damnit elon! Tesla Q2 Earnings Call Disaster

Kevin, somebody would consider. Kevin is

fantastic. Kevin is very talented, but I

don't know it's going to be him, but

he's a very talented guy.

>> Kevin is much more interested than most

people, by the way, in the balance

sheet.

>> Well, in honor of Tesla earnings and the

latest Epstein news, you can go to meet

Kevin.com and use coupon code release

the files to get the alpha report and my

trade alerts every day before the market

opens. So, you're prep. All right,

here's a recap of what was just said on

the Tesla earnings call. We went from up

50 basis points to down 4 1/2. We are at

the very moment losing the 318 line

critical line. Remember before earnings

we were in no man's land. So it was

either up or down. The goal was to go up

on talk of new models, especially after

the UBS rumor that there was going to be

a Model Q getting released, at least for

the Chinese market. Unfortunately,

we got way more caution from the Tesla

executives than we would have bargained

for or hoped for. Uh, not great. Okay,

so let's talk about some of these

details. First, uh, I'm going to focus

on some of the nitty-gritty. Uh we heard

that the delay now in a potential more

affordable model is to avoid the

complexity of other models to avoid

reducing the margin or like competing

against their own other products. So in

other words, cannibalization

and they want to make sure that they

produce as many of these as they can now

because of that EV tax credit. So, so

basically they give three reasons why

they're delaying an affordable model

right now. One, complexity. Two, not

cannibalizing their current vehicles.

And number three, they want to print as

many vehicles as possible now. uh

because they want people to be able to

take advantage of the tax credit where

they're like, "Hey, by the way, buy a

Tesla because if you place your order

after late August, you might not be

eligible to get the tax credit anymore

because we might not be able to deliver

before September 30th when the tax

credits expire." So, they kind of turned

it into this weird like, "Yeah,

let's sell what we have now. That's how

our affordable models are going." And

people are like, "Huh?" The stock market

didn't like that. We saw a little bit of

a sellown as soon as they started

talking about that. Then we got a little

bit of a sellown when Elon was talking

about retooling Optimus. He was asked

about what's Optimus doing and Elon

said, well, you know, started talking

about Optimus, started talking about how

basically they need to retool Tesla that

like its design is fundamentally good,

but they're going to have to make a V3

prototype. And hopefully they can make

that V3 prototype by the end of the year

and then they could scale it next year,

which remember earlier or LA last year

and early this year they're like, "Oh

yeah, we'll scale V2 this year cuz it's

great." And now they're like, "Fine."

And when it came to like what does it

actually do? The only thing we heard was

that Optimist is walking around the

office in PaloAlto, which wasn't great

either, right? Like people are looking

for some juice here. And again, that's

why I think we saw some of these red

candlesticks come in. So, I'm just

trying to align like I made little notes

like when were the red candlesticks

coming. Uh the first red candlestick was

uh you know when when our CFO comes on

and starts talking about the uh the

impacts of the big beautiful bill and

then of course we got a red candlestick

on Optimus by the end of the year. But

then we also got a red candlestick when

Elon says he wants to he's working on a

new master plan for Tesla. And I think

that got people scratching their heads a

little bit where they're like, "Wait,

what? What do you mean a new master

plan? Is is is there something wrong

with the the other master plans that

we've been working on?" So, that was

something uh that came up. Uh there was

also this talk about the cost of tariffs

being $300 million and specifically

hitting the battery division. uh they uh

both Elon Musk and the CFO framed robo

taxi as kind of a way to sell supervised

FSD like oh the more people want to use

robo taxi the more they want a car with

supervised FSD and it was kind of weird

because it was sort of like they didn't

really want to commit to like talking

about the economics of robo taxi though

we did get some numbers on that we'll

talk about that in just a moment they

instead were like hey the cars people

are using for robo taxi now are kind of

like you know the cars you could buy.

So, it's a great way to sell FSD, which

I think is true. Then they get asked

about the Cyber Cab and they basically

talk about how the Cyber Cab will be

cheaper because it won't need the

acceleration or the turning uh you know,

capabilities. Uh it won't need the

high-speed tires. It could use lower

speed tires. It could use lower speed

brakes and and you know, components

basically because it's supposed to be

more of a stable ride anyway. This is

where Elon thinks you can get the cost

per mile under 30 cents, maybe even

under 25 cents, which that was great,

but now the question is what are the

revenue economics? Most people take the

Kathy Woodian argument and go, "Oh, 50

cents per mile. That's 50% gross

margin."

But I think that's a stretch given that

you really need to assume that your pool

of robo taxi uh you know riders expands

uh in place of you know Uber or Lyft or

that massive competition in the space

doesn't compress that because if you're

operating at a 10% margin you know a 30

cent versus a 27 cent or 28 cent or

whatever is it worth it right that's the

big question. Uh, so some weird things

here. So we got vagueness on the

affordable models. Again, UBS leaks this

model Q for China, but the leadership

was really sort of vague on new models

here. Again, focusing on avoiding

complexity and don't want to have margin

compression and don't want to

cannibalize and oh, we're going to focus

on the credit expiration. Oh, by the

way, we have $300 million in increased

tariff costs. Uh, but buy now because

otherwise we can't guarantee delivery.

