first time during that time
and a lot of people bought on margin.
There was free money being pumped into the economy
because of the pandemic issues.
You had this expectation from a lot of people,
maybe for the first time they started investing
or they took on a lot of risks.
They just thought stocks go up forever.
Tesla went up 740% in 2020.
That was just an insane year of crazy events,
the S&P 500 inclusion, the stock split.
Tesla hit profitability that year.
I think it was more about long-term trajectory of Tesla.
I sense back then that people were more long-term focused
and as Tesla has gone on through the years,
I've noticed that people are more short-term focused.
I think a lot of people in the community now are,
I love analysts and I love their insights,
but they often do more have 6 to 12 months outlooks.
Analysts specifically that they're price targets
are often 12 month price targets.
It's not common for analysts to have,
let's say a three to five year price target
like Cathie Wood has, for example.
I think it's a lot more difficult for people
that came on in 2020, 2021
to have this more long-term focused mindset
because a lot of us waited for many years
for a lot of things to play out
for Tesla's profitability to come for volume.
In 2018 and 2019, they were on the verge of bankruptcy
and it was pretty nerve wracking as a shareholder.
The media was bashing Tesla left and right.
Short sellers were brutal back then.
Tesla has nearly 30 billion in cash on hand.
They have a really incredible product pipeline
ranging from vehicles to robots to AI related things.
So I would just say hang in there
and try to be long-term focused if you can.
There's a lot of people on X
that try to analyze the short-term stuff.
but try to just stay focused on the long-term.
I don't know if I'm seeking it out last,
but I feel like I see a Gordon Johnson left
I think Tesla Q is sort of non-existent nowadays.
Honestly, a lot of the uncertainty
and doubt often comes from inside
the Tesla community itself these days.
At least that's what it feels like.
I know there's certain people coming to mind.
I should add that this isn't to say that
Tesla and the management team at Tesla
and Elon Musk don't deserve some level of criticism
for the decisions they've made.
I think they waited too long probably to start ads.
I was against ads like a year ago,
but my eyes really opened to the benefit of those.
Once Tesla started dropping prices 25, 30 percent
volumes weren't really increasing all that materially
to what we thought they were.
It became clear to me how bad EV education was out there,
how few people know that these price cuts even existed
I think there's a lot that Tesla can do
to win back some of those doubters
and address the concerns that they have
while still keeping true to themselves
Omar, I saw you emoting a little bit during that.
Do you have any thoughts on the sentiment
and what Sawyer was talking about there?
Yeah, I think this is maybe obviously something
that you had a confluence of factors really.
You had really short sellers betting
that the company was a fraud and was going to go bankrupt.
I believe the company was the number one
most shorted stock at that time.
There were doubts that the company
would ever be able to achieve profitability.
you cannot sell an affordable EV and make money.
The company will go bankrupt, guaranteed.
Nobody was really expecting them to be profitable.
Then you had sort of the S&P 500 inclusion
happening at the same time.
You had a lot of these factors
that essentially forced people to buy the stock.
and a lot of portfolio managers
who just kind of had to throw it in
or they would have underperformed the index
Then on top of that, you had low interest rates.
You had people getting a check from the government
and opening their Robinhood account
and buying GameStop and buying Tesla,
buying these brands they knew.
You saw some very unusual things
But you don't want to confuse
the performance of a company's stock
with what's really happening at the company
and the growth that's happening in the company.
I think really when you look at EVs
and clean energy, we've just seen an incredible year.
Battery storage is growing like crazy.
It's making renewables the lowest cost way
You're seeing a tremendous growth in EVs
You're seeing a growth in the AI space
that I think is already starting to transform our economy,
transform worker productivity.
And at the end of the day,
I think this company probably has a shot
at being one of the most valuable companies in the world.
They've got one of the most successful products
really one of the most incredible growth stories
with just the growth of their EV products.
And I think that's going to continue well into the future.
I mean, this is an incredibly disruptive product
you can get a $35,000 electric vehicle,
And it's a great electric vehicle.
You're not maybe necessarily going to see it
in the stock price this quarter or that quarter's earnings.
But there's a major disruption happening
that's changing the market.
That's changing the choices consumers have available.
And people are learning about it slowly.
They're showing their friends.
So I agree with Sawyer that
while things don't look so great right now,
you don't want that to sort of blind you
from this incredible long-term story
that despite what a lot of legacy automakers say
is still looking pretty strong.
we saw them go above a million for the first time.
they probably never dip below a million again.
