Tesla's financials show improvement and the company is thriving in the automotive and energy industries, with a focus on cash flow, future investment, and the potential for further growth
Questions to inspire discussion
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What are Tesla's financials showing?
—Tesla's financials show improvement and the company is thriving in the automotive and energy industries, with a focus on cash flow, future investment, and the potential for further growth.
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Why has the Tesla semi truck been delayed?
—The Tesla semi truck has been delayed, causing disappointment, but the video provides insight into the reasons for the delay.
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How is Tesla's revenue and profitability?
—Tesla's revenue and profitability have been declining, but it's largely due to conscious pricing decisions and a one-time supply shortage.
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What is the difference in production versus deliveries of Tesla vehicles?
—The difference in production versus deliveries of Tesla vehicles is largely explained by transportation delays and not solely a demand issue.
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What is Elon Musk's goal for Tesla's profit margin?
—Elon Musk's goal for Tesla is a 25% profit margin across the board, excluding regulatory credits, with energy profit margins increasing and services and other remaining profitable.
Key Insights
Financial Performance and Growth
- 📉 Consumer Reports has determined that Tesla has the lowest repair cost over five years and over 10 years than all the other automakers.
- 💰 Tesla's cumulative net income has gone from a loss of $5 billion to a total cumulative net income of about 28 billion, showing significant financial growth and stability.
- 🚗 Other automakers may not be making money on their EVs, unlike Tesla, which is still making money per EV sold.
- 🔋 The energy profit margin in green has moved up nicely and continues to be strong, reaching the highest point in a long time.
- 📈 Tesla energy is now the most profitable part of the company and contributing meaningfully to profits.
- 💡 The energy business has significant growth potential, with the capacity in place for Tesla to take off, including the construction of another Factory in China with a 40 or more gigatt hour capacity.
- 🤑 $4 billion in profit from energy storage alone, the potential for massive earnings is mind-blowing!
Strategic Focus and Innovation
- 🔄 The unique situation of competitors effectively helping Tesla build new factories is unprecedented in the business world.
- 🤖 The combination of the AI-powered businesses like the humanoid bot, Auto bidder, FSD, and robot taxi Network exceeds anything else that Tesla is doing.
- 🚗 Elon Musk emphasizes that Tesla's focus is on autonomy and creating a fleet of autonomous vehicles, not on short-term profits from selling vehicles.
#Tesla
XMentions: @Tesla @RandyWKirk1 @GoingBallistic5 @TheJeffLutz @NickGibbsIAG @FutureAza @HabitatsDigital
Clips
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00:00 🚗 Tesla announced new model, Mentee Robotics creates lifelike humanoid robot, quarterly earnings show decline due to pricing decisions and supply shortage.
- The speaker discusses the exclusive reveal of a new Tesla model and plans for a road trip with a friend.
- The Israeli company Mentee Robotics has revised their plans for a humanoid robot, now making it in the likeness of a knowledgeable guy named Scott, which some may find scary at first but is actually very lifelike and humanlike.
- Tesla announced their quarterly earnings, and the speaker wants to delve deeper into the details.
- The Tesla semi truck has been delayed, causing disappointment, but Jeff Lutz provides insight into the reasons for the delay.
- The graph shows the trailing 12-month revenue, with the most recent quarter showing a decrease, but it's important to consider the cyclical nature of the industry and not judge the company based on one quarter.
- Tesla's revenue and profitability have been declining, but it's largely due to conscious pricing decisions and a one-time supply shortage.
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07:15 🚗 Tesla's low inventory days, transportation delays, and decreasing costs are contributing to its success in the automotive industry despite challenges faced by other automakers.
- Tesla has been consistently operating with no true inventory days for the last three to four years, which is a problem.
- The difference in production versus deliveries of Tesla vehicles is largely explained by transportation delays and not solely a demand issue.
- GM has 69 days of inventory, while Tesla only has 28, and despite industry-wide sales being down, Tesla's lower inventory is not a problem and may even be beneficial.
- Ford's Model E volumes and revenue were down significantly, with a negative 98% margin, while Tesla's vehicle sales were down 20% due to shipping issues, but still performed better than many other automakers.
- Tesla is facing challenges in the automotive industry, but other companies like Volkswagen and Ford are also experiencing declines in sales, particularly in the electric vehicle sector.
- Tesla's costs are decreasing, battery pack pricing is coming down, there is a glut of batteries on the market, EV sales are projected to grow, and Consumer Reports found that Tesla has the lowest repair costs.
