Elon's Biggest "Ever" Announcement for Tesla

Lot of news out of Elon's expost this

weekend about Tesla as well as

potentially an X AI uh involved

investment from Tesla. But we've got to

talk about this because it's potentially

critical to Tesla stock. Elon Musk

saying just left Tesla design studio

most epic demo ever by end of year. Uh

and then reiterating ever. Now, this is

interesting because first, we've

somewhat got a high bar in my opinion. I

actually think the uh cyber cab

demonstration day was pretty epic,

mostly because we had the robo van uh

which was a very cool sort of concept

vehicle that was probably remote

controlled but looked amazing. We had

the Optimus demonstration that really

showed us the components of Optimus

robots, at least being capable of being

teaoperated and moving very, very

smoothly or programmed to dance very

well. Which still creates questions

around how long can these Optimus robots

actually function on relatively small

battery packs that would end up fitting

into a humanoid robot. uh what kind of

weights can these Optimus robots

actually carry over time that would not

overheat the joints or the servo motors

inside the various different components

of the Optimus robot? These these are

all, you know, questions that obviously

we still have. But Elon is essentially

saying we're going to top the work that

or demonstration that we've done

previously with Tesla. Uh and so there

are rumors around what it could

potentially be. for example, here are

with 23,000 votes, which is quite a bit

for a poll here. Uh, in the comment

section, uh, what is it? I I I really

wish there were more options given here.

38.5% of people think it's a NextG

Roadster, which you know has been

promised for, you know, what, seven,

eight years now. An Optimus version 3 or

something else. Uh I'll give you my

opinion as to really what it should be

and what would be a gamecher for Tesla

and then of course we'll talk about that

X AI uh investment idea and sort of my

take on that. So first uh I actually

don't think it makes a difference if we

do any kind of Optimus demonstration

frankly because this is Elon leaving the

design studio and I don't think an

upgraded version of Optimus matters

design-wise. I think upgraded versions

of Optimus need better battery

technology or better uh uh sort of motor

technology in terms of the weights that

these these robots can actually carry

multiple times for hours and hours long

uh in in their work. I don't think

that's so much a when I think design I

think visually I don't think it's so

much of a visual aspect that we really

care about with Optimus right now. So, I

don't think that Elon saw something in

the design studio that he's excited

about. The Tesla Roadster maybe, but

this would actually be probably the

worst case scenario for Tesla. While it

would be fantastic for enthusiasts,

myself included, who would almost

certainly line up to throw money,

whatever the price, at a, you know,

Tesla Roadster, especially some

convertible version of it, which would

be amazing. I don't think this is the

mass market game changer that Tesla

really needs. So I voted for as you

could see check mark something else and

that's because even though that has the

lowest probability on this Sawyer uh you

know poll here I actually believe it is

the most critical for Tesla that that

design studio actually provides us a new

vehicle of some type. Now, maybe it's

the production version of the Cyber Cab

that you could potentially buy. Let's

write down some of these ideas and think

about the value that these could create.

