Tesla Investor Day | Revealing the Generation 3 "Model 2"

we gotta talk a Tesla because I just

interviewed well an amazingly brilliant

mind over at arkinvas Brett Whitton

phenomenal researcher and the full

interview uh will be on my channel

Saturday February 18th but we're gonna

talk about Tesla and this potential Next

Generation vehicle Brett is convinced

that Tesla is going to announce the Next

Generation vehicle now I'm going to talk

a little bit about my thoughts about

what he said but I also want to First

talk about what Wall Street says about

this specifically Goldman Sachs so here

is Goldman Sachs take on Tesla and then

we'll get into Ark invest stake and then

we'll get into some of my commentary

take a look at this

Goldman Sachs says that for investor day

you should expect Tesla to talk about

the Generation 3 platform

a lower cost structure potentially a

generation 3 vehicle platform where

costs could be reduced

by about 50 percent March 1st is uh

going to be the investor day

and they believe that everything about

investor day will be about how is Tesla

going to get their costs for vehicles

down 50 percent which actually increases

their pricing power because if they

let's say reduce prices 25 but reduce

costs 50 percent you actually have

massive PP massively huge pricing power

it's really incredible in fact uh rumor

has it that Tesla might be close to

announcing officially their uh Giga

Mexico either this weekend or or as

early as late as next week we'll see

that rumor ends up being true but I mean

just think about the cost of goods sold

for manufacturing in Texas or sorry uh

in Mexico relative to Texas cost of

goods sold for labor your average wage

in Mexico is somewhere around three

bucks 325 350 whereas out in in Texas

you're probably 15 to 25 bucks

so you're already looking at reducing

your cost of Labor by an order of

magnitude of 4X just by near Shoring uh

in in Mexico really incredible uh labor

cost reductions and and what you'll have

you know some people will hear about

that as oh you know exploitation you

know here comes the capitalist exploit

but what you're actually doing is you're

just moving to an area where you have a

lot of auto manufacturers already I

guess Mercedes and GM already exploiting

Mexicans

uh at that lower pay but what the

reality is the more you have companies

move to Mexico like uh Tesla opening a

gigafactory Mexico what you're actually

doing is you're creating more demand for

housing and labor and you actually

increase average labor costs uh and so

maybe you'll see that average labor cost

actually rise and you're actually

increasing the standard of living in

those regions of uh Northeast Mexico so

so we'll see what ends up happening but

I'm actually relatively bullish on on

the Giga Mexico

but uh Goldman Sachs here believes that

Tesla's going to talk about achieving

this cost reduction and then being able

to uh ship a lower cost consumer-based

vehicle based off of that third

generation platform now Goldman Sachs

believes that people are investors think

that Tesla would start shipping a lower

cost consumer vehicle starting in 2025.

