Tesla Stock Earnings SHOCK w/ Trump FLIP | Full Breakdown

The stocks are rallying. Tesla earnings

just came out and yeah, they weren't

good, but the stock is still up 5%. Why?

We'll break that down in this video. And

I'll briefly touch on what the houble

hockey sticks just happened with NPA

earnings. Now, a few things to know. And

I just want to start with why the heck

are futures pumping? Why is the market

running? This actually has little to do

with earnings at all. Pretty much has

nothing to do with earnings. It has

everything to do with Donald Trump

negotiating against himself on Chinese

tariffs. That's not trying to take a

stab at Trump. It's just that we haven't

started conversations with China per

Bessant today. They have hopes of

starting negotiations with China. And

Trump is now saying the tariffs won't be

zero, but they won't be as high as 145%

on China. So in other words, Donald

Trump since they haven't started

negotiation with China and Donald Trump

is saying they're going to be lower than

where they are now, but they'll be

higher than zero and less than where

they are now. He's basically negotiating

against himself. But it wasn't just

that. Donald Trump also said that the

Fed should lower interest rates and we

would like the chairperson Jerome Powell

to be early or on

time but then said that even though

Jerome Powell might be late, you know,

Mr. Late as Donald Trump calls him,

Donald Trump has no intention of firing

the Fed chair. Okay, markets pumped

immediately after this discussion. So

when Donald Trump said these things,

markets jumped immediately. Futures went

up from basically flat to almost up 1.8%

on the cues. Everything went up on this

because you're undoing some of the

uncertainty of investing in America by

this idea that we're going to turn into

like a turkey or something where we just

fire our, you know, chairperson of the

Fed of the central bank when we don't

like what they're doing. And so that is

bringing some money back at least in,

you know, the futures markets and after

hours. So, in case you're wondering why

there's this huge pump, hopefully that

gives you some understanding of what's

going on in the broader market. Now, we

do have to talk about earnings. So,

Tesla told us some really important and

critical things today. And I'm going to

break this all down for you as simply as

possible. There's a lot. I mean, it it

was like we did a three and a half hour

live stream. So, let me just keep this

very simple for you. Okay. One of the

big big big fat takeaways was that the

company update was really just that Elon

Musk is going to keep fighting for Doge,

but he's going to walk back his efforts

at Doge to maybe just two days a week,

one to two days a week starting in May.

So Elon Musk says there's still work to

be done, but the groundwork has been set

and that he's going to spend more time

at Tesla starting in May. We didn't

really actually get a big company update

after that. everything else fell mostly

in line. However, we did get a little

bit more color on this idea about, hey,

what about new models? You know, we keep

getting this talk about new, more

affordable models. And if you look right

here, this is the snippet that you want

to pay attention to when we're talking

about these newer uh models of vehicles.

And so what we see here is this phrase,

plans for new vehicles, including more

affordable models, remain on track for

the start of production in the first

half of 2025. Now, what I wrote up here

in gibberish is, okay, wait a minute,

new vehicles could be cyber cab, and

then including more affordable models

could really just be stripped down

versions of existing models. And then

what I wrote is like, could somebody

just give us more freaking clarity?

Like, tell us what you mean. So they

don't do that in this document, but they

did in the earnings call. See in the

document they said, "Hey, our goal is to

just to get to basically full capacity

of our existing manufacturing lines."

Now, this is really important because

they're saying, "Look, you know, we

realize we are not fully using all of

our manufacturing lines. In other words,

we could produce more vehicles than we

are today." And so, we want to get to

100% functionality. And so, or or

productivity, I should say, would be a

better way to put it, right? Output 100%

productivity. So their phrase is quote,

"We are focused on

affordability. We're focused on people's

monthly payment because that leads to

more vehicles and therefore quote new

models will resemble in form and shape

the existing cars we make, but the cars

will be more affordable." Quote, "We are

limited on using existing manufacturing

lines with different form factors."

