00:00 Speaker A
You and I talked yesterday, and you had three things that you were looking for. I got to admit, we got news on one of those that surprised me, the more affordable Tesla model. But how did they meet? How did the company sort of meet what you were looking for?
00:27 Speaker B
Yeah, you know that more affordable car, Tesla then revealed that that car is going to be coming into volume production in the back half of the year. So sort of confirming that the car is still happening this year. Whether we see it or not, it’s another story, but it’s going to be hitting that volume production in 2025. So that part was good. Uh, robotaxi news not that sort of in-depth. We just heard about possible expansion into new areas. They want to eventually go into California obviously. And then, but no real mention about when they’re going to take away that safety driver and things like that. But there were there were sort of kind of coy on a on future expansion for that. So a little question, a few questions there. But I think the biggest question, arguably, is that, you know, um, we’re talking about the business, the core auto business, right? And basically the CFO is saying that they’re going to have to like basically pull forward some demand here because of the expiration of the tax credit, and that might lead to a supply crimp at the end of the at the end of Q3, meaning fewer sales. And even and when Musk was talked asked about the EV tax credit, he said, quote, we’re in for a couple, a few rough quarters, he said. Probably could have a few rough quarters as as a result of this. And he said, quote, I’m not saying they will, but we could. And that really kind of hit shares in the aftermarket and during the call, and now we’re seeing it down 7%. So it’s that core auto business that that being impacted by Trump’s BBB that is really hitting the stock here right now.
03:28 Speaker A
Um it is definitely hitting the stock right now. And Josh, you know, has the faith-based story for Tesla run out of a little bit of juice here?
03:44 Josh
It feels like it, Julie, right? I mean, this is always, Tesla earnings are always kind of a story of what what story Elon Musk can tell, right? It is not ever really about necessarily what the company is doing with its core auto business. I don’t think most street analysts that we talk to are talking about the core auto business and that being a key driver of why they would have a price target in the 400s or the 500s on this stock, right? It is a story about what is to come tomorrow. And right now, what is coming tomorrow just feels pretty far out, right? And I think even when you think about robotaxis and you think about the competition that Cross has been covering pretty significantly, right? When you see Uber getting further into autonomous driving, of course you have Waymo’s already on the road in areas of the country. And I think you just sit back and and sort of say to yourself, okay, well, when is Tesla really getting into this space? This game is happening right now, and it feels like Tesla isn’t fully involved in it at this point. And then you’re just wondering in general, after the last several months of Musk back and forth with the government, if investors are maybe just getting a little bit sick of the Elon story here, and he’s just becoming a harder voice to listen to. Because there’s certainly been quarters where Tesla’s financials have not looked great, but he has come on the call and talked about robots and talked about the future and talked about things that are going to come in 5 to 10 years, and the stock is up, right? Right now the stock is not up because the near-term story continues to just be challenging.
06:03 Speaker A
Yeah, Ally, you flagged his predictions on Optimus 3, the robot, right? And the big ambitions still for how many of those things they’re going to make. But investors are not biting this time.
06:35 Ally
Yeah, it feels like Tesla is caught in the middle between the company that it is or was, which is that pure play EV powerhouse, and the company that it really wants to be, which is relying on artificial intelligence, robotaxis, robots. And like Josh was saying, that just feels very far out at this point. So investor concerns are definitely valid that in the near term, the part of the business that’s making the money, the EV business, is slowing considerably, both in the US and abroad. We have intense competition on that front. We did have the reveal of that cheaper EV model, and I agree with you, Julie, that’s something that surprised me as well. But we need that to get to market ASAP because this competition is is so intense at this point. So, for me, the bulls are really focused on the the future, the possibility here, what Tesla could be. But I think, for investors, how much patience do they have to wait to see when we start to see some monetization on that front? And according to Elon Musk, it seems like we’re going to have to wait quite a while. We don’t really have firm deadlines or targets here, and I think that murkiness is what’s creating a lot of this jittery jittery action in the market right now.