So, uh a you know, production version of

Cyber Cab that includes the uh you know,

newer FSD technology and the upgraded

camera suites or hardware suites that

the robo taxis have. This would be

great. some form of production version

of this uh or potentially even uh

consumer purchasable uh version. That

would be great. Uh some form of uh other

new mass market uh vehicle. This this

would probably be uh the most critical

mostly because mind you we've talked

about this before losing the ZEV credits

a zero emission vehicle credits along

with the incentive which uh ZEV credits

have already been lost. The $7,500

vehicle incentive expires on September

30th. And then of course uh purchasing

solar panels versus leasing or power

purchase agreements. Purchased solar

panels lose some of their benefits by

the end of the year which is a hurt to

Tesla because Tesla doesn't do PPAs or

leases. They used to do leases. They

don't anymore. Uh and and they just sell

them. Who knows? Maybe they'll bring

back leases. But the point is Tesla's

got multiple negative caddies that we're

going to have to deal with in terms of

actually hurting uh you know supply or

sorry uh demand forces, right? when you

remove tax credits, you hurt demand

forces, but then you also potentially

hurt margin forces uh in specifically

ZEV credits, but then also, you know, if

we have to lower prices because the

$7,500 vehicle tax credits go away. Now,

we really need a higher margin maybe

mass market vehicle. To me, this would

be the most critical element for Tesla

because yes, while the goal of Elon is,

hey, this is a bet on autonomy. Uh, I

really think you have a potential uh

mass market here that is willing to eat

up a, you know, even some form of other

$30,000 car. I don't know what we want

to call it, or Mercedes style, like

Sprinter van style car that maybe has uh

that's that's inexpensive, no frrills,

but it has more space than any other car

before. This to me would be interesting

if you could create something that was,

you know, no a no frrills version of the

Mercedes Sprinter van. Oh, you want nine

seats? Perfect. You want cargo space,

perfect. And one of the things that I

think is so critical about these sort of

the Sprinter van idea, uh, is even

though it's not really model 2esque,

that's an option as well. I don't know

that people are convinced that they're

going to be willing to buy twodoor

vehicles in the United States. I think

four-door is probably minimum in the

United States. But what's fascinating

about if you ended up with some form of

low no frrills van for Tesla, you really

unlock the construction environment as a

potential buyer, which in the world of

AI, you have more people talking about

trades anyway and trades potentially

being more resilient to artificial

intelligence,

potentially great market. So my take

here is the most critical would be

either a sprinter van uh style like no

frrills version

or uh you know again some form of model

2 that would be critical in terms of a

design. Uh the next best case scenario

could be a production version of the

cyberc cab or some kind of consumer

purchasable vehicle mostly. Why? Uh so

they can uh do what they do best

manufacture and mass uh you know and and

and with scale and you get it. I don't

have to write it all down. That's my

opinion on on the design studio. Now who

knows we'll have an epic demo. Who

knows? Maybe they'll create like a

December demo or whatever. It's also

pretty common for Elon to sort of dangle

the carrot of like some really new

exciting news or whatever coming in the

future. Uh and and typically it does

well for the stock leading into the

events. The events are almost always buy

the rumor, sell the news. But that's

okay because you know there just ends up

being a new rumor afterwards. So that's

just sort of the the game that we play.

In fairness, this robo taxi launch in

Austin so far it's been super super

quiet, which is actually perfect. That

is exactly what you want if you are a

Tesla investor. You do not want Tesla

robo taxis in the news every day because

you know if they're in the news every

day, it's bad.

So the fact that we are not hearing of

Tesla robo taxis on a daily basis and

they're slowly expanding the uh uh you

know

area in which we're providing robo taxi

service. Great. As I wrote here, a big

pee pee. Very nice. very very nice. Uh

so you're getting this expanded service

which is great. Now there's also this

talk here SpaceX to invest $2 billion uh

into XAI which uh you know this has then

also led to rumoring that maybe Tesla

should also invest into XAI uh and that

uh you know the latest discussion has

been that no Tesla would not end up

taking over XAI. There wouldn't be any

kind of merger but maybe Tesla would

invest into XAI. To me, I don't know

that broadly this really matters because

Tesla does have a a good chunk of free

cash. We could calculate that quickly. I

want to say it's somewhere around $10

billion of free cash. So, even if they

invested two or three billion, it

doesn't really matter. I think it's a

great way for Elon to

uh you know raise capital easily. I

don't know that it makes much of a

difference for the stock although it

does give shareholders the opportunity

to gain exposure uh to XAI and it kind

of gives retail investors exposure to

XAI via a public vehicle which is

interesting. Uh I know that XAI is a

cash burning uh you know company so it

makes sense that they need the extra

cash. We've got about 36.9,

let's just call it $ 37 billion of cash

and short-term investments. And if I

take off current liabilities

of uh less worried about this, take off

about

call it 26.6.

It gives me about 10 and a half 10.5

billion dollars of free cash, right?

Because we got we need money to pay our

bills. People always when they talk cash

balances, they forget that companies

also have bills to pay. And free cash

flow might fall without the ZEV credits.

