Bullish Tesla | Musk Announcement & Price Target

it's a moment of truth from us no one

including ourselves expected he'd be

this involved in Doge this involved in

Trump Administration and it's really

cascaded and I think this is a pivotal

moment for him all right so Tesla is

back to pre-election pricing Ron Baron

the Tesla bull is not going to sell a

single share and yesterday Kathy Wood

bought about 69,000 shares for her funds

the question now is what's next for

Tesla and what did we just hear

announced well multiple things we just

heard the first that I'd like to hit is

that at the delivery of Donald Trump's

new Tesla uh we saw Elon Musk announce a

potential doubling of production for

Tesla vehicles over the next 2 years

this is quite interesting because we at

the moment at least feel like we might

be slightly demand limited and might not

need more than the production that we

already have which sits at a capacity of

essentially matched with demand our

demand seems to be about 1.8 million

vehicles per year Nationwide or globally

uh and and our production is right

around 2 million it's likely that Elon

Musk is referring to the robo cab though

and optimism that the robo taxi will

sell substantially as they expand the

manufacturing for the robo taxi not just

in the Austin gigafactory but

potentially also open up a new location

within the United States now that does

create some potential unionization and

cost issues that I want to talk about

but first let's listen to Elon Musk

actually say

it helpful mentioned the I want to say

as as a function of the great policies

of President Trump and his

administration and as an Act of Faith in

America Tesla is going to double vehicle

output in the United States within the

next two years double big deal about

YouRock by the way he makes one car this

one I don't understand this one I don't

want but that's okay without a steering

wheel it comes out next year right tell

explain that please yes so well at the

the Cyber cab uh sauce production uh in

Texas next year and it's a self-driving

we have so much confidence in the

self-driving nature of it that it will

actually not have a steering wheel it

will not have pedals it'll either self

drive or not drive at all but it'll self

drive and I'm going to pass okay I like

that as a joke self drive or not drive

at all uh now a few things that we want

to detach from that first of all it does

sound like a little bit of a delay we

were originally told that the Cybercat

was going to begin production in 2025

this is now being delayed to 2026 now we

understand that uh you know they have

test models obviously that are are

produced this year but the original

understanding was that we would slowly

start production in

2025 ramp production in 2026 and be Mass

producing in 2027 it appears now that

the start of production is actually

likely getting pushed to 2026 so but

that's okay I mean you kind of come to

expect this it's Elon time right so but

another thing to consider here is when

Elon Musk suggests uh this um this

development in Austin Texas we have to

remember that we're paying Texas labor

and guess who's actually clamoring for

more tariffs against Canada and Mexico

it's the UAW now this actually makes

sense unions are his torically Pro

protectionist policies because that's

exactly what tariffs do tariffs

incentivize domestic production and that

means more jobs for American workers now

those are higher wage C like higher wage

jobs and therefore higher costs are

associated with that but is true you do

create those higher wage jobs

domestically which is exactly what

increases the potential strength for

unions more union workers potentially uh

means more potential Union do members

and a more powerful Union it wouldn't

surprise me that doubling down of

production in the United States versus

potentially the gig of Mexico that had

previously been considered before the

Trump Administration became a potential

new

reality would not only increase certain

costs for manufacturing these vehicles

at Tesla but also potentially increase T

Tesla's risks against unionization we

know that elon's not a big fan of

unionization that said the unions are

going to have to compete with Elon and

Optimus see Optimus could be that sort

of balancing force that gives Tesla some

leverage over hey look we want workers

to have jobs but you know we we're also

going to be shifting more to Optimus

over here so I expect some balancing uh

uh axe to be uh you know coming down the

pike uh in that front another thing that

comes out of what Elon just said is it

will either not drive or it will be

fully self-driving this again doubles

down

on the premise that there will not be

more affordable new models this has been

a big debate in the Tesla Community

everybody's been waiting for like the

model 2 right we've been waiting for

that for years and Elon Musk really put

that rumor to rest by saying there won't

be a $25,000 car that's not fully

self-driving because the future is fully

self-driving so why create something as

an

intermediate to this obviously people

have suggested got it so a $225,000 car

is not economically viable which is a

logical conclusion uh and to this then

there have been suggestions that well

maybe they'll come out with smaller

battery packs for other vehicles but

that was then flipped on mostly because

of the realization that a lot of the

margin the profit margin in Teslas comes

from actually selling you the battery

pack at a premium especially as lithium

costs are falling that also said we do

have a little bit of an indication that

there are demand problems uh one

potential indicator of that could be the

fact that Donald Trump is holding up a

notepad all cars have self-driving just

needs to be turned on Teslas can be

