Tesla's Robotaxi Story Just Divided Wall Street

Tesla's earnings call seems to have widened the divide between bulls and bears. Bears focus on robo taxi taking longer than expected. Bulls focus on what Tesla said next. Today's roll out is city by city, but the goal is statewide expansion. Is robo taxi falling behind or is Tesla simply building the infrastructure before scaling much faster? We got the bulls here with us today. We got the rational bull, also known as Mr. Incredible. The executive Jeff Lutz. We got the power bull, the queen Tesla boomer mama Alexander Mertz. And today we have the Financial Bull, also known as Nerd Alert on X, the most accurate Tesla retail analyst, Matt Smith. Welcome everyone.

"Heybert, thanks Herbert."

"Hi Herbert."

"Good to have you back."

"Thank you very much. I appreciate you taking overs the last couple weeks. Uh this earnings call is a big one. Uh lots of divided opinions and I wanted to explore that a lot more in detail. The stock has fallen significantly after the earnings call, which it typically does, but is now at 319 when we're recording this on Thursday afternoon. SpaceX is 118. Of course, this is uh against a broader AI kind of environment. But, uh, just want to start off with your reactions to the earnings call. Did you look at it as a negative, as a positive? How did you guys see that? Let's start off with you, Matt."

"the company and the product. I don't look at the quarterly stock movement."

"A very realistic bull questioning certain decisions."

"The rational bull."

"We enjoy listening to bears."

"We're looking for the red flags. You're supposed to react. It's just worth reminding people how big this upside opportunity is."

"Yeah, I mean, I I think it's it's hard to say it was a huge positive when you see the the kind of stock market reaction to it. I mean, clearly there was an earnings miss there. Um, and it actually, you know, took a little bit longer than usual, I would say, to kind of piece together, you know, what were the, you know, uh, big drivers of this. Um, you know, there were a lot of small things. Your credit revenue was down. Um, energy gross margins were down. Expenses were up. Uh, but then just automotive margins in general were were down uh, a lot more than than certainly I expected. So, you know, I I think the on the one hand the um kind of core focus on the business has always been looking forward and that's robo taxis, that's Optimus. Um I don't think we got a whole lot of kind of um exciting exciting news around kind of acceleration of that, although there certainly were some pieces of it that that were good. Um but you had kind of the core of business having a fair amount of bad news. Um we're spending more capex for investments that we think will pay off, you know, three, four, five years down the down the road. So long term, I like I think the whole thesis is still very much intact, but I I think a lot of investors are are sort of feeling right now that um boy, there's not a whole lot to be excited about over the next say six to 12 months. And and I'm certainly seeing that in kind of sentiment on X and I'm sure we'll we'll get into some of the differing opinions we've had later on in the show. But um yeah, there's not a a whole lot of of kind of near-term things to get excited about right now. So I think that's that's probably why uh we're seeing sentiment in and the stock move move the way that we saw it."

"No. Interesting that you said capex is potentially bad news."

"Um well I I don't think that but I I think like the short-term uh market reaction kind of indicates that. I mean we saw Google had a great earnings report yesterday. Um and they uh showed or they shared that they're increasing their capex spend which probably has a great ROI. So in the long term it's probably going to really work out but in the short term you know people see their free cash flow going negative for the first time in like a decade or whatever and it's it's spooking the market a little bit. So, like I I think it's really important to actually kind of differentiate between, you know, what's the kind of near-term impact on earnings and sentiment and all that versus, you know, long-term is what they're doing sensible and does it make sense? And I think everything Tesla is doing, I shouldn't say everything, but I think most of the things Tesla is doing is is very sensible. Um, and the long-term story really is intact in my mind, but you know, I don't think they're communicating a lot of stuff very well. And, um, I think there's, um, you know, not too much to get excited about in the near term."

"Okay. And I know Alexander, you have a different opinion about capex. Do you want to speak to about that?"

"Yeah. And maybe we should first address Matt and me hashed this out. And I think one clear understanding is that Matt and many of the people that follow him have a vision that in the short term there may actually better stock than Tesla, right? And and that that is a valid question. While it is true for myself and I know for some of my followers, um that's not even an option. We feel like you never know when Tesla is suddenly appreciating and you just, you know, want to stay in there, do the best you can to support the the company, not only with your stock purchases, but also with, you know, in my case, helping with governance or whatever else, and uh and just let it stay there and and grow and DCA into it and uh just evaluate if there's ever a huge red flag. And for me, yesterday was none of the huge red flags. There were a couple of things I was actually uncomfortable with and I'm still searching for uh answers notably and I'm really glad we have Matt here today to discuss that because he knows much more about that than me. How the energy margin could go to 20% and that they now feel that is the new level it should be because we came obviously from much much higher levels and so yeah how how did that happen? Um, I don't consider the EPS just as a headline number, neither a good nor a bad number. I I tried to understand during our call yesterday when we were live where it came from. On one side, you had actually appreciation of our two billion investment in SpaceX that added a billion. You know, you should have hoped that was really a good driver. Then you had the nearly six billion of capex. I can completely understand that free cash flow was actually much better than I had expected. So with about four billion they could of of operational cash flow they could absorb nearly six billion of the of the copics expenditure. So you know it's it made sense but it didn't look good on paper. So why did it not look good on paper? Well, because you had to really dig into it to understand where where it was missing the car margin. Why was that? Was it the new shift to now more of only three and Y sales, the SNX going away? And on one point I granted to you um Matt, communication is just always complicated. The earnings call itself is difficult to listen to. it's going all over the place and the documentation is um I mean the the the document itself reads well but you just can't extract of it as much as you can from the 10Q came out which came out today which I found much easier to understand and appreciate. Now um it it is for me one of those days where it goes down. I bought I I always announce my purchases because I want to make sure that you know there's transparency in my strategy which is still an all-in and now all-in plus because I have options and I have TSLL some of the TSLL funds but um it it did not bother me to the point that I wanted to take down leverage. I actually increased it. Why is that? because I actually had the feeling that they are coming very close to the merger scenario and I may be on the completely wrong train. I'm saying that again and every time I say that and Herbert I I want you to also tell people when we talk about the merger we take that as a hypothetical but we're not saying this is happening. This is just us trying to put breadcrumbs together and trying to have a theory. So my theory is still that this will happen before mid August. We were long time speculating on when is the SpaceX earnings call. Why is that important? Because SpaceX will be the absorbing entity. That is now on 4th of August. So that puts it all into those two weeks in in August. I may be completely off, but if there is a merger announcement, I do expect a big movement in the stock price and that was my motivation behind today's purchases."

