WEBVTT - Gerber Sees 'Very Exciting Year for Tesla'

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<v Speaker 1>This is Bloomberg Business Week with Carol Messer and Bloomberg

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<v Speaker 1>Quick Takes Tim Stinovic on Bloomberg Radio. Let's get back

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<v Speaker 1>to Tesla because the stock still under pressure in the

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<v Speaker 1>after I was down about four and a half percent.

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<v Speaker 1>Here the company out of revenue, miss some other metrics

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<v Speaker 1>and miss uh perfect voice to talk about Tesla because

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<v Speaker 1>he owns them, owns the stock. Yes, he does several Teslas.

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<v Speaker 1>I think we got. Ross Gerber, president and CEO of

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<v Speaker 1>Gerber Kawasaki Wealth and Investment Management, joins us on the

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<v Speaker 1>on the phone from Santa Monica, California. He's on Twitter

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<v Speaker 1>at Gerber Kawasaki. Ross. Good to have you with us

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<v Speaker 1>this afternoon. Thanks for taking a break from digging through

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<v Speaker 1>the twenty nine pages of earnings that we got from

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<v Speaker 1>the company. Um, what sticks out to you because we

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<v Speaker 1>got shares down about four point seven percent in the

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<v Speaker 1>after hours. Yeah, it sticks out as an amazingly good

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<v Speaker 1>quarter considering the operating environment. I was like super excited

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<v Speaker 1>to see that not only a second Ross where shares

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<v Speaker 1>her down four percent? Right now? What's so amazing hours?

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<v Speaker 1>We haven't had actually heard the conference call yet, and

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<v Speaker 1>I think what we're going to hear in the conference

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<v Speaker 1>call is that Cybertruck production. So there was a big

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<v Speaker 1>change in the in the charts that they put in

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<v Speaker 1>the release and and where they put where each vehicle

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<v Speaker 1>is in production, they change Cybertruck and Semi, so it

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<v Speaker 1>now says that Cybertruck is now tooling and Semi truck

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<v Speaker 1>is in early production. This is a massive change for

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<v Speaker 1>Tesla in their future now that they are officially announcing

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<v Speaker 1>the beginning of production of their truck business. And that's

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<v Speaker 1>what we're going to see in the conference call and

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<v Speaker 1>once the goofballs in the after hour trading here this stuff,

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<v Speaker 1>and you started thinking about numbers for Tesla when these

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<v Speaker 1>factories are at a production level where they're not eating

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<v Speaker 1>so much capital and you're looking at a very exciting

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<v Speaker 1>year for Tesla next year. Well, and you know, I'm

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<v Speaker 1>going through a live blog which is such great UM

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<v Speaker 1>analysis because it just pulls on so many different people

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<v Speaker 1>from across the Blueboard universe that covers Tesla, and it

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<v Speaker 1>says one thing that we're hoping to get a bit

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<v Speaker 1>more color on during the call. Teslas as it continues

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<v Speaker 1>to expect fifty average annual growth and vehicle deliveries over

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<v Speaker 1>a multi year horizon. That's their words, not explicitly saying

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<v Speaker 1>it will hit that target this year and are down

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<v Speaker 1>the hole saying Tesla will need a big fourth quarter

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<v Speaker 1>to hit that rate for two. What's your analysis on that? Well,

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<v Speaker 1>my analysis is that they will be around that rate

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<v Speaker 1>of return of growth UM over the long term, just

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<v Speaker 1>based off their factory growth and installation UM. I. I

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<v Speaker 1>really think it's kind of like what happens every year

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<v Speaker 1>with Tesla, where they're just a little bit shy of

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<v Speaker 1>their number, so they'll end up growing forty eight percent

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<v Speaker 1>set of fifty and everybody say, oh, look at the

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<v Speaker 1>big miss. And I'll say, can you name any company

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<v Speaker 1>growing at fifty percent that's eight hundred billion dollar company?