Kaoshi, make the market, make the market.
Yeah, Penny, though, you got your hand up?
Yeah, I got excited when Sawyer was talking
about how this is the year that separates
the long-term investors from the short-term.
I think people are used to looking at mega-cap companies,
looking at Tesla like a mega-cap company.
They're uncomfortable in this transition
and they're thinking just about the cars.
But to me, the Tesla investment thesis
has always been long-term.
It's always been about the fact
that they're getting the best talent,
they're getting the best engineers,
and they have the best product pipeline
I look at Tesla like a group of,
I mean, I don't even know
if you can call them startups anymore,
they're some of the world's best startups
and they're just hidden behind
the Tesla automotive primary business.
We talk about Autopilot, FSD.
We talk about the different giga factories
that are going to be being made.
We talk about the Cybertruck ramp
and the upcoming robotaxi and $25,000 car.
My sense is that Tesla can only be looked at
like a startup if you're really understanding the story.
And I look forward to that playing out
over the next couple of years.
I'm not so sure what we see in 2024
although I also wouldn't be shocked at all
if Optimus, the thing that I'm most bullish about,
surprises people this year.
I think people aren't expecting at all
for any useful application of Optimus this year
but given the demos and the acceleration
of the progress that we're seeing
when they're just dropping random videos
of super impressive things like folding laundry
without bringing a ton of attention to it
other than just posting a video,
it seems to me like that's moving really fast.
I look forward to what happens in 2024
Tesla has a lot to juggle this year.
They have more new product launches and ramps in 2024
than they've had in any year in their history.
they'll have the Cybertruck truly reaching volume output
to likely launch the refreshed Model Y.
I think that hopefully the next-gen car
Tesla Semi will schedule it on track
to hit volume for start volume production later this year.
And then you'll have Tesla's Shanghai Megapack factory
coming online towards the end of this year.
So there's a lot of exciting stuff happening
but we're sort of in a waiting period for that to play out.
a lot of these things are going to be material
to Tesla's not only revenue growth,
but earnings and profit growth, too.
I do just want to quickly reiterate one more time,
make sure you're following the amazing speakers up here.
Everyone is super fantastic.
Make sure you're following the co-hosts, especially.
We really appreciate Tarek for coming on
and sharing so much with Koushi.
And then the Tesla Talk account is a fantastic weekly spaces
hosted by Omar, Sawyer, and Stocktalk.
Really love listening to it every single week.
So if you enjoy this specific type of conversation,
you're going to be wanting to follow that Tesla Talk account.
And then also this account hosting,
we just host general Market Live conversations every single week.
So a lot of really great people
and a lot of the people kind of making all of them possible
So follow everyone, appreciate everyone.
And yeah, Penny, your points there
do kind of lead into the next say.com question,
which congrats, everyone.
We went two hours and 18 minutes
and really didn't bring up this whole,
it was maybe brought up once
around the 25% voting shares and that whole thing.
So Sawyer, I'm going to lay it on you.
The question is from Adam W.
be concerned that Elon has stated
he's uncomfortable expanding AI and robotics at Tesla
if he doesn't have 25% voting.
I think, so a few things.
I think Elon will reiterate his commitment to Tesla
and that this specific ask is just about him
having more voting control
rather than him wanting more money.
I think a lot of people feel like
Elon has lost some focus towards Tesla.
Just because you see more tweets than you did
a few months ago from him
doesn't necessarily mean he's spending hours more on X
I don't think he can really expand much
on what they might offer or what he might want
because the Delaware case isn't over yet.
So it doesn't really make sense for them to speculate
on what they could offer him.
But I think he can at least reiterate that
he's committed to Tesla long-term,
but he does want more control.
And maybe he'll go into more depth
about why he wants that control
and specifically what he's concerned about.
Omar, I know it's been the big topic going on
and I heard your thoughts on it a little bit,
but would love to hear what you're thinking on.
So you're talking about there and then in general.
Yeah, I think a lot of people did take his comments the wrong way.
I've seen interpretations ranging from
he's leaving Tesla to he's taking FSD and Optimus
and starting a different company.
So I'm sure it'll come up at some point
if he could just sort of clarify what he meant,
reassure investors that he's committed to Tesla.
I think that would be sort of a bare minimum.