That was interesting. Uh Elon Musk

briefly talks about the 13% control that

he has still being a little bit of an

issue because he thinks that activists

are going to take over and kick him out

after he builds an army of robots and he

thinks that'll be bad for humanity. He

also forecasts that we're in this weird

transition period where we'll lose these

incentives. This is actually something

that I mentioned earlier that we're sort

of in this lull of Tesla now. Uh and the

reasons we're in this lull right now are

because we're losing the ZEV credits

July 4th. We're losing the $7,500 EV tax

credit September 30th. We're losing the

4K use tax credits September 30th. We're

losing the home energy tax credits at

the end of the year. We just took a

benefit of $320 million for a crypto

valuation adjustment, which helped us

have free cash flow, which otherwise we

would have been negative, right? Uh and

then the upsides on things like no

politics and a model 2 or Q. I mean,

politics, great, no politics, but no,

the Model 2 Q talk was really weak. It

really wasn't exciting. Right.

Obviously, they're like, "Hey, this

isn't the place for product

announcements, but we also don't have

anything on the calendar for real

product announcements, and we're not

using cyber cabs on the road right now.

There, you know, we're using regular

Model Y's." Now, there was this talk

about potentially us being able to

submit our cars to a robo taxi network

next year. I think that's a total Elon

line right there. I don't think that's

realistic whatsoever, but he did say it.

Uh, and he did also say, which I think

is realistic and honest and fair, he

says that we're probably going to see a

few rough quarters. He says, "Could we

have a few rough quarters?" Yeah, we

could probably Q4, Q1, maybe even Q2. We

need to scale. Now, he doesn't talk

about exactly scale what, but the

assumption here is we need to scale robo

taxi and Optimus. And then he says, "I'd

be surprised if Tesla's economics are

not compelling next year." So, in other

words, could the next three quarters

suck? Yes. And he said that before and

so I think it's honest. I remember him

saying that back in 22 and and yeah, you

had a couple years that were, you know,

pretty rough there. So, I don't think

he's wrong about that. I think they're

realistic here. So, unfortunately, I

think you've got a delay in the

affordable models, which is a near-term

oopsies. Uh, you've got a delay in

Optimus because you're kind of like,

"Hey, we have to make everything new.

The gearbox, the sensors, the motors."

Remember how I've been talking about

like the overheating issue with motors?

When these Optimus robots or robots in

general pick up heavy boxes over and

over again 24/7, like you know,

eventually those joints start

overheating a little bit, right? So,

that's a problem. Uh and uh you know

this requires not only getting new

motors or inventing new motors but then

actually proving that those work. Uh and

and then of course you get this talk

about a new master plan. It's kind of

like ah the call seemed very

how should I put it? The call seemed

very

it I don't want to use the word

defeated, but it seemed definitely low

energy and it just seemed

it didn't seem like a usual Elon call.

You know, it seemed like today like I

don't know if he's off the ketamine or

what, but like get get where's that

happy party Elon? You know, he wasn't

here today. Uh, and who knows, you know,

maybe maybe that's a good thing because

then we got like a more realistic Elon.

Uh, but that is something that I noticed

that was a little bit different. Uh, so

let's see here. Somebody I'm going to

look at what some of y'all say in the

chat here.

Uh, Tesla won't be making enough money

to keep up or compete. Whimo was smoking

them and self- self-driving. I don't

know. I mean, that's a that's an opinion

that's out there. You know, I'm excited

about the scale that they can achieve

without relying on LAR and mapping. I'm

pretty excited about that. Uh Liil says,

"Hey, Kev. I'm Mikey's uh neighbor. We

do content with your older." Let's go.

That's freaking awesome. Good for you.

What up? That car is freaking sick.

If I actually had a driveway, maybe I

would have kept it. I don't own a

driveway.

Well, not where I live, at least.

All right. What else we got here? Uh, so

I'm just looking at some Optimus also

serves popcorn. Yeah, purposefully.

Remember, notice how that's lightweight,

right? That's a big deal. Uh,

lightweight product. Very lightweight

product. The box is lightweight. You

know, the the item inside the box is

very lightweight. Uber wins here. Well,

that's why Uber is partnering with

everyone. Do you have a brother, Kevin?

No.

Uh, they do not refer to the big

beautiful bill. They they call it the

one big bill. That's what they refer to

it as. Uh, and then somebody's asking me

what's the coupon code. That's right. If

you haven't yet taken advantage of the

coupon code, go to meet kevin.com. Use

coupon code release the files and become

a member of the Meet Kevin alpha report

for life. Get access to all the courses,

the course member live streams, the

alpha report, the fundamental analysis

on real estate, on sales, on stock

fundamentals, on trade alerts, you name

it. Check it out at meetke.com.

>> 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 Praath there, financial analyst

and YouTuber. Meet Kevin. Always great

to get your take.