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16:25 🚗 Tesla's financials show improvement, with a focus on cash flow and future investment, despite a difficult quarter on the earnings front.
- Tesla's dominance in the electric vehicle market is compared to UCLA's basketball team in the 60s and 70s, with the question of whether they will continue to be number one.
- Tesla's cumulative net income has improved significantly, showing that the company is not failing financially despite previous losses.
- Cash flow is more important than operating income, and despite Tesla's low operating cash flow this quarter, they have a cumulative operating cash flow close to $50 billion and are heavily investing in their future.
- Despite a difficult quarter on the earnings front, Tesla's continued investment in the business and free cash flow is expected for a growing company, and there is potential for a turnaround in the future.
- Tesla's revenues would have been higher if the average selling price remained the same, resulting in a 20% increase in net profit despite a 12% increase in the number of vehicles sold, but there was a big inventory bump that reduced cash flow.
- Operating cash flow increased to 4 billion, free cash flow could reach 1.7 billion with potential for 4-5 billion, and Q2 is expected to show a significant increase in free cash flow due to reduced inventory and improved sales.
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27:20 🚗 Tesla's regulatory credits from various countries have funded its capex budget, allowed for the building of new factories, and are driving down the cost of EVs while still making a profit.
- Tesla earns regulatory credits from various countries, not just California, and these credits have been steady and consistent.
- Tesla has been able to fund its capex budget and build new factories with the help of red credits from other EV companies, making it a unique situation in the business world.
- Tesla is making EVs more affordable while still making money per EV sold, and they are driving down the cost to make the vehicle and also driving down the selling price.
- Elon Musk's goal for Tesla is a 25% profit margin across the board, excluding regulatory credits, with energy profit margins increasing and services and other remaining profitable.
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32:48 🚀 Tesla's energy business is thriving, with increased revenue and profits, high gross margin, and promising future prospects, expecting 75% growth in energy storage deployments by 2024 and potential for further growth with a new factory in China.
- The speaker discusses Tesla energy's record and moves on from negative topics.
- Tesla's energy business has seen a significant increase in revenue and profits, with a high gross margin and promising future prospects, despite the difficulty in accurately reflecting its performance due to the time it takes to deploy and recognize revenue from energy systems.
- Tesla's indicative revenue is higher than reported revenue due to deferred revenue and unsatisfied performance obligations, making the business healthier than it appears.
- Tesla is expecting energy storage deployments to grow by at least 75% in 2024, with the capacity to hit 40 gwatt hours and potential for further growth with the construction of another factory in China.
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37:47 🚀 Tesla's energy storage business is projected to make $1 billion in profit each quarter, with potential for even more growth in the future, while Elon Musk emphasizes that Tesla is an AI company with a focus on solving autonomy and creating a fleet of autonomous vehicles.
- Tesla's energy storage business is projected to make $1 billion in profit each quarter, with potential for even more growth in the future.
- Elon Musk emphasized that Tesla is an AI company, with the combination of AI-powered businesses such as humanoid bot, Auto bidder, FSD, and robot taxi network, leading to potential future revenue growth.
- Tesla's delay in getting computing infrastructure in place caused a delay in FSD2, but now they are not compute constrained and are heavily expanding their systems.
- Elon Musk believes that Tesla's focus should be on solving autonomy and creating a fleet of autonomous vehicles, rather than maximizing short-term profits from vehicle sales.
- Tesla and Facebook are both heavily investing in AI and capital spending, with Tesla's capital utilization being praised while Facebook's heavy spending is causing concern among investors.
- Investors are concerned about Tesla's massive losses and investments in AI, but Warren Buffet has a lot of cash to potentially help out.
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46:23 🚚 Tesla's semi truck offers numerous benefits beyond cost savings, while plastic waste and environmental harm are growing problems attributed to the oil and gas industry.
- Plastic waste is a growing problem, with more plastic ending up in landfills and oceans than being recycled or incinerated.
- Plastics have caused environmental harm, and the oil and gas industry is to blame, while artificial intelligence investment is not as exciting as it should be.
- The presentation was the best yet, cutting through the details without charts and graphs, and the speaker is doing research on girkin versus fortnits.
- The benefits of the Tesla semi truck go beyond cheaper utilization and lower cost of products, with numerous other advantages.
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50:52 🤔 The speaker discusses naming conventions and family names, with some humor and personal anecdotes.
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Duration: 0:51:41
Publication Date: 2024-04-26T01:21:02Z
WatchUrl: https://www.youtube.com/watch?v=clgS7P_6DHY
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