But I'm also just interested to get some more color
on what exactly is motivating his comments
and any thoughts he has on the next call
I think the previous compensation plan
was a huge success for shareholders
and I'm broadly supportive of a new plan
that has similar milestones
where he's granted, for example,
equity or incentive stock options
or whatever meets that objective,
contingent on the company meeting
certain market cap and operational milestones.
I would expect market cap targets
one of the largest companies in the world.
Maybe a revenue target of
$1 trillion for the top tranche to vest
really sort of out there.
This was what they did when they set
a $650 billion target at a time
when I think Tesla was trading between $30 to $60 billion.
Very few people thought that was possible,
but now even with a major correction in the stock,
they've still been trading above that level.
I'm not in the camp of people that think,
well, Elon made so much money
in the last compensation package,
he's worth a couple hundred billion dollars.
He shouldn't get any more money.
I don't care how rich you are,
and if you work for a public company
as a CEO, your incentives should align with shareholders
and usually that's in the form of options,
which gives them more money.
I don't see a way that he could only get control,
stronger control, without giving him more money
unless they create that dual-class share structure,
which based on what Elon says
doesn't sound doable post-IPO.
Just in general, I think as long as
if we're going to give Elon another compensation package
and it would likely be a record compensation package,
we should give him unprecedented market cap milestones
within that compensation package.
He only does well if we as shareholders do well,
just like the previous pay package.
In addition to that, he should be required
to hold those shares for a certain period of time.
For the 2018 compensation package,
he's required to hold those shares for five years.
He has about 300 million options
that he hasn't exercised yet.
He hasn't told 2028 to do so.
If he were to exercise those net of taxes,
his total Tesla ownership
would probably be around 19% or 20%,
so that's a roughly 5% gap
that he would need to fill within his new compensation package.
If you account for a dilution,
maybe it's a little bit more than that.
In general, I am supportive of him
getting a new compensation package
and aligning his incentives with shareholder interests.
and I'm excited for this question to be asked
and hopefully answered on the call.
I definitely think, just given the timing
of when he released that two, three weeks ago or so,
I would be shocked if there isn't something around it.
Now, obviously, we know this question will be asked,
For those who don't know,
we got about seven minutes
until that earnings call starts.
We're going to have a crystal clear copy,
courtesy of Omar and William, my boy.
So stick around with us as we listen to the call,
and we can all hang out and listen together,
and we're going to talk through it a little bit after.
Yeah, let's go ahead and give that system a quick test.
Let's play this YouTube video.
a show dedicated to enthusiasts
of the global automotive industry.
Are you in like a different room or something,
or what's happening there?
I'm just piping it directly through the computer,
so it's not passing through physical air.
just going from the browser directly into the space.
If I fart or something during the earnings call,
you're not going to hear it.
So are you saying you fart a lot during these earnings calls, Omar?
The world will never know.
I've listened to you play some of them,
you know, you can kind of sometimes hear a little bit of typing,
a little bit of chip-eating.
Dude, those chips packages are so loud,
and I love me some big plays.
Big plays are objectively the best chip brand out there,
but we'll swiftly move on from that one.
I know we got that Tesla Talk account.
Oh, Penny with the thumbs down.
I know we got that Tesla Talk account up here, though,
and I just want to give you guys a second to just give it a quick shout out.
It's all three of you guys, Sawyer, Omar, Stock Talk.
I love to listen to it every week.
Was this kind of past couple hours a good example
of some of the stuff that we might expect
and why should people go and follow that?
We just talked about anything that's happened the past week
in the Tesla space, Elon, Moskonomy space, and SpaceX and whatnot.
And we won't spam you guys with any posts.
We just post out the link to our spaces, and that's it.
Make sure you're following that account that's up here as a co-host.
I love to listen to it every single week,
and I think we got about, what, 3,400 people on you?
Or else we're not going to listen to the earnings call.
10 minutes and 20 seconds away from the earnings call.
This is the moment we've all been waiting for.
The stock is trading at $200.50.
If Elon does a good job, we stay above 200.
If he ends up talking about robots too much, then 100s it is.
The Tesla Talk account is at 3,400 followers right now,
so we will listen to the call.
But Omar, you sparked something.
Ooh, I see we got a Mr. Grant Cardone coming up as well.
Give me an over and under.
Are we going to be at over or under 200
when we open trading tomorrow?
That is basically where we are at right now.
I'm going to say the over.
