Watch BEFORE Tesla Investor Day

we've got to talk about Tesla investor

day and the new preview out by Barclays

this preview just out we got to go

through what their opinion is of Master

Plan Three and I think that's really

important to do because the Tesla event

the investor Day event actually occurs

after the market closes I mean that's no

surprise it's no surprise that all the

juicy stuff will occur after the market

closes uh in fact I can give you the

schedule of what we're looking at for

investor day at least I think I can I

have that here somewhere uh but anyway

most of the activities and most of the

actual announcements we expect to occur

in the second half of the day here we go

11 A.M today is event check-in all of

these times are Central Standard Time 11

A.M is event check-in uh there will be

factory tours and plaid demo rides

doesn't particularly say that there'll

be any kind of demo rides for the Cyber

truck but maybe there will be who knows

it says plaid demo rides uh that will go

from 11AM to 2 45 p.m and I believe

Tesla's starting to live stream at 1pm

but I don't actually expect anything to

really occur until the keynote which the

keynote address is set for 3 P.M central

time that's 1pm California time the

keynote literally starts

the moment the market closes

uh so kind of interesting q a will be

from 4 30 to 5 30 p.m and then there

will be a meet and greet between 5 30 to

7 P.M uh seven yeah 7 P.M so 90 minutes

anyway so what does Barclay say for the

investor Day preview well let's take a

look at that right and now so their

preview reminds you that I have timed

the expiration of my flash sale for

today yeah sometimes there are more

coupons on the channel but you know what

the price trends up over time so if you

want to guarantee the best truck price

and if you ever think you need a price

adjustment because you didn't get the

best price just email me kevin.com but

if you want to get guaranteed the best

price guaranteed uh you buy today

because if the prices go up over the

time you want to lock in that lifetime

access even if you're not ready to take

the courses yet on zero to millionaire

real estate investor you're like I'm not

gonna buy a house until six months from

now you know I'll learn them you may as

well lock it in now because you end up

saving money a lot of money same thing

for the stocks and psychology money

group or any of the other programs I'm

building growth today is The Flash sale

and that means prices go up tomorrow

again you get lifetime access to not

only new lectures that are added I keep

them updated course member live streams

if you join the elite Hustler group we

do a Saturday sort of Mastermind live

stream together every uh day that's

what's nice about that every Saturday is

it's a smaller group course member

livestream though is the perfect size

group because we have plenty of time to

answer questions everyone's questions uh

mostly everyone's questions and do fun

fundamental analysis together we do this

right after the morning public live

streams anyway investor Day preview

master plan 3 Grand scale okay great

let's look at some of the comments here

so as a reminder master plan one was

number one build a sports car number two

use that money to build an affordable

car number three use that money to build

an even more affordable car and while

doing the above provide a zero emission

electric power generation option okay so

that has somewhat been achieved a lot of

these plans have been quote never fully

uh realized or have never fully

materialized but it's okay to sort of

like you make a plan and as long as you

can Trend in that direction you're doing

pretty dang well right so master plan on

uh

pretty great master plan 2 was created

stunning solar roofs and those really

haven't scaled terribly well with

integrated battery storage those are

doing pretty decently those are ramping

pretty well as well as the mega packs

fantastic in fact a lot of Tesla Bulls

are saying you know we got to start

realizing the potential 50 margin that

uh that uh that all of a sudden you end

up having with um uh with with mega

packs and you start putting that into

Tesla uh uh you know forecast for for

stock pricing oh Everything Changes

Everything Changes when you start

putting Mega packs into the Tesla

analysis now I personally don't like

putting in mega packs into the Tesla

analysis because I see it as the icing

on the cake right I wanna I want to

ideally try to stay somewhat

conservative with my projections and I

say somewhat conservative because I

think they're already you know they're

already on the more bullish side right

we know that if Tesla can manufacture 4

000 vehicle or Sorry 4 million vehicles

in 2025 at an average selling price of

40 seven thousand dollars I align uh

with with a lot of the industry on this

average selling price and if anything my

number of vehicles produced is probably

on the lower side for 2025

but anyway uh if I use this with only

about a 10 take rate on FSD uh on uh on

the number of vehicles and then only 10