Okay. In English, yes. what we've been

concerned as a likely reality over the

last 18 months, which it's good and bad,

right? But we've been concerned that

this idea about a new car coming is

really just going to end up being a

paired down Model 3, paired down Model

Y, or cheaper Cybert trucks. And that

sounds like it's exactly what we're

getting. Now, that's not necessarily

bad. From an efficiency point of view,

this is totally logical. But from a

hopium point of view, some people were

going to be disappointed by this because

there was hope that if we have a new

car, there'll be some new sizzle or some

new stake that we could sell and we

could get to more vehicle production.

Instead, Tesla's basically saying, "Nah,

we're going to use the same platforms

that we have. We're just going to figure

out how to pair them down more so we

could sell them more cheaply." Now this

is slightly problematic because margin

is already getting compressed as they

said in their earnings call and in their

press release that tariffs will affect

their business more so the energy

business than the vehicle business but

also the vehicle business know that just

5% of lithium ion battery production

comes from the North America 84% comes

from China and so when it comes to the

trade war they see more of an impact on

their energy side which is also very

battery dependent which we'll talk about

Nphase a a little bit later in this

video, but it's worth noting when you

compare the production of of uh you know

batteries between Tesla and Nphase, it's

not even close. Like NPhase blow or

sorry um Tesla blows NPhase absolutely

out of the water uh in terms of battery

production. Tesla output over 10 gawatt

of battery production whereas uh and you

know that's Tesla right over 10

gigawatts. Just want to make sure I'm

saying that right. And Nphase only

produced about 44 megawws, which if you

divide those into each other and

convert, Tesla's doing 236 times the

battery production of Nphase. It's it's

a huge huge number of battery production

that Tesla is doing. And this is really

important because batteries have good

margins. Uh and unfortunately, the

tariffs are hitting those margins for

Tesla. So, not great. Now, that said,

margins for energy were great this

quarter at Tesla. We had uh energy

margins at 28.7%. That was above

expectations for the first quarter.

Although they kind of asterisk that by

saying that energy income's going to be

very volatile. There's also a point in

the uh slide deck where you get Elon

Musk suggest or presumably Elon Musk

suggesting but we don't know. Uh we have

this suggestion. I'll show it to you

right here. Uh here it is. The rate of

growth this year will depend on a

variety of factors including the rate uh

of the acceleration of our autonomy

efforts, the production ramp of the

macro environment, and we will revisit

our 2025 guidance for Q2 or in Q2. In

other words, you know, is this sort of

Elon saying like, hey, we'll have a

better idea of where tariffs land by

July because maybe a lot of the tariff

drama will be over by then. I don't

know. May maybe that's too optimistic to

look at it that way, but I do think it's

kind of interesting that they specified

the second quarter and Elon is an

insider in the White House. In addition

to this, we have automotive margin X

credits at just 12.5% that was a miss.

Uh and automotive margin with credits at

16.3% which was a slight beat over the

16.1 expected. Tesla's got plenty of

cash. This is the balance sheet. You

really when you're looking at Tesla, I

know a lot of people are going to poo

poo these numbers here, but they have a

lot of money. They're not going anywhere

anytime soon. And you kind of have to

look at the money that they have and

respect it and go, "All right, I mean,

this is still pretty damn good." They've

got $40.7 billion of available cash. In

fairness, they have a stack of bills on

their desk of 26.5 billion. They have

$16.2 billion of long-term debt, which

means if I just subtract the cash they

have from the bills they have, they have

14.2 2 billion of free cash just this

year available. On top of that, they

have another 11 billion of inventories.

