1 00:00:00,080 --> 00:00:01,640 Speaker 1: Let's take a look at some of the stocks on 2 00:00:01,680 --> 00:00:04,360 Speaker 1: the movie alsoing alongside normal Lindon, we've been talking a 3 00:00:04,360 --> 00:00:07,800 Speaker 1: lot about Tesla delivery numbers came in weaker than expected. 4 00:00:08,039 --> 00:00:10,480 Speaker 1: Let's get the broad overview of what's happening that our 5 00:00:10,480 --> 00:00:13,560 Speaker 1: good friends at Tesla stocks down about twenty four percent. 6 00:00:13,600 --> 00:00:17,239 Speaker 1: You Todd return to Pierre Farragu, head of Global Technology 7 00:00:17,280 --> 00:00:20,160 Speaker 1: Infrastructure at New Street Research. Pierre, thanks so much for 8 00:00:20,239 --> 00:00:24,160 Speaker 1: joining us here. How do you think about these Tesla numbers? 9 00:00:24,200 --> 00:00:26,239 Speaker 1: What does it mean for the near and intermediate term 10 00:00:26,360 --> 00:00:27,560 Speaker 1: story at Tesla. 11 00:00:27,720 --> 00:00:29,520 Speaker 2: Yes, as you said, that is a bit of a 12 00:00:29,560 --> 00:00:34,080 Speaker 2: positive surprise, like people tracking very precisely deliveries in various 13 00:00:34,080 --> 00:00:37,639 Speaker 2: markets by expecting slightly lower numbers. The surprise comes from 14 00:00:37,680 --> 00:00:41,159 Speaker 2: the US. The US did is a place where it's 15 00:00:41,159 --> 00:00:43,840 Speaker 2: the most difficult to track the number of Tesla being delivered, 16 00:00:44,200 --> 00:00:48,159 Speaker 2: and the US bit beat expectations. So that's another why 17 00:00:48,240 --> 00:00:51,800 Speaker 2: coming in doing actually quite well. That's good. But then 18 00:00:52,200 --> 00:00:53,720 Speaker 2: at the end of the day you have to remember, 19 00:00:53,720 --> 00:00:56,560 Speaker 2: as the big picture, we are down thirteen percent here 20 00:00:56,600 --> 00:01:00,720 Speaker 2: on air, so we are facing a situation where Tesla 21 00:01:00,840 --> 00:01:04,399 Speaker 2: is struggling to sell cars a gross margin is in 22 00:01:04,480 --> 00:01:08,560 Speaker 2: the latins. To me, Tesla facing good demons should be 23 00:01:08,600 --> 00:01:11,560 Speaker 2: able to defend like mid mid twenties gross margin. So 24 00:01:12,520 --> 00:01:14,960 Speaker 2: we have like we are facing like a core business 25 00:01:14,959 --> 00:01:16,640 Speaker 2: and not a business that is really at a very 26 00:01:16,680 --> 00:01:19,640 Speaker 2: low point that is struggling. And so that's the difficulty. 27 00:01:19,800 --> 00:01:22,960 Speaker 2: You have, like one structural difficulty that is relatively that 28 00:01:23,000 --> 00:01:26,800 Speaker 2: we understand relatively well. It's that with their current product, 29 00:01:26,920 --> 00:01:31,319 Speaker 2: Tesla has kind of saturated its opportunity. Tesla needs lower 30 00:01:31,400 --> 00:01:34,880 Speaker 2: high points to keep growing, and that's in the plan 31 00:01:35,000 --> 00:01:37,319 Speaker 2: they're working on it. And then you have a number 32 00:01:37,319 --> 00:01:40,680 Speaker 2: of other issues. You know, electric cars are less fashionable 33 00:01:40,720 --> 00:01:43,440 Speaker 2: than they were a couple of years ago. The Tesla 34 00:01:43,520 --> 00:01:48,120 Speaker 2: brand has suffered, particularly in Europe where numbers are done 35 00:01:48,200 --> 