Omar, throw the speculation hat on.
People do seem to really like that 200 level.
I could see it dipping below, but I think it is a pretty strong glove.
Well, I don't think it'll stay below there for too long, honestly.
You have a lot of excitement right now with some of the things
that are happening, these new product introductions, FSD.
I think that's going to spur a lot of excitement
from especially the retail investor community.
Sawyer, give us the over, the under.
Obviously, we're not holding anyone to this.
Put your speculation pure fun.
You think we open over or under 200 tomorrow, current level?
I don't remember the last time Elon did an earnings call,
we didn't drop, so I'll just take the under, I guess.
The last three calls, we've seen a 10% drop all after the call,
so it was doing fine until the call started.
9.3, 9.7, that kind of thing.
Everybody's developed this super bearish expectation
around the call because of what's happened the last three quarters.
Maybe something different will happen.
That's the kind of thing about the market.
When everyone starts expecting something to happen,
that kind of opens the door for a surprise.
Has Tesla posted directly on their X account?
I know it's on YouTube already.
A little bit here, by the way, we just gave up 200.
By the way, my vote is under.
I want to buy more Tesla, and I don't want to buy it above 200.
I have not seen that account, that tweet come out,
or that post come out, Sawyer.
180, I'll take it, I'll take it.
Any thoughts over under 200 open tomorrow?
Oh, man, no cop-out answers.
You know what, just to be realistic here,
I think it was a tough running, I'll go under.
I'm glad it took me over, get some confidence.
Who would have thought in this crowd I'm the over guy?
Okay, but yeah, once Omar hears that,
we will definitely be listening to it,
and I'm looking forward to it.
The stock's getting worried about this call, it looks like.
Some of the other questions you should hear,
what is your expectations for automotive gross margin,
excluding regulatory credits for the full year,
that one should get answered.
Does the company anticipate a 50% volume cow guard
to be realized in either 2024 or 2025?
They kind of answered that one already.
The call should be going for an hour.
We're going to be listening to it live in here,
and I hope everyone's following the speakers.
Throughout it, we'll probably have some discussion
after on kind of summarizing everything,
Jeez, we're giving it a good setup
that if he says anything good,
it could be going higher.
Sometimes they are fashionably late from time to time
on these earnings calls as well.
So let's hope that doesn't happen here.
I would say 190 is a key area of support.
Used to be support, turned into resistance,
should turn into support again, hopefully.
I appreciate you joining in, Kevin, as well.
You might get interrupted,
so I might be setting you up for a shitty thing here,
but you have any thoughts or anything you want to get in there
about the conversation we've been having?
the market's actually probably priced in a lot of this stuff already.
I would have expected a little bit more of a drop
post the earnings announcement.
Yes, the conference call can be a little bit volatile,
but based on the numbers,
I would have suspected that we would have dropped
a lot lower than the market's pricing in,
and there was a lot of call flow at around the 220
buying in small increments, but over the day.
So I know that there is put flow,
but there were some call buyers there looking for long shots.
Let's see if we see a turnaround.
Yep, we are still waiting on the music.
We got William, we got Omar,
we got everyone listening,
and the second we start to hear stuff,
I am shocked that they don't do these earnings calls on Spaces.
I am really shocked that it is not on the Tesla account
or anything like that in here.
There is a lot of arcane SEC compliance things.
You know how everyone uses that same website?
But we have done the other one for earnings calls.
They all use the same crappy website.
Q4 was the one I was talking about.
But we have done an earnings call on Spaces before.
It is possible. It is legal, too.
By the way, Evan, I don't know if you saw this,
but it is definitely legal and everything,
I don't know. I am weird.
I Googled my name every here and there,
and I saw that there was an SEC website.
Do you Google your name every day?
Probably once every two weeks.
I am just messing with you.
And so I saw an SEC website came up,
and it was from the RCI earnings call that we did on Spaces,
and me and Mark Moran have her name in an SEC filing somewhere
Interesting time. So it is possible.
I am surprised there is an IR business going on.
Like we said, earnings call is supposed to be starting right now.
They are second or too late, but the second it is up here,
we will tune into that one.
You can see the music going on in the background.
I don't know if you hear it or not.
All right. And now we wait.
Some more of those say.com questions, though.
These are questions from retail and institutional investors
that we know are going to be asked normally the first six or seven.
