Tesla Warning

now we've gone to talk a Tesla and a boy

oh boy we've got a lot to talk about

from new firings at Tesla what the heck

is going on with the supercharger

Network and what does it have to do with

the White House and billions of dollars

what's going on with Mr old school

Charlie Munger lashing out at Tesla and

what's going on with the European Union

we've got a lot to cover let's see how

quickly we can get through it first two

days ago we heard roses are red violets

are blue we have a flash sale for you

that's 69 off on the program so I'm

building your wealth expiring Friday at

11 59 PM we extended that flash sales

take advantage of that and get lifetime

access and yes that is actually what I

said two days ago but then I also

followed that up with saying that two

days ago individuals at Tesla Buffalo

New York ended up circulating at the

autopilot labeling team which is kind of

where you have minimum wage starting at

19 and you kind of sit and push a button

like yup looks right yep no look looks

wrong yes no yes no yes no yes

all day long they were pissed about

apparently not getting snow days that

they wanted and uh being monitored for

how long they were spending in the

bathroom which I I don't know what's

more weird the suggestion that the

employee is concerned about people

monitoring how long they're spending in

the bathroom or the company monitoring

potentially how long people are spending

the bathroom I'm not sure it all sounds

a little weird but they circulated a

letter saying roses are red violets are

blue unions start with you and somebody

at Starbucks thought it would be a good

idea apparently like somebody who helped

start unions for Starbucks decided to be

a good idea to connect with people over

at Tesla and try to start a union at

Tesla and so they got about 25 people to

put a letter together and email Elon

Musk and say yo we're unionizing and uh

pretty much every one of you called it

in not only the comments on the live

chat or uh in the uh the what's it

called uh in the comments on the actual

YouTube video and what did you end up

getting well what you ended up getting

was as you all called it you're fired

Tesla fired all 25 of the individuals

who started suggesting that they wanted

to unionize goodbye unions now Tesla has

been slammed for this in the past my

expectation is even if Tesla were to get

sued for firing people for threatening

to unionize although they'll probably

use a different rationale it would be

years before that sort of litigation

actually ends up playing out so we'll

probably come back to the roses are red

violets are blue argument in 2025 and by

then honestly I think Tesla's going to

be in a lot larger of a place than uh

well where we are today uh now another

thing obviously that we've got to talk

about is what's going on with the Tesla

supercharging Network now this is

actually interesting The Wall Street

Journal did a phenomenal piece on this I

think they they put it together the most

clearly and then we'll get into Buffett

and some of what's going on in Europe

because there's a lot to talk about uh

but we'll look at this so Tesla is

expanding their non-tesla supercharger

pipe lit and basically what uh what

they're doing is look they have 40 000

superchargers worldwide and the White

House gives like massive Mega subsidies

if you end up opening your supercharger

Network to other electric vehicles and

this makes sense because the White House

wants more electric vehicles in America

but the big thing that everyone's

worried about in America is premature

electrification of course remember the

Dodge the ram ad for a vehicle that

doesn't even exist yet anyway people

have range anxiety when it comes to

buying electric vehicles there aren't

enough superchargers and a lot of

superchargers are just not super they

suck they're very slow from other

companies Tesla by far has one of the

most robust supercharger networks one of

the most reliable networks uh and Tesla

now plans to open at least a 3500 new

superchargers and existing 250 KW

Chargers to drivers of all EVS by the

end of the year the White House is

bragging about how wonderful this is for

everybody it actually is a good thing

now Tesla is expected to receive

potentially billions of dollars billions

of federal subsidies to continue to

build their supercharger Network because

they're doing this now think about that

that's incredible so Elon Musk actually

visited uh with the Biden Administration

about a month ago and I wouldn't be

surprised if they ended up talking about

the supercharger Network and how they

were going to announce it apparently in

addition to him actually visiting with

the Biden Administration Elon Musk

participated in a call with their

infrastructure coordinator and they

discussed about basically their

discussions revolved around improving

Highway charging and this right here is

what I love about Elon Musk is he's a

very reasonable person uh they they say

here quote he was very open very

constructive and at the time he said his

intent was to work with us to make the

network interoperable a lot of people

say hey like is Tesla seating a

competitive Advantage for doing this and

I think the way to look at this is yes

to some degree the Tesla supercharging

Network motivates people to buy a Tesla