"Alexander, do you still think that a merger could still happen? Now clearly he was asked that question at the earnings call and the way he answered it bringing it on the lawyer sounds like it's a you know"

"not any lawyer this was this is Brandon Eric this is the the general counsel of we met him Herbert you met him remember last at the last shareholder meeting he came and introduced himself telling us he watches cyber balls and we were proud standing there and beaming and gleaming. Well, um, Brendan is certain not somebody who can just sit in an earnings call. I've never heard him be there. So, the fact that he was there, they had the say questions, they regrouped the say questions, that was a a nice quick tour of the say questions. I mean, ignored some and regrouped others. I liked it because I found we discussed say question. I'm not going there anymore. You can watch last week's video on the say questions. But anyway, then they came to the analyst questions and I had speculated that maybe the analysts um were not allowed to talk merger, but no, obviously they were allowed because one of the analysts brought it up and contrary to what he always does, Elon meaning talking and blubbering and blubbering and giving information, he cut it very short into one sentence saying this is not the right this is not the right occasion to talk about that. This is an earnings call and with this I hand it over to our GC. And and I was like wow wow wow because he could have just stopped there. There was no point handing it over. He wanted to hand it over. He wanted to signal there is a Brennan sitting there and you know ready to answer and not that he really added a lot but the simple fact he was there that he was called to contribute gives me this feeling that he was watching what anybody was saying to stop them if ever they would have gone down the wrong path on that topic. And why would you do that? Well, you would do that because you are currently working on it."

"Okay. But my question to you though was um would a merger still occur if the SpaceX stock is at 118 and Tesla's at 319?"

"Well, it's easier today than it was yesterday morning. So, was this all easier when when SpaceX was 150 and more or even 200 and more? Because remember my Goldilock scenario was that we would get a multiplier of 4.2. So, let's just dream of 200 times 4.2. Well, there we had a huge 840 Tesla stock price, right? That because it's the multiplier on the on the SpaceX price. Now obviously the SpaceX price being so low and until yesterday the Tesla price being relatively high made it really difficult because with it comes a whole calculation of how much does it cost Elon because he's the biggest SpaceX investor but also all other SpaceX investors to make this offer and you know is it reasonable to expect a multiplier that's higher than 4.2 too. And then does that multiplier actually trigger I'm sorry I'm going down the rabbit hole but it's all necessary to be explained. Does that trigger milestones of the 2025 compensation plan to to be achieved because they are now suddenly only linked to market cap and not anymore to operationals and which can be changed in the negotiation but at the moment that's what says on paper. So the the whole construct is I made a spreadsheet. I gave everybody access to that spreadsheet is um complicated and much more complicated if Tesla's price is high. And I know that's intuitively wrong to the view. People feel like, "Oh my god, no, we're high. This should be good for us." No. Tesla's stock price being high and SpaceX's price being low makes it actually super super uh difficult. Now Tesla came down today to 320. Let's call it 320. That makes it somewhat easier, but obviously still expensive. Now what could motivate their timing? Because will they do it at an earnings call? Not if I listen to what what uh Elon said yesterday. Yesterday he said the earnings call is not the right setting to announce that. That probably applies also to the SpaceX earnings call, right? Once you say this, the earnings call is not where you want to do that. He did say that the terrafab is the symbol of the synergy and there should be a terrafab um groundbreaking day or I don't know how how you want to call that. Um so maybe that is an event where it could be tied. In any case, no matter when it is going to be announced, you will see an avalanche of three months talking about synergies because that's the idea you have to sell. If you're Tesla and and SpaceX, you have to sell to the shareholders of both companies that this has value and you have to bring that value forward. So the Roadster and the Roadster event is a good way of showing the synergies. The Terra app is a perfect way to to show it. So there are many things that could Optimus of course Grock in the car, the Starink V, what is it five in the car? Those are all things that can show this synergy in a very easily understandable understandable way. So when they announce it, it is really important where the SpaceX prices Tesla's price as well, but it's really important. So between now and the and the day"

"SpaceX earnings call August,"

"we have seven business days."

"Mhm."

"Anything can happen. If this goes up to 150, it becomes very easy again. If this stays at 115, he may have to insert what I call a Joe Buckley floor. Now, he may have to make an offer where he gives a multiplier, but he also says that multiplier doesn't reach whatever number, there's going to be a floor at that in that price to make sure that we're getting there. And then what happens is Tesla's price should in that same day move up to that floor minus 10 15% because there's always uncertainty in those things or regulators to approve and whatever and the shareholders but it it should really move into that direction. So that could be that one single event that really drives us up."

"Thank you Alexandra. Okay, so Jeeoff Alexander is still uh bullish thinking that in the near term there could be a Tesla pop because if SpaceX announces an acquisition of Tesla, but um I wanted to ask you about the stock um and earnings call that uh there's a whole group of people who heard the earnings call was pretty negative in terms of robo taxi. I I heard obviously negative both negative and positive, but I want to hear your thoughts on this. Some people think that yeah, the stock's not going to move at all for the rest of the year. What was your thinking?"

"Well, no, I think it's absurd to try to predict the stock for the entire year given how just unpredictable the stock is. The earnings call was a rorchack test based on where you stood and what you believe about the company. I will say that there were there communication concerns on that call for sure. uh there are things that are going extremely well that are very important to the perspectus of the company. Those seem to be uh like not communicated well, buried, distorted, whatever you want to call it. And I'll give you examples. So number one, I I think the the opener in the whole thing I'm not I'm not telling Tesla how to conduct an earnings call. They're a trillion dollar company, very talented people. I'm just giving my feedback. I thought the communications of what's going very very well were were distorted and what's not going well was very clear. And I'll give you some examples of this. Um number one, the core business. You have a core business right now where oil is going up 5% per day. We've seen demand. We have three-year high backlog on the auto business. We have a booming energy business where backlogs are increasing. ASPs are under pressure. Gross margins are under low pressure. By the way, the gross margins in the auto business, it's an 18% business. It was a little bit higher last quarter because we had some true-ups, but it's roughly where it is. If it's plus or minus a percent, I don't think it's a big I don't think it's a huge issue. I don't think that is the reason for the um for the pressure. I mean, could it be down a couple of percent on the EPS miss? Of course, there's a a topline, you know, EPS miss. That's fine. But the core business, I think, is relatively intact and you've got momentum. You've got oil going up again. You've got FSD acceptance and and installation rates going up. You're you have demand for your cars and now you have a three-year high backlog, and you have a com you have a constrained supply chain. you don't have inventory of parts sitting around. You're trying to get parts. So, what I believe happened there is I believe demand has gone up while lead times of parts have actually extended because of what's going on with electrical components. BBO mentioned it. Ka got on the call a little bit and spoke about it and I believe their demand has gone up inside of lead time and they're chasing and that's typically good for a hardware business for a business that's selling cars. you that you're you're you have a little bit of a chase going on. I think the core business is intact. I thought the communications around the row taxi status were uh distorted, vague, then clarified a bit, but still left kind of vague. What are we compounding 10% on? I don't know. When we say that we're going for a march of nines, where are we? If we're gonna if we're going to accentuate March of Nines, then is there some sort of normalized metric you can give us? Because if these metrics are being kind of tossed out there is critical to to getting to expansion. Well, I think it would be helpful for investors to understand it. So, I don't know exactly what we're compounding from. I I I mean, I think you can make some ass you can make a worst case assumption. you can make a best case assumption and create goalposts, but why keep the investors guessing? Just let's go through the numbers um and maybe in a different manner. So, I thought the whole robo taxi and and then the the scoreboard kind of changed on robo taxi. went from we're kind of going for 10, you know, around 10 billion miles and we're trying to go for roughly 10 times better than human driving to we're going to stick to, you know, trying to get the zero incidents. And I understand the zero incident piece given how Tesla's treated in the media. Um, but again, I think it's kind of it's kind of moving a lot of stuff around. Uh, and it's not as easy to understand and follow. So it's it's new. I think it's it's new. So what's what's happening now is we have a governor on robo taxi deployment and that is the performance of the system must improve. The incident rate must stay at zero and the only way you can grow the install base and keep the incident rate in zero is the system must just improve. You can't increase the install base, you can't stay inside of this 10 times greater than a human. It's zero right now. So, I think that presented a delay in some people's minds. Um, the compet here's the other thing they could have accentuated and they didn't. The competition isn't getting closer on any of this stuff. They're not getting closer. When we count 3,700 Whimos, they're not profitable. We can't get an answer out of the company for when they are going to be profitable or any robo taxi company. Some are putting some claims out there, but it's really hard and distorted to understand. And Tesla doesn't have a profitability claim officially yet. But we know they've designed a car that's 18 to $20,000 to build at scale. And we know they're targeting under 30 cents per mile, which would be world class in this in this case. So the competition isn't getting any closer, but that could have been accentuated. It isn't. Same on the Optimus side. There's no company that has the manufacturing capability, the AI capability, and the product definition of an optimist together. You have to multiply those three things together. If any one of those are a zero, you essentially have a zero as a product. And many of the box that are being"

