The Tesla Problem | Tesla Stock.

if you want to know what's going on with

Tesla you need to understand these two

numbers which I'll explain in this video

but first we got to get out of the way

what this is not this drama of Tesla SN

falling over 6% today does not

incorporate what the heck is possibly

going on with X and I'll tell you we

just had news about that we just heard

that multiple Banks were in talks to try

to shore up the debt that backs the x/

Twitter acquisition deal and so far it

looks like some of those talks have

fallen apart why does that matter well

as most people who invest in Tesla know

Elon uses Tesla you can't blame him but

he has and he potentially will again

Tesla as his piggy bank to finance other

projects Tesla has been used to finance

the acquisition of Tesla selling over

$24 billion in 2020 2 2 which was almost

$8 billion more than what retail bought

that year now Elon did promise not to

sell any Tesla shares the year after

which was 2023 that's over now maybe he

wouldn't sell in 2024 which is now so

that means we're in the maybe world but

the fact that there's also talk about

things maybe not being great or at least

Banks having to write down their

ownership value of SL Twitter ownership

by 60 to 70% isn't so great when it

comes

to Tesla news because here's the thing

you might initially think Kevin why why

does this matter well it matters because

it's kind of like potentially getting

margin called you know if a bank says

hey we'll lend you x billion dollars uh

so that you can buy X you know Twitter

uh but it's predicated on loan terms

that say the equity in the deal needs to

be why and all of a sudden X plummets

because of user growth or issues or

Revenue issues who knows well then you

definitely have what we call refinancing

risk and unfortunately that's not even

being talked about right now when it

comes to good old Tesla and I hate to be

the bearer of additional news but

consider this Fidelity wrote down their

position

72 percent Morgan Stanley I didn't give

a percentage here but they took an

almost billion dooll loss on the value

of their portion of the debt there was

about a 12.5 billion debt package when

it comes to X and uh the group that put

this entire package together did hold

talks with Elon it says here earlier

this year and those talks faltered so

what kind of pressure comes next who

knows do we really want to know not

really because this is supposed to be a

Tesla video so why are we spending the

first nearly 3 minutes talking about X

well because unfortunately when the

largest shareholder of the company has

turned the company into a bit of a piggy

bank for other projects you have to

that's just the way it is if you don't

talk about it you're kidding yourself

now is Tesla dead are EVS over are EV is

the next plant-based food no uh and I

want to be crystal clear about that I

was asked that question Point Blank this

morning in our course member live stream

where we do fundamental analysis every

day the market is open we talk Trends

whatever's going on real estate analysis

you name it Eevees are the future there

is zero doubt in my mind Eevees will be

the future they are substantially easier

to maintain they are substantially more

powerful they are more capable Vehicles

when it comes to computer responses with

autonomy much more fantastic Vehicles

the problem is we have time between then

and now why well because of a few things

range anxiety which let's be real there

are enough supercharging stations

everywhere but people's memory is very

uh uh house how I should I say people's

memory is very elastic meaning that once

people are convinced that range is a

problem with electric vehicles

especially in the cold it takes a very

long time to get people out of that

memory hole right uh and in the future

Battery Technology and Battery warming

technology will be such that this really

isn't an issue but the reality is yes

range does decline with cold at least at

this point and yes certain batteries

like the lipos lithium I am phosphates

not to be confused with liposuction not

sure why I'm making that comparison yes

those you generally only charge up to to

about uh 80% those with Nickel in uh

included there are some batteries that

are now the nickel-free batteries like

the 4680 which you don't necessarily

have to only charge to

80% you know and the whole point of that

is not to have longer term battery

degradation of you know 5 to 10% or

whatever the 4680 is you don't have that

issue you could really charge them up to

100% but still when you look at Tesla's

showpiece for a 4680 product what do you

get you you get a cyber truck that was

released that's maybe manufacturing I

don't know a couple hundred Vehicles a

week which is a Far Cry of what Tesla

put on the financial press release of

250,000 vehicles of capacity 200 time 52

weeks maybe we'll deliver to like 10,000

cyber trucks this year maybe we can even