right that obviously is a draw however

if you now let other people use the

electric vehicle Network what you really

potentially do is you increase

congestion for people who have Teslas

you kind of take away that whole like

Tesla Club feeling exclusivity when you

drive through a mall and there's just

like a row of backed in Teslas and it

looks really badass I mean it's like the

best ad ever and if you start seeing

like Kias and Nissans or whatever

plugging into the Tesla superchargers

it's kind of like okay it's not unique

to Tesla anymore not there's anything

wrong with Kias or Nissans okay I'm just

saying not unique anymore but well so

let me first say yes there is some form

of uh potential negative in sort of that

competitive advantage or that Tesla

might have but I think the reality is

people buying Teslas are probably not

buying Tesla solely because of the

supercharger Network they're either

buying a Tesla because they want the

full self-driving the technology how

fantastic the freaking car is in terms

of acceleration uh and and just how

Sleek it is right you're buying it for

all of these other reasons and the

supercharger Network I personally

believe is just icing on the cake uh and

and the reality is people who are not

going to buy a Tesla probably just

aren't going to buy a Tesla anyway in

fact somebody very close to me and I was

really surprised by this but somebody

very very close to me they actually I

asked them I go hey have you um uh they

refused to buy a Tesla by the way and I

asked them I go hey did you see my

latest Twitter post and he's like no I

uninstalled Twitter after Elon bought it

and and I kind of like paused for a

moment and then I just said the quiet

part out loud and I'm like I literally

never thought I would meet someone in

person who actually uninstalled the app

because Elon bought it and and he's like

yeah yeah I'm one of them and I'm like

I'm not even gonna start

it's like we could still have beer but

I'm not even gonna start because that's

insane and ludicrous and silly but

whatever everybody is entitled to their

opinion my opinion is very obvious but

anyway those people whoever whomever

they may be I don't dislike them I don't

disrespect them for that I think it's

crazy but that's okay I also think in

many regards I'm crazy but then again I

think you have to be crazy to wake up at

three every day and work until you know

work basically two jobs but anyway uh

which that's not to say that oh working

two jobs no big deal a lot of people

work two jobs okay point of this is to

say uh that people who are not buying a

Tesla are probably not buying a Tesla

for other reasons outside of like the

supercharging network potentially being

available to them right so the way to

look at it is the minus of of of people

not buying a Tesla because of opening up

a supercharger Network I personally

think anecdotally is nominal in addition

to that the plus is that Tesla's

probably going to get billions billions

of dollars of of money to expand the

supercharging network which I actually

attracts people to Tesla in the first

place right because you actually get

cheaper charging rates in the Teslas but

it also potentially gives Tesla money to

invest in their manufacturing ability so

you're getting more manufacturing

subsidies to actually produce the uh

Tesla uh uh charging vehicles or not the

charging Vehicles the charging stations

that's because if you actually look let

me see where is it where is it where is

it if I look at housing in the Wall

Street Journal article they basically

talk about how the inflation reduction

act requires a certain percentage here

it is that of the steel enclosures or

housings needing to be manufactured in

the United States

starting immediately and I think Elon

Musk is going to look at that and he's

going to be very smart he's going to go

well I mean if you want us to

manufacture more of these housings in

the United States we're going to need

some big old tax credits to help us

expand Giga taxes or whatever right and

by 2024 at least 55 percent of the cost

of all components needs to be

manufactured in the US okay hey give us

some bills so we can maybe mine more

whatever we want to do in the United

States so I actually personally think

this is absolutely fantastic I think

this is this is great the loss you have

is nominal the subsidies you're getting

are absolutely huge now we got to talk

Charlie Munger in just a moment but I

just want to on the topic of subsidies

talk about here's a Barclays piece and I

mean I'm seeing stuff like this daily

about talking about how Joe Biden's

inflation reduction or reduction Act is

a serious competitive threat to the

European Union because of how many

subsidies are going into battery storage

and electric vehicles tax breaks for

manufacturing them like what we just saw

for the EV network and remember if you

actually go through uh Tesla's document

on uh you know what they end up like how

it's going to end up working that's this

particular document here you basically

download the Tesla app and you can plug

in other vehicles by just marking which

charging stall you're at and then you

pay through the test lab I do want to

make it very clear though on this note

of subsidies and sort of a tangent there

is an additional cost for non-tesla

members so non-tesla members do pay a

