tesla stock WTF

is perhaps the most bullish analyst on

Wall Street when it comes to Tesla. He

will tell you that things are going to

get better, that Elon is the man when

he's focused on Tesla, but he put out a

note essentially saying this is not what

investors want. They don't want Elon

Musk focusing on uh political activities

or spending most of his time talking

about politics and and fighting with the

president. He wrote, "Tesla needs Musk

as CEO and its biggest asset and not

heading down the political route yet

again while at the same time getting on

Trump's bad side." No indication that

this is guys, this is getting on the

president's bad side. The president

responded by calling Elon's suggestion

of a third party ridiculous. He says

Elon is off the rails. Um, but there was

nothing by the president so far that is,

hey, you keep coming at me, we're really

going to take some action against Tesla.

And that is the concern for investors.

Yeah, Phil, the certainly the one

downgrade we got today doesn't talk so

much about relationship with the

president. Doesn't talk so much about

auto deliveries. It's more about coming

out on the losing end of this giant

legislation that we got now. Right.

Well, that's something to keep in mind.

And and and so here's something to know

about uh this legislation is it has been

revised to where the EV tax credit

expiration got moved up to Q3. That was,

I think, a slap at Tesla. On top of

that, we ended up getting the expiration

of the zero emission vehicle tax

credits, which was also a slap against

Tesla. Now, historically,

Tesla recovers the 295 line. We're down

7% now. But historically, the first time

Donald Trump uh and Elon got in a spat,

we fell below the 295 line, right here

where my mouse is, and we ran right up

to the 347 line under robo taxi hype.

Then Elon went anti- uh Trump again, got

a lash out from Trump again, and what

did we get? 295 test and a bounce again.

Got back to 318. It was rapidly and

immediately bought. Here we are again.

Elon forms the America Party or TAP. And

what happens? Tesla again drops to

approximately 295. Now, can we actually

break through it today? To be

determined. We have the last two times.

Will we again? Today though, we're

weighed by this potential that the

America Party is more than just a tit

fortat

yapping. It's more of something that

could be a longunning

goal of Elon to fight Donald Trump over

the long term between now and midterms.

Which means you basically have this sort

of tit for tatting for the long term

rather than just a spell where JD Vance

comes in and says, you know, have you

said thank you yet? Something to that

effect, which he had done the first time

Elon and Trump had a little spat and

settled things down. problem with this

is you're now combining this political

drama with concerns that a robo taxi,

you know, roll out could could be

relatively slow. Concerns that

breakthroughs on Optimus robots might

take years. Uh and that basically China

is eating our lunch. Uh we were just

going through this Elon Musk is running

out of road piece on China in the Wall

Street Journal. Elon absolutely hates

the journal. Okay, absolutely hates it.

Uh personally I like I I like Elon as as

the innovator, right? And I I really

I've mentioned before I feel like Tesla

to some extent has suffered not having

Elon. Uh and I I've somewhat struggled

with explaining why, but this article

really helps. I've previously mentioned

that if Elon were more full-time at

Tesla, we would have had multiple new

vehicles. I think we would have had a

Sprinter van Tesla. I think we would

have had a Model 2 Tesla. maybe even a

minivan style Tesla. These are the

priorities that I think Elon would have

heard from his con, you know,

constituents, his audience or whatever

and he would have provided more value to

them. That has been my opinion in the

past. But the Wall Street Journal

actually takes another angle and I think

it's interesting to just highlight some

of what they talk about. Basically, they

start by saying when you go to China,

you potentially end up like a Motorola

or Apple in China where you help the

infrastructure get built out and started

and then another Chinese company takes

over. In the early 2000s, Motorola was

taken over by Chinese companies as as

you know the largest radio or handset

company, especially with battery

technologies. And then when Apple was

the number one, it got taken over by

Huawei uh in in China and now Apple's

number three. And they basically talk

about this potential that when you get

invited by China to set up shop in

China, what you do is you create supply

chains that weren't there previously. I

think an easy way to try to explain this

is just by using an overly simplified uh

example here. Let's use this this

Pokemon mug right here. Okay, let's say

nobody makes Pokemon mugs in China. And

the Chinese government sees that you

make really good Pokémon mugs and

everyone wants these Pokémon mugs in the

United States. So, China says, "Hey,

Kevin, do you want to come make your

Pokemon mugs in China? We'll help you.