double that and go to 20,000 but wall

Street's looking for 50,000 and there

are people out there thinking it's going

to go to 250,000 for a vehicle that

sells for $100,000

where they do continue to expand who's

getting invites for the cybertruck and

they don't even have full self-driving

for that's probably the biggest pisser

for me no parking sensors no F like

those are all short-term annoyances

obviously the Cyber truck is going to

have FSD in the future obviously FSD is

going to continue to get in the

direction of better and yes of course

we're going to talk China numbers and

all the other stuff but the point is

right now what we've got

is the glitz of the Cyber truck is

behind us because now it's out and it

ain't that Glam that's a problem and

it's going to take a while for it to be

Glam instead in the meantime you're

going to see as we predicted this

vehicle on tow trucks you're going to

see people complain about it you're

going to see features that are stupid

like no FSD it does it's like illogical

I don't understand why you would buy a

Tesla and and then not have full

whatever

uh and and of course FSD prices are

still ridiculous I did just get version

12 and I have to say I'm a little

disappointed now I will say it's

extremely impressive that it is a neural

net trained system this thing can make

u-turns like the last version couldn't

even make a full U-turn this sucker will

make a U-turn for me and I'm like OHA

damn that's pretty good it'll do things

that are great but I'll just give you a

couple examples railroad track red light

this sucker creeps up sees red light

railroad track no train no gate or

anything and it just stops at the

railroad track and then it wants to go

like half a mile an hour to get the 30

ft to the stop line of the red light to

go make its right turn and I'm like bro

I don't have time for this again maybe

I'm being impatient but the old version

wasn't that weird so there it it to me

it felt like getting fsd2 and this is

the first time I've done this in a very

long time but when when I saw that fsd2

update pop up I looked at I'm like oh

hell yeah I went straight home updated

that sucker the moment the update was on

was done Lord I'm getting

milk like I felt like I was 16 again I'm

like oh yeah we're going to try this out

we're going to the grocery store man it

actually handles roundabouts really well

like the old version it was like you

were going into a roller coaster you'd

go into the roundabout and then and then

you'd be like okay here we go

W like this cuz it would like floor it

halfway through the roundabout and it's

like we still have turning to do here

anyway uh this one goes through the

roundabout just fine but for improving

that and giving me u-turns it's

ridiculously slow at certain stop lights

and sometimes I don't know where it gets

this idea from but when it's making

unprotected lefts it wants to cut it

really freaking close I never have had

to slam on the brakes with this freaking

car before because it was going to pull

left in front of traffic that was

speeding I'm

like that was just my first drive just

my first drive maybe it was an anomaly

maybe I should have just said you know

what f it I'm just going to see what

happens and if I get T-boned oh well

I'll blame Elon but then part of me is

like I can't do that I got seven

kids so uh yeah like again I I'm I'm not

here to say it's not good like it's so

impressive that a neural net trained FSD

product can do what it can do but let's

just say if we were looking for

something that was going to go oh my

gosh fsd1 is like 80% of the way there

this is 90% of the way there it's more

like oh my gosh 11 was 94% of the way

there oh my gosh 12 is 94.5% of the way

there because well we did go forward it

felt like we also went back and so we

netted out a little bit ahead so step in

the right direction but

again practically for

users it's not there yet oh well that's

what it is FSD is just taking longer to

get to realization that's a pain point

for the company now remember those two

numbers I brought up yeah those don't

even have to do with the Chinese numbers

now a lot I want to be crystal clear

about this a lot of the Twitter bull

Community uh and I I just want to be

clear like after having seven kids and

uh going through what I've been through

with kids in emergency surgery and

almost dying I like bluntly I look at

these numbers and like I feel nothing

anymore about anything other than like

people so so forgive me if I sound maybe

a little

CST I've been through a little bit here

and and I know it could be way worse

okay so knock on wood I don't want it to

be way worse I I'm just saying the

sample I got I'm like oh okay all right

so anyway G to get on emotional here

um Tesla numbers with China a lot of

people right now are arguing that oh

Tesla China numbers they're just low

because of the shift in Chinese New