purchased as low as $299 a month or

$35,000 it's almost like a paid

sponsorship with the president of the

United States but then again many will

say Elon did pay quite a bit to get to

where he is and so maybe he deserves the

shout out uh but anyway uh we know we've

got 0% API limited time only apparently

for the model 3 but something else I'm

noticing here is inventory model Y is

now available at reduced pricing now

this is obviously very likely to be the

older model why not the Jun Juniper

update uh but what you're finding is the

new Tesla's long range uh rear wheeel

drive models are selling for

$449 you've got here's the new model y

the up updated version uh here's the

updated version at 60,000 that's your

entry price for the updated version one

way you could ident identifi by the way

is look for the light bar it's very much

the Cyber truck style light bar and you

can see the old model right here so the

cheapest version of the old model is

that 449 level but if you go to that

reduced pricing section you get these

tabs right here you could actually see

some of these uh have about a

$3,600 price adjustment to them so you

could see a uh basic rear wheel model Y

without full self-driving it's going for

about 4139 90 right now which seems uh

basically the same as this one right

here there essentially no difference

that we could see in this uh with the

exception of the price and that one is

already built and one is not now I find

this very interesting because to

me you know these these aren't even demo

models seeing a price reduction on

inventory of somewhere around what was

that $3,000 $4,000 uh 10% $3,600 let's

do that it's about 8% eh about 8% %

let's do the math here 3600 divided by

and then off of the um original price uh

449 that is a price reduction of about

8% uh it does suggest that there is a

limit to the amount of demand we could

actually hope that Tesla have at least

with current models now is it possible

that we end up getting some you know

more refreshes like Model S and X

refreshes of course uh and and who knows

you know maybe those will increase some

pricing power here but this idea of

manufacturing 2 million more Vehicles

over the next two years it it cannot

come from the traditional vehicles at

least not at this current pricing

structure it's not it's not likely going

to come with smaller battery packs so

Elon Musk is likely assuming that we

could manufacture somewhere around 2.3

million cyber cabs per year within the

next two years and that does align with

his mass production ramp thesis of 2027

2 years from now is 2027 and that's when

he thinks he could be mass-producing

cyber cabs now of course we still have

to prove that the Cyber cab can be 100%

full

self-driving and that is exactly what

Morgan Stanley says is really the next

Catalyst for Tesla in fact Morgan

Stanley put together this report right

here and they say that according to

their valuation Tesla is selling at a

pretty big discount at only 19 times on

a PE ratio basis for 2030 based on their

2030 estimates now I personally think

that when we start getting companies

that are predicting stock prices five

years out as opposed to talking about

what the valuations are today and then

assuming you know some kind of growth

rate over the next few years so we have

a metric to watch it usually when we get

these five to 10 year price Horizons we

just get disappointed I hate to say it

and I'm not trying to sound like a bear

just saying it's not my version of doing

analysis I like to say where are we

right now how much can we grow to next

year and can we grow again the year

after that

yesterday we did that math so I'm not

going to rehash all of that math and the

valuation we covered that math yesterday

and encourage you to watch it on the

channel however it's worth mentioning

that if we can get to 2 million cyber

cabs and full self-driving it would make

Tesla look like a bargain today that

would be fantastic so if you think that

what Elon mus just announced is

possible then you might want to Discount

how much that might be worth to you uh

in fact what we could do is we could

update a little bit of the evaluation

that we had yesterday and just assume

some of those numbers and you could see

some of the other numbers yesterday and

today's you know PE ratios and that but

let's just go right in 4 million

vehicles for the end of 27 so we'll go

to the end of 2027 we'll do 4 million

Vehicles I'll pull this up in a second

we'll go with

margin I don't think the Cyber cab

margin is going to be that great so I'm

going to leave it at the same level that

margins currently are so I don't think

you're going to get a margin Improvement

because I think they're going to sell

them for a lower price right even if

they are able to be manufactured at a

lower cost I think you'll sell them at a

lower price so you probably keep

consistent margin ratios uh and if we

produce 4 million cars and value Tesla

as a

manufacturer well that would bring us to

a valuation of about $31 by the end of

27 which is about you know two and a

halfish years out now if we had a full

self-driving Fleet and we valued it as a

service company sure then maybe we could

get back into the 400s where we were in

December but I mean look everybody

looked at those numbers in December and

we're like wait a minute this has gotten

a little ahead of itself but Morgan

Morgan Stanley actually has a really

good line for this and I kind of agree

with them that Tesla's stock price tends

to really affect sentiment for the

company look at this I I completely

agree with this having covered Tesla for

nearly 15 years we find that the

investor narrative around the company

tends to follow a share price the share

price

in December when the stock was testing