00:01:51,880 Speaker 2: like almost forty percent year on air, and so it 36 00:01:52,000 --> 00:01:54,920 Speaker 2: is definitely it's difficult to quantify, but it is a 37 00:01:54,960 --> 00:01:59,960 Speaker 2: significant headway as well. And overall, you know, the economy 38 00:02:00,120 --> 00:02:02,880 Speaker 2: is not right the best you can imagine for. 39 00:02:04,440 --> 00:02:06,840 Speaker 3: Yeah, I mean when we look at the mag seven stocks, 40 00:02:06,840 --> 00:02:09,760 Speaker 3: we see Tesla as the primary laggard this year, down 41 00:02:09,800 --> 00:02:12,720 Speaker 3: about twenty three percent. And of course we know that 42 00:02:12,760 --> 00:02:15,799 Speaker 3: investors have really been vying for Musk's attention as he's 43 00:02:15,840 --> 00:02:18,920 Speaker 3: been really politically involved. So as we're seeing these numbers 44 00:02:18,960 --> 00:02:22,520 Speaker 3: come through, what do things like moving forward? Are these 45 00:02:22,600 --> 00:02:26,400 Speaker 3: numbers a massive impact or are the Tesla loyalists still 46 00:02:26,440 --> 00:02:29,200 Speaker 3: out there and is there some further positivity to come. 47 00:02:30,000 --> 00:02:33,359 Speaker 2: The Tesla stock has been on a royal cost. It's 48 00:02:33,440 --> 00:02:35,360 Speaker 2: like a very low performance this year, but it was 49 00:02:35,440 --> 00:02:38,679 Speaker 2: like a clear out performer last last year. And as 50 00:02:38,720 --> 00:02:41,920 Speaker 2: you say, you know, it's following, it's following, you know, 51 00:02:42,560 --> 00:02:44,920 Speaker 2: the political carrier, if I may say, of the CEO 52 00:02:45,880 --> 00:02:51,320 Speaker 2: in a musk and like this has created this situation. 53 00:02:52,080 --> 00:02:54,799 Speaker 2: Now if you look at the stock, you know, since 54 00:02:54,919 --> 00:02:58,400 Speaker 2: you know, like April first, what you see is that 55 00:02:58,560 --> 00:03:01,440 Speaker 2: what tends to really move the stock is actually the 56 00:03:01,440 --> 00:03:05,240 Speaker 2: news flow around how the company is now focused on 57 00:03:05,320 --> 00:03:10,600 Speaker 2: deploying fleets of robotaxes. They've just started that in a 58 00:03:10,639 --> 00:03:14,520 Speaker 2: couple of weeks ago, like late late last months, and 59 00:03:14,560 --> 00:03:17,120 Speaker 2: I think that's going to be the primary driver of 60 00:03:17,200 --> 00:03:20,680 Speaker 2: the stock going forward. Of course, there is a lot 61 00:03:20,720 --> 00:03:23,760 Speaker 2: of uncertainty on you know, how fast Testa is going 62 00:03:23,800 --> 00:03:26,320 Speaker 2: to be able to deploy robotaxy or even make a 63 00:03:26,360 --> 00:03:30,120 Speaker 2: profits like generate the profits out of the robot taxi fleet. 64 00:03:30,800 --> 00:03:33,600 Speaker 2: But the size of the price is so gigantic and 65 00:03:33,680 --> 00:03:35,960 Speaker 2: so much more than the hotel business that this is 66 00:03:35,960 --> 00:03:38,120 Speaker 2: probably why drives the stock going forward. 67 00:03:38,680 --> 00:03:40,640 Speaker 1: Pierre, thank you so much for joining us. Always appreciate 68 00:03:40,640 --> 00:03:43,160 Speaker 1: getting your thoughts there. Pierre fairgul He's set of Global 69 00:03:43,200 --> 00:03:46,640 Speaker 1: Technology Infrastructure at New Street Research.