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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.

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Speaker 2: We are honored to have back with us Gene Munster,

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Speaker 2: iconic at Piper Jeffrey at deep Water. Here on Tesla, Gene,

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Speaker 2: you called it, which is a pause here to refresh?

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Speaker 2: What's the character of the pause here? For Tesla? Down

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Speaker 2: six percent in this set of headlines.

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Speaker 3: So it was a it was a soft number, and

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Speaker 3: so think about this as being sub I was talking

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Speaker 3: about being down two percent to being flatish. But in

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Speaker 3: this case we've got like a forty thousand unit miss

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Speaker 3: relative to expectations. So it's I would put this in

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Speaker 3: a category of a surprising, borderline unprecedented miss when it

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Speaker 3: comes to deliveries.

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Speaker 1: So, Gene, what do you think is going on here?

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Speaker 1: If you had to read read through.

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Speaker 3: I think it's a combination of what what's happened with

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Speaker 3: the interested I think just the broader EV market has

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Speaker 3: slowed and Tesla being all EV's, I think, has had

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Speaker 3: a profound impact. There probably was over the last couple

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Speaker 3: of years a pull forward of demand as kind of

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Speaker 3: some of the excitement around EV's. Maybe people years out

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Speaker 3: who maybe would have thought about buying a car went

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Speaker 3: thro five years decided to get one at three years

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Speaker 3: and kind of pulled some of that demand forward. So

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Speaker 3: I think that this is I mean, it's pretty clear

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Speaker 3: as EV's are in a slow period right now, and

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Speaker 3: this is worse than what I would have expected. Yep.

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Speaker 3: And I think the question comes down to is is

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Speaker 3: this a temporary pause? Is it going to be two

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Speaker 3: to three quarters or is it going to last longer?

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Speaker 1: Hey, Gene, if Matt Miller here, he would probably ask

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Speaker 1: this question, which is when does this When? Does Tesla

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Speaker 1: really need a redo on the design of the car?

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Speaker 1: We need a new version. I mean, it seems like

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Speaker 1: the big Auto comes out with the new version every four, five,

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Speaker 1: six years. We haven't had that from Tesla.

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Speaker 3: Well, the model wise do for an update, and we'll

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Speaker 3: likely get one in the next year. The Model three

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Speaker 3: just had one in the last couple of months, and

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Speaker 3: that makes these numbers even even worse because you just

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Speaker 3: had this update to Model three and so, yes, they

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Speaker 3: do not do the typical annual updates, but the vast

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Speaker 3: majority ninety plus percent of their sales right now are

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Speaker 3: Model Y and Model three, and so it is more

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Speaker 3: susceptible to these model changes. So I think that I

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Speaker 3: think the big picture is around this is just relative

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Speaker 3: to the appetite for evs from consumers, and we've seen it,

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Speaker 3: especially in the US, that that has slowed, and so

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Speaker 3: I think that that's having a bigger impact than any

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Speaker 3: sort of revisions to the model.

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Speaker 2: If you're just joining us around the world. In Shanghai

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Speaker 2: where they manufacture Tesla's Gene Munster, where this after disappointing

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Speaker 2: that numbers, Tesla just breaches a one to sixty three

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Speaker 2: down seven percent. Here monster, is there a stock price

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Speaker 2: that mister Musk has his ion? You know, I could

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Speaker 2: get the chart up here right now, but Gene, is

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Speaker 2: there an important stock price for you? Where things the

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Speaker 2: optionality for Elon Musk changes from four hundred down, we

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Speaker 2: go to one seventy five now one sixty two. How

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Speaker 2: fraught down do the facts change for Elon Musk.

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Speaker 3: So, just in terms of evaluation, where it's currently trading

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Speaker 3: the down seven percent, it's trading roughly forty times twenty

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Speaker 3: twenty five earnings, and so if we want to put

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Speaker 3: a point of where it's going to trade in line

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Speaker 3: with let's say in Nvidia for example, or Microsoft, you'd

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Speaker 3: have to be right around one hundred and forty dollars,

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Speaker 3: so still another twenty points of downside from here, you know.

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Speaker 3: So I think that there's for I think a lot

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Speaker 3: of investors, it's less about where the price goes. It's

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Speaker 3: just more about waiting this out, and who knows how

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Speaker 3: the psychology is going to weigh on shares in the

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Speaker 3: near term.

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Speaker 1: Geane, how do you think Detroit is looking at this

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Speaker 1: number in terms of how they're thinking about the push market.

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Speaker 3: I think they're related. I think that they're saying this

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Speaker 3: is a smart move that we've had by kind of

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Speaker 3: pulling back on some of the investments. So I think

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Speaker 3: from Detroit, this is today is a victory. And you know,

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Speaker 3: I don't like using war analogies in business, but this

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Speaker 3: is a battle. It's a war going on between gas

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Speaker 3: and electric here and this is definitely a victory for gas.

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Speaker 3: And I think that I think the bigger picture is

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Speaker 3: far from over.

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Speaker 2: Price discipline here is so important. Our Tesla unit sails

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Speaker 2: down because Lisa Matteo really wants to buy one, except

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Speaker 2: the prices declined, which means all the used Teslas out

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Speaker 2: there right now have cratered. That's got to be a

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Speaker 2: huge part behaviorally, this gene monster, right.

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Speaker 3: I think so. I think that you know, this used

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Speaker 3: market is showed some price to clients. Maybe that's picking

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Speaker 3: up a little bit. I think the broader macro The

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Speaker 3: two biggest forces in play here are the evs are

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Speaker 3: more expensive than traditional cars, rates are high, and then separately,

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Speaker 3: I think the excitement around VS has slowed. I think

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Speaker 3: those two are getting us to the numbers we're having.

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Speaker 2: And Paul, that's exactly what you said in the break.

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Speaker 2: I mean, I mean you've said here the heart of

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Speaker 2: the matter is EV's costs more.

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Speaker 1: Yeah, they certainly do gene any sense that you know,

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Speaker 1: when Elon Musk and company they're just rethinking any of

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Speaker 1: their short to intermediate term strategy here.

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Speaker 3: I would be shocked. I think that they have a

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Speaker 3: view about where the world is going and they're playing

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Speaker 3: towards that and would say that this is a speed bump.

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Speaker 3: And I think that if you just look at the

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Speaker 3: numbers and look at the relative stock reaction, the stock

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Speaker 3: should be down more.

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Speaker 2: Yep.

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Speaker 3: And I think the and why it's not is because

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Speaker 3: I think they're investors who are in that camp that's

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Speaker 3: personally where I'm in. The camp that I'm in is

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Speaker 3: that I think that this is ultimately going to be

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Speaker 3: It's a painful bump, but I think a bump in

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Speaker 3: the row, right.

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Speaker 2: Gean, thank you so much, thank you, thank you, thank you.

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Speaker 2: We're going to feature mister Munster on our podcast single

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Speaker 2: Best Idea Today's with deep water Acid twice there on

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Speaker 2: Tesla with this thing.