"Yeah, exactly. The manufacturing piece, including supply chain, right? And you can't find a company that has all of those boxes checked. And even Tesla's saying this is going to be challenging. So, look, um, some of it's a, you know, a kind of a dose of of of reality, and some of it's like there's really good things happening. Maybe they could have been accentuated better. Maybe other things could have been explained a bit better. I don't think it's nitpicking. I think it's I think some of it's valid feedback. It's kind of I don't want the earnings call to be kind of a murder mystery train of like who done it. Want to just like kind of get through it operationally, understand where the company was, is and where they think they're going. And that took a lot of um deciphering and I'm not sure everybody is is quite clear yet."

"Let let me uh let's dive deeper into this, okay? Because um I I'm trying to understand what many investors are saying. So, first of all, Ashok had a segment. I'll play some of what he actually said. And in that segment, he shared 380,000 miles of robo taxi unsupervised miles driven with no zero notable incidents. Then he said that we are expecting to have doubledigit growth weekly until the end of the year. Uh it was Elon that said over I think he goes I think it's at least over 10%. Okay, that's fair. Now some people go oh okay well if I do 10% and all of us did it all all of us did this math right? 10% per week. What happened? What does that mean? Well, it's actually not a big number, right? By the end of the year, you're talking a thousand cars, maybe two, three thousand cars, right? Okay. The problem is why are why is everybody saying it's 10% per week till the end of the year when when Ashok said we already have FSE version 15, we're 40% of the way into the seven features. So, do you think it'll take them the entire year to finish that? Maybe. What if they get it done sooner? and that that they're doing the multiple states uh the sorry the multiple cities only because for four Tesla executives can't explain why they're doing the four cities each they have their different reasons why but once once they get the city by city kind of knocked down they're going to go state by state. So that tells you that maybe maybe not the end of this year, maybe the first quarter next year, but at some point it goes like this, nothing, nothing, nothing, 10%, you know, then all of a sudden it becomes 20%, 50%, 100%. It's like a thousand cars like that state by state."

"I think you're filling that in, Herbert. I don't think they"

"Right. Right. But I think it's also wrong that people are thinking, well, it's 10%, then therefore that's what it's going to be for the whole year. Look, look, you you I think what we the 10% number was was constrained to the performance of of the system. It didn't account for the operational readiness of all these cities. Now, they're designing a good approach where you can almost autonomously bring up a city. There's nobody getting closer to what Tesla is doing, but I felt like the Ashoke update was related to the performance of the system, which is probably the most important thing. But if the rest of the operations are I don't know if there's other operational constraints or not when they give that update. I hope there is."

"I'm not sure that that's what I got. Uh that I think uh Shock also talked about operations but let's let's play a little bit of it and let's react to it. I'll play just a minute of it."

"Today our VP of AI and he's going to cover questions related to robo taxi. Shook."

"Thank you Travis. Many of the questions on say.com relate to robot taxi deployment and scaling. So, we thought we'd provide a comprehensive view of where we are now and where we are going in the future. First of all, I'd like to state that the robot taxi program has been operating extremely well, especially in terms of safety. The program has had an impeccable safety record. We have driven more than 380,000 m of unsupervised robot taxi now across six cities in two different states. We have had zero notable incidents. Any reports have been of other actors impacting us when we were stationary. Again, I'd like to emphasize how safe the operation has been so far. Zero notable incidents over 380,000 miles. Historically, the so-called experts have always claimed that you need lightars, radars, HD maps, and the entire kitchen sink to drive safely. Here, we show that such is not true. You can have safe, comfortable, and affordable autonomy with just cameras. This record should be a huge validation of Tesla's entire AI approach. Second, I'd like to discuss scaling. We started the robot taxi program roughly a year ago in Austin. We had safety monitors in the passenger seats of the cars back then. Around the end of last year, we had the first fully unsupervised robot axes in Austin. Since the beginning of this year, we have grown at doubledigit growth rates to the number of unsupervised miles that the fleet drives every week. I repeat, we have grown at such a high compounding rate on a week-overweek basis over the last several months. Not only that, we expect to continue growing at such a large rate through the rest of this year. The other thing to note is that for expanding to new cities, it has been relatively less effort on our front. We expect that the time to launch to a new city will continue to trend towards zero towards an end where we operate in entire states as a whole instead of going by city by city."

"Let me pause it there for a second. First of all, thank you to Peter, SpaceX, Tesla for preparing this. Um, so that sounded not just like about just safety, he talked about operations and launching as well. Yeah, I mean I don't think it was perfectly phrased, but it should have been the headline that they're not going city by city anymore. So don't expect further cities. I mean that's a bit strange because they're recruiting in different cities. They're building infrastructure in different cities, but that they're going state by state. So not we should not watch out for cities. We should watch out for states now. So what happens? I was just asking myself, what's happening to Las Vegas? Las Vegas seems really close, right? There are people seeing them on the streets. Um we've heard about infrastructure being developed. So, I mean, you'll tell me Nevada that means Reno and and Vegas at the same time, then it's the whole state. What happens in Phoenix? I mean, Arizona is more than just Phoenix. So, I I wonder a little bit what they mean when they mean we're going for the whole state straight away, but we'll see."

"That's not what I heard, though. I I don't know he gave a time frame for when they will switch to state by state, but at some point they will, but not I don't know if that's"

"But he said no more city by city, right? That's what he said. What didn't"

"the last half minute? Am I the only one who heard that?"

"I I I did not hear that. And especially when you consider in their report they they listed the additional cities that they're going to be launching in still. I mean, I I don't that seems like a goal, but maybe not something that I think we should be expecting soonish."

"When you're when you're doing operations, there's there's what you want are goals intention. And there were two goals that were intention. You want a third. The two goals that were intention were zero incidents. So the quality aspect and then the miles aspect. We don't know the the rate. We don't know what the we don't know 380 like we don't know what June ended at for example like what did that week we knew what that week ended at we would have another piece of the puzzle but you want three you want three things in tension in this case. You want the quality, you want the rate, and then the third thing you want is you want some sort of uptime or availability metric because what people people are going to these cities and they're trying to call a robo taxi and it either says high demand or it's, you know, some very long wait times. So, I'm not trying to tell Tesla exactly what to do, nor should anybody, but I think if you're going to share some of these KPIs, I think the final piece of that puzzle is is is it launched? like is it a real server and like it's almost like there should be some designation like we started in a city but it's pre-launch. So that third element which is the availability and what's your availability goal Tesla is it less than three minutes or is it five minutes to get a car and then when do cities reach that I think that's the a piece that a lot of people are looking for and then I think it's it's I like I said when it got to a show it got a lot better but you're still you're still trying to calculate where what rate are we at in miles what are you compounding from and then in this March and nines commentary where are we that."