See, if we go to free cash flow on a

3month basis here,

we only have free cash flow of 500

million, call it about 600 million bucks

of free cash flow, but

ZEV credits were I think all of that uh

it's not listed on this. So, we have to

go to the uh financial statement for

this, but it's somewhere between $4 to

$600 million. So, most of the free cash

flow now is coming from ZEV credits,

which means yeah, we've got about 10.5

billion available free cash. I

personally think it'd be so nice to see

that, you know, Giga Mexico. It's

obvious that we're not going to do that

now under this uh you know, tariff drama

that we're we're dealing with, which I

think long term is is problematic for

corporate EPS across the board and

across the United States. something

probably unpriced in markets right now

since we're so convinced and that you

know taco is here to stay basically.

We'll see. Really topic for a different

video. But if you've got about 10 and a

half billion of free cash, again I I

personally I think it'd be wonderful if

we had a product that we could mass

manufacture and expand, but we're not in

that sort of environment. Uh we're not

going to do a gig of Mexico. Maybe we

could do a solar facility in the United

States. But again, uh even if you have

homegrown solar, are you really going to

be competitive against China against in

in this environment? I don't think so. I

don't think that's the perfect growth

trajectory for Tesla. I personally think

a mass market vehicle that people could

get excited about here would be the way

to play it. You know, the the the

problem that you really have with Tesla

uh is you're you're not creating

something new and juicy and exciting for

people to buy. The Cybertruck was great,

but it was very niche. The benefit that

Tesla has, remember a big benefit Tesla

has,

China isn't here. China is is such a

competitor when it comes to introducing

new models of vehicles and providing so

much choice for people at a low uh or

inexpensive price as they control so

much of the battery manufacturing

globally.

One of Tesla's greatest benefits is that

they are American and that tariffs are

protectionary. So, wow, that's crazy

typing there. Are protectionary. Who do

tariffs protect? Tariffs protect US

manufacturers. What is Tesla? US

manufacturers. So, the more you hear of

tariffs, the more you should think

protectionism. And it protects companies

like Tesla. So companies like Tesla can

benefit substantially if if they provide

new designs and new products for to

excite American consumers and get away

from this reputation of, you know, just

being this person who's going to wave

the chainsaw around in politics and cut

people's government jobs. The more we

move away from that and we move into f a

focus on providing great quality

products again, the more I think Tesla

uh can uh can win bigly. So I'm excited.

Uh, you know, hopefully hopefully

honestly maybe we even get both. You

know, who says it has to be one new

vehicle? How about a lineup of two or

three new vehicles? That to me is

exciting. Although knowing Elon, uh,

it's honestly, it's probably more likely

to be this. Something about Cyber Cab,

uh, maybe a consumer purchasable like

fleet version like, hey, want to launch

cyber cabs in California? go buy 10

cyber cabs and we'll help you and and

then you deal with the liability of it

and cleaning them or whatever wouldn't

surprise me. And I think that kind of

stuff would also go viral amongst like

passive income with my robo tax. Yo,

check out my passive income business

with robo taxis and like people around

the United States are scaling it out as

opposed to Tesla having to scale it out

themselves. Some thoughts again, XAI

investment doesn't really matter one way

or another. Uh, I don't think it's

really a needle mover for Tesla's

valuation. And if anything, it's just an

easier way for Elon to raise money for

XAI without having to take on expensive

debt. And I kind of think that's why

SpaceX is investing in XAI as well,

because again, it's easy to just sell

one of your other cashrich company

shares and then not have to pay uh the

higher interest rates to some of these

other uh companies. But anyway, talking

about AI, we've got a big uh AI

announcement coming with House Hack,

which I'm really excited about. So stay

tuned for that. Probably Saturday,

between now and Saturday for that. So

that'll be really exciting. Remember,

you can always invest uh into House

Hack. It's open to nonacredited

investors for now. That might change

soon, but uh check that out at

househack.com.

Read the uh offering circulars and uh

perspectes

to understand your risks in investing.

But uh do check it out. offers a 5% uh

yield paid on a monthly basis plus all

the upside uh in the company stock which

is exciting. We actually think if we if

we really go double down on on uh our AI

trajectory that uh we are woefully

undervalued as just a real estate

company. Uh and that's you know what

we're selling uh we're raising money in

now which is kind of exciting. So

anyway, stay tuned for that.

>> 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 Papra there, financial analyst and

YouTuber. Meet Kevin. Always great to

get your take.