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<v Speaker 1>And they'll say no. And I said, there's very few

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<v Speaker 1>small companies growing at And so I think people have

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<v Speaker 1>to keep in mind this amazing growth from this company

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<v Speaker 1>that can grow fifty into this I you know, boy,

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<v Speaker 1>it's impressive when your voice goes up in octave when

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<v Speaker 1>you're talking about test, well, it's crazy. It's crazy numbers.

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<v Speaker 1>You know, I did an Apple thing. I started with

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<v Speaker 1>Apple as a kid, and I remember when the iPhone

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<v Speaker 1>came out and and everybody poopooted, or when Netflix came

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<v Speaker 1>out and everybody said, oh, they'll never get to two

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<v Speaker 1>million people and all this kind of stuff. And you're

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<v Speaker 1>seeing when Tesla started, and we started with Tesla, all

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<v Speaker 1>the naysayers will never make cars, will never make them

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<v Speaker 1>in scale, And now we're talking about can they achieve

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<v Speaker 1>fifty growth in the next five years? Every year? It's

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<v Speaker 1>like this is incredible, right, Yeah, And I should say

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<v Speaker 1>that just looking at our blog, battery supply fingered as

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<v Speaker 1>a key constraint on EVY growth. Hey, Russ, let's talk

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<v Speaker 1>a little bit about average selling price on our livelog.

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<v Speaker 1>We've got a great one going. Danni Hole, who's autos

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<v Speaker 1>reporter along with Seawan mu kain Um. She's noting that

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<v Speaker 1>Gene Munster from Loup says that average selling prices were

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<v Speaker 1>lower than expected, which could explain why they missed on revenue.

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<v Speaker 1>Are you seeing some pricing pressure give in? There is

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<v Speaker 1>so much competition or there there will be so much

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<v Speaker 1>competition for Tesla vehicles evs moving forward? No, No, I mean,

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<v Speaker 1>why do you think that was a mess there? The

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<v Speaker 1>average selling price was lower? Why is that? Um? I

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<v Speaker 1>think that First of all, I don't know if that's true.

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<v Speaker 1>I might have to do with the actual car mix,

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<v Speaker 1>because they might have sold a lot of the low

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<v Speaker 1>end cars to the to the rental That's what I

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<v Speaker 1>was thinking too. And stuff, some Model three is going

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<v Speaker 1>to them and they have to fill some of the

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<v Speaker 1>order to her hurts and stuff, you know, like you

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<v Speaker 1>can't just like not make them and those cars. I

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<v Speaker 1>think we're priced around fifty not the average selling of

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<v Speaker 1>a model wise, more like sixty five or seventy. You know. Um,

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<v Speaker 1>so you know you have to look at auto mix.

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<v Speaker 1>But once again, I think we spend a lot of

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<v Speaker 1>time looking at minutia in numbers, which I'm not saying

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<v Speaker 1>that there's no value in it. There is some value

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<v Speaker 1>in it. But you've got to look at the tree,

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<v Speaker 1>not just the leaves here. And this tree is growing

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<v Speaker 1>like amazing easingly well, and and so there's little things

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<v Speaker 1>you can nitpick out. Why don't they nit pick at

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<v Speaker 1>the three point two billion in cash flow, which is

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<v Speaker 1>up substantially from last quarter, I mean just their cash flow.

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<v Speaker 1>Look at their cash on their books going up over

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<v Speaker 1>two billion dollars, three billion dollars of cash added to

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<v Speaker 1>the books. I mean, this is a highly profitable company

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<v Speaker 1>as they grow at a very high rate. I mean

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<v Speaker 1>these are important things for investors to to really think about. Alright,

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<v Speaker 1>talk with Ross gerbera founder president and see at Gerber

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<v Speaker 1>Kawasaki Wealth on Investment Management on the phone from Santa Monica, California. Hey,

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<v Speaker 1>so help me out here. Ross. The stocks down, as

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<v Speaker 1>we said, three percent after ours, We'll see what the

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<v Speaker 1>trade is tomorrow. It is down about this year. Um.

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<v Speaker 1>Part of that, you know, let's not forget there's a

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<v Speaker 1>backdrop of Elon musk billion dollar bid to buy Twitter

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<v Speaker 1>and concerns over slowing economy, higher inflation, rising interest rates.