"Yeah, I think Elon just kind of threw that out. You know, the March 9 thing. He shouldn't have mentioned it at all. But, um, you know, Jeeoff, like, let's listen into a little bit more what he says because he does talk about how they want each car to be fully utilized. And there that that is so critical before you scale, he wants to have every car fully utilized, right? More than 50% usage. I know he didn't give a number. Um, and I think that's what you're asking for. That's valid."

"But that that that explains why for me that's why they actually intentionally kept the number of cars low because they're testing how how how much utilize can they have each car before they go, okay, I can just throw more cars in, of course, but that's not what they were trying to test for."

"But wouldn't you want to be maximizing for like gross profit dollars, not for individual utilization?"

"Not yet. This this is the whole thing about Tesla. What I get from the whole thing is this is their strategy is they're going to go and go blanket the whole earth if they right any car anywhere any place before they do that they have to get everything in place which is zero safety FS15 has to be fairly you know they made that decision and not to expand using 14 and then now they they said okay I want to have every car fully utilized before I'm going to go and do this I want to have every edge case settled before I even do this um expand and then we'll go."

"But I I guess individual car utilization seems like a bit of a strange metric, you know, to to be prioritizing before you you scale because like if you're"

"to Jeff's point about, you know, goals being intention. If you do that, then the the tension is longer wait times and like basically a really poor customer experience. So to me, that seems like one that you wouldn't really want to be optimizing for,"

"especially operationally. We do that post launch,"

"but they're that they're okay with that now. So let listen to what else he says because this is where he then talks about this."

"Can I just come back to that phrase again because I think I did misunderstand but I still then don't don't understand what he meant. He said we expect that the time to launch to a new city will continue to trend towards zero. What does that mean? The time to launch will trend towards zero. Means"

"they'll be launching more cities more and more quickly. You know"

"they'll basically yeah launch them autonomously. It's not like there would be some time time offset between And we don't know what how they're defining launch. Like we see the Tesla robo taxi X account say we've launched in Tampa but like what what's a launch if you can't get a car. Um but I think that some I think I think it's a milestone. I just don't know what it's I don't think it's called launch. I don't know."

"Such growth was only possible because we have a world-class engineering team at the frontier AI development here at Tesla. The currently operating robotaxi fleet is already running early version early versions of the V15 FSD software that we had referred to in the past. For V15, we had planned roughly about seven major improvement tracks uh and they're all happening in parallel. Uh the early V15 builds that are running on robot XC have already 40% of those tracks merged together. Uh and that's what's running in the fleet right now. As we continue to complete our work on V15, we will see that the car is going to be ridiculously safe and capable. We're already seeing internal signs that all of these bets that we have made for technology improvements are all continuing to are all starting to work. Uh and we expect that the payoff uh will be huge and that's what is going to help us sustain the same growth rate uh through the rest of this year and so on. Finally, regarding the Cyber Cap, first of all, it's a phenomenal product. Anyone who rides in it instantly falls in love with the experience. We have aligned our manufacturing targets to roughly match the projected growth rate of the unsupervised miles. The same V15 models that power the Model Y and other platforms will also work on cyber gaps. In conclusion, robot taxi growth so far has been literally exponential while keeping an impeccable safety record. Our technology bets are paying off, helping us sustain the exponential growth for the foreseeable future and the cyber cap is going to be awesome."

"So, who said Tesla investors are smart? That's cute. Did you"

"It was Peter. No, it was Peter. That was u where I got the video from. So, FSE version 15 is already ahead of schedule. People thought that that wasn't going to come till the end of this year or later ne early next year. Now it's still early build. So it's not done."

"40% build 40%."

"But it is a 10x parameter and that's the one that is going to have ridiculously safe and capable system."

"I guess it's hard to say that it's ahead of schedule if it's not done. It's certainly in progress. Again, I've I've always, by the way, I've always been on the train that V15 is just a version number and people shouldn't necessarily be hanging their hat on that. I I think the difference between the last call, the last two calls and this call is this zero incident rate like we're going to like we're going to you need to be at roughly zero and and in order to expand if your goal is zero, like you have to have really like perfect software. And again, I don't think anybody was advocating for people to get hurt. We just we want less people being hurt and more rides given with 10x safer, 6x, 10x safer product. Um, so I think that's that's been I think to me that was the robo taxi change. And then they put out metrics, but it is it is very difficult to know how many of these and at what rate will they be, you know, giving revenue rides this year. It's they may it's very it's kind of a very difficult thing and you know what companies don't have to necessarily provide every single metric you want. Um, but it was hard to me it was it was just difficult to understand exactly we just know this thing's going to grow. It's going to grow big like we're at we're just at some early stage. We just don't know how long that early pre-launch stage is going to necessarily take even coming out of this. Yeah, and it's it's Go ahead, Alexander."

"Thank you. And and I have actually that issue with a lot of things that were said yesterday. I reread the whole transcript now twice and there are a couple of things. For example, the auto margins. Is it the Y long version ramp? Could very well be. I have no idea, you know. I But I would like to hear that. I would like to hear how far it is the new product mix of more S and um Model 3s and and Model Y's. Is is you know the the lack of the higherend cars responsible for it? Is it was it promotions? What do I know? Maybe they had promotions in other countries. I didn't see any in the United States. Or was it the ramp? Because as Jeff explains as always, you know, there's one point you get to a price you want to but the initial months are very very expensive. Or is it a combination of them all? give us the other thing I really feel I want to have clarification is the 55% FSD rate right uh I I would like to know does that include the ones is that the point where the first month has expired where everybody gets it free is that only USA but so what I want to come to with all these these critical points and again it doesn't change my long-term view on on Tesla but giving us if if you throw us these bones of explanations which we can all take. We're all intelligent enough and give us everything or at least as far as you can go without breaching any secrets so that it really makes sense rather than having these pieces that we're trying to put together."

