1 00:00:00,120 --> 00:00:02,160 Speaker 1: Right now, we're going to do Sam Dicky from Fisher 2 00:00:02,200 --> 00:00:05,800 Speaker 1: Funds for an update on Tesler. Sam is with us, now, 3 00:00:05,840 --> 00:00:07,680 Speaker 1: Hey Sam, Hey Ran. 4 00:00:07,720 --> 00:00:08,160 Speaker 2: How's it going? 5 00:00:08,240 --> 00:00:10,560 Speaker 1: Yeah good, thank you. So shares down twenty five percent 6 00:00:10,640 --> 00:00:15,319 Speaker 1: this year, the distracted CEO. How should investors be thinking 7 00:00:15,360 --> 00:00:16,520 Speaker 1: about Tesla at the moment? 8 00:00:18,400 --> 00:00:20,000 Speaker 2: Yeah, well, I guess the first thing to think about 9 00:00:20,120 --> 00:00:24,600 Speaker 2: is it's traditional electric vehicle business. And how did it 10 00:00:24,680 --> 00:00:29,280 Speaker 2: lose its crown to China's BYD. So I guess seven 11 00:00:29,360 --> 00:00:31,880 Speaker 2: or eight years ago it used to sell two to 12 00:00:31,920 --> 00:00:36,959 Speaker 2: one to BYD electric vehicles. This year, BYD will sell 13 00:00:37,000 --> 00:00:40,319 Speaker 2: about five point two million vehicles and Teessler will sell 14 00:00:40,320 --> 00:00:44,240 Speaker 2: about one point seven, so more than three times as many. 15 00:00:44,280 --> 00:00:46,639 Speaker 2: And there's two reasons for that. The first reason is 16 00:00:47,840 --> 00:00:54,360 Speaker 2: just manufacturing expertise and scale. So Musk was always fanatical 17 00:00:54,400 --> 00:00:58,920 Speaker 2: about lowering the cost of an electric vehicle to produce, 18 00:00:59,040 --> 00:01:01,279 Speaker 2: because that would drive down the price you could sell 19 00:01:01,280 --> 00:01:03,600 Speaker 2: them at and that would lead to widespread adoption. But 20 00:01:04,440 --> 00:01:06,880 Speaker 2: if you even look at head to head in China, 21 00:01:07,000 --> 00:01:12,080 Speaker 2: so A Tesser's Shanghai gigafactory versus BYD, BYD is still 22 00:01:12,120 --> 00:01:15,240 Speaker 2: about twenty percent cheaper to produce. Per car. So that's 23 00:01:15,240 --> 00:01:17,160 Speaker 2: the first thing. The second thing is, of course brand, 24 00:01:17,240 --> 00:01:22,160 Speaker 2: AND's Tesler's brand was originally sort of super exciting, synonymous 25 00:01:22,200 --> 00:01:26,920 Speaker 2: with exceptional innovation and clean energy. Everyone wanted to have 26 00:01:26,959 --> 00:01:30,000 Speaker 2: a Tessler, and that's obviously swung sharply negatively. The brand 27 00:01:30,840 --> 00:01:35,039 Speaker 2: favorability is an all time low, and that's probably driven 28 00:01:35,080 --> 00:01:39,679 Speaker 2: by Musks often inflammatory comments, alignment and misalignment with Trump, 29 00:01:39,800 --> 00:01:43,200 Speaker 2: and plus, of course, other electric vehicle brands around the 30 00:01:43,200 --> 00:01:47,680 Speaker 2: world are really carefully building their precious brand value, whereas 31 00:01:47,720 --> 00:01:50,400 Speaker 2: Trump seems to be sort of flying by the seat 32 00:01:50,400 --> 00:01:51,120 Speaker 2: of his pants on that. 33 00:01:51,600 --> 00:01:53,880 Speaker 1: Yeah, is that How big of a problem is that 34 00:01:53,960 --> 00:01:57,920 Speaker 1: having a personal brand like Musks tied up with the 35 00:01:58,040 --> 00:02:00,120 Speaker 1: value of a company. 36 00:02:01,080 --> 00:02:03,400 Speaker 2: Well, I think it's. Yes, it's good if it goes well, 37 00:02:03,480 --> 00:02:08,519 Speaker 2: but it goes badly, and I think it's I look, normally, 38 00:02:08,680 --> 00:02:11,320 Speaker 2: any company should be bigger than one person. Musk is 39 00:02:11,360 --> 00:02:16,040 Speaker 2: obviously a genius. Here's obviously divides opinion, but he's definitely 40 00:02:16,080 --> 00:02:19,399 Speaker 2: a genius. And I think it's also that focus. Right, 41 00:02:19,480 --> 00:02:24,280 Speaker 2: So today's e CEO of Tesla, SpaceX, Neurlink, the boring 42 00:02:24,360 --> 00:02:29,240 Speaker 2: company Twitter or x xai, and he's dabbling in politics. 43 00:02:29,280 --> 00:02:33,160 Speaker 2: But when you look back at his golden run from 44 00:02:33,240 --> 00:02:35,760 Speaker 2: sort of twenty seventeen to twenty twenty one, when the 45 00:02:35,800 --> 00:02:39,519 Speaker 2: stock went up, you know, three thousand percent, he only 46 00:02:39,560 --> 00:02:41,960 Speaker 2: really had take Tesla and SpaceX. And I think that's 47 00:02:42,040 --> 00:02:44,920 Speaker 2: quite key, that divided attention of a CEO. Plus the fact, 48 00:02:44,960 --> 00:02:50,040 Speaker 2: as you said, that's his brand or his name, and 49 00:02:50,080 --> 00:02:52,720 Speaker 2: his brand is very synonymous with Tesla's brand. 