We need to Talk about Tesla Stock.

hey everyone me Kevin here breaking news

out of Tesla that Tesla is now requiring

FSD demo drives as part of your delivery

experience when you purchase a Tesla now

there are a lot of mixed feelings about

this from some people believing that

this is sales pressure and will add to

what should otherwise be a pretty

seamless delivery experience other

people say no this is exactly what's

needed to actually get to mainstream FSD

adoption there are a lot of ideas and

opinions on both sides of the aisle and

so what we're going to do in this video

is we're going to break those down I do

want to start by doing a bit of a

delivery update here uh and then we're

going to as in number of deliveries and

then we'll get into the actual FSD uh

numbers shout out by the way to those

course members who jumped on with that

lucid trade with me this morning and

kicked a butt we're up about 40% within

20 minutes if you want alerts like these

make sure to join the stocks and

psychology of money group that was a

nice day okay okay let's get into this

so I broke this down on eack and what

what I wrote down is that a few things

Barclays has a q1 delivery Target of 420

to 420,000 Vehicles this is the lowest

I've seen so far from the street and

barklay suggests that we might see some

more seasonal sensitivity for Tesla

deliveries in q1 and Q2 so prep for a

harder q1 and Q2 in the future now that

the growth rate isn't meteoric anymore

for Tesla this is actually going to be

really important as a longrun Tesla

investor if that's you then you should

keep in mind that q1 Q2 might be the

harder quarters going forward this is an

interesting argument I haven't heard of

before but it makes sense since a lot of

folks are going for those uh end of the

year car buying spre especially since

you go through Labor Day Black Friday

Christmas a lot of excuses to treat

yourself to a new car so interesting not

about seasonality we've also got a

subsidy rollof in Germany France and of

course the $7,500 roll off for the model

3 in the United States but to offset

that we do have a point of sale Credit

Now for the vehicles that do get the

credit and for the people who do qualify

which means you're getting those credits

up front which is a good thing it's nice

not to have to wait a year to get the

money you're entitled to of course this

morning we had reports about byd cutting

prices again on over 100 at different

models in siomi following suit something

that's driving more price competition in

Tesla or for Tesla in China some folks

are saying Elon Musk may have started

the price competition but China will end

it well to the extent that they can

given that they're really competing in

Europe and China versus the United

States where we're likely to have a lot

of protectionism limiting the impact of

Chinese vehicles in the United States of

course Barclays also points out

disruptions in Berlin and and suggests

that if we get a q1 run rate of around

420,000 we're probably only or call it

even 425 we're only looking at about 1.7

million units for the year which is not

great because 1.7 million units for the

year that's if you annualize q1 Q3 Q4

should obviously be a lot higher but if

you were to annualize a q1 you'd be down

6% on annual deliveries that would not

be great baras calls this quite negative

my guess is if we continue to receive no

guidance from Tesla we're probably if

you're a Tesla shareholder you're

probably going to really have to buckle

up for q1 Q2 earnings before you start

getting some positive momentum and that

positive momentum should align with when

rate Cuts begin if they indeed begin

this year so really getting to like July

to September is probably the target for

where you want to start re-evaluating

okay is this really the time to buy the

dip do you save some cash now buy the

the dip then or is the dip now and do

you buy now is the market already pre-

pricing all of that in we'll see Goldman

Sachs reiterates that we're in between

growth curves this is something we've

heard on the earnings calls Goldman

Sachs after their visits uh visit to the

Tesla and rivan Facilities argues that

uh Tesla should remain positive on a

free cash flow basis and ultimately

monetizing software is key and how

interesting monetizing software is

exactly what it appears to be uh Tesla

is trying to do with the the following

email now you'll note that the email was

sent at 2: a.m. personally I think

there's like a

1.7% chance that Elon sent this email at

exactly 2 a.m. mostly I just did 1

divided by 60 there which is about 1.7%

now let's say he did this to sort of be

ironic then maybe call it a 30% chance

Elon purposefully hit send at 2 a.m.