"Yeah. And so I I'll I'll pick up one one thing you you said there on the you know kind of metrics on um FSD. That was actually one of the things that I was most impressed with on on the subscriptions. So, you know, I was assuming like around 46,000 uh incremental FSD subscriptions because, you know, historically their their take rates have been, you know, reasonably low. And they um it was interesting that they didn't just kind of quote the overall um gross additions to those subscriptions, which which they did do. Um but and that does exclude free trials. So, that's one of the footnotes that that's in there. So, you know, that's good. But it it it did strike me as like a very high number that they didn't give a whole lot of of extra kind of context around. Um but kind of coming back to the point Jeff was was making earlier around like you know trying to make sense of these robo taxi metrics and you know what what do we think um you know was it the Q4 call um or was it the Q1 call where Elon said you know that we're going to be roughly doubling the fleet every month um and then of course they you know came nowhere near that. And so then now when Deshoke is saying like basically a 10% increase um you know per per week when you do the compounding on that that's like a little over 50% increase per month on a slightly different metric. Um and it's like okay so you've kind of reduced the expectations and also like my trust or confidence in your ability to execute you know has taken a hit because you know what you said last time you you didn't really even come close to to doing. Now I would say like you know when Ashoke is saying it I give it a little bit more you know kind of credibility than Elon who shoots from the hip and probably overpromises and and tries to set very ambitious timelines in a way that I think you know Ashoke doesn't. Um but still there's there's kind of this you know walking down of expectations um after we've kind of endured three to six months of you know kind of missing what they previously said they would do. And so then when we're, you know, extrapolating as you were discussing earlier, Herbert, of okay, well, at the end of the year, like even if you do continue this all year, that that it's actually not like a really large number. So, so that's, you know, I think some of the the tension or the frustration that um a lot of people are are feeling. And, you know, um it's you I've seen some people like flat out capitulate, sell their Tesla stock today. You know, sentiment is in my minds oftentimes a contraindicator. Like, you know, I kind of feel a little bit more comfortable when when I'm seeing capitulation like that. Um, but you know, still the company needs to execute and long term, you know, I think they're going to figure it out. Jeeoff, to your to your point about like Whimo, like, yeah, they're not competition. So, I'm seeing other people that are actual bears u, you know, saying like, oh, like, you know, Whimo is doing 10 times more revenue or miles or whatever the metric is that than Tesla. And I'm like, yeah, okay, but that that business model very clearly doesn't scale. So, it's it's it's irrelevant. So, I feel like Tesla has a long-term solution. If I were to like go back in time five years ago, like my my more kind of naive self kind of believed that we'd have this like we back when we left the geo fences and now here Tesla is doing doing these these geo fences which I think makes sense and we all have kind of you know come to understand that like you do need to roll this out in a somewhat controlled fashion and like you know going from zero to one is is really hard. Um you know but I I I think most people thought Tesla was building this generalized solution that's going to be very scalable. Um, and so it's it's it's a little it's a little bit of a of a head scratcher in terms of why we're actually seeing declines in the in the monthly uh rate of additions to the kind of cumulative total of um of miles that was that was in the chart the chart they showed."

"I think the reason for that or um Brian Wang his theory of why that is is that he said that that was when they switched over to version 15 they probably slowed everything down a bit."

"Yeah. So, like I but I think that explanation makes sense. And you I was kind of workshopping an answer with with Jeff on on X about, you know, like if you're if you're scaling back the supervised rides and you're only going unsupervised, then you maybe maybe that makes sense. But also like why couldn't you just go, you know, um straight to uh like replace all the supervised rides with unsupervised? So like I never in my wildest dreams would have imagined that there's a kind of reduction in the monthly robo taxi miles driven um absent some like big safety incident or something like that. So, um, they didn't really explain that very well and and so there, you know, there there's reasons to be bullish in the long term, but, you know, still there's there's a bit of this, uh, these metrics are confusing, not explained well. The goals seem to be um being stretched out and and also kind of like reduced in terms of of the rate. Uh, and even one of the things that I found really frustrating was, you know, like Elon in the past has really prioritized um this like getting this technology out as fast as possible. if it's, you know, five or 10x safer than a human today, which I honestly think it is. Like my my car won't even get near a pedestrian on the road or uh get nearer to causing an accident or something like that. So, you know, Elon's position in the past was"

If you're, if you really have technology that's that's safer, it's actually morally irresponsible not to accelerate it quickly. And they seem to be, you know, kind of going the other route, which is, you know, okay, well, if we do have an incident, um, you know, that could actually, you know, cause some public backlash, which could, you know, further delay the robo taxi roll. I think that kind of makes sense, but also it seems to me that they're being way too cautious, like, like to be doing sub a million miles when my own lived experience is, is that like, is this thing is like not even close to being able to to cause a, you know, a fender bender of its own accord, you know, let alone some sort of fatality. So there, there's just a lot of confusing things there that seem to be.

And when you compare it to Whimo's roll out, which again, is, is I don't consider competition either, especially not on the business model, but they obviously didn't ask themselves all these questions and had all these incidents, and we were laughing about it and whatever, but, you know, they're still functioning, they're still doing over-the-air updates, they're still continuing doing it. So you feel like, okay, fair enough, Tesla should. And Tesla probably doesn't have as much slack with the press. I mean, he's right, there would be a major accident. It would be all over the world and they would make the the biggest. And Tesla risks actually much more because you want these FSD approvals in the whole world. You don't want to feed them with anything that, look at the French this week. Oh, we can't do this yet. This is not safe enough. Now, if you give them the proof in the pudding that it's not 100% safe, uh, then it's, it's delayed in Europe even further.

In fact, uh, all of Europe could could be denied because I think you need to get 65% of the population represented to approve. And if just three of the main countries deny FSD, all of Europe, and in fact, even Netherlands, apparently who's already approved it, it's a provisional approval. They would have to pull back. So all of Europe could end up not being approved for FSD. And if just one incident occurs, they might use that as the reason.

Yeah. But I think all this kind of creates this sense of whiplash from investors who, you know, like five years in, it's like, oh, we finally get to the robo taxi moment, like things are going to really accelerate and and then it doesn't. And like, you know, for for some good reason, but um, man, the storytelling could could sure use some improvement, I think, from from Tesla's side.

Can we, can we um, dive deeper into that question? Because there's two I want to talk about. One is the specific one, which is, you know, yes, you're right. I mean, Elon has promised a lot of things. I mean, this is not new. He has done this a lot of times. Now, Alexander did a fantastic job. She laid out in detail in exact words. She pulled out all the different transcripts for each of the earnings calls of what Elon actually said. And there is a lot of, there's faults on both sides. There's faults on the investor side. Some will say Elon promised 50%. Well, he had lots of caveats. He didn't really promise it, but they heard that. But at the same time, they did have in any earnings deck saying that we're going to have seven cities launched by June and it didn't happen.

Mhm.