$500 a share the prevailing sentiment

was that the company is an AI winner

with untapped exposure to embodied AI

Expressions such as humanoid robotics

today with a stock down 50% our investor

conversations are focused on management

distractions brand degreg and a loss of

Auto Sales quite interesting for them to

say that because even Dan

IES just talked about how Elon needs to

stop being distracted with Doge

basically and double down on Tesla and

that's Dan Ives who's you obviously a

Tesla Uber bow it's a moment of truth

from us no one including ourselves

expected he'd be this involved in Doge

this involved in Trump Administration

and it's really cascaded and I think

this is a pivotal moment for him few

trillion I may I believe when it comes

to physical AI autonomous robotics

they're they're actually the best

position coming in the world but with

that said to hear musk continue to talk

and and again on social media as well

it's really us trying to explain like

look this is the time very similar as we

saw during Twitter very similar as we

saw even c a year and a half ago this is

the time to lead it's the time to be CEO

because I think patience is wearing thin

among investors and it was really to

communicate those thoughts and I think a

pivotal time for the stock now with all

of that said uh what's my take well I

personally think that it would be a lot

cheaper if we could manufacture in

Mexico

uh and not have a trade war that said

I'm not optimistic that we can

manufacture 2 million more cars unless

we're convinced that Tesla can actually

solve full

self-driving I'm not sure that we're

there yet we know that cyber caps are

expected to have the sort of Hardware 5

version of Technology we expect that

most of the hardware 3 vehicles are

going to have to get upgraded Hardware 4

vehicles like the cybertruck right now

they're pretty good they're not all the

way there especially dealing with those

edge cases the predictive edge cases

it's problem problematic issue but we'll

get there but by 267 if we've haven't

gone into a recession remember we we not

only have the upshot of the Cyber cab

but we also have the cybertruck

production that's an upshot so this is a

lot of American production so there is

definitely real Hope on the horizon uh

and and it could make you bullish as

long as you're optimistic in FSD and

excuse me Elon mentions it himself if

you don't believe in Tesla ability to

solve autonomy don't buy the stock so I

think that's a that's actually sort of a

fair disclaimer there uh but again

you're going to face UAW risks with more

uh us manufacturing over time over time

especially as uh Optimus production

scales up although that'll be an offset

so we've talked about that but again as

as far as demand these these price cuts

that we're seeing are slightly

problematic and again it is on older

inventory you know people might want the

launch edition but you can't get the

launch edition unless you're willing to

pay $60,000 versus $45,000 000 that's a

whole chunk more it's 33% more right so

with all of that said together I think

when you look at Tesla today you really

can't say anything about the stock until

you have more certainty on FSD until

then what you're really going to be

stuck with is evaluating all right what

is the economy going to do you know

Trump classifying Tesla vandalism as

domestic terrorism that's great it's a

pat on the back to Elon but you really

have to ask yourself is the economy

going to come out of this sort of tariff

hiccup stronger then you've got to and

is Tesla going to solve autonomy then

you want to buy Tesla all day long right

so think about that short-term trade War

government shutdown Catalyst no

recession and Tesla solves economy

Tesla's probably a fantastic buy right

now if you question how quickly elon's

going to be able to solve autonomy that

maybe he will at some point in future

but it might take years longer you

probably don't want to buy Tesla right

now probably have more negative

catalysts as they miss that cyber cab

deadline in August which morg Stanley

talks about as well with their $800

price Target in the

future if you think that we're going to

go through a

recession probably also going to take a

big hit on some of the production

numbers uh and capital expenditures that

you're going to see from companies and

Investments and you probably see a

Slowdown on this anyway uh I mean even

Morgan Stanley tells you delivery data

has been below expectations this year

here especially with an aging lineup and

buyers uh uh you know basically striking

the brand

from you know the negativity that's uh

circulating in the mainstream media and

on social media something to keep an eye

that said they think that Tesla could

get to oh it's actually $800 within the

next 12 months sorry about that within

the next 12 months that's pretty

incredible the reason I think that is

because of the pull forward of

autonomous vehicles

now they as as a way of citing like

their evidence is an AI humanoid day

demonstrating the latest capabilities of

Tesla's Optimus is expected before the

end before year end and the release of

the robo taxi the unveiling they think

those two catalysts uh will shoot the

stock up to $800 so if you believe

Morgan Stanley that they're going to do

well at both of these potential events

then hey this might be another buying

opportunity for you on Tesla anyway

hopefully you found this helpful see you

in the next one goodbye and good luck

why not advertise these things that you

told us here I feel like nobody else

knows about this we'll we'll try a

little advertising and see how it goes

congratulations man you have done so

much people love you people look up to

you Kevin PA there financial analyst and

YouTuber meet Kevin always great to get

your take