now Goldman Sachs says they do not model

for a lower cost vehicle they're not

projecting in their price forecasts that

Tesla will have a lower cost vehicle out

by 2025 and they do not expect that

Tesla is going to announce a specific

product on investor day however there

are a lot of investor rumors about maybe

a model two a model q a model Q is sort

of like another slap in the face to the

short sellers because Tesla Q is

considered a

you know your your uh Tesla short

position uh but anyway what's

fascinating about this is most Financial

models right now most people who who

essentially project prices for Tesla

they they look at okay you know how much

money can Tesla make just ramping the

three maybe get the cyber truck in there

throw a little bit of semi truck in a

little bit of mega pack expansion that's

it those are most models most models

aren't touching Robo taxing most model

um models are not touching a lower cost

generation vehicle however if it is

possible that a generation 3 vehicle

could uh be built at a 50 lower cost

again remember you could take something

like a model three

uh which you know selling in that 40K

range right now and you could lower the

cost of these substantially let's see

what we could get a model 3 for right

now so let's go to order now on the

Tesla page and let's see what the

current price is for model three keep in

mind that Tesla has been uh reducing the

cost of three but actually after

reducing cost we ended up raising the

cost of the model y because they ended

up selling out for q1 which is through

basically you have to wait until April

now to get a model

um uh model y but anyway you've got a

model 3 over here at about 43 000 bucks

if you could lower the cost of a model

three by fifty percent you could

potentially lower the cost of this by as

much as 40 you don't even necessarily

have to announce a new car you could

just sell the model 3 cheaper right so I

mean think about that if if it's 43 000

bucks let me make sure we don't have

incentives on yeah get rid of the

potential savings over here

you could maybe lower the cost of this

sucker by 40 that would bring you down

to twenty five point eight thousand

dollars there's your 25 000 car you

don't actually need a new car you could

just take the model three and sell it

for forty percent less if you get your

cost down fifty percent you're actually

gaining operating leverage you're

gaining gross margin while lowering

prices potentially as much as 40 and

that gets you

basically right to twenty five thousand

dollars 25.9 call it

so you don't really need a new vehicle

to be announced to get to a 25 000 car

if Goldman Sachs is right and Tesla can

pull off a uh a margin uh uh reduction

or cost reduction of 50 that's pretty

incredible maybe they can do that via

gigafactory in Mexico for example right

and deliver the United States version uh

via the inflation reduction act which

wants uh Vehicles produced in North

America which includes Mexico

and uh and you could potentially create

that 25 000 vehicle without even

announcing a new car now

Arc uh and uh well I should speak

specifically of Brett Whitten which

you'll see in the interview again it's

being posted uh Saturday February 18th

you can see the full interview that I

have with uh Arkin vast Brett Whitton

Brett believes that Tesla is going to

announce a new vehicle on investor day

he believed and he said it extremely

convincingly and he believes it's going

to be a vehicle uh that will be the

essentially epitome of the robo taxi

vehicle it will be Tesla's Robo taxi

vehicle that in the future you could

actually have an optional steering wheel

for that initially it might ship with a

steering wheel but in the future it

won't have a steering wheel and it will

be the foundation for uh the uh the the

robo taxi Network

that's pretty incredible now in order to

create that

uh you would expect that full

self-driving and the road map for full

self-driving and some of the Cutting

Edge full self-driving needs to be

substantially better than it is now

right now you still need a driver right

that lasts 10 on AI is so hard the first

90 is exponentially easier than that

last 10 percent to actually get to real

full self-driving and now we'll see

I've purposefully actually just to see

how close we are on the wide release let

my car get into funky situations and

then let it do stupid things in a safe

way obviously I like I'll go to yields

and it'll treat it like a stop sign and

there's traffic around and it's in this

unknown area where it just hasn't

trained for yet and I'm just like

all right go ahead the people behind me

are just gonna have to wait 30 seconds

while the car figures it out now I feel

bad for those people I'm sorry I I

monopolize their time their 30 seconds

for the sake of uh you know beta testing

I feel bad about that because if

everybody did that there'd be a lot more

traffic on the road In fairness there

was not a lot of traffic on the road

there just happened to be cars behind me

at that point and I did get a honk or

two but anyway they're definitely still

there's still some work to be done uh

and who knows maybe The Cutting Edge

Tech already has that so I would expect

we'll see a lot of information about the

future of full self-driving

on investor day as well as potentially

that Robo taxi platform but while Arc

believes that will be the announcement

of a completely new vehicle I actually

lean a little bit more towards Goldman

Sachs opinion that you could just cut

costs by 50 for the model 3. and uh and

and uh you know Goldman doesn't even

talk about uh this particularly but if

you then reduce prices of the model

three by forty percent you have a twenty

five thousand dollar model three it's

crazy so and you still have a growth in

in gross margin which is wild

that sounds like a big PP to me a lot of

pricing power but uh yeah Arc invest is

convinced at least brettis that there

will be a new vehicle announced so uh

they they have uh and they said that

very very confidently so good for them

and if they're right then I'm gonna

start scratching my head going what did

you know

uh but uh but anyway they're convinced

it'll be a robo taxi style vehicle what

I also thought was interesting in my

conversation with him is he thought that

in their models they've started

realizing that Robo taxis are going to

become so cheap that people are going to

use so many more Robo taxis that you

might actually substantially increase

congestion on the roads

that you might actually have to create a

capsuled based robotaxi Network we're

kind of like uberpool you don't want to

sit next to other people but you end up

having a car that has like four

different capsules where people can get

into different capsules and like

optionally open partitions uh if they're

traveling with family or whatever

so that way you uh uh you don't have to

interact with strangers but you could

actually have a robo taxi Network that

drops people off along the same path

without you know driving past those

potential drop-off points by having a

sort of capsuled style Robo taxi that

sounds a lot like a bus but one that has

sort of private compartments I thought

that was quite a fascinating idea and

and that is one that I personally do not

think we are going to hear about on

investor day but I may be pleasantly

surprised again I think investor day

will probably be by the rumor sell the

news event

for the stock I think that just reducing

costs by opening gigafactories in lower

cost areas whether that's you know

Indonesia or Mexico

or potentially both to deliver a cheaper

model 3 could be all you really need so

you don't actually need a new car you

just need a more efficient platform so

that's my take on Tesla and and what's

coming for Tesla