Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. Let's get back
Speaker 1: to Tesla because the stock still under pressure in the
Speaker 1: after I was down about four and a half percent.
Speaker 1: Here the company out of revenue, miss some other metrics
Speaker 1: and miss uh perfect voice to talk about Tesla because
Speaker 1: he owns them, owns the stock. Yes, he does several Teslas.
Speaker 1: I think we got. Ross Gerber, president and CEO of
Speaker 1: Gerber Kawasaki Wealth and Investment Management, joins us on the
Speaker 1: on the phone from Santa Monica, California. He's on Twitter
Speaker 1: at Gerber Kawasaki. Ross. Good to have you with us
Speaker 1: this afternoon. Thanks for taking a break from digging through
Speaker 1: the twenty nine pages of earnings that we got from
Speaker 1: the company. Um, what sticks out to you because we
Speaker 1: got shares down about four point seven percent in the
Speaker 1: after hours. Yeah, it sticks out as an amazingly good
Speaker 1: quarter considering the operating environment. I was like super excited
Speaker 1: to see that not only a second Ross where shares
Speaker 1: her down four percent? Right now? What's so amazing hours?
Speaker 1: We haven't had actually heard the conference call yet, and
Speaker 1: I think what we're going to hear in the conference
Speaker 1: call is that Cybertruck production. So there was a big
Speaker 1: change in the in the charts that they put in
Speaker 1: the release and and where they put where each vehicle
Speaker 1: is in production, they change Cybertruck and Semi, so it
Speaker 1: now says that Cybertruck is now tooling and Semi truck
Speaker 1: is in early production. This is a massive change for
Speaker 1: Tesla in their future now that they are officially announcing
Speaker 1: the beginning of production of their truck business. And that's
Speaker 1: what we're going to see in the conference call and
Speaker 1: once the goofballs in the after hour trading here this stuff,
Speaker 1: and you started thinking about numbers for Tesla when these
Speaker 1: factories are at a production level where they're not eating
Speaker 1: so much capital and you're looking at a very exciting
Speaker 1: year for Tesla next year. Well, and you know, I'm
Speaker 1: going through a live blog which is such great UM
Speaker 1: analysis because it just pulls on so many different people
Speaker 1: from across the Blueboard universe that covers Tesla, and it
Speaker 1: says one thing that we're hoping to get a bit
Speaker 1: more color on during the call. Teslas as it continues
Speaker 1: to expect fifty average annual growth and vehicle deliveries over
Speaker 1: a multi year horizon. That's their words, not explicitly saying
Speaker 1: it will hit that target this year and are down
Speaker 1: the hole saying Tesla will need a big fourth quarter
Speaker 1: to hit that rate for two. What's your analysis on that? Well,
Speaker 1: my analysis is that they will be around that rate
Speaker 1: of return of growth UM over the long term, just
Speaker 1: based off their factory growth and installation UM. I. I
Speaker 1: really think it's kind of like what happens every year
Speaker 1: with Tesla, where they're just a little bit shy of
Speaker 1: their number, so they'll end up growing forty eight percent
Speaker 1: set of fifty and everybody say, oh, look at the
Speaker 1: big miss. And I'll say, can you name any company
Speaker 1: growing at fifty percent that's eight hundred billion dollar company?
Speaker 1: And they'll say no. And I said, there's very few
Speaker 1: small companies growing at And so I think people have
Speaker 1: to keep in mind this amazing growth from this company
Speaker 1: that can grow fifty into this I you know, boy,
Speaker 1: it's impressive when your voice goes up in octave when
Speaker 1: you're talking about test, well, it's crazy. It's crazy numbers.
Speaker 1: You know, I did an Apple thing. I started with
Speaker 1: Apple as a kid, and I remember when the iPhone
Speaker 1: came out and and everybody poopooted, or when Netflix came
Speaker 1: out and everybody said, oh, they'll never get to two
Speaker 1: million people and all this kind of stuff. And you're
Speaker 1: seeing when Tesla started, and we started with Tesla, all
Speaker 1: the naysayers will never make cars, will never make them
Speaker 1: in scale, And now we're talking about can they achieve
Speaker 1: fifty growth in the next five years? Every year? It's
Speaker 1: like this is incredible, right, Yeah, And I should say
Speaker 1: that just looking at our blog, battery supply fingered as
Speaker 1: a key constraint on EVY growth. Hey, Russ, let's talk
Speaker 1: a little bit about average selling price on our livelog.
Speaker 1: We've got a great one going. Danni Hole, who's autos
Speaker 1: reporter along with Seawan mu kain Um. She's noting that
Speaker 1: Gene Munster from Loup says that average selling prices were
Speaker 1: lower than expected, which could explain why they missed on revenue.
Speaker 1: Are you seeing some pricing pressure give in? There is
Speaker 1: so much competition or there there will be so much
Speaker 1: competition for Tesla vehicles evs moving forward? No, No, I mean,
Speaker 1: why do you think that was a mess there? The
Speaker 1: average selling price was lower? Why is that? Um? I
Speaker 1: think that First of all, I don't know if that's true.