Some other ones that we didn't read off was,
when will Tesla start construction on the Giga Nevada expansion
in Giga Mexico, and when can we expect each of these
to produce their first units or first products such as 4680?
If you need to pass a little time.
No. And has there been any progress made
with an FSD licensing agreement with another company?
Oh, hitting them with the Jeopardy theme song?
Oh, yeah. Think music as they call it.
Hey, can I ask a question real quick while we wait?
So if Elon, I mean, somebody brought up the threat
of Elon leaving and taking FSD,
I don't think that would even be possible, right?
I mean, that's still licensed under Tesla.
And I'm probably sure that their model is also probably patented.
And so I don't know if that's like a real thing,
to say the least, but one of the kind of get some thoughts
from Omar and everybody else,
if that's actually a real possibility that he could take some of that type.
That's what I was thinking.
Yeah. I mean, I think like my point is really
that there is a lot of misconceptions from people.
Obviously, he can't take those technologies.
Those are assets of Tesla,
but a lot of people were sort of confused by the comments.
So any clarification he could make, I think,
would help assure people of his commitment.
If our result were an article about KPM Central Time
and the update that we published at the same link as this webcast.
During this call, we will discuss our business outlook
and make forward-looking statements.
These comments are based on our predictions and expectations as of today.
Actual events or results could differ materially
due to a number of risks and uncertainties,
including those mentioned in our most recent filings with the SEC.
During the question and answer portion of today's call,
please limit yourself to one question and one follow-up.
Please use the raise time button to join the question queue.
Before we come into Q&A, we want to take some opening remarks.
So the Tesla team did an incredible job in 2023.
We achieved record production and deliveries of over 1.8 million vehicles
in line with our official guidance.
And in Q4, we're producing vehicles at an annualized run rate
of almost 2 million cars a year.
This was really a phenomenal achievement.
Looking at just the three-month factory alone,
In fact, it's the highest output of automotive plant in North America.
And people often surprised that the highest output car factory in North America
is in the San Francisco Bay area.
It's a little counterintuitive, Babs.
And it's really had an incredibly positive impact on that entire area.
What would have been a rundown strip wall is the highest productivity car plant
It was derelict when we got it.
And now it's the most productive plant in this entire part of the world.
And it's enriched the community in so many different ways.
So I'm super proud of the people that work there.
Model Y became the best selling vehicle globally, as predicted.
The best selling vehicle of any kind, not just electric vehicles,
with over 1.2 million units delivered.
The energy storage business delivered nearly 15 gigawatt hours of batteries in 2023
compared to 6.5 gigawatt hours the year before.
So tremendous year-over-year growth.
And yeah, I think we'll continue to see very strong growth in storage,
I said for many years that the storage business would grow much faster
than the car business, and it is doing that.
Free cash flow remains strong at $4.4 billion in 2023
in spite of record spending on future projects.
So we had record capex expenses, as well as record R&D.
There's a lot to look forward to in 2024.
Tesla is currently between two major growth waves.
We're focused on making sure that our next growth wave, driven by next-gen vehicle,
energy storage, full self-driving, and other projects,
is executed as well as possible.
For full self-driving, we've released version 12,
which is a complete architectural rewrite compared to prior versions.
This is end-to-end artificial intelligence.
So another bit nets, basically photons in and controls out.
And it really is quite a profound difference.
This is currently just with employees and a few customers,
but we will be rolling out to all customers in the U.S.
who request full self-driving in the weeks to come.
That's over 400,000 vehicles in North America.
So this is the first time AI is being used
not just for object perception but for path planning and vehicle controls.
We replaced 330,000 lines of C++ code with neural nets.
It's really quite remarkable.
As a side note, I think Tesla is probably the most efficient company
in the world for AI inference.
Out of necessity, we've actually had to be extremely good
at getting the most out of hardware,
because hardware 3 at this point is several years old.
So I think we're quite far ahead of any other company in the world
in terms of AI inference efficiency,
which is going to be a very important metric in the future in many arenas.
The new Model 3 is now available globally.
So we didn't update it in Model 3.
While the call looks similar, a lot of work's gone into the vehicle
to make it better in every way.
It is significantly quieter, more refined, better equipped,
has longer range, and many other improvements.
And I recommend taking it for a test drive.
If you have not driven a Model 3 in a long time,
you should really try the new one.
And we're very far along on our next-generation low-cost vehicle.
This is an earnings call, not a product announcement.
