Mainstream Media Confronts Meet Kevin On Tesla Earnings

long time Tesla investor and YouTuber

Kevin pavroth joins us now so Kevin as

we take a look at the reaction that

we've seen from the street here I mean a

lot of good to be found in the earnings

report itself but really honing in on

some of those warning signs on price

Cuts cutting into margins and some of

those incentives as well do you think

the street has it right in their

reaction to this right now no Wall

Street never has it right when it comes

to Tesla they however are right in the

short term right Wall Street doesn't

care about the robot taxi they don't

care about AI they don't care about Dojo

they don't care about full self-driving

the street is right to care about what

they care about now and that's near-term

profitability they care about New York

term margin near-term profit and what

did we hear well we didn't hear as you

mentioned yourself a date on the Cyber

truck we actually heard they're still

testing the Cyber truck which sort of

made me scratch my head too we didn't

hear talk about them actually

acknowledge that they are indeed

advertising which is something they

agreed to do to sort of help boost the

near-term profitability and reduce the

need for Price Cuts instead we

potentially at hints of more price Cuts

coming so all of the near-term

ammunition that really said hey

near-term profitability might be hurt

more is what Wall Street got to say all

right so long term we didn't even get

that great of a vision though on Cyber

truck which we were really hoping for

more color on and then something that I

was a little disappointed on don't get

me wrong still happy on uh for Tesla

long run here but something that I

thought was really odd was elon's been

talking up Dojo the super computer for

artificial intelligence this is going to

be the best super computer ever but then

he said hey but if we can get our hands

on enough Nvidia chips we wouldn't even

need dojo this was in my opinion kind of

like saying your girlfriend is the best

ever but if I had my ex back I wouldn't

be with my girlfriend

I I love that analogy there because I

mean investors really well looking for

they were looking for some clarity and

some details here and it did seem as if

musk was sort of hedging his bets on the

calls I mean when we talk about

um FSD I mean this is something that

started talking about in 2016 still

really waiting to see it come to

fruition here and he he even on the call

called himself you know the boy who

cried FSD but he's actually expecting to

see that here and talking about seeing

that potentially by the end of the year

what should you make then about musk's

promises when it comes to FSD and where

we really are in the story and how much

that means to Tesla yeah that's a great

argument uh it is true he is a little

bit The Boy Who Cried FSD it look it is

getting better I use FSD on two

different Teslas it is getting

phenomenally better at those Edge case

scenarios where sometimes it feels like

it wants to drive you into the wall and

now it doesn't do that as much anymore

which kind of goes from like bad to

great now it's acceptable uh it's it's

getting much better I'm taking regular

drives myself self as a user where I'm

finding myself more and more taking

those drives going wow I didn't have to

take over once on that drive which is

fantastic do I really think we're at

that phase though where by the end of

the year it's going to be at a perfect

level no we're not going to be at 100 I

think for a few years however Elon Musk

did tease something that I thought has

real potential and that's licensing the

software to other manufacturers like a

Ford or GM I personally think many of

the Adas softwares like your adaptive

cruise control or your lane keep assist

aren't that great at the Mercedes or

Ford or GM and if they can even just get

autopilot from Tesla Tesla could

probably make maybe an extra thousand

two thousand bucks of every car the

other manufacturers sell now that would

be a margin that would be explosive for

Tesla margins I would expect that if

as much as many of the companies that

are adopting the nacs the North American

charging standard start adapting even

just autopilot the lane keep and the

Adas on highways and streets rather than

even full self-driving you could solely

from those incremental revenues from

other companies which cost Tesla

virtually nothing other than software so

probably 90 plus percent margins you

could probably see the valuation of

Tesla double on that alone unfortunately

we have we don't even have a taste of

that yet and so in this short term it's

very difficult for Wall Street to assign

any value to that at all because they

don't have a taste of well how much

would that even sell for on a single car

at a single manufacturer but once it