of those uh that money being realized in

2025 so it's uh basically the point of

that uh is to say Hey you know we're

going to take the number of hold on let

me make sure I have this right uh we

have the number of vehicles four million

Vehicles we're gonna assume a 10 take

rate okay I actually have it at 10 take

rate the reason I did a 10 take rate

rather than the current take rate of 20

or the potential forecast to take rate

of 30 or 40 percent by 2025 is because

they did come out with a monthly option

to pay monthly for this so I don't think

it'll all translate down to uh cash flow

although a lot of people will sign up

for full self-driving as part of their

uh amortization for their loan which

basically means Tesla's paying for

getting the money up front so I think

I'm actually very conservative bottom

line I think I'm very conservative on a

10 take rate here

25 margin we know that Tesla's probably

going to go to about a 20 gross margin

their goal is 30 I'm just gonna go with

about a 25 margin here and I'm mostly

going to leave uh energy and services

out of this I'll have a little bit in

here for uh leases Services energy I

have about uh one percent over here and

I have margin of energy of only 18 some

people think you could massively 10x

these numbers you could probably have a

margin of fifty percent here and maybe

10 uh you know um 10x the energy Revenue

I'm just gonna call that icing on the

cake as well as a higher take rate for

FSC that's just icing on the cake for me

so in my opinion as long as Tesla's

growing earnings per share in excess of

30 and we take a PEG ratio of one you

know at that level of about 1.6 percent

well PEG ratio of about 1.6 percent

would drive us to about a 500 reasonable

price target for Tesla by 2025. the

present value for Tesla is about 210

dollars per share which gets you about a

compounded annual rate of return of

about 34 that's pretty substantial now

that's not a guarantee right still

pretty substantial not a guarantee of

course but it's great it's fantastic so

uh that sort of gives you just a catch

up on this so what does Barclays tell us

here well they talk about master plan

two again you know coming out with full

self-driving being much more capable 10x

safer than manual learning so what is

this next master plan 3 likely to reveal

well Barclays believes that their

Generation 3 platform is going to be

what we get revealed and it will be the

basis for the quote-unquote model two

now this is really interesting because I

personally don't think there's going to

be an announced model too unless it's

specifically for the Chinese market I

actually think the model 3 is the model

2. I think the model 3 is what Tesla

wants to reduce its cost in by about 50

and if they can reduce their cost on the

model 3 by 50 then that's fantastic

because right now you're running at a

margin of your running at a cost of

about thirty two thousand two hundred

and fifty dollars for the car if they

could reduce that to about sixteen

thousand five hundred bucks and they

wanna operate at a margin of twenty five

percent well now all of a sudden you've

got a car that probably could sell uh

for about let's see if I divide it that

car at actually even a thirty percent

margin if 16 000 represents seventy

percent there we go you get a car that

costs only about twenty three thousand

dollars so in other words if they can

reduce the cost of the model three today

by fifty percent they could sell the

model three for twenty five thousand

dollars and actually make more profit

phenomenal so I actually personally

think the model 3 is the next model too

but Arc invest thinks they're going to

announce a new model too today uh or

some kind of new model vehicle today uh

Barclays thinks that they're going to

announce the basis for the model too

especially given that Tesla right now is

primarily positioned for the luxury

Market uh and they say that in order for

Tesla to actually achieve that 20

million volume number that they're

trying to achieve by the end of the

decade or at some point in the future

then they need to have some kind of 25

000 vehicle again my take is that's

already the model 3 and just reducing

the cost there now they have a different

opinion they base that opinion on Elon

Musk suggesting that the uh vehicle will

be smaller than the model 3 Model y

platform and it will shortly exceed the

production uh of all of our other

vehicles combined I think they mean

surely here surely here but but anyway

uh Elon Musk apply implied in the Q3

earnings call that Tesla will aim for a

50 cost of goods sold reduction

and uh Barclays here is suggesting they

think they're going to see somewhat

similar of an investor day today like

what we saw at battery Day Battery day

is basically where they showed like

pictures of of the batteries uh the 4680

cells and how they're able to increase

the efficiency of these batteries while

reducing costs now I'm a little

skeptical about how great some of these

things are because the battery is bigger