Year please please please take the stick

out of your high horse's but like no no

okay yes it is true that Chinese New

Year this year occurred on February 10th

versus January 20th last year which

means the start of Chinese New Year and

the end of it was all in February this

year whereas last year is split over two

months Chinese New Year 2024 dates just

pump it in boom what is the Chinese New

Year it's the 10th so the celebration

happened slightly before and slightly

after because people go travel to be

with their friends and their family and

whatever so yes probably the 5 days plus

or minus are bad for vehicle sales and

those occurred fully in February so a

lot of people are like well yeah you

know the February numbers this year were

lcus

Chinese no no and I will explain why no

because it's actually quite simple all

you have to do is go and add together

the TW Monon period okay the two-month

period and I'm not even using doomberg

numbers here okay we could see doomberg

numbers here because they got it

somewhere around here uh they talk about

EV sales us here it is uh 16 okay

Monday's Chinese numbers the

6,365 vehicles delivered uh from Chinese

factories in February were the lowest

read since December of 22 so that's

about 14 months ago down 16% month over

month and year-over-year the decrease

was 19% a lot of people are like oh

those numbers are fugazi you know

because of the Chinese New Year fine and

I'll talk about this other 25% number in

just a moment but what do you actually

have when you add these two digits

together well let's just do it 60,00 uh

400 plus

71,500 and then what we're going to do

is we're going to look at the 2023

numbers because just so you know that

total is

131.8 th000 and then if I go all the way

over here I add together

66.1 74.4 and what do I get

140.5 okay now this is simple math

131.8 divided by the old number 140.5

what do I get I get a decline over the

two-month period of 6.2% yes that means

a company where we were expecting for a

period of time 50% growth and I

personally thought well I thought that

was high I've generally been in the 30

to 35% growth rate for this company we

are literally now talking

2month

decline compared to the prior year now

let's be real that potential for decline

going forward and the decline is

actually happening at a company you

might be familiar with with exposure to

China as well it's a small company uh

that has performed decently over the

past few days you don't want to be

bitter over this one or the past few

weeks or the past few months or the past

year it's Nvidia uh they too have had

negative sales in China in fact the

Chinese outlook for NVIDIA is

devastating the difference is nvidia's

been able to offset that with massive

growth elsewhere Tesla's not Tesla

expects about 25% of their revenues to

come from China and unfortunately with

the Chinese economy likely in recession

Xin ping thinking that you know we don't

really need to stimulate more because if

we stimulate that'll lead to frothy

growth and we want long-term growth

that's high quality not cheap growth

therefore refusing to do more stimulus

leaves guess what Tesla cutting prices

and contributing to more promotions in

March Tesla for example is increasing

promotions by

$487 off of a model 3 or model y if you

buy in China in March in the United

States they threw in $5,000 of free

supercharging miles so the promotion ism

is continuing at Tesla now there's a

problem with that it's a real problem

when prices decline you end up running

into the Paradox of deflation so I want

to talk about that and then of course

this negative growth here I don't want

to run away from this negative growth uh

but before I talk about the Paradox of

deflation which is wildly important that

you understand this it is also wildly

under important that you mark your

calendar for June 21st to June 23rd

we've got some insane innovation-based

finance-based speakers coming up that we

going to announce including some

startups that are going to present some

pretty sick things now stay tuned for

the reveal once we actually make the

official reveals we're going to raise

the prices not like Tesla declining pric

we're going to raise the prices of this

event Mark a calendar it's going to be

in Vegas June 21 22 23 it's going to be

sort of a like an evening cocktail

reception party followed by two full

days of actually learning how to build

wealth and real estate Finance being

exposed to Innovation speakers were

calling at the millionaire Symposium I

really hope you're there it's at

meetkevin.com you'll see the banner

forward or it's linked down below highly

encourage you be there I want to make

this the finance event of the year and

you know me I'm no BS this we're going

to do everything we can to make sure

when I touch it it's always a providing

more circumstance so stay tuned okay

with that said Tesla with a decline of