So you're right that investor confidence in exec, Tesla executive in general, that's what we're seeing in the sentiment, right? A number of investors have just said, and this, I can't trust this company anymore. Anybody here want to comment on this? Um, I think it's recoverable if you do the following. One is you're communicating to millions of people. So it just has to be, it's a complex topic, but your job is to make it bone simple. Like you're smart enough, Tesla's smart enough to take complex things. This is what great leaders do, and they are great leaders, and to make complex things bone simple. And that's what needs to happen. It, it doesn't, we don't need to turn a call into a digital optimist product review and what could happen here or what's this scenario there. And Tesla said, hey, we want to stay away from that as well. But you leaders, you know, should take complex things and make them bone simple, especially when you're communicating to millions of people. That's the, that's the bottom line. And Tesla should accentuate what is going very well, and they should communicate what's not. But just, it, it, it felt like it was a bit of the opposite on the on the call. Now, the final thing, it, it, when I say it's recoverable, like when you're going after audacious goals like they're doing, and you're, you're, you're going to miss more than companies that are iterative and in incremental, like companies that aren't doing anything, they're going to miss less, but they also have a much lower PE and the expectations are a lot lower. When you're Tesla and you're going after these, you're swinging for the fence in so many different areas. Um, I think if you explain, like I think what people are looking for is the what, like why, why on the January earnings call, why did you think February would be doubling in robo taxis and it, and every month after, and it didn't? Like rewind the clock back, and and if you explain what happened, I think people would be like, all right, I get it, and this is what they're doing. And I think there's, I think we're part of the way there, which is like Tesla, you know, the the scrutiny could bury the robo taxi program if, you know, if the media gets a hold of something, whatever, right? And I think a show clarified how how impeccable the record is, but that, that risk has been there for five years with or more with Tesla. It's always been a media scrutinized, unfairly media scrutinized company with a very high multiple. So in summary, complex topics should be made simple. The things that are going very well were kind of felt buried. The things that weren't going well were very well accentuated. How difficult Optimus is going to be, how slow and painful Optimus is going to be. And we're slow, we're kind of, we're going to be very cautious with the robo taxi roll out. And again, there's a good side of that and a bad side of that for investors. As an investor, you don't want a company rolling the dice and having a bunch of issues and getting their program canned uh by regulators. So, uh, I think I, I think there's there's some reasoning behind this, but I go back to making complex topics simple and and a little bit more balance on what's going well, what's not. And then finally, the third thing, explaining what happened, what from the last 90 days we said this to here, just some explanation like this, we're we're learning. This is new. We're doing this differently than anybody else. This is what we've learned. This is what we're doing going forward. End state, nobody's gonna get to this cost per mile and nobody's gonna get to the scale of cyber cap. And I would have left it there and dropped the mic. But to build that credib, to rebuild some of that credibility of missed milestones, maybe explaining what happened would help.

Yeah, I agree with you. And I, I want to bring it back to my hope. The engineering talk we had yesterday was actually very well prepared. If you listen to Ashok at the beginning, he said, oh, we decided to regroup the say questions. So there was, you know, a script. The people had sitting around the table before and decided who says what and whatever. So, it wasn't as if they were just shooting from the hip. There was a script, who was saying what, when do we invite last to give a comment and and all that. So, when is Brandon calming everybody down? So, there, there was something scripted. It doesn't, it didn't feel scripted. It didn't feel sufficiently prepared. I grant you that. But it's engineers talking. I mean, did we ever have a talk where we really felt it was neither sandbagging nor being over optimistic and being clearly structured? I, I don't remember. But what will happen, what will happen if my theory is true, and this doesn't mean about timing. I mean, obviously you all know I'm very aggressive with my timing. But even if this merger happens in six or 12 months, is when this merger idea is going to be announced, this will be the biggest road show ever. Not even comparable to what they did for the SpaceX IPO, because selling this idea of a merger is important for institutions, is important for retail. Let me recall where we are. We have Elon having 20% of Tesla shares. We have retail having about 30%, but not all 30% can vote. And then we have 50% institutions. So they will have to really drum the drum, beat the drum. I don't know how to say anymore. Uh, and there will be, in my view, three major events in that time. The Terra Fab groundbreaking, the Roadster presentation, and the Optimus presentation. And there may be more, but I think those are

Macroard. Yeah.

Macro. Yeah. That that will be the the main, the the main, the the main.

And you will see how these engineers suddenly can talk because no company in the world, not even Tesla, can do this without a PR agency managing them, and especially Tesla. And while they hate that in normal times and don't let they understand that this is so crucially important to get to that vote. I mean, they can't lose all of retail. They can't lose all of retail. No, they can't. I mean, I did my calculations in all senses. They need at least a good third, if not half of retail. And they do not want to win this merger mode with 50.01%. They, they want to have a clear vote, right? So, it has to be at an attractive price. The prices obviously the most important, but current stock prices are making it expensive to make it attractive. So, the missing factor, the connecting piece will have to be that road show. And we will hear coherent sentences and we will hear, we will hear clear layouts where we are in in whatever else. You will see how this suddenly unfolds. I'm not saying they did express the last two, three calls as chaotic as they did. I really don't say that. But if they would have had to, it could have been much different.

And I want to just jump on on that that thread, Alexandra. I mean, you mentioned how important it is for him not to lose retail. He's never been at risk of losing retail until recently, you know, in my mind. I mean, I've been a longtime kind of Tesla commentator and I've been much more critical than than usual. Um, not because I'm just trying to stir the pot, and Alexander, you and I had a great conversation for those who are wondering like, hey, like you guys, we're we're we're all good. You know, we we're coming from slightly different perspectives. Um, and and I think we're much like aligned on in terms of um, kind of how we're we're thinking about things. Um, but just from um, you know, kind of Tesla retail investors, you know, feeling like somewhat left behind or like, you know, where that that drowning kid in the meme when the mother's like playing with with SpaceX, like the the favored child right now. A lot of Tesla investors are feeling that way. And if you, you know, were invested in Tesla from say 2021, maybe you didn't get that initial or the second pop, I guess, uh, you know, in in in 2020. And like, you were early on recognizing that AI was going to be a trend and Tesla was your your play in that. And now you're seeing, you know, Nvidia and Coreweave and literally like dozens of of companies um going through these multi-x revaluations upward because AI is like the hottest trend in investing right now. And Tesla's like flat to down from from when you invested. Like, and then they're missing these these internal milestones and and, you know, um, Elon's credibility is is taking a bit of a hit, um, you know, in a lot of people's eyes. Like, like there is, um, I would say a bubbling sense of displeasure. And it's everyone's a little bit different, so it's it's difficult to paint with too broad of a brush here. Um, but there are a lot of people who don't want this merger to go through, that that feel like, you know, Tesla's being acquired on the cheap. And we've been very vocal, rebellionire, um, and myself and Bradford and others about just saying like, it has to make sense for Tesla shareholders. And it can't just be, you know, SpaceX, you know, went on this this huge revaluation and Tesla's done nothing. And um, you know, and then you you acquire Tesla on the cheap as a when when you're looking at the exchange ratio. So, like I, I think it is actually really important that it does make sense for all shareholders. Like we get the strategic implications that the companies would be better together in the very long term. I, I absolutely get all that. Um, but there is this this sense of um, you know, almost like feeling taken advantage of or just lied to consistently over years. Like, you know, you can you can forgive, you know, a couple, you know, mistakes here and there or, you know, delays here and there, but it just, it's like five years of, you know, kind of getting kicked in in the gut and, you know, the expectations getting pushed out. Um, you know, 20 million deliveries, like all, it's not just like the most recent things that that you quoted in your um, in in your um, uh, blog post or your expost, which was great, by the way. I really encourage everyone to to read that and, you know, actually look at the context because I think this is a really nuanced conversation that we need to be having about what was actually said and what is all the context. Um, you know, but it's, you know, it's even things like, you know, solar roof and, um, a lot of the other parts of the business and, you know, even energy margins, people were really like bowled up on auto bidder for a long time. And and, um, you know, there's just a lot of these these kind of things that, um, have just quietly been killed and we never hear from them anymore, um, that are is is sewing this, I would say, bubbling sense of kind of distrust, um, that is, um, I think they really need to get a lid on it if they do want this this merger to go through, because they're, it's kind of shocking me to say this, but I think they are at risk of not having retail behind them for this.