little bit more money so I wanted to

clear that up but anyway back to the

subsidy stuff the amount of money that's

expected to flow into State support

subsidies in the United States alone is

expected to be somewhere around 440

billion dollars into energy storage

green solar electric vehicles you name

it and the same is expected to happen in

Europe to somewhat of a smaller degree

but also massive so sectors that are

going to benefit from the subsidies

mining energy semis capital goods Autos

chemicals construction materials

utilities these invest assessments are

going to be huge uh and I mean keep in

mind we expect not only the United

States to throw hundreds of billions of

dollars in tax credits and subsidies at

this uh at Green vehicles and battery

storage and that but also Europe to

compete and after Europe guess who else

China massive Chinese subsidies 450

billion of euros worth of subsidies in

China's Five-Year Plan to invest in uh

in in Chinese electric vehicles so the

amount of money that you're going to get

thrown into batteries and EVS probably

over the next decade from governments is

gonna is probably going to exceed a

trillion dollars I mean this is like a

huge stemi check to the industry it's

absolutely insane but you know who's not

stimulating I hate to say it but it's Mr

Charlie Munger Mr Charlie Munger has

some uh Choice words for uh Tesla versus

byd so let's listen into that and uh

here we go question from Steven Spencer

uh who writes in from New York New York

he's curious why Mr Munger prefers an

investment in byd to Tesla

well that's easy

Tesla last year reduced its prices in

China twice byd increased its prices for

direct competitors

we're so much ahead of by itd I mean byd

is so much ahead of Tesla in China it's

like a

it's just it's almost ridiculous

it's almost ridiculous that that's

actually not true I mean if you actually

look at the real data what do you end up

having is you have byd uh selling half

ice vehicles and hybrids well those are

hybrids are ice Vehicles right and the

other half are fully battery electric if

we just look at battery electric battery

electric vehicles sold by byd were about

900 000 units in 2022 and a Tesla sold

about 7 000 sorry 700 a thousand uh in

in China of the battery electric

vehicles right so you're talking about

900 versus 700 talking about 28 I don't

know if that's so far ahead the numbers

I think are a little bit more worth

looking at and keep in mind byd sells

vehicles for 15 to 30 000 on average the

average selling price of a Tesla is

knocking on the door of uh fifty two

thousand dollars so you have a massively

different audience you're appealing to

smaller Vehicles versus larger Vehicles

let's also look at the numbers when you

look at the byd investor relations

information what do you actually have

for the numbers for byd well you're

looking at numbers that aren't anywhere

near Tesla's numbers in terms of margins

you're looking at maybe maybe a net

margin for Q4 sitting around a 3.4

percent it's better than it's been in

the past but 3.4 percent on Net versus

Tesla's 13 to 17 percent net bottom line

numbers or if you look at the gross

margins byd gross margins maybe 13 14

Tesla and gross margin 20 to 25 but

whatever Monger let's keep listening to

you for a moment and

if you look at byd which no mostly I've

never heard of

if you count all the manufacturing space

they have in China to make cars it would

it would amount to a big percentage of

all the land in Manhattan Island

and nobody ever heard of them a few

years ago

all right let me jump to another

question this one comes from Michael

aseo

who says did the this is regards to some

movement at Berkshire some sales of

Berkshire stakeholdings did the sale of

some byd and Taiwan semi shares have

anything to do with the relations

between the United States and China or

was it for purely economic reasons

well be what he's talking about 50 times

earnings

that is a very high price

oh come on man now he's bagging on his

own thing I mean come on I'm starting to

lose a little bit of respect and I don't

want to go on for this forever here on

Munger you know what they've got their

opinions that's okay but look this is

where Warren Buffett and Berkshire

Hathaway sold Taiwan semiconductors see

it at the pit of that blue line there to

me that looks a little bit paper handy

now don't get me wrong they bought low

but that looks a little bit paper handy

and now you're telling us how great byd

is with the lower margins and it's still

trading for 50 times earnings you're

basically saying it's trading for

roughly the same valuation with worse

margins and less expensive Vehicles than

Tesla in fact Bloomberg themselves

expects that margins for byd will suffer

more than Tesla's and this is despite

the fact that Tesla has adjusted prices

down a little bit versus byd up a little

bit again substantially cheaper vehicle

versus much more expensive vehicles in

Teslas Tesla's just became the third

most popular vehicle in Europe and you

know what look I I don't know I I'm a

Tesla so maybe I'm jaded but hey you

know what Sorry Charlie Munger I ain't

buying it we got good news here on the

anti-union move I think you've got a

good news here on superchargers you've

got great news on uh Tesla overall with

margins I'm a big fan