WEBVTT - Deep Dive: Tesla Sales Slow

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<v Speaker 1>Let's take a look at some of the stocks on

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<v Speaker 1>the movie alsoing alongside normal Lindon, we've been talking a

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<v Speaker 1>lot about Tesla delivery numbers came in weaker than expected.

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<v Speaker 1>Let's get the broad overview of what's happening that our

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<v Speaker 1>good friends at Tesla stocks down about twenty four percent.

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<v Speaker 1>You Todd return to Pierre Farragu, head of Global Technology

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<v Speaker 1>Infrastructure at New Street Research. Pierre, thanks so much for

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<v Speaker 1>joining us here. How do you think about these Tesla numbers?

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<v Speaker 1>What does it mean for the near and intermediate term

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<v Speaker 1>story at Tesla.

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<v Speaker 2>Yes, as you said, that is a bit of a

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<v Speaker 2>positive surprise, like people tracking very precisely deliveries in various

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<v Speaker 2>markets by expecting slightly lower numbers. The surprise comes from

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<v Speaker 2>the US. The US did is a place where it's

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<v Speaker 2>the most difficult to track the number of Tesla being delivered,

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<v Speaker 2>and the US bit beat expectations. So that's another why

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<v Speaker 2>coming in doing actually quite well. That's good. But then

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<v Speaker 2>at the end of the day you have to remember,

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<v Speaker 2>as the big picture, we are down thirteen percent here

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<v Speaker 2>on air, so we are facing a situation where Tesla

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<v Speaker 2>is struggling to sell cars a gross margin is in

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<v Speaker 2>the latins. To me, Tesla facing good demons should be

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<v Speaker 2>able to defend like mid mid twenties gross margin. So

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<v Speaker 2>we have like we are facing like a core business

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<v Speaker 2>and not a business that is really at a very

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<v Speaker 2>low point that is struggling. And so that's the difficulty.

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<v Speaker 2>You have, like one structural difficulty that is relatively that

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<v Speaker 2>we understand relatively well. It's that with their current product,

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<v Speaker 2>Tesla has kind of saturated its opportunity. Tesla needs lower

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<v Speaker 2>high points to keep growing, and that's in the plan

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<v Speaker 2>they're working on it. And then you have a number

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<v Speaker 2>of other issues. You know, electric cars are less fashionable

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<v Speaker 2>than they were a couple of years ago. The Tesla

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<v Speaker 2>brand has suffered, particularly in Europe where numbers are done

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<v Speaker 2>like almost forty percent year on air, and so it

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<v Speaker 2>is definitely it's difficult to quantify, but it is a

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<v Speaker 2>significant headway as well. And overall, you know, the economy

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<v Speaker 2>is not right the best you can imagine for.

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<v Speaker 3>Yeah, I mean when we look at the mag seven stocks,

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<v Speaker 3>we see Tesla as the primary laggard this year, down

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<v Speaker 3>about twenty three percent. And of course we know that

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<v Speaker 3>investors have really been vying for Musk's attention as he's

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<v Speaker 3>been really politically involved. So as we're seeing these numbers

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<v Speaker 3>come through, what do things like moving forward? Are these

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<v Speaker 3>numbers a massive impact or are the Tesla loyalists still

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<v Speaker 3>out there and is there some further positivity to come.

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<v Speaker 2>The Tesla stock has been on a royal cost. It's

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<v Speaker 2>like a very low performance this year, but it was

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<v Speaker 2>like a clear out performer last last year. And as

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<v Speaker 2>you say, you know, it's following, it's following, you know,

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<v Speaker 2>the political carrier, if I may say, of the CEO

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<v Speaker 2>in a musk and like this has created this situation.

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<v Speaker 2>Now if you look at the stock, you know, since

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<v Speaker 2>you know, like April first, what you see is that

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<v Speaker 2>what tends to really move the stock is actually the

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<v Speaker 2>news flow around how the company is now focused on

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<v Speaker 2>deploying fleets of robotaxes. They've just started that in a

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<v Speaker 2>couple of weeks ago, like late late last months, and

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<v Speaker 2>I think that's going to be the primary driver of

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<v Speaker 2>the stock going forward. Of course, there is a lot

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<v Speaker 2>of uncertainty on you know, how fast Testa is going

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<v Speaker 2>to be able to deploy robotaxy or even make a

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<v Speaker 2>profits like generate the profits out of the robot taxi fleet.

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<v Speaker 2>But the size of the price is so gigantic and

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<v Speaker 2>so much more than the hotel business that this is

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<v Speaker 2>probably why drives the stock going forward.

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<v Speaker 1>Pierre, thank you so much for joining us. Always appreciate

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<v Speaker 1>getting your thoughts there. Pierre fairgul He's set of Global

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<v Speaker 1>Technology Infrastructure at New Street Research.