personally I think it was a scheduled

send this is something you kind of write

later in the evening and then you

schedule send it makes it kind of seem

like you're working it's part of the pr

part of the marketing fine not that this

really matters but a lot of people were

commenting on that so I thought I'd

address that ilamas says going forward

it is mandatory in North America to

install an activate FSD 1231 and take

customers on a short test ride before

handing over the car almost no one

actually realizes how well supervised

FSD actually works I know this will slow

down the delivery process but it is

nonetheless a hard requirement okay few

things here first of all I love 123 123

is way better than what I've experienced

with 121 big fan I will say there are

some parts where I I know the car is

probably looking ahead I'm guessing it's

looking ahead and so I I expect

everything is fine but I'll give you an

example of a 123 drive not a 12 3.1

drive just to give you a little bit of

uh an example of two parts where you

kind of kind of notice okay this is kind

of where the car has still a little bit

of work to do and honestly that's very

very little if this is the limit or the

work that we still have left to do we've

got like not much left to do so first of

all i' just like to shout out that this

is a version 123 right here it is really

good it's not even 1231 yet and it's

phenomenal I did about a 13-minute video

no takeovers no interventions it's by

far one of the best uh FSD versions that

I found it does like to cut curves a

little tight so sometimes I get a little

nervous that I'm going to end up

clipping the side of the curb and I've

seen some other folks on social media

talking about doing exactly that uh and

so that's just something that'll get

fine-tuned over time obviously we don't

want that to happen uh but that's why

this is a supervised FSD uh Beta release

right now what I want to show here are

the two leftover challenging points and

I think the easiest thing to do is just

sort of listen to me on these and then

you can kind of see it happening uh as

it's happening live here we oh my gosh

chill out would you there we

go okay slowing down a little hardcore

here I do have traffic behind me that's

pretty natural that was nice quickly got

in that right lane so trafficing pass me

this is not a stop this is a yield come

on come on go go go why are we going so

slowly

why that is one thing that I talk about

in this video is that when it sneaks up

to red lights or stop signs it is very

slow at getting to the stop line but I

also acknowledge in the video that it's

probably better to be safer than sorry

obviously especially before pedestrian

lines and it's good for robo taxi now

here's a part that gets a little weird

and I call it out as it happens but the

car probably saw uh I want to take the

next one okay good that's the

unprotected left here so let's see if we

get traffic and how it does and not only

is an unprotected left we don't even

have a lane so oh my gosh I'm so scared

I'm going to put my hand here cuz that

car is going to turn and then there's

another car behind it please don't go

please don't go please don't go we can't

see behind it you dumbass oh my go I

maybe it's saw maybe it's saw that

scared the crap out of me again I say da

but I'm like that was scary because if

you look back I could not see and I've

looked and played back on this I don't

see the visualization here coming for

the vehicle behind that we could kind of

see this on the frame by frame right

here if we zoom in we don't see

another vehicle coming uh in the frame

by frame until I think here there we go

I see a small dot here so maybe we do

see it see that tiny little dot there

but my concern is what what if somebody

was pulling out right here right in the

blind spot of the vehicle I suppose we

could have turned and then stopped here

but let's just say this like

uncertainty was scary again a car could

have pulled out from here even even

though we were tracking this one and

again I suppose we could have stopped

here but

boy so there are a couple of scenarios

or at least I'm still like okay I'm

usually really comfortable with FSD I've

been using FSD uh and autopilot for over

seven years now which is crazy actually

it's over six years I'm on my seventh

year essentially uh cuz I got the car in

2017 so I haven't quite lapped it yet uh

and I'm I love this I mean it is the

best ads system that exists out there

but yeah you probably don't want to take

new drivers on specific encounters like

that and you kind of got to supervise

where the car's strengths are and where

the car's weaknesses are see in my

opinion there are probably a lot of

people who look at FSD and say like I I

hear it's good but I'm too afraid to try

it and I think that's probably what Elon

Musk sort of forcing this trial will

help accomplish for Tesla is getting

people wared up to the idea of okay all

right I can use this in a supervised

Manner and when I feel uncomfortable I

can take over and drive just like normal

now I do think that's fair entirely fair

but let's run through this a little bit

and think through this logically and

what this means for the stock ultimately

so I broke this all down over at ec.com

so this is obviously going to increase

time and labor costs I do some quick

calculations here on how much it's going

to cost my guess is it's going to cost

about $7.5 million per quarter in

additional labor costs assuming an extra

20 to 30 minutes per delivery for each

vehicle that's assuming every single

vehicle gets about 20 to 30 additional

minutes of uh demonstration time versus

the Express Deliveries we have now a lot

of the delivery today is done by you

going into your app pre-signing things

uploading documents and frankly when you

get there to pick up your Tesla usually

you exchange a few words you get in your

car and go it's actually an extremely

seamless delivery experience but now you

have to wait for somebody somebody comes

to you then you have to introduce

yourself they'll probably run some

Basics through with you then somebody

has to decide do you want to drive do

they want to drive do you want to take

turns driving realistically it's

probably between you know you're not

going to be able to assembly line this

too easily you're probably looking about

30 minutes per uh delivery demonstration

but again this isn't necessarily that

big of a deal because you're selling an

extremely high margin product to where

even if you just convert at full price

point

15% of people you pay for the extra

labor costs but I honestly think the

conversion rate could be substantially

higher than this so for the long term

I'm actually pretty bullish in people

getting that extra push to trying this

out so I'm not bearish on this this is a

long run good thing now I do think