We'll give you low interest rate loans

like they did for Elon. We'll give you,

you know, we'll roll out the red carpet

for you. We'll give you easy utility

hookups and permitting processes. We'll

streamline everything for you." So, you

go there and you build your factories

and you're like, "Great. I'm now going

to make Pokemon mugs." Well, what do I

need? Well, I need people that can

supply me ceramic products and and

paint. And maybe previously there were

no companies that were really good at

making the ceramic products that I make

or in the case of a vehicle, the

batteries, the the motors, the coiled

copper, the heat pumps, right? Companies

don't have the experience making that.

But I come and I'm like, "Oh, here's how

you make it. Here's how you do it.

Suppliers, can you make this for me?"

And then the companies, the suppliers

are like, "Sure. We'll make you that

paint. We'll make you those ceramics.

We'll make you those heat pumps. We'll

make you those motors. We'll make you

those, you know, gear boxes or whatever.

We'll make you all those parts." Now,

those manufacturers are like, "Hey, I

work with Kevin or, you know, in this

case, I work with Tesla." all the other

companies and startups in China are

like, I want to make Pokemon mugs, too.

In this case, EV cars, uh, electric

vehicles, and, uh, and they already have

the knowhow to make these electric

motors and gear boxes or heat pumps or

whatever because Tesla basically showed

them how to do it. So you kind of take

Tesla's IP and then all of a sudden you

get out competed when the CEO gets

distracted acquiring Twitter, uh turning

it into X, then building XAI, building

Grock, then joining uh you know team uh

Trump, uh and then obviously now joining

your own sort of political party. And

this is really the intro to how they say

China's really good at bragging about

how they can prop up a company to a

success. But then they don't really talk

about how you end up getting eaten by

the other Chinese companies. So this is

where uh you know they they start

highlighting how Tesla's market share

has collapsed from 11% in 2021 in China

down to just 4% in China in May. which

it's worth noting that Zyomi, a company

that only started selling electric

vehicles a year ago, already has 3%

market share. So almost has as much

market share as Tesla does in China.

Now, obviously Tesla's China facilities

have become sort of an export market.

But part of that has been because local

dealers have been complaining that Tesla

hasn't been innovating the way people

want with voice assistance products or

the entertainment or infotainment

products that people want. And I feel

like that's a little bit what people in

America are feeling as well. Like, hey,

you know, we've been promised maybe a

lowerc cost vehicle, or at least there's

been talk about that. Uh, we're hoping

for maybe a larger vehicle for people

with larger families. Look, you know me.

I have a Tesla Model X. Uh, I have the

original Roadster. We've got the

Cybertruck. We've got the Model S. You

know, I've been a I've been a shill for

Tesla since 2017. Uh, and you know, I've

seen the frustration because I

recognize, you know, as soon as I had

basically two children, even the Model X

is somewhat on the small side because if

you use this the the extra row in the

back, uh, the the, you know, seats six

and seven, basically, you have no trunk

space. You can't put a troller a

stroller in the back. The the size of

the car is just too small for for, you

know, an average family. you're better

off having a pickup truck like a cyber

truck with a family of four, which is

great. But as soon as you get to now

another kid, you know, a third kid,

you're kind of screwed and you got to

really go minivan direction because now

you actually act have real trunk space

and the size. And so this is, I think,

where, you know, modelwise Tesla's

fallen behind a little bit. But here's

an interesting quote. Here is somebody

who says Teslas are almost like iPhones

now. They're getting uninspired and

stale. You don't have revolutionary

features anymore, whereas the Chinese

vehicles do. They're including uh full

self-driving for free. They're including

more seamless uh infotainment

technologies or voice activated

assistant technologies. Uh there's also

this, and I didn't recognize this. I

think this was really insightful.