6.2% in revenues year-over-year how are

we going to prevent that from leading

earnings per share to from declining

well maybe we can advertise oh but wait

that isn't working now that's not saying

Tesla shouldn't advertise it's just

saying Tesla with advertising and we're

still getting a 6.2% decline in

revenues either the ads ain't working or

the product ain't

selling or both or the ads are working

and the products are selling less which

is also bad right so that's not good

because now you have to consider what

Wall Street is projecting Wall Street is

projecting uh roughly 28% growth for

this company in fact if I go to my peg

sheet here uh it's actually 26.6 5 uh

Tesla is projecting here I'll just throw

it up on screen right here we went

through this in the course member live

this morning uh and this is before it

updates to today's prices given that

obviously it fell like 6% today uh

numbers just uses yesterday's prices all

the time but whatever it's formulaic so

at yesterday's prices which would

actually be Friday's we've got 26.6 5%

growth projected which puts us at about

a 2.4 Peg so if I drop that to 190 it

puts us at about a 2.3 Peg okay big deal

that's a nominal difference I personally

think there's a risk that growth based

on this q1 decline is actually going to

for the next 4 years average out to

closer to 20% than 30% that actually

means Tesla selling for a PEG ratio of

closer to three which is pretty hot the

only thing that also has a PEG ratio

that's pretty high like this would be

well like a pounder at 4.3 but you

actually want to see another one Nvidia

nvidia's Wall Street forecast Peg is

7.46 it's freaking insane Wall Street

after this year so when you get to

January 2025 you're projecting an EPS of

24.5 which is double last year's EPS

which is great but from that double on

for the next average of 4 years the

market is expecting 4.5% growth at

Nvidia which means Nvidia right now at

822 bucks has a PEG ratio of

7.46 that's insane now the stock War

today is at 852 if I change it to 8 uh

uh 52 you're actually at 7.73 you could

almost round that to 8 it's nuts so

what's happened is you've pulled forward

so much growth at Nvidia that that's why

the stock is skyrocketing now the

problem with Tesla is Tesla stock ran up

so much 3 years ago because we pulled

forward growth the problem today is we

might not even have that growth we might

actually have a year of no growth which

tanks the 4-year average consider this

for a moment if you have four years in a

row of 30% growth 30 plus 30 plus 30 you

have 120% growth right and I understand

this is compounded but I'm just going to

get an average annual growth rate all I

have to do is take 120 divided 4 We're

simplifying here what do I get obviously

it's an average four-year growth rate of

30% per year and then of course to

calculate EPS that compounds right easy

math okay but what if I now do zero for

no growth one year plus then we get to

30% growth 30% growth 30% growth well

that's simple you could do that in your

head that's 90 90 divid 4 might not be

able to do that in your head but it's

22.5 5 which is the number I've written

here and it's based on q1 figures so yes

Tesla's Peg is actually not that cheap

now keep in mind we have hope oh trust

me there is no shortage of

opium my God Tesla Optimus program you

got to be kidding if you don't think

robots are the future and you got to be

kidding yourself if you don't think

Tesla has one of the greatest

competitive advantages given that they

actually have in-house manufacturing for

all these freaking robots you could get

a company like figure AI that it's

getting use somebody else to manufacture

them I I don't really know what their

plans are maybe those are their plans or

what but here's a startup that basically

had nothing a year ago and is now worth

like over $2 billion it's freaking

ludicrous but it's hopium because you

know oh yeah there's going to be AI in

these robots who's going to make them

for you and then what's it going to do

unload boxes from from from you know uh

like a a container well the only kind of

demos we get are uh you know pressure

grip uh and then wobble for a little bit

and set down but what about when you

have to start lifting from high what

about when you have to start lifting

from low like the the future is there

the future is clear in my opinion this

is my opinion it's very clearly

artificial intelligence and it is very

clearly humanoid Robotics and it is very

clearly electric vehicle but again the

question is how much of that can I price

in today the the reality is probably not

that much it's it's wonderful hopium but

again here look at the figuring okay I

want you to look at this very closely so

we're going to I'm going to play it once

quickly this sucker goes to pick up this

box mind you $2 billion valuation okay

it goes to pick up this box and then

it's going to go walk on over to the