So there will no doubt be many questions that try to ask us about
But we reserve product announcements for product announcements,
But we're very excited about this,
and this is really going to be profound,
not just in its design of the vehicle itself,
but in the design of the manufacturing system.
This is a revolutionary manufacturing system significantly.
It's far more advanced than any other automotive manufacturing system
in the world, like by a significant margin.
Several years ago, I said that perhaps the most important
competitive characteristic of Tesla in the future
will be manufacturing technology,
and you will really see that come to bear with our next-gen vehicle.
The first manufacturing location for this will be at our Gigafactory
and headquarters in Orson, Texas.
And then we'll follow that up with other locations around the world.
Probably the factory we built in Mexico will be second,
and then we'll be looking to identify their location,
perhaps by the end of this year or early next,
In conclusion, we had a great year with record production,
record deliveries, and a strong pre-cash flow
in spite of a very high interest rate environment.
And we are focused on exciting new projects that will,
I think, ultimately, if we execute on all these things,
and it is very hard to do all these things,
But I do see a path where Tesla could one day be
the most valuable company in the world.
I do want to emphasize that it's not an easy path,
but a very difficult one.
But it is now in the set of possible outcomes.
And previously, I would not have thought it is
in the set of possible outcome.
And thank you again to all of our investors,
our employees, and our suppliers for a strong year,
and looking forward to a great 2024 and years to come.
And our CFO, Ray Baff, have some opening remarks as well.
Good afternoon, everyone.
As Elon mentioned, we had a record year in terms of
both production and deliveries for our auto business,
as well as record deployments in our energy business.
This was achieved despite 2023 being a challenging year
in terms of higher interest rates and higher inflation.
Big thanks to our customer for being with us
through this challenging period.
I would also like to thank the whole Tesla team
for their resolve and dedication throughout.
In terms of 2023 financials,
we ended the year with over $96 billion of revenue
and generated $4.4 billion of free cash flow to end the year
with over $29 billion of cash and investments on hand.
Our 2023 cap net income was impacted
by the recognition of one-time non-cash benefit
of $5.9 billion from the release of valuation allowance
on certain defect tax assets.
This was due to our recent history
of sustained profitability,
and is similar to several other companies
who have recently gone through a similar change
Accordingly, starting with Q1,
our book tax rate will now be more in line
with other companies in the SMT 500.
In our vehicle business, we continue to see improvements
despite us being in the early phase of Cybertruck
as well as our customers.
We have seen a lot of improvements
in our customer acquisition,
some of which are out of our control,
like the change in tariffs or local incentives,
While the teams are focused on cost reductions,
we are approaching the limits within our current platforms.
as promised, we made investments
in digital campaigns in 2023.
We fully appreciate the importance of customer education
as we are still in the customer acquisition phase.
We have been able to bring in a small number
of different companies and customers
The key to the customer development
is that the cost of our vehicles
we have been working with our customers
to bring in new customers
and educate them about the benefits
of owning a Tesla versus gas-powered vehicles.
The key among them being total cost of ownership.
This concept is mostly overlooked
for just the upfront cost.
There are two additional things I would like to mention
as it relates to the US market.
First, for customers who qualify for the IRA buyer credit,
we now offer that as a point of sale benefit for Model Y,
which means an immediate reduction of $7,500
at the time of purchase to the end customer.
Secondly, we continue to offer very attractive lease rates
for Model 3 and Y using our partner leasing program.
Note that the sales under this program
are recognized as upfront revenue
and reported within automotive sales.
Our energy storage business had another record year
with deployments more than doubling
and revenues increasing by more than 50%.
This business is poised to again surpass our auto business
in terms of growth rate in 2024.
This has been in the works for quite some time
with us laying the foundation a few years back
by building our bank of factory in April.
I would like to thank the whole Tesla energy team
for their efforts to make this a reality.
Our services and other business
also started contributing meaningfully to our results
and our fleets as our freeze goes.
As we expect the fleet based revenues
from supercharging use cars
and services to continue to increase.
For 2024, our focus is to continue growing our output,
continuing our cost reduction efforts
and increasing investments in our future growth initiatives.
Accordingly, we are currently expecting
our capital expenditure for 2024
to be in excess of 10 billion.
We believe this would be critical in helping us lay
the foundation for the next phase of the growth.
Once again, I would like to thank everybody at Tesla,
our investors and our suppliers
for being with us in this journey.
We can open it up to questions.