There's this talk about how Tesla has is

stuck between a rock and a hard place

between FSD and China. Because in order

to train FSD in China, the Chinese

regulators want you to train that data

in China. But all of Tesla's FSD

training has been in the United States

and the servers are in the United States

because they use the advanced H100

Nvidia chips. But those are subject to

export control and so you can't use

those advanced chips in China. But China

wants you to train FSD technology in

China. So Tesla stuck between a little

bit of a rock and a hard place here

where now other companies like Pony AI

or some of these other companies are

launching robo taxis in China. BU as

well because they're using locally

trained FSD technology. And so this is

really where where this article I think

actually gives some interesting

perspectives. They also talk about how

other Chinese automakers have now

adopted Chinese uh or or Tesla's giga

casting

technology again because of that example

that I gave where you basically trained

your competition. Uh and so this is

unfortunate because that's not now

limited to cars only. It's also moving

into the mega pack business, which is a

huge margin, by the way. Like Tesla's

battery business is like a 50% margin

business. It's actually like a 30%

margin business on the energy side, but

batteries are known for having a 50%

gross margin. That's going to collapse

in the long term. And so, while it's

good for now, in the long term, there

will be a substantially more technology

uh and competition. You know, I was

actually uh I was on a run. I'm training

for a marathon half marathon. I got to

be careful not to like prop myself up

here. It's only a half marathon. Okay. I

feel like when I became a pilot, I got

really bad at running and so like I'm

glad I back to running. But I was on a

run

and I want to see if I can find the

picture of Ah, yeah. Here it is. I was

on a run and I saw this solar array at a

school. Uh and uh and I'm like, "Oh,

that's interesting. this, you know, they

they you see these pretty commonly now.

They're like the shade providing solar

panel um you know, structures. Uh and I

so I saw this facility at a school and

I'm like, hm, I wonder what inverter

they use. You know, I I I so here's the

picture of it. I was able to find it

really quickly just by looking at the

location map on on the iPhone. That was

convenient. But anyway, so I so I looked

this up. I go, CPS, is that like child

protective services? No, it's a Chinese

company. So, I found it interesting

because it looks like it could be an

American product. You know, you don't

have Chinese lettering or logos on it or

whatever. You really have to kind of go

through like the subsidiaries or

whatever to figure out that this is

actually just a Chinese inverter that

our local school districts are using.

So, our school districts aren't even

buying American products, right? Because

they're just cheaper. It's just cheaper

to buy the Chinese junk. And honestly,

it's not even junk anymore. It's it's

gotten pretty good.

So I think this becomes more ubiquitous

and unfortunately even Tesla's battery

business will will be subject to

competition by essentially Chinese

copycats. Uh so that said look in the

near term look at that as I'm filming

this video we reject 295. I think

there's, you know, in the short term

probably somewhat of a lack of catalyst

for Tesla to really extreme like move up

consistently unless we can get some real

progress on robo taxis, some kind of

positive expansion or some new models

and bring Elon back home, right? Bring

the innovator back home. Uh, and I think

that's important. Now, longer term, I'm

really excited about Optimus and and

what's going on with robotics. That

said, the Wall Street Journal even has a

decent, you know, portion about robotics

where they say Tesla basically utilizes

uh these suppliers to work overtime with

Optimus engineers to complete designs.

Okay, so we're getting parts from

Chinese companies, right? Oh, no. But

what's happening now? Now, China has its

own batch of robotic startups such as

Unitry and Agibbot gearing up to compete

with American companies. But the problem

with this as well is it's not just that

they're Chinese companies selling these

robots in China. It's that Amazon is

wanting to partner with these companies

for uh you know robotic deliveries

basically. Uh and they're partnering

with Chinese companies to do these.

Yeah. Amazon is exploring the use of

humanoid robots for package deliveries

focusing on Chinese-based Unit

uh as a partner, right? And so then when

you look at Unitry, this is the Unit.

Uh oh, look, and they advertise Liar on

their front page. It's almost like a

purposeful like middle finger to Elon or

whatever, but I think it's interesting.

You know, they've got the whole dog with

the lidar head, which looks kind of

funny, honestly. Uh, Unitry first

universal humanoid robot. Buy now.

Anyway, oh yeah, contact the sales team,

of course. Uh, I mean, I'd love to buy a

humanoid robot and make it do things for

me. It'll happen in the future, but I do

also, you know, we were talking about

this a little bit yesterday. There there

are some problems with humanoids and

it's one of the reasons I love symbotic

so much because humanoids you're really

trying to create these joints that you

could just use 24/7 and you're it's the

real problem is overheating the

actuators in all these various different

joints the hips the elbows and then the

question is do you really need this? you

know, do you does it really need to be a

human

or can it just be like a robotic arm

that does the same thing over and over

again? You know, that's another thing is

like we see these robots picking things

up, but like how much how often can they

really pick up heavy things over and

over again? Like I almost kind of wonder

like I was um you know playing uh uh

airsoft with the boys and uh what we

found is if we used forgive this battery

capping up but if if you use these often

they overheat too, right? And that's

just from shooting an airsoft gun. The

the motors overheat. It's like oh we

have to wait to cool this thing down.

