Speaker 1: Well, let's get back to one of our top stories.
Speaker 1: It's about Tessa with its third quarter revenue figures and
Speaker 1: they fell shy of analysts estimates. Let's get over to
Speaker 1: David Welch Bloomberg Detroit Period chief. David give this festival
Speaker 1: in the overview of what test that did right and
Speaker 1: wrong and what the company was saying. Yeah, I think
Speaker 1: one thing they did right. So they did beat Arnings
Speaker 1: for share our fire they beat by a couple of
Speaker 1: but four pennies bypennies not terrible. But what the markets
Speaker 1: reacting to in the last I work shares with down
Speaker 1: four a half percent in after market trading, is they
Speaker 1: missed on revenue and also missed on vehicle sales value.
Speaker 1: The reasons they say are less to do with semiconductor
Speaker 1: chips and that sort of supply chain stuff and more
Speaker 1: to do with shipping. But investors still worried because they
Speaker 1: don't know when they're going to get all of those uh,
Speaker 1: supply chain and transportation issues fixed, and you know that
Speaker 1: could pretend for maybe you know, missing sales again in
Speaker 1: the four quarter. Euan Musk said that they're still going
Speaker 1: to be able to hit their target of boosting sales
Speaker 1: production this year, but they're going to have to have
Speaker 1: a really real knockout fourth quarter at the plant level,
Speaker 1: will be able to do that. They're gonna build about
Speaker 1: five vehicles, so there's some doubt about that, and the
Speaker 1: shares are done. I think people are taking a cautious look.
Speaker 1: Let's take a closer look at China. It's it's understandable
Speaker 1: in some ways that you know, we know what's happened
Speaker 1: in China this past year and it's not likely to
Speaker 1: change overnight. But that would investors not give Tesla a
Speaker 1: little bit of a pass over that or do they
Speaker 1: actually blame Tesla for so much exposure in China given
Speaker 1: the way the country has moved. Um, I don't think
Speaker 1: the investors are going to blame Tesla for having exposure there.
Speaker 1: It's a good ev market, it's huge, the government mandates
Speaker 1: in some places that that's pretty much all you can buy,
Speaker 1: and they're a leader there, so they've got to be there.
Speaker 1: They've got to capitalize on the growth that Chinese actually
Speaker 1: really like that brand quite a bit. But they're gonna
Speaker 1: be bumps here because of COVID, the way the government's
Speaker 1: handling it and the economic issues that they're having in
Speaker 1: the market, and everyone's going to have to weather through that.
Speaker 1: Investors may take away and see attitude, and I think
Speaker 1: they are in the case of Tesla, because the shares
Speaker 1: are down thirty seven percent, which is a bigger drop
Speaker 1: than the SEP has seen. So you know, clearly Testa
Speaker 1: was taking once not only because of their exposure in
Speaker 1: China on a sales basis, but I think their shares
Speaker 1: are exposed to it as well. And you know, what
Speaker 1: once was a high flying growth stock that was immune
Speaker 1: to all of these different global economic inputs is now
Speaker 1: kind of suffering along with everybody else. Yeah. But given that,
Speaker 1: and given what's happened, what is the company saying about
Speaker 1: its targets? Do you want must saying they can still
Speaker 1: hit their their target for the year, but again that
Speaker 1: that requires a grade fourth quarter. It's possible. There's often
Speaker 1: a lot of up demand. A lot of times there
Speaker 1: are vehicles that are built but not completely finished because
Speaker 1: maybe it's chips, or there are things that just need
Speaker 1: to u get shipped out or shipped in, and you
Speaker 1: can can finish things quickly. Living here in the Detroit area,
Speaker 1: we don't have Tessa production, but I can tell you
Speaker 1: there are a lot filled with GM and four vehicles,
Speaker 1: a C nearly finished trucks that are just waiting for
Speaker 1: some semiconductor or some module and and so sometimes production
Speaker 1: can be made up very quickly if it's just a
Speaker 1: supply chain issue. But they're really gonna have to knock
Speaker 1: it out of the park of the seventy in in
Speaker 1: a quarter of the time. That's a third, that's more
Speaker 1: than a third of what the yearly target is. So
Speaker 1: it won't be easy, but again seasonally good period. Uh.
Speaker 1: But the competition is coming for you. Are they not
Speaker 1: there yet? Uh? This has been something that that analysts
Speaker 1: investors have been watching for for quite a while with Tesla,
Speaker 1: and I think when people question why didn't Tesla hit
Speaker 1: their their sales targets, I don't think it's the case
Speaker 1: in the third quarter they missed their sales targets because
Speaker 1: competition is here, although board others are and the Korean
Speaker 1: automakers are starting to sell more electric vehicles, but that
Speaker 1: does kind of hang over the stock. I think the
Speaker 1: markets looking for that moment when all the other carmakers,
Speaker 1: the legacy carmakers as we call them, Mercedes, BMW, General
Speaker 1: Motors scoord Volkswagen on Ikea start to sell a lot
Speaker 1: of electric vehicles and cut into the market share of Tesla,
Speaker 1: and they will, and because they're all gonna be selling
Speaker 1: expensive vehicles. And I think, look, some of those other
Speaker 1: car companies may be better positioned to capitalize on growth
Speaker 1: in the mass market than Tesla, because Test those vehicles
Speaker 1: are all expensive. You're gonna see uh Korean e v s,
Speaker 1: and you're gonna see Ford and g M ebs that
Speaker 1: sell forty or less. In the case of General Motors,
Speaker 1: you're gonna see some on as little as thirty thousands,
Speaker 1: and Tests it doesn't have anything like that. Their vehicles
Speaker 1: are selling Fords. So yes, we see the market go
Speaker 1: to e vs. I think others are better a position
Speaker 1: to capitalize on mass market growth. Yeah, I've been joking that,
Speaker 1: you know, investors are selling the dream. Tesla's down almost
Speaker 1: fifty in the past year, selling the dream, buying you know,
Speaker 1: more sort of stodgy, old fashioned, old American companies. Maybe
Speaker 1: after hours down five point four percent today. Um, so
Speaker 1: definitely a story that investors not all that comfortable with
Speaker 1: these earnings. David Welch has been with us Bloomberg Detroit
Speaker 1: Bureau Chief