conveyor belt here we go come on all

right I'm just going to fast forward a

little bit all right cool it sets it

down now a lot of this can be

pre-programmed scripting it doesn't

necessarily mean it's autonomous but the

idea is obviously there now what I

really want you to see is and I'm not

sure if they're where they show me the

closeup ah here it is here it is watch

this grip and when you see the hand grip

I want you to see something very key

that happens

watch here

there do you see that I don't know if

you saw that but clearly if you look

very closely you're going to see this

box is empty you know that because

imagine picking up a box with just like

two fingers putting a a pressure point

so you're basically making a how should

I say you're making kind of a pivot

point on something right and if it's

slightly unbalanced it's going to fall

right out of your hands so you pick up

anything like that it's going to tip

over look I'll take this iPad for an

example if if I go to pick up this iPad

and I pick it up slightly too far at the

front what's going to happen it's going

to fall right if I pick it up slightly

too far at the back what's going to

happen it's going to fall if I pick it

up perfectly in the middle and then I

start walk see I can't even get it right

and I start walking with it it's going

to have like this little wobble to it

right watch that video watch that

wobble boom see that wobble look at that

wobble it kind of got lucky where it

pinched it imagine there was stuff

actually in it now that's figure AI

again it's early yes it's cool

Terminator this that everybody's excited

about it there's a lot of work to be

done here now that doesn't mean it's not

technology that's worth investing in I'm

actually bullish on investing in things

that are humanoid robot uh or in the

direction of humanoid robots or whatever

like I'm bullish on that whole world but

I want to be clear pricing that hopium

into Tesla is not probably going to help

us much for our four-year growth Target

so what does the stock market do the

stock market only gives a crap about the

next 18

months so forget your four year forget

five or 10 year price Target doesn't

matter why is the stock down today

because over the next 18 months Tesla's

probably looking at negative

growth and I hate to say it I really

hate to say it because I I feel like I'm

a big believer that you know the FED has

has overtightened interest rates need to

come down substantially but you know

what I wrote this on ec.com this morning

and I was very clear about it I said

look jpow speaks this week and what are

we faced with the loosest financial

conditions we've had all

year the earn the uh layoff recession

isn't occurring

the New York Community Bank issue is

probably idiosyncratic I talked about

all this this morning like you can see

my detail on that video from this

morning real estate prices at least in

single family are stable in multif

family and Commercial you have problems

but that creates

opportunity and even Atlanta fed's GDP

growth estimat which just fell a percent

is still at 2.1

so you don't really have this necessity

of cuts ASAP in fact if anything the

whole AI re ution hurt Tesla because

Tesla has used ai ai since before the AI

Revolution so it didn't really benefit

much I don't think from the AI

Revolution sure maybe you get some more

powerful chips out of it to help learn

or or teach FSD a little better but what

you're actually getting is a stronger

GDP as a result of the AI spend and that

leads to more jobs which leads to less

urgency to cut rates which hurts an

interest rate sensitive stock like Tesla

so now you look at this company you go

well damn FSD issues cyber truck issues

negative growth the Chinese numbers I I

mean you have to lie to yourself to tell

you that they're good oh and then you

got the deflation Paradox wh why please

those of you who have watched my channel

for years you know I say this I say this

over and over and over again why is

deflation bad or at least why do

economists think inflation is bad

because when deflation occurs people

stop spending money because they expect

things are going to get cheaper so

therefore they wait for it to be cheaper

they stop spending which then crushes

the economy it's what China is going to

experience oh great Tesla's exposed to

China we know that

already the deflation Paradox when it

comes to Tesla is oh Tesla prices are

plummeting basically another price cut

every so often you know all you have to

do is wait two months and you get

another price cut why would you invest

in a new Tesla now

just wait wait for rates to come down

wait for prices to stop falling so you

don't have negative equity after you buy

something wait for FSD to get cheaper so

all of that together is not great now

sure it is good that more people have

jobs real wages are positive when the

economy booms maybe people will spend

more money on vehicles it is entirely