Yeah, they, and I, I grant you that. I think they do. And I think it's all our jobs to actually, you know, vocalize the people that are unhappy. Matt, here we are. And the people that are happy, because I think it actually helps other people to make up their mind what is their priority, right? And we can have, we can understand the same things and yet not interpret them the same way. For example, when you said there were lies, I don't consider anything a lie. I, I think there always. Yeah, you did. When I, I, you know, feel like there is a moment where things make sense and then a couple of months later, they don't make sense anymore. Now, do they always explain why they don't make sense anymore and why it was abandoned and in what circumstances? No. It's for us to figure out why suddenly operating expensive has certain lines for projects being canned or whatever. So, you know, there is a missed communication issue. There clearly is. You know, sometimes I just wish I could just shake them up and say, "Now talk and tell us what it is." But it, and and there is stuff that is missing in the whole timeline since I'm a Tesla investor. But does that bother me in the big picture? No. Now, would that bother me if my investment horizon would be smaller? Probably not. You know, mine is really long. I mean, it, I, it's a perpetual five years forward. That's one of the reasons I still have a day job because I don't want to depend on this money now because I feel like, you know, as long as I'm making money, this is all good. I don't need to touch it and I can just leave it there and and let it sit there. But I do understand that not everybody has that comfort level and and has to have a different or has a much more ambitious goal of having much more return on investment than what I currently experience. I will, I will crack the code on something here that has been happening in the community and I hope people can just follow along for a minute. This whole thing of of saying that the company lies, and I've seen it all over X or the the launch of a couple of cars in or Orlando and Tampa was a stunt for the earnings call. If you listen to the earnings call and the delivery and how difficult everything was made to sound, that wasn't a pump earnings call. I'm, I'm sorry, that wasn't set up that way. So in that 70, that 48 hour period or whatever that period was, that the company clearly isn't doing that. Their method of launching robo taxis and starting with is a method, is a process, and what they're doing, they they explained that process on the call. So when you stitch the two together, I think people need to stop with this. Oh, this is a pump or this is this is. But I think it is appropriate though to question what are the metrics? Are we going to can you announce active miles, active number of cars, you know, is there some more transparency in that that would help investors understand where the program is going? That's fine. But this whole thing of they're lying, I'm telling you from being in product and let's say you're working on 10 different product lines, I'm telling you not all 10 are going to be a hit. And at some point during the duration of and development of that product, you realize we're not going to invest in much as much in that anymore. Like solar roof, that you, you know, we found as we got closer to the end, at some point you find like, look, the economics aren't going to work. We're going to pull back from that and we're going to push there, we're going to pull. So the batting average on products is actually quite low in the industry. You'd be surprised at how low it is given all the different things you launch and go after. So, they're not, they're not, I don't, I don't believe that they're lying. I, you just look at how the earnings call was delivered. That wasn't delivered as some sort of like two or three day pump routine. It wasn't. So, they're not. But what, what is, what they aren't doing is maybe unpacking some of these things and communicating them better.

Correct.

And and so I, I don't think that I said they were lying. So maybe if we can roll back the tape or whatever, you know, that certainly was not my intention and I, I don't actually think that I, I, I said that. But like, I, I think the solar roof example is kind of a a good um, idea of things that you could very well have been, you know, um, laid out with with good intent. In fact, I think they were. Um, but it does kind of create this mistrust. Um, you and if you kind of go back to the Solar City acquisition, you like when you when you go back and actually look at what was happening, those were like fake tiles, you know, that um, you know, Elon didn't really talk about at the time. There was this this kind of um special benefit, you know, with with Solar City being in the family. And he, you know, pitched this um, you know, the these, you know, Solar Roof as as being like this thing that's going to drive the company together. And of course, like these, uh, Solar City and Tesla never should have been, you know, separated. They really always should have been one company. And like he made a pretty compelling pitch and then like none of it really panned out. Like the existing solar installation business completely wound down. Solar roof like fizzled and went nowhere. Um, and then all that really happened on the energy side historically was on batteries, which was a Tesla product, not a Solar City product.

And now solar panels are going to be produced by SpaceX.

Yeah, that that's actually like wildly ironic. So, so like there's, I, I don't think like the worst, and I don't think that, you know, Elon was trying to like self-deal here and and like flat out lying to get this deal approved to like, you know, bail out his family. Um, but like you have to kind of look at those objectively and say, yeah, like that deal didn't really work out. And, you know, it was probably pitched in a way that was overly aggressive considering what they actually had at that time. And that deal didn't work out to the benefit of Tesla shareholders. Like I think that's objectively true. Um, and so when they're bringing another deal which has, you know, it's even larger and it has, you know, self-interested parties again, you know, kind of at the table, I think it's understandable that there's going to be some level of skepticism. And so to your point, Alexander, I really agree with you. Like we need to have an honest conversation about all this stuff. Talk about like the good, the long-term good. I really do agree that these companies make sense together in in the long term. Um, but there's been a lot of kind of rocky road along the way that is is causing this distrust that I think, you know, management would do well to iron out.

Yeah. I think we have to understand why they were initially set up separately. Okay. Because when you set up SpaceX initially separately from Tesla, that makes a lot of sense. Either one could have gone bust and if you put them together straight away, they would have gone bust together. So that that.

Were not at all apparent back then.

Exactly. And or or we've had this discussion because I mean, people always feel that I'm not at all critical. I am. I have my list. It's just that this list doesn't shake at all my long-term conviction and I rather leave it there and let it work out. Um, but it, for example, XAI, I strongly feel should have always been part of Tesla, strongly, like from 2018 onwards. And I was, I mean, I came to the table in 2020, so by the time I was there, it was a done deal. And and that was, but it's, it's a bone that I still have that I really feel, you know, should have not been that way. And now it got put into SpaceX. And we actually know from Bloomberg that there were discussions in January this year whether SpaceX going public should straight away merge with Tesla or first with XAI. So this was all on the table. And I think it's normal that it's on the table. I'm not, you know, of course it should be on the table. They should explore all all different sections. But you, you also want to make sure that the Tesla shareholder, when it will happen again, I think sooner, but it may be later, um, gets a fair premium for it. And and the discussion we have among us now for weeks is what is a fair price. And obviously with the stock stock prices both now going down, fair price becomes much more difficult to finance, especially for Elon because he has 40, what is it, 42% of of SpaceX? Because it's SpaceX going to pay for it, right? So, um, we shall see. But one thing is that there is going to be a big need for transparency during that period between announcement and proxy of Tesla. And that's not a huge, that's not a huge win. I mean, during the proxy as well, but during the proxy, it's going to be less effective because the proxy is written right now. have now you have all the conditions on paper, while the initial period has to be the one that creates the enthusiasm. And and there is a huge need to fill this communication vacuum with a lot of enthusiasm at the moment. I, I see that. It doesn't mean that I'm, you know, completely blind to that. Oh.

Just to correct and I agree in principle with the XAI kind. Just the the years it was formed in 2023. Um, and so not it wasn't earlier than.

Yeah. Uh, and and then Solar City, I mean, that was 10 years ago. I, I think we should be talking a little bit more about like like recent Tesla, not saying the last three months, but maybe the last couple of years and what's going on, how they're constructing the business, how they're guiding, and and then maybe there's there's issues to take with some of that. I, I think it comes down to a communication issue. I know from doing product that there's a batting average with doing products. They're not all going to be hits. Just because you play them out, you launch, you you have a launch and say, "This is the business we're trying to build." it doesn't mean it's going to be a guaranteed hit. And nobody, that's what investing is like, you're you're making a bet on something and there's somebody else on the other side of that. So, but yeah, I think it's, I think it's communications and clarity communications. I don't think that Tesla is like purposely misleading. It's more of like, how do you clarify some of this stuff?