right like of course a battery cell

that's larger has five times more energy

or six times potentially more power it's

a bigger cell yeah you know it's kind of

like going from a c battery to a D

battery so I'm a little skeptical there

but I do think they'll get some kind of

marginal improvements like you know

maybe 16 more efficiency or whatever we

want to see is today going to be a

realistic path to potentially lower cost

of production are we going to see more

Giga castings can we do the whole you

know can we do the front the back and

the bottom not just those in Giga uh you

know via Giga castings but can we do

bigger vehicles like maybe Vans like

Sprinter vans can we cast together

Sprinter vans from Tesla and then have

full self-driving Sprint advance I love

the Sprinter van by the way I think

Tesla needs to get in that market there

really is no Mommy car for Tesla by the

way if you have two kids best case

scenario you have a five seat model X or

model Y and then you actually have some

trunk space but if you have any more

than two kids or you have the seven seed

option for the model of or even the six

seat option for the model X or Y you're

screwed your trunk space goes down to

zero you ain't putting a stroller in as

soon as you you have a third kid you're

screwed there is no three child mommy

Tesla car you need you need to go to a

minivan and personally I think that

sucks don't get me wrong I'm not trying

to offend minivan folks we own a minivan

and it's the most functional car we have

uh you know when we gotta take uh the

in-laws the kids me and Lauren we got

two kids to the airport and have all our

luggage the minivan works but as soon as

we have one other kid we're screwed and

we have to have a sprinter van which I'm

really excited about Lauren's like I

don't know man I don't want to drop my

kids off at a sprinter van I'm like this

is why we need a mommy car anyway like

that's not a minivan but anyway

they talk here about cost reductions

coming uh to batteries potentially

increasing scale vertical integration

structural improvements structural

castings manufacturing improvements and

trying to reduce manufacturing floor

space by 50 for their third gen platform

now it's worth noting that they are

looking at uh potentially announcing

today the Mexico gigafactory that would

be about three hours from a giga Texas

the Mexico gigafactory is expected to

see about one billion dollars of capex

Investments soon and up to 10 billion

dollars of capex Investments over time

we actually actually also just got this

update here that in addition to

potentially announcing an actual

gigafactory in Northeast Mexico now

there's an update just now coming in

that Tesla is considering opening an

electric battery vehicle or an electric

battery plant I'm sorry not a vehicle

plant in central Mexico so not just a

gigafactory in Northeast Mexico where

remember in California we're paying like

20 bucks an hour for workers and taxes

you're paying like 15 bucks an hour for

workers in Northeast Mexico you're

paying like 3.40 per hour for labor in

Northeast Mexico some people are like oh

my God that's exploitation But realize

like capitalism that brings more work to

those areas drives wages up in those

areas so it's actually helps those areas

get wages up uh but anyway

the United Auto Workers Union by the way

in the United States is like punching

the air right now they're like damn you

good Elon Musk going to Mexico

is the inflation reduction act uh which

is important for capitalizing on that 7

500 vehicle tax credit which you have

over here and Barclays mentioned as well

uh it means that Tesla has to Source its

battery materials from North America and

then assemble the stuff in North America

well look low and Below low and behold

new Tesla Nuevo Leon plant could create

up to 6 000 jobs battery plan in central

Mexico fantastic so again Lower costs

for Tesla you help increase wages in

Mexico you have a substantially lower

cost of doing business and you meet the

benefit of the inflation reduction act

now maybe that wasn't the political

intention maybe the political intention

was to have Tesla manufacturing stuff

here but instead they're now doing it in

Mexico because they can but hey that's

the politicians problems and that's

exactly why the United Auto Workers

Union is like punch in the air anyway

here's an example of what Barclays

thinks for forecasts

current uh model 3 looking at a cost of

goods sold at about twenty seven

thousand nine hundred dollars minus the

battery excluding the battery the model

2 low-cost vehicle could have a cost of

about sixteen thousand five hundred

dollars boom baby that's exactly what

I've been talking about for weeks on

this channel that in order to have a

twenty five thousand dollar vehicle I

mean it's not hard to do the math

you got to be sitting at somewhere

around sixteen thousand dollars for cogs

now Barclays actually thinks they're

going to announce something like this

today uh now what they do think though

is images of the model too

probably not going to happen so they