So, as they start, you know, selling

vehicles, they increase their cash flow

and they can pay off their bills or

whatever, right? So, they've got plenty

of cash. And even though their cash flow

isn't as great as it used to be, their

cash flow coming in at just over $600

million. The expectation was for it to

be over a billion dollars. They're still

producing cash flow on top of this cash

pile that they have. So, they've got a

lot of cash. And yes, free cash flow was

low this quarter, but they themselves

say we have sufficient liquidity. And

this is actually good because people

were concerned that Tesla might want to

like issue shares to invest in XAI or

something. There were some crazy rumors

about this beforehand. A bigger problem

I would say is net income. You know,

Tesla's net income was not very good

this quarter and I'm very curious to see

how Wall Street analysts are going to

treat this net income. There's also some

rumor mill that and this could be true

that because we did last quarter we

recognized Bitcoin gains as part of our

net income. And I I I haven't had time

to get to the bottom of this yet, but

there's a possibility that Bitcoin

losses were not included this time. I'm

wondering if that's because now we're in

a quarterly report and the last report

was an annual report. I I don't know.

Either way, I don't really care because

I care about the core of the business.

And the core of the business h it had it

did have some problems. Okay, it we we

had some problems. First of all,

automotive revenues were down 31%. Okay,

that's that's a big hit. Now, yes, we

went from Q4 to Q1, but that's still a

pretty big hit. Yes, some of that is

because of the Model Y revamp Juniper,

but a lot of it is probably brand damage

and just selling cars for less. Although

the Model Y Juniper led to, you know, a

higher average selling price because of

Juniper, so that helps. But you're still

cutting prices across the board. You

know, even on the Cybertruck now out for

what, $69,000, you could get a long

range Cy Cybertruck. I have the

Cybertruck, the fast one. Honestly, I I

I never Trump on it, so I would probably

just get the regular one, and you

basically get the same vehicle. Uh, and

you save what, $30,000. That's probably

a good deal. Anyway, uh we can see that

their margin on energy was good, but

their gross profit overall here in this

red highlight collapsed

25%. Which isn't great. That's again

mostly because their automotive

revenues, their topline fell. This is

why you have to put your business hat on

when it comes to Tesla. This is why

Tesla is telling us, "Hey, um we're

going to focus on actually manufacturing

as many freaking cars as we can." And

honestly, I'm bullish about hearing

that. Like fine, no new model, fine, but

get more vehicles out. In fact, I've

been pounding my fists on the table

saying just make more cars. Like we

should be saturating the world with FSD

and more cars. Like even if you have to

lower the price of FSD, make more cars

because that increases the network

effects of Tesla. More people buying

Tes, you know, Tesla solar, more people

buying Tesla batteries, more people

talking up FSD, more people minimizing

the brand damage of Tesla and defending

Tesla. uh you know more people

supporting uh Optimus or buying the

stock or or believing in the company or

whatever because they're users of the

product. This is a good thing. This is

why you know when like you know I've

I've done just real estate analysis as

an example just as a comparison on on my

YouTube channel for years and I I I

don't think it's a surprise that when

you know I'm like hey we're starting a

real estate company that you can invest

in people are like oh yeah I like I I

know the work Kevin does. I want to be a

part of that. It's the same thing for

Tesla, right? The more people you have

inside the company, the more people are

willing to invest in the company and in

the stock. And so, I actually think this

is a good strategy of moving to full

production and getting back to vehicle

growth. Let's get to 3 million vehicles

produced. Let's stay away from this 1.9

million nonsense being stuck in the

schlog. Now, we're going to talk about

Optimus and some of this excitement in

just a moment, but I do want to quickly

mention we put this sweet banner

together at Houseack. Look at this.

Diversify away from rich stock market

valuations. You get 5% annual yield plus

100% of the upside in the stock. You

diversify away from long-term treasury

risks. You diversify away from most

tariff risk. You diversify away from

frothy VC AI valuations because we're

raising at the low end of our Wall

Street valuation from the end of last

year, which is outdated anyway.

Valuation is probably way higher today.