eventually uh they will have to reduce

the price of FSD so there is a concern

that I have that Elon is potentially

pushing this to sell more FSD rather

than reducing the price I want to see

the price go down and do the demos the

FSD price should be substantially lower

my opinion now I do also wonder is there

a concern over low take rates where Elon

Musk is potentially trying to blame the

sales team or is he just simply

suggesting hey the sales team hasn't

been asked to prioritize this in the

past let's now prioritize it and see if

we can upsell some subscriptions

personally I think the best time to do

this sort of FS demo testing would be in

a test drive up front so people can buy

the car with FSD already because they

got to have it now you could Finance it

you could build it into the cost of the

vehicle rather than yay I'm taking

delivery oh now I kind of wish I finance

that right so I mean I guess you could

always go for the $200 a month option

but again even that option 200 bucks a

month is a lot should be lower quite

significantly lower and then I think the

take rate would go up substantially and

if it was 600 bucks a year you know pay

in full for a year get 100 bucks off

$4.99 or whatever you know something

around the price of one of the meet

Kevin wealth building courses or

whatever over at me kevin.com or a

ticket to the millionaire Symposium

right that's kind of where the price

should be 12,000 bucks it's tough

because it's you know people aren't as

familiar yet with this FSD so uh you do

have a little bit and that's the whole

point of this right is to get people

more familiar I do think there should

probably be an opt out but let's look at

what some people are saying in the

commentary first of all Elon Musk

acknowledges there is some calibration

time risk is usually when you get your

first Tesla you have to calibrate the

cameras first for the car and that could

take some time I'm not exactly sure how

that pre- calibrating is going to be

done at the delivery centers that could

be a little Annoying uh Omar creates a

joke here and Elon says we does

acknowledge that we do need to trim down

that time frame for calibrating but

here's some commentary or here is some

commentary from some folks

maybe delivery staff have more time to

sell now since they're delivering less

somebody else says this is very high

margin so this could be a great

opportunity to make more money for Tesla

I agree with that upfront FSD demos

might be better also agree with that you

could do both though some people say

well you're not really getting sold

you're just being shown a feature of the

car it's not like it's supposed to be

high pressure sales but some people if

there's no opt out will feel pressured

like hey this is a waste of my time I

either want it and I have it or I don't

want it and I don't want it right uh it

also comes at the same time as Facebook

is moving into sorry Tesla is moving

into Facebook ads in Mass which does

cater to an older demographic so maybe

you're educating a new demographic on

FSD though there are still going to be a

lot of people even after a demo who just

don't trust it but again you really only

need to break a 15 basis point

conversion rate above the number of

people who would have gotten FSD anyway

to break even on this so personally I

think I'm actually long-term bullish on

this I think long-term the little Kinks

like being slow going up to a red or the

uh you know the the sort of scary

unprotected left uh you know the these

sort of encounters I think you'll get a

less of those I'm also a little jaded on

my 12.3 experience with that left turn

because I did have a very scary 12.1

experience where the car almost tried to

drive in front of a very fast traveling

car uh and I had to slam on the brakes

to overtake the car was not going to

stop it was literally accelerating into

their leg

uh and it was it was a two-lane road so

I was halfway in one of the first Lanes

uh and and they were able to pass on

sort of their right lane anyway that's

121 so I don't expect that to happen

anymore uh and I think like the Curbing

and again the slowness at stops and and

these uh Edge case scenarios of these

these left turns will normalize and

these are areas where you're paying

attention to the car more anyway but I

will say in that video clip I showed had

I had a passenger on the right side of

the vehicle I would have hit the brakes

on that one I would not have felt comfor

able making that left turn without being

able to confirm that there wasn't

another vehicle pulling out of a lot and

then driving straight but again maybe

the car is able to see things from

different angles that I can't see it

didn't make me feel comfortable though

and I feel like I'm a generally a pretty

good tester of this stuff so um as far

as what I think this actually does for

the stock in the short term q1 Q2

probably very little we usually get sort

of like by the dipping when we get news

announcements like this but those are

usually offset by negative news like

price Cuts in across the board or Price

Cuts in uh uh in in China or deliveries

missing estimates or earnings so for me

if I was looking for buy the dip

opportunity this is not the news that I

think really catapults the stock to new

highs however in in the long term like

25 26 as this becomes more mass adopted

I'm much more enthusiastic the question

though is Will other manufacturers using

nvidia's data set be able to get to

version FSD

121 much quicker than it took Tesla to

get to 121 remember Tesla went end to

end neural net with version 12 so

version 12 is really like version one

well if another company uses the same

amount of data that maybe they've been

collecting maybe not we don't know the

argument is that Nvidia has already been

collecting this sort of data if let's

say they have been then they could

probably get to a version 1 pretty

quickly which would be the equivalent of

a version 12 of Tesla now Tesla's still

ahead they're at 123 now they're at 12

3.1 now and they're going to be at 12.4

soon so Tesla's got to keep this lead

going and I think maybe that's another

thing that Tesla's going for here is if

we could get more people using FSD we

could sort of lock in that that that

lead that Tesla does undeniably have

right now so definitely believe in this

so more feedback for the AI team good

thing could also help boost margin I

really don't think it's really going to

show up in margin until probably a year

or two from now again I don't think the

costs of actually doing this are that

meaningful relative to the margin that

Tesla could yield from this so I'm

actually a fan of doing this and I think

it's a long run benefit to Tesla

shortterm I remain unconvinced ad 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

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