think it's unlikely that there'll be

images of the model too because they

don't want to cannibalize current sales

and that's again why I think it's more

likely that project Highland is the

model too in other words the model 3 is

the model 2. it's just the new model 3

it's just a cheaper version that you

could sell at a lower price uh you know

project Highland vehicles in camo have

been spotted you know covers over the

front back as far as the model too we

don't expect Tesla to show a vehicle at

investor day as this could risk

cannibalizing the current demand and

lastly we assume the model 2 will be a

different model than the 3y platform I

personally disagree with that but we'll

see we'll see I'm willing to be raw I

don't mind being wrong I do think if

there's a model 2 it's gonna be China I

think the model 3 is the smallest thing

you could sell in America and and I

really took that to heart when I talked

to Brett Whitton from Arc invest type

that into YouTube meet Kevin Ark invest

I just interviewed Brett in person at

Santa Monica beautiful by the way it's a

little chilly but it's beautiful

uh okay so we talked about that plant

already manufacturing will be a central

theme of investor day we expect Tesla to

point to key aspects of the Austin

gigafactory as the basis for Tesla's

manufacturing key question here is

around other manufacturing expansion are

we going to expand Fremont Shanghai

Austin Berlin currently at 2 million

units a year how are we going to scale

that to four five six how is that going

to uh scale you know here you go our

estimates of Tesla deliveries they

actually think

that uh oh uh gosh that's quite

disappointing but anyway the annual

delivery estimates here for 2025 are are

a very very slow ramp by Barclays here

look at this this is like a trashy ramp

I mean they're basically saying we're

going to be at about 1 8 for 2023 barely

grow in 24 barely grow I mean we're

growing at like 10 to 15 over here like

this would be pretty embarrassing if

this if it takes until 2030 to get to

5.5 million Vehicles we shall see

uh anyway they think the model 2 would

end up having the lowest margins at

around 21 with the S's and X's like the

Plaid sitting around 32 percent maybe

the Roadster in cyber truck up here in

high margins as well and notice they

left off this uh the semio over here

these are some of the current uh

production uh capacity numbers for Tesla

or or some projections that they have uh

4680 progress the larger of when

questions from investor for brand new

models uh well maybe we'll be talking

about today longer dated initiatives uh

potentially hey maybe we'll hear a

little bit about lithium miners maybe

we'll hear a little bit about uh the uh

the software Sac or even the uh robot

the robot not only Robo taxi but what

about the robot uh they do say they

don't expect much on in terms of

financial targets maybe that's actually

a good thing because if like Wall Street

doesn't actually think that Tesla's

going to be able to scale at this level

maybe that means the price targets are

way too low for Tesla right now uh so

you know they do talk about Tesla having

a margin Edge over Legacy automakers

obviously we already know that we know

that Tesla's lead in creating

software-defined Vehicles is an

opportunity key differentiating factor

of course we know that uh Tesla EV

Supply chains maybe we'll hear a little

bit about that uh we acknowledge the

near-term questions of further price

cuts and margin normalization from lofty

levels previously uh that said the

underlying fundamentals combined with a

valuation that appear far more

reasonable compared to a historic

pricing so even though Barclays is kind

of skeptical on some of the forecasts of

numbers produced uh you know we you know

they actually see Tesla's reasonably

value today those who remain bullish see

further upside but have pointed out that

Tesla's 2030 volume opportunity is

likely above our 5.5 million units more

like 7 to 10 million units and Tesla

might lean into this with its

significant cost Advantage so in other

words Barclays is actually already

saying like yeah our forecasts might be

a little on the low side for Tesla's

production uh yeah I think anyway kind

of interesting and it's almost as

interesting as recognizing that hey

Tesla is now opening up their

superchargers uh to other individuals

I'm really curious to see how that

charging is going to uh lead to

congestion because it's going to take a

while to actually see a lack of

congestion I think because Tesla's going

to take billions of dollars from the

government and build more Chargers but

the congestion thing bothers me although

I don't even charge with the

superchargers because I don't go

anywhere but where I do go is to course

member live streams to provide more

value to course members every single day

and you should join that using the

course member flash sale today in honor

of investor day this is going to be the

best price guaranteed going forward

because the price will be going up after

today