happens it'll happen very quickly so I

remain very long-term optimistic for

Tesla but look the Bears are 100 right

here in the short term the earnings call

was a disaster Elon was probably

tweeting during it anyway and elon's not

really the best spokesperson for talking

to Wall Street should I had a little bit

more Focus there on Finance on what

they're doing to improve advertising and

margin and really it's a Wall Street

earnings call talk short term in the

earnings call talk long term at the

Tesla events like the AI day that would

have been better here

and the thing is I mean you talked about

this in this this idea of really sort of

having that data that you're now picking

up by sort of out by licensing what they

have with the superchargers potentially

talked about that OEM for doing the same

thing with with um FSD as well what is

the long game here is it Tesla

essentially making most of their money

and Gathering sort of this data from

other companies or relying on this on

this cyber truck to me that's sort of

the next level of growth which he says

you know it's full of Technology didn't

really give us any sort of specs on it

at all or even delivery dates what's

going to be that next growth driver for

Tesla yeah I think that's really

interesting what you're hitting on

because we were always first promised as

Tesla investors that Tesla was the best

at manufacturing cars and that you want

to invest here because the profitability

is so large for the vehicles but now

Elon Musk is somewhat u-turning to oh

well we could sell the cars for a break

even we'll make money off the software

but take rates for FSD or somewhere

under 10 so we're not even convinced

today that FSD and software is really

going to be a driver of Revenue so to

hear Elon suggests that oh well okay we

used to be a company that focused so

much on profitability and Manufacturing

too well that doesn't matter so much

anymore we want to profit off software

is definitely going to give Wall Street

some pause at least in the near term

until we can prove that software

profitability I believe in the long term

yes we'll have a combination of profit

even if we just maintain 15 to 25

percent margins on the cars we'll still

be well above industry average and if we

can layer onto that high quality

software which I think Tesla has it's

not 100 yet but it's still very good

miles ahead of what anybody else has yes

you'll have a combined very profitable

company here and that's why I'm an

investor not only myself but also in my

fund my ETF but beyond that uh I have to

say you're right you're kind of as an

investor in the short term looking

around going oh okay I thought that was

the goal okay now this is the goal

people Wall Street doesn't like those

pivots

and I mean in terms of the amount of

breathing room the Tesla has at the

moment as you do have you know more of

these Legacy Brands coming in with

perhaps cheaper EV options as well how

strong how dominant do you think Tesla's

position is going to remain at least in

the short term

yeah I mean certainly I expect the pie

to continue to grow of electric vehicles

but I I think the more uh a Time Goes By

the more folks end up giving Tesla a try

and I actually think some of the biggest

investors of Tesla stock are retail and

now what's really interesting about this

is when we look at funds specifically we

can see that only about 30 percent of

funds out of the big seven stocks have

an allocation to Tesla at all whereas

about 71 percent of funds have an

allocation to Apple or somewhere around

60 to 80 percent of funds have an

allocation to meta Nvidia Google

Microsoft so Tesla's still a little bit

of the black sheep where you've got a

lot of very excited retail who love the

vehicle so they invest in the stock and

actually the more Tesla continues to

sell Teslas the more retail investors I

expect you're going to get which

eventually Wall Street will be convinced

by and that's probably where we end up

getting real Euphoria for the stock

block where we could end up seeing more

of a Kathy Woody and price Direction

where we're starting to look at the five

six hundred maybe even the thousand plus

dollar range for the stock but it's

really going to take all of that

happening more retail leading to finally

seeing those software revenues to

finally seeing Wall Street turn and

allocate appropriately to Tesla but in

the near term you've got some headwinds

before you're there I think I may have

missed all of your questions so maybe if

it restate anything if I missed there

sorry about that

no no you you hit all the bases there

it's a lot for investors to take in an

interesting time especially in the short

term here always great to have you on

Kevin pavrath their financial analyst

and YouTuber meet Kevin always great to

get your take

thank you so much