possible that China is just in the

dump and the United States is going to

blow us out of the water that is

entirely possible but but I'm going to

tell you

something and and some people are really

bagging on this guy and he doesn't

deserve it you should know Troy teslik

he does uh estimates or whatever with

the VIN numbers for

Teslas not very optimistic on us DMV

registrations for q1 so it's not just

China in fact Wall Street is forecasting

49,000 vehicles to be delivered in q1

518 Q2 54.5 Q3 573 Q4

that's like 2.1 million which would

represent about 17.2% annual growth and

then 30% from there but what happens if

that q1 number is actually 450 and each

one of those is actually lower well then

you're not looking at 70% growth anymore

so you got to write down the stock so

Wall Street is overly optimistic at

least based on these Chinese numbers and

Troy's q1 estimates which maybe Troy's

just wrong which would be great but it's

possible you could go he's got like a

patreon or whatever you could go look at

if you want so then you have to consider

and I hate to say it but you have to

consider the

brand Tesla's not the brand it used to

be like Elon hate Elon don't care

doesn't matter the fact is whether it's

mainstream media bagging on EVS or it's

bagging on FSD or it's bagging on elon's

Antics on Twitter where he's basically

just become a

politician Tesla's brand has been

hurt maybe one day they can fix it maybe

they can still go on to be the most

prolific Vehicle Manufacturer that

exists

maybe but I I don't know if that's

clear so sentiment right now could not

be worse and this is compounded by the

fact that you've got the attorneys who

basically eradicated elon's shareholder

approved Compensation Plan demanding $6

billion of Tesla's stock to prevent uh

that from being a cash expense now those

attorneys are probably only going to get

like 10% but that's still $600

million you shoot High to get the news

because then everybody looks up the

attorneys and they're like I want to

hire that attorney it's a big ad it's a

big ask it's a big ad it's it's just

part of the

game Ford by the way expected to lose

$5.5 billion this year on electric

vehicles that's on top of the nearly 52

billion they lost last year year Volvo

is cutting EVS alt together Global

shipments for EVS are only expected to

grow at 25% this year so it's not just

Tesla byd is also down by the way like

37% since last year with these February

release numbers but that 25% EV shipment

number is down from 36% growth last year

and 96% growth the year before that so

yeah EV sales are slowing down probably

because just across the board we're

seeing numbers slow now I do have all

Autos numbers Autos per Goldman Sachs

for February did actually beat

expectations this is broadly our

consensus was 15.4 Million uh in an

annualized adjusted annualized rate

seasonally adjusted annualized rate we

actually hit 16 mil in February which

was actually better than expected but EV

mix stayed

stable so some people are wondering

could this potentially be the car bottom

maybe but even if it is is I'm not sure

if it is a benefact or if Tesla is a

benefactor of that now I do think that

Tesla will survive in the long run I

want to be clear about that I do think

Tesla is going to survive in the long

run

but want be

clear like it's there's nothing so

exciting where I'm like oh my gosh wall

Street's wrong this stock should be

skyrocketing that's just not there right

now will that happen in the

future hopefully is it here now no so is

that challenging ABS freaking lutely

does it suck if you're a Tesla share

older absolutely that's why a lot of

people just selling calls on the sucker

it is massively shorted we know

that so it ain't easy but it is what it

is so there's your Tesla update I

screwed up and accidentally deleted the

ending so I have to press the button

like this and you're just going to get

to stare at me for a little bit maybe

while I pull up the Weeble chart even

though I'm a licensed financial adviser

real estate broker and becoming a stock

broker this video is neither

personalized Financial advice nor real

estate advice for you it is not tax

legal or otherwise personalized advice

tailor to you this video provides

generalized perspective information and

commentary any thirdparty content I show

should not be deemed endorsed by me this

video is not and shall never be deemed

reasonably sufficient information for

the purpose of evaluating a security or

investment decision any links or

promoted products are either paid

affiliations or products or Services

which we may benefit from I personally

operate and actively managed ETF and

hold long positions in various

Securities potentially including those

mentioned in this video however I have

no relationship to any issuers other

than hellack nor am I presently acting

as a market

maker thanks for watching see you in the

next one