Speaker 1: I might have to do with the actual car mix,
Speaker 1: because they might have sold a lot of the low
Speaker 1: end cars to the to the rental That's what I
Speaker 1: was thinking too. And stuff, some Model three is going
Speaker 1: to them and they have to fill some of the
Speaker 1: order to her hurts and stuff, you know, like you
Speaker 1: can't just like not make them and those cars. I
Speaker 1: think we're priced around fifty not the average selling of
Speaker 1: a model wise, more like sixty five or seventy. You know. Um,
Speaker 1: so you know you have to look at auto mix.
Speaker 1: But once again, I think we spend a lot of
Speaker 1: time looking at minutia in numbers, which I'm not saying
Speaker 1: that there's no value in it. There is some value
Speaker 1: in it. But you've got to look at the tree,
Speaker 1: not just the leaves here. And this tree is growing
Speaker 1: like amazing easingly well, and and so there's little things
Speaker 1: you can nitpick out. Why don't they nit pick at
Speaker 1: the three point two billion in cash flow, which is
Speaker 1: up substantially from last quarter, I mean just their cash flow.
Speaker 1: Look at their cash on their books going up over
Speaker 1: two billion dollars, three billion dollars of cash added to
Speaker 1: the books. I mean, this is a highly profitable company
Speaker 1: as they grow at a very high rate. I mean
Speaker 1: these are important things for investors to to really think about. Alright,
Speaker 1: talk with Ross gerbera founder president and see at Gerber
Speaker 1: Kawasaki Wealth on Investment Management on the phone from Santa Monica, California. Hey,
Speaker 1: so help me out here. Ross. The stocks down, as
Speaker 1: we said, three percent after ours, We'll see what the
Speaker 1: trade is tomorrow. It is down about this year. Um.
Speaker 1: Part of that, you know, let's not forget there's a
Speaker 1: backdrop of Elon musk billion dollar bid to buy Twitter
Speaker 1: and concerns over slowing economy, higher inflation, rising interest rates.
Speaker 1: There's a lot of macro issues at play. Would you
Speaker 1: be buying either in the after hours or potentially tomorrow
Speaker 1: if the stock is down? Well, I never buy anything
Speaker 1: in the after hours, and I caution investors to do
Speaker 1: that because it's such an a liquid market. So I
Speaker 1: think it's it's a dangerous thing. But we are typically
Speaker 1: buyers of Tesla when the valuation reaches this level. I personally,
Speaker 1: you know, have recently added to my personal Tesla position
Speaker 1: in my fun g K it is you know, our
Speaker 1: largest position as well. And I think for investors that
Speaker 1: look at the valuation of Tesla today and it's growth rate,
Speaker 1: I think that it represents a very good opportunity for
Speaker 1: investors who want to buy the stock and own it
Speaker 1: for the long term. Tesla has risks like all other companies,
Speaker 1: but they've executed marvelously in an extremely difficult operating environment.
Speaker 1: And I think as the environment gets easier next year,
Speaker 1: because it will, Tesla is going to be in a
Speaker 1: wonderful place. So investor investors have to think about the
Speaker 1: next year or two, not the next month or two.
Speaker 1: And I think if you look at Tesla from that perspective,
Speaker 1: there are no other companies in the world that can compare.
Speaker 1: What's interesting, though, is in the next year two we're
Speaker 1: going to be seeing new EV models from four GM, Volkswagen,
Speaker 1: not to mention the higher end players as well, Mercedes.
Speaker 1: It's not just Tesla, right, They're not the only game
Speaker 1: in town anymore. So how does Tesla compete there? And
Speaker 1: I'm talking in the long term here, Ross, So there's
Speaker 1: two issues in one is you're absolutely right, and there
Speaker 1: are so many cool evs coming out from companies like
Speaker 1: poll Star and ribby In and Ford and and many others,
Speaker 1: even the Volkswagen I D four I'm seeing around, you know.
Speaker 1: But what's happening is people are replacing gas cars. They
Speaker 1: It has nothing to do with like, oh I'm gonna
Speaker 1: buy this EV or that evy. It's it's it's that
Speaker 1: they're leaving the gas cars and they're all going to
Speaker 1: e vs. So every company that makes an e V
Speaker 1: is going to sell the EV and it doesn't matter
Speaker 1: who it is. Who's really the losy. Here are companies
Speaker 1: like range Rover that don't have an EV that now
Speaker 1: are competing directly with Ribby in for example, and Rivian's
Speaker 1: are beautiful cars that in my mind, is really going
Speaker 1: to take rain Drover's business, not Tesla's business. You see
Speaker 1: what I'm saying. And then the second mode that Tesla
Speaker 1: has is the software. You know, you mentioned that I
Speaker 1: drive a Tesla, and I was about to say, well,
Speaker 1: half the time I don't drive the Tesla. I don't
Speaker 1: think you should say that. The Rossow that really drives me,
Speaker 1: you know half the time now on l A city streets,
Speaker 1: and so we're not far away from a real big
Speaker 1: you know AI. So if I see you out on
Speaker 1: the road, go the other way, Ross, So you're saying,
Speaker 1: honestly truth is my wife prefers autopilot over from Yeah.
Speaker 1: I think I could see that with my husband, or
Speaker 1: he could see it with me, that's for sure. Russ Garbera,
Speaker 1: thank you so much, President CEO G. Kawasaki Wealth and
Speaker 1: Investment Management, on the phone from Santa Monica, California. Tesla
Speaker 1: share still down about four percently after market