So, I think you're getting a wedge on

the company. And you diversify into

American real estate by investing in

house hack. So consider taking some of

your money off the table wherever you

have it and investing in house hack. Go

to houseack.com. You can now invest as a

nonacredited investor which uh is

awesome. Uh so anyway, going back to

this sheet over

here, Tesla is, you know, there is

obviously a huge amount of hope priced

into Tesla right now. We know that this

idea that we only generated $399 million

of net income in the face of an estimate

of $1.13 billion is a big problem. It's

not good. You have a collapse of net

income. Last year, you had 34 cents of

earnings in this quarter. Now you're

down at 13. So, not good. Your net

margin, like this, this 3.99, if you

divide this by the revenues they had,

you're only at 2% margin. And if you add

research and development back, you're,

you know, somewhere at a 9.3% net

margin, which is a low margin business.

It's not good. So then the question is

if you produce more cars at, you know,

and you get more volume, but you're

doing it at a lower cost with these

newer models that are going to be the

same form factor, are you actually going

to increase this net income? We don't

know. Now hopefully we could do it with

Optimus, right? Because see the thing

about Optimus is Elon says, "Hey, maybe

we can produce a million Optimus robots

by 2030, maybe even 2029." Okay. Well,

so really quick math at $25,000 per

Optimus robot, a 30% margin because

hopefully it would include the FSD,

basically the AI brain, that generates

about $7.5 billion per year of income

before taxes, which would be roughly

double our 2025 estimated profits alone.

This would be great. But then when you

look at what Wall Street's already

estimating for for Tesla, Wall Street's

already pricing in an explosion in net

income by 2029. Net income for 2025 is

supposed to be $9 billion. Wall Street's

already assuming net income is going to

more than 3x to $29 billion by 2029. So

Wall Street's definitely pricing in some

level of either margin expansion, energy

sales expansion, certainly energy

expansions built into there, but not

that much, not $20 billion worth. uh and

then some sort of revenue for Optimus

and uh uh and and robo taxis which uh

Elon Musk does suggest we're still going

to see robo taxis uh launched in Austin

as a trial this June. Then he revises

that to say late June, early July. So

we're getting a little bit of a

potential delay here. And he says that

unsupervised uh uh FSD would come to

vehicles by the end of this year in

select cities when in the last earnings

call he said by summer for Texas and

California. So we're seeing some delay

uh about a six-month delay on

unsupervised FSD and about a one-mon

delay potentially on robo taxi. That's

that could be worse. Okay, not trying to

defend Elon with his bad timing, but I'm

just saying that could be worse. You

know, one month delay even on the robo

taxis isn't too terrible. So then in

fairness, if you do look at the

automotive credits, which Tesla's still

getting for manufacturing and customers

were still getting for EV tax credits

before Trump's tax plan, without the

automotive tax credits, Tesla would have

lost money. They had $595 million of

automotive credits. So keep that in

mind. That's a problem. Supercharger

growth only grew by 17% on the low side

for really expanding this EV network. Uh

and uh 10.4 gawatt hours of deployed Q1

energy battery packs, storage packs.