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<v Speaker 1>There's a lot of macro issues at play. Would you

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<v Speaker 1>be buying either in the after hours or potentially tomorrow

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<v Speaker 1>if the stock is down? Well, I never buy anything

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<v Speaker 1>in the after hours, and I caution investors to do

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<v Speaker 1>that because it's such an a liquid market. So I

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<v Speaker 1>think it's it's a dangerous thing. But we are typically

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<v Speaker 1>buyers of Tesla when the valuation reaches this level. I personally,

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<v Speaker 1>you know, have recently added to my personal Tesla position

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<v Speaker 1>in my fun g K it is you know, our

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<v Speaker 1>largest position as well. And I think for investors that

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<v Speaker 1>look at the valuation of Tesla today and it's growth rate,

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<v Speaker 1>I think that it represents a very good opportunity for

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<v Speaker 1>investors who want to buy the stock and own it

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<v Speaker 1>for the long term. Tesla has risks like all other companies,

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<v Speaker 1>but they've executed marvelously in an extremely difficult operating environment.

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<v Speaker 1>And I think as the environment gets easier next year,

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<v Speaker 1>because it will, Tesla is going to be in a

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<v Speaker 1>wonderful place. So investor investors have to think about the

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<v Speaker 1>next year or two, not the next month or two.

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<v Speaker 1>And I think if you look at Tesla from that perspective,

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<v Speaker 1>there are no other companies in the world that can compare.

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<v Speaker 1>What's interesting, though, is in the next year two we're

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<v Speaker 1>going to be seeing new EV models from four GM, Volkswagen,

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<v Speaker 1>not to mention the higher end players as well, Mercedes.

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<v Speaker 1>It's not just Tesla, right, They're not the only game

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<v Speaker 1>in town anymore. So how does Tesla compete there? And

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<v Speaker 1>I'm talking in the long term here, Ross, So there's

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<v Speaker 1>two issues in one is you're absolutely right, and there

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<v Speaker 1>are so many cool evs coming out from companies like

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<v Speaker 1>poll Star and ribby In and Ford and and many others,

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<v Speaker 1>even the Volkswagen I D four I'm seeing around, you know.

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<v Speaker 1>But what's happening is people are replacing gas cars. They

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<v Speaker 1>It has nothing to do with like, oh I'm gonna

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<v Speaker 1>buy this EV or that evy. It's it's it's that

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<v Speaker 1>they're leaving the gas cars and they're all going to

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<v Speaker 1>e vs. So every company that makes an e V

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<v Speaker 1>is going to sell the EV and it doesn't matter

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<v Speaker 1>who it is. Who's really the losy. Here are companies

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<v Speaker 1>like range Rover that don't have an EV that now

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<v Speaker 1>are competing directly with Ribby in for example, and Rivian's

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<v Speaker 1>are beautiful cars that in my mind, is really going

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<v Speaker 1>to take rain Drover's business, not Tesla's business. You see

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<v Speaker 1>what I'm saying. And then the second mode that Tesla

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<v Speaker 1>has is the software. You know, you mentioned that I

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<v Speaker 1>drive a Tesla, and I was about to say, well,

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<v Speaker 1>half the time I don't drive the Tesla. I don't

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<v Speaker 1>think you should say that. The Rossow that really drives me,

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<v Speaker 1>you know half the time now on l A city streets,

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<v Speaker 1>and so we're not far away from a real big

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<v Speaker 1>you know AI. So if I see you out on

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<v Speaker 1>the road, go the other way, Ross, So you're saying,

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<v Speaker 1>honestly truth is my wife prefers autopilot over from Yeah.

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<v Speaker 1>I think I could see that with my husband, or

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<v Speaker 1>he could see it with me, that's for sure. Russ Garbera,

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<v Speaker 1>thank you so much, President CEO G. Kawasaki Wealth and

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<v Speaker 1>Investment Management, on the phone from Santa Monica, California. Tesla

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<v Speaker 1>share still down about four percently after market