Imagine the actuators on a humanoid

robot. Uh so there are definitely some

challenges to get through and and I'm

not uh you know I'm I'm optimistic that

Tesla will be able to figure it out but

I do understand and realize why people

are concerned about Chinese competition

for Tesla. Uh and what might happen is

that maybe Elon's, you know, America

party, the America party, which I

actually think would be great for

California. Like I think in California

that's what you need because you just

you need kind of like a coalition

centrist party that could pull together

Republicans and Democrats in California.

And then maybe you could actually get

away from like this extreme left

California and have like a reasonable

middle ground in California. You could

probably pull it off in California

because of the way California's primary

system works. uh all all parties show up

in the primary and it's basically first

two past the post make it in a governor

race which is interesting uh you know

could could work with Elon's America

party and I'm optimistic about what he's

doing in the long term but I definitely

see those headwinds that in the short

term could could create some buying

opportunities for Tesla especially over

the next 6 months because remember what

we said in previous videos over the next

6 months we're getting hit by the

removal of the ZEV credits the zero

emission vehicle credits those are

basically becoming worthless and we're

losing that. We've already lost the ZEV

credits. Those are already done for Q3.

So Q3 earnings will be in October.

You'll still see ZEV credits in Q2, but

Tesla might guide or give a heads up

that, hey, yeah, we're expecting to lose

ZEV credits in the earnings call, which

would be bad. Uh, and then you're going

to be up against the expiration of the

$7,500 tax credit September 30th, which

is a negative catalyst for Q uh

well, technically you'll have a good Q3,

but you won't see Q3 earnings again

until October. Uh, so somewhere between

October and January, I think you

potentially bake in the worst of the

news. maybe ends up being a buying

opportunity because the one thing that I

do believe Tesla has that they're so

good at is some of the best

manufacturing within America. And that's

why I wish we had an Elon that that

would just double down on what he's good

at, which is manufacturing uh these

vehicles. You know, I respect that

highly. Uh and so I do think there'll be

a longer term opportunity, but you know,

for now it's all going to be about this

uh this line right here. Somebody in the

chat says Q3 will be an absolute

disaster.

Somebody says, "Tesla owns 15,000

bitcoins. It's going to be clutch

hopefully." Uh, somebody else writes,

"Tesa's a $50 stock." Somebody else

says, "Phone home." Uh, if people It

could if people in California didn't

hate Elon so much. Well, that's also a

problem. Somebody else writes, "Stay in

your lane, Elon." It's ironic for like a

self-driving vehicle company. Uh, so the

anti-Elon stickers are German. Don't buy

it. says someone. Okay. Uh Q3 saved by

pull forward. Maybe you could get the

pull forward from the expiration of

$7,500. That's true. Uh overheating

joints. Yeah. Human hand optimized.

Yeah. But again, you have to optimize it

for weight. You know, something that

like what's what's an example of a tool.

I mean, even a power drill, right? Like

if you're drilling drywall, your drill

doesn't overheat your your DeWalt or

whatever you're using, it doesn't

overheat. But when you're drilling

through like, you know, uh, Stuckco or

concrete to set anchors, the stuff

overheats fast. And and that's what you

have to think about with a humanoid

robot as well is when these hands pick

up a tennis ball, no big deal. No

overheating issue, no real resistance uh

to these small motors.

uh or small actuating joints, but uh but

big issues when it comes to heavier. Tom

from MySpace says, "Tell us about

House."

Uh we're we're probably going to do an

AI day. I I feel like this this after we

have our board meeting, which is

tentatively scheduled for the 15th, we

want to do like a you know, sort of a

little update on on our AI plans or

initiatives. It's less of a plan and

more of an initiative at this point. uh

which I would say is more progressed

mostly because we feel like inside house

we've had a pretty exciting sort of AI

breakthrough that that is licensable and

so it's a small portion of our business

that could end up becoming a very large

portion of the business. So we're pretty

excited about that just because there's

so little AI competition in real estate.

Uh but thanks for mentioning that. Uh

anyway, anything else on Tesla here?

Tesla's one robo taxi crash away from

$200 or lower. No. Kevin, when you do

paintball, do you go giddy form or do

you stay in tree form? Oh, kitty form.