Sorry, let me clarify. I was talking about Open AI when you wanted to get into Tesla.

Gotcha. Gotcha. Yeah.

You know that we talk about your the Tesla community and the Tesla community, I think we should communicate. Hopefully Tesla understands that it is is probably at the height of its most disarray, most, I don't know what the right word is, just uh disillusioned, right? When you say the Tesla community, it's not one thing. There's multiple fragments of that. There are, I'm a long-term shareholder. Some people. And then uh then they ask me, why do you have, why do you talk stock? Then why do you care? Well, because there's a segment of the Tesla community that is all about stock. And there are those who play options. And so you need to cater more to that. But I lean towards product and business, and that is what I care about. And yes, there are a lot of negatives, and I try to point them out. I don't, I don't, I don't shy from any story that is a negative on Tesla, like I don't ignore them. I will bring them up and we'll talk about them. But the, so there, but it's true that the short-term shareholders, the one with the options, a lot of them are very upset because it didn't pan out what they wanted. I'm also saying that even the long-term investors, they also are feeling a little bit of this um too much of this miscommunication and mis set owned guides there. They set their own thing. It's one thing when you know, we as investors think, ah, Tesla's going to go to the moon, and it doesn't. That's another thing when the, you know, earnings stack says these are the things we're going to hit, they don't hit them, which is again, fair, that's fine. But they don't, it just happens too often. And then you go, okay, what's going on here? If this is, uh, the case, is that what you guys are seeing out there as well in the community?

Yeah, that's fair, that's fair. And I mean, I, I get attacked if you want to all the time. And the latest trend is, Alexandra, you lure investors into being all in. I mean, no, I did not. It's not because I am all in that any encourage anybody else to be all in. We actually try all the time to tell you, you know, everybody has to really understand investment horizon, how much risk they are capable of doing. And if this is too much for you, well, then go to a financial advisor and and get some help. Don't listen to any influencer, especially not me, on uh, on whatever source, X, YouTube, or whatever else. This is this is crazy. If people think they make investment decisions because they listen to us and don't switch their brain on, this is crazy.

All right. Uh, final words on the earnings call. What we've learned about Tesla. Are you guys not are you on the camp of, yeah, don't, we won't see much this year? It's all going to be 2027 now. In fact, mid 2027 for scale happens, or do you think that there's still, Alexander says there's a chance there's a merger that could pop the stock? Anybody else?

Yeah, I mean, I, I, I, I've been posting a little tongue and cheek. You know, some people probably think it's like, you know, overly critical or whatever, but it like, I, I had a post like every six months, it seems like my expectations for what's going to happen six to 12 months from now get pushed back six months. And it, it just seems like the exact exact same thing is playing out again. Um, so like when when I'm looking, like we're kind of in the early stages of the S-curve. And so like last year I thought the S-curve was going to kind of look like this. Instead, you know, it's looked like this. And so now we're we're over here. And I still think the S-curve is going to kind of look like this. Um, so, you know, I, it seems to me we're probably, you know, 12 months away from like really hitting meaningful scale in terms of like robo taxi increasing um, in in like a meaningful way to the point where it's actually starting to drive earnings per share and gross margins and all that. So I, I still think that is kind of what we're we're waiting on for kind of the existing standalone Tesla business uh to really move. I, I do think we we shouldn't sleep too much on FSD as a driver of existing car sales. I know Jeff touched on that on that briefly. Um, and I think that could be a pocket of of good news as well. I don't think it's going to necessarily change the story. Um, like even if you were to kind of take this run rate and assume that it, it um, persists, you're only talking about a billion dollars of gross margin incrementally uh from doing 200,000 incremental FSD subscriptions per quarter. So a billion dollars per year. So it would take five years for that to become a $5 billion business. Um, so, so there's um, it's going to take some time, I think. But I think that's that could be a positive kind of indication of increased interest. And if you have increased interest, you know, that could drive overall vehicle demand, which could, you know, cause them to raise prices and gross margins and all that. That that's a, a little bit of a, I hope that's going to happen as opposed to I think that definitely will happen. Um, but, you know, in terms of of kind of the near-term, yeah, there there's a lot of, you know, mistrust. It doesn't seem like there's anything imminently on the horizon that's going to, you know, be a kind of um significant catalyst to, you know, increase that that S-curve where we're we're rapidly expanding more than we were initially thinking. In fact, if anything, our expectations have probably taken a hit um from that, you know, 10% per week figure that that you were talking about the math on Herbert. So, um, right now it does sort of seem like the only, you know, positive catalyst on the horizon is, you know, if and when a merger happens and assuming that happens with a reasonable premium. Um, to me, that that feels about right. But um, I, like it kind of shocks me to say this, and I'll, I'll just repeat it one more time. Like they really are at at risk of not having retail behind them to support that merger. So it's, it's important that it's at a reasonable price. Um, and I'm honestly, I'm just very curious to see what happens. Very bullish in the long term. Like sometimes people say I'm not a long-term investor. Uh, which I, I don't really understand. But um, um, yeah, it's just a interesting time. one of the more unique times I can remember, you know, in the many many years we've been covering Tesla stock.

If I may add, there was actually a news in the 10Q that obviously didn't get discussed yesterday. Is we are back to Delaware. Well, not really, but there was a, there were still open law cases. And then, let me recall quickly the story. Uh, Chancellor McCormick liked a LinkedIn post that was inappropriate. She was then discharged of those cases that were still under her um jurisdiction and gave them to another judge, a vice chancellor. Um, that vice chancellor on April 13th, within a 10-day window, dismissed those cases and said that Delaware is not responsible for them anywhere anymore. They are, they, if these people want something, they should go to Texas. These people know darn well that in Texas they can't file. But anyway, so we thought that's it. We're out. I actually wrote even an article middle of April about that's it, we're gone. And today in the 10Q, we learned that these plaintiffs are going to the Delaware Supreme Court to try to get it judged there. So, we'll have another thing to follow up there.

Thank you. Thank you, everybody. The more to discuss, as always.

Follow us next uh next Cyber Bulls. Thank you so much, Matt, for joining us. U the most accurate Tesla retail analyst. I think I can still say that. Alexander Mer, not this most recent quarter, but my trailing 12 is is still intact.

Oh, well, sounding like I'm losing my trust in your, dear.

You were too bullish, Matt.

Everyone was too bullish. Yeah, but I was uh slightly more than uh slightly more too bullish. I, I want to say Troy Teslike was the the most accurate this quarter. Uh, I could be wrong on that, but um, yeah, I think I was at 59. He was at 55, something like that. And it was actual was 33. So yeah, everyone missed. Yeah, it's the capex and the R&D that nobody got right this time.

And there's more to come. Oh, one thing I forgot to tell you. We're now going for a 30 billion credit line. That's something that's new, right? Tesla has always tried to avoid credit. We were around 7 billion in different, you know, smaller situations. But now we're going for 30 billion. That shows how much we cannot finance uh through operating free cash flow.

But it also means why they're going to scale. Why else are you going to buy borrow that much money?

Yeah. Thanks, everybody.

Thanks, Herbert.