Yikes Tesla [TSLA Stock]

remember that fund raise for house Haack

closes tomorrow check it out at hous

hack.com or email us

ous hack.com well we've got some Tesla

news some good news some bad news let's

get started with some good news we got

permits for Giga Mexico which is

fantastic but we also know that Elon

Musk is purposefully slow walking the

building out of Giga Mexico because of

concerns over the high interest rate

environment given obviously that

companies like Tesla are extremely

interest rate sens it entirely makes

sense that a company would want to be

conservative in an environment where

we're not sure how long interest rates

are going to stay this high now

fortunately we have some positive

European inflation data this morning

suggesting lower than expected inflation

thanks obviously on the headline heavily

due to Falling Energy prices in Europe

but most importantly even non-energy and

non-f food prices core came in lower

than expected this is good we want to

start seeing yields come down because

those a really going to ultimately help

those cyclical plays like Automotive

manufacturing and solar manufacturing

whatever it

is so getting permits federal and state

for Giga Mexico is fantastic but we

don't actually expect to really hit the

ground running in Giga Mexico in other

news that is we'll start with the bad

and then we'll go to the good in the

more not so great news we have this

herz's Embraces of Tes

isn't going so well and this really

depends how you spin it you could spin

this as a positive you could spin it as

a negative and the truth is it's a

little bit of both so remember when Herz

is like we're going to buy 100,000

Teslas well they're going to buy less

now and the reason has nothing to do

with the function of the Teslas the

Tesla's functionality is fantastic the

Tesla's cost of ownership is

fantastically low lower than their

equivalent ice Vehicles like a Toyota

Camry let's said you know what the

problem is the problem has been renting

out Teslas to drivers who are using them

for ride share and then the vehicles end

up getting damaged because when you use

them for ride chair it's kind of like

you know putting a house on Airbnb it's

going to get beat up more than if it was

just used by somebody who has the car

for their family it's in use much longer

it's got more people going in and out

it's got people in it who don't

necessarily care about the condition of

the car and even though the cost of

maintaining the vehicles and operating

the vehicles is lower for Herz the cost

to repair damages to an electric vehicle

are around twice as much as fixing

similar issues on comparable ice

Vehicles routine maintenance costs less

so notice that difference there it's

when these cars get beat up and ride

share they're more expensive for Herz to

fix and it's hard to pass those cost on

to every individual person who's renting

the cars from Herz to ride share them

because you have to inventory after

every time you're not necessarily seeing

all the damage until it acrs and then

something officially breaks this is

probably because anytime you have a

newer vehicle there are just less Parts

in the supply chain for that vehicle and

therefore it takes longer to get parts

so you have more downtime and not only

does it take longer to get parts but the

parts are more expensive it's the same

in Aerospace this is very normal so

again this is where you can kind of look

at this as a pro or a con the pro would

be hey look the cars are cheaper to

operate uh they're they're better for

individuals to buy but if you're going

to put them in a fleet where they're

going to have a lot of wear and tear you

might end up having more downtime

because the parts aren't readily

available it's kind of like with my

plane I'm very happy that I have a plane

that is the most popular plane in

America for business use because that

means there'll be more pilots for it

more parts for it right you have you

have more interchangeability you go get

a plane that's 20 years old and there

are no parts for it anymore you're

screwed uh or you get a plane in The

Sweet Spot which is maybe like 5 to 8

years old and there are a ton of Parts

everywhere for it

fantastic uh so anyway diverging from

Tesla but that's a little bit of bad

news for Tesla now what else is in my

opinion good news for Tesla well it's

actually that the competition is rolling

over so we already know this or maybe

you do maybe you don't but GM has

announced that they're scaling back

their plans to manufacture EVs and

that's because they're burning 200

million dollar a week in profit on

trying to make these EVS it's also worth

noting that Elon Musk is expected to be

on the Joe Rogan podcast today I'm going

to see if I can do like a viewing party

on the channel maybe we can watch it all

together but but anyway take a look at

this you go over here uh we're at what

197 or so right now Tesla mind you is

almost at that 3year low level like

we're we're kind of really aligned with

that kind of sucks the Same by the way

it's crazy to say but it's true of end

phase right you're about a three-year

low except Tesla just had a bigger dip

at the end of last year the uh dip for

end phase was delayed though because of

the big purchases during Ukraine uh or

after the Ukraine Invasion anyway going

back to GM here the United Auto Workers

obviously have struck a deal with GM but

GM is scaling back from their 400,000

electric vehicle Target by 2024 because

they're concerned about EVS but most

importantly they're concerned that EVS

are costing them $200 million in profit

per week $200 million of their profit

gone per week to try to make EVS sorry

just not going to be able to compete

with Tesla you're actually seeing a very

similar thing happen in the Solar Market

where businesses are starting to leave

the industry it's like in the EV Market

more EVS that leave the business what

happens more for Tesla to take right

when or take most similar things are

happening in the Solar industry a lot of

solar competitors laying off workers

cutting their business reducing their

business could that potentially leave a

Survivor like enase to take over more

maybe who knows so far it looks like

their stocks going to zero but anyway uh

with that said it is very interesting to

also see that the former CEO of Ford

says that the Auto industry should not

expect a quick adoption of electric

vehicles he was on a CNBC interview last

week and was talking about how ice

Vehicles will be here to stay it really

sounded like he was kind of turning into

a mouthpiece for the unions because the

unions haven't really fully transitioned

to adopt an EV future yet so you have a

lot of resistance to get to EV because

it's not profitable for GM and Ford so

in instead what do you do you stick with

ice Vehicles so you could pay the higher

wages that the unions are demanding then

you have former people affiliated with

unions that are like yeah yeah EVS are

going nowhere and then the companies

announce yeah yeah yeah we're not

focusing on EVS we're going to focus on

profitability negotiating with the

unions Tesla on the other hand can go

Full Speed Ahead on engineering the

future which is actually long-term

pretty bullish for Tesla so personally

what do I think well I think you're

probably at at the most difficult Point

uh for Innovative cyclical companies

that means companies that are Innovative

that are at that are very sensitive to

high interest rates you're probably at

one of the most sensitive points because

you're probably in a position where

rates are at their highest and we'll

probably be at this high level for the

next two to 5 months it depends once we

finally see the peak and bonds start

getting bought then you start seeing

yields coming down you don't actually

need the FED to cut what you need is the

market to start buying bonds Market

starts buying bonds yields plummet

before the FED even acts it could all

happen before the FED even acts so

you're probably two to five months of

pain left with high rates but when the

flip happens it probably happens quick

so personally I look at this and say I

know that the companies that I'm

investing in are the best of class Tesla

for example Nvidia for example these

companies are best of class just in a

tough econom IC time and yeah there's

always going to be good news here bad

news there that's going to create some

fluctuations and earnings quarter to

quarter the question is where do you

want to position yourself for the long

term and for me that's in my favorite

stocks and of course house hack with a

fundraise expiring tomorrow Happy

Halloween and we'll see you later for

The Joe Rogan podcast thanks so much bye

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

congratulations man you have done so

much people love you people look up to

you Kevin P there financial analyst and

YouTuber meet Kevin always wait to get

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