Like Tesla Drew. I'm a big fan of kitty

form. Stealth mode. Coming up behind

people is the most satisfying thing when

it comes to paintball or uh or airsoft.

The problem is when you come up behind

people, you end up getting shot by your

own team or the people respawning. So,

you kind of have to be quick. Uh and you

usually end up getting taken out by

either your own team or the other team.

It's the worst. Anyway, all right. So,

so that's my take on on Tesla. Uh what

somebody oh writes here margin.

Uh okay, that's another fair point to

bring up quickly on Tesla margins. Tesla

battery margins will will compress over

time just naturally as the industry

expands. Uh but also

uh I would make the argument that uh t I

don't know that Tesla gets the benefit

from Tesla leasing

uh on

solar. See solar and power purchase

agreement plans actually get carveouts

in the big beautiful bill

where you still the companies still get

tax benefits. But I don't know that

companies like a Sunun or whatever, I

don't know that they lease or PP uh a

the solar panels. So because the solar

panels you get from Tesla, I believe you

just buy or finance them.

I believe,

let me just put an address in here. I

believe you end up with

uh

a lack of the benefit

of the leftover big beautiful bill

provisions because again if you buy it

outright you get cut out.

Uh so if I exclude Yeah, it's pretty

expensive. So, I just put in my

atti here. And so, I get recommended 22

kilowatts of solar, 55 panels,

uh, two power walls is going to cost me

$80,000 without the tax credits and

incentives, right? That's a lot. And so,

I could either pay cash or finance it

because I'm not able to lease it through

Tesla and I can't do a power purchase

agreement. Unfortunately, I lose more

tax benefits in the big beautiful bill.

Somebody in the chat here says 70 to 80%

of Sunun's business is a power purchase

agreement. Exactly. So they actually

benefit from the big beautiful bill

where Tesla loses on that solar side

which is also a little bit unfortunate.

Uh, and then on top of that, when it

comes to vehicle margins, I hate to say

it as well, but unfortunately when the

$7,500 tax credit goes away, you're

probably going to have to lower the

price of the Tesla Model Y. Uh, so right

now the Tesla Model Y includes that

$7,500 tax credit. So you that cash

price of $45,000 is really 375.

Unfortunately, when that tax credit goes

away, Tesla will look less competitive.

So, they'll have to drop their prices,

which will go right into their margins.

So, if right now they can sell the car

for $45,000 at an $18% margin, that's an

$81,000 profit. Well, if I have to drop

the cost of the car to $39,000

and I had an $8,000 margin, most of that

comes out of margin. I'm losing about

$5,000 there. you know, my margin could

be down to $3,000 on a $39,000 car,

which would be about a 7.7% margin,

which is about half the margin. So,

there are some serious negative

catalysts that I think really get offset

by getting Elon back to Tesla. And

that's unfortunately where while I'm

optimistic about the America Party, I

mean, so much inside my head is like the

America Party, this is what t this is

what California needs. like, you know,

California needs a, you know, a

legislature and a governor that's that's

pro America party. The downside is you

have an Elon that is not uh at Tesla

every day. And I know people are like,

"Oh, he can multitask. You do as well."

But I feel like we've seen that for the

last 3 years. And and and some of that

that progress that we've been hoping to

make just hasn't become a reality. Uh so

anyway, that gives us a little bit of

this. Uh so shouldn't this all already

be priced in because the big beautiful

bill was making its way through that?

Well, probably you know that might be

why Tesla's not $400ish dollars or

whatever now. But what happens is when

you know if Q3 then Q4 and then Q1

earnings are bad eventually that EPS

starts looking heavy too because then

you look and go paying quite the

valuation here, right? So, I I think

there will be a cheaper time to pick up

Tesla stock. Uh and I'm not I'm not

saying that to be a bear. I'm just

saying like I think you're going to go

through a hard six months. Uh and uh

that doesn't mean, you know, paperhand

and and forget Tesla forever. That's not

what I'm saying. I don't have any puts

on the company. Uh but um it it is just

Yeah, as somebody says here, Tesla's in

a slump phase and we'll just have to

accept it. You know, just sort of like

going through its own little version of

COVID, if you will. Yeah, this is true.

Uh, it's very true. Uh, so yeah, very

interesting as you're rejecting the uh

295 level here.

Dang it, Tesla. Politics will consume

Elon for the rest of his life now, says

so. It's possible. 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.