50 00:02:53,400 --> 00:02:56,640 Speaker 1: What do investors do you reckon need to believe to 51 00:02:56,760 --> 00:02:58,400 Speaker 1: buy or sell the company today? 52 00:03:00,040 --> 00:03:02,920 Speaker 2: Well, that the simple mass is that the company's value 53 00:03:02,919 --> 00:03:06,119 Speaker 2: at a trillion dollars, and you know, we think the 54 00:03:06,160 --> 00:03:08,920 Speaker 2: electric vehicle business is may be worth quarter of a 55 00:03:08,960 --> 00:03:13,480 Speaker 2: trillion dollars or three hundred three hundred billion, so you know, 56 00:03:13,639 --> 00:03:15,520 Speaker 2: just to get today's share price, and you obviously want 57 00:03:15,520 --> 00:03:17,200 Speaker 2: to make a return on top of that, but just 58 00:03:17,280 --> 00:03:19,360 Speaker 2: to get today's share price, you need to believe that 59 00:03:19,400 --> 00:03:26,200 Speaker 2: the combination of robotaxis, you know, humanoids, that there's smaller 60 00:03:26,280 --> 00:03:30,400 Speaker 2: energy business and obviously Musk's genius to conjure up other 61 00:03:30,440 --> 00:03:33,160 Speaker 2: value drivers for Tesla worth at least three quarters of 62 00:03:33,160 --> 00:03:37,240 Speaker 2: a trillion dollars. And that's fine because they are quite 63 00:03:37,280 --> 00:03:39,240 Speaker 2: well positioned. But if you think about the fact that 64 00:03:39,240 --> 00:03:43,440 Speaker 2: those companies, those businesses are basically making zero earnings, you 65 00:03:43,520 --> 00:03:44,920 Speaker 2: really do need to take a leap of face. We've 66 00:03:44,920 --> 00:03:47,120 Speaker 2: set another way, the stocks trading on about one hundred 67 00:03:47,160 --> 00:03:50,920 Speaker 2: and fifty times priced to earnings, which is a standard 68 00:03:50,960 --> 00:03:55,280 Speaker 2: valuation metric, and for comparison that the US stop market 69 00:03:55,280 --> 00:03:58,640 Speaker 2: itself trading on about twenty times earning. So that's super expensive. 70 00:03:58,800 --> 00:04:02,560 Speaker 2: And to justify that huge valuation, you need a genius 71 00:04:02,640 --> 00:04:05,680 Speaker 2: that is, you know, singularly focused on your company. You 72 00:04:05,680 --> 00:04:07,560 Speaker 2: need that genius to be sleeping at the factory like 73 00:04:07,600 --> 00:04:10,480 Speaker 2: he used to be, and you need him to stop 74 00:04:10,520 --> 00:04:13,600 Speaker 2: poisoning the Tesla brand with his inflammatory tweets. 75 00:04:14,480 --> 00:04:17,080 Speaker 1: Do you think in terms of the car sales This 76 00:04:17,160 --> 00:04:20,039 Speaker 1: is not so much a market question, but do you 77 00:04:20,080 --> 00:04:24,080 Speaker 1: think that you know who owns the company actually has 78 00:04:24,279 --> 00:04:27,359 Speaker 1: out a tangible result on sales? 79 00:04:29,160 --> 00:04:32,000 Speaker 2: Yes, I think in terms of masks brand, yeah, I 80 00:04:32,040 --> 00:04:35,800 Speaker 2: do think that's the case. You know, they're shrinking this 81 00:04:35,880 --> 00:04:38,960 Speaker 2: year in terms of their sales. B WAYD is continuing 82 00:04:39,000 --> 00:04:41,880 Speaker 2: to grow. It's partly because of this cost thing. So 83 00:04:41,960 --> 00:04:44,120 Speaker 2: Tesler can't get the cost to produce down enough, so 84 00:04:44,880 --> 00:04:47,800 Speaker 2: they can't get that widespread adoption of electric vehicles because 85 00:04:47,800 --> 00:04:50,279 Speaker 2: it's just too expensive. But I do think the brand, 86 00:04:50,279 --> 00:04:53,240 Speaker 2: I mean everywhere you look, you know, the net promoter 87 00:04:53,320 --> 00:04:56,760 Speaker 2: scores and the brand favorability of plummeted over the last year, 88 00:04:57,240 --> 00:05:00,200 Speaker 2: and it's hard to believe that's just because Tesler are 89 00:05:00,400 --> 00:05:02,440 Speaker 2: a little bit too expensive. Sam. 90 00:05:02,560 --> 00:05:06,320 Speaker 1: Appreciate your analysis tonight, Sam Dicky Fisher Funds for. 91 00:05:06,360 --> 00:05:09,640 Speaker 2: More from Heather Duplessy Allen Drive. 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