It's actually pretty good. That's

actually pretty bullish coming from Q4

because, you know, Q4 is usually where

people deploy this stuff. So, I thought

that was pretty actually good. Uh, now,

as far as this uh this talk about, uh,

you know, the the um tariffs, he says

that Elon Musk says he's, you know, pro-

free trade or no tariffs for greater

prosperity, but tariffs are a decision

that the president comes up with. It's

not up to him. So, they're going to work

to localize their supply chains. But

there's some challenges because a lot of

their supply chains localized in North

America rely on Canada and Mexico. 85%

of that roughly fortunately USMCA

compliant which is a good thing. Mostly

exempt from tariffs right now mostly. Uh

but then they do also rely on China for

things like critical minerals which is

uh you know certainly a sore spot right

now especially since China is asking

Tesla hey you know for these critical

minerals you need in your robots your

Optimus robots are any of these going to

be used in military purposes? It just

shows you how much power China actually

has. Obviously the answer is no, but it

shows the power China has even over

Tesla right now. Uh which is somewhat

challenging. Now uh what we also find is

uh this this idea of

uh how many autonomous vehicles might we

get by July or June, whatever. Elon says

about 10 to 20 and we're still planning

on releasing those this year. Uh but the

big focus right now is full utilization

of our factories this year. That's the

big goal. Uh Elon talks about being

ridiculously vertically integrated. Uh

we're going to be the most valuable

company in the world. The problem is

when you manufacture a new product like

Optimus, which is still a development

product. It's uh complex to manufacture

and it's going to take a while to scale

it. You know, talk to us next year

basically on that. So this gives us you

an overview of Tesla. I think most of

Tesla's bounce in the after hours was

really more Trump driven and trade hope

driven than it was actual numbers driven

because if you think about it the

company update we didn't get a new model

announced we actually got the opposite

we got no new car announced we missed on

basically every single metric with the

exception of one set of margin you know

EPS guy like all this stuff was a miss

it was bad uh we didn't get again a new

model we got this talk about Elon maybe

coming back next month uh but you know

then again like does how much does that

fundamentally change the business model

if he's still working at Doge one to two

days a week I don't know so most of the

runup we're seeing right now I'm going

to attribute to Trump not so much these

earnings however there is also the

possibility that people are just looking

at these Tesla earnings and they're like

all right the worst is now over now I

don't know that the worst is now over

but it could be that people are like all

right terrible quarter behind us now we

could buy the dip that's also possible

now I'm going to briefly do end phase

Nphase. Uh, okay. Look, minimal impact

for micro inverters. They do most of

their micro inverters in America because

of the tax credits they get from the

inflation reduction act. Big dollar.

Unfortunately, much like Tesla, they

source a lot of their batteries from

China and that's going to hurt their

margin by 6 to 8% on gross margin uh

between like well really until the third

quarter and then they're going to start

working on switching to other countries.

They didn't say which. I guessed South

Korea and then later in their earnings

call they suggested South Korea as a

potential. This is not a surprise. Just

think Samsung. Okay, this this is not a

you know big brain move here. This is

kind of obvious. Uh so they're looking

at lower tariff alternatives. But Nphase

missed across the board really as well.

Their estimate for revenue was 377 mil.

They came in at 360 4.5% miss on the

guide. Their margin came in at 455

versus 49.8 expected. their adjusted EPS

missed at 68 cents versus 73. Basically

missed across the board. Basically,

don't buy NPhase until the Federal

Reserve panics and cuts rates. That's my

take. Uh however, their balance sheet

still looks pretty good, which makes

them a cheap deal right now to maybe

start thinking about as we get into a

rate cut environment. 1.5 billion of

cash, $960 million of bills, plus about

600 million in long-term debt. They

could basically use 100% of their cash

to pay off 100% of their debt. They're p

cash flow positive slightly about 34 mil

a quarter. So I don't see a high

bankruptcy risk here. Obviously their

stock will probably just continue to go

down on the weight of tariffs and high

interest rates which hurt solar

adoption. So this gives you a full

breakdown of everything. If you found

this useful uh well consider subscribing

to the channel and as always go check

out househack.com. Uh and then also keep

in mind when we do our course member

live streams in the morning we do them

in the meet Kevin membership. So, go to

meet Kevin.com to check out the Meet

Kevin membership. It includes access to

all of the courses on building your

wealth. And in addition to the courses

on building your wealth, it includes the

alpha report. You know, this morning's

trade alert, for example, or or you

know, trade ideal or whatever you want

to call it, uh was coreweave. We thought

it would go to $40 and it's at $40 now

from 35 is a really big move. So, uh

this would have been an easy one to make

money on. Anyway, if you want these sort

of alerts, can't guarantee that every

alert will will make you money, but uh I

will do my best to provide you as much

alpha as I can every single morning. In

addition, you get the course member live

streams and all the courses. Get it over

at meetke.com. Less than two bucks a

day. Thanks so much for watching. We'll

see you in the next one. Goodbye and

good luck. 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.