The Motley Fool Money podcast did an interview with Tim Beyers, one of their analyst, to give a quick run-down of Tesla's latest investor day. Here are the notes.
- Revenue up, margins shrinking.
- Operating margin in Q3 2022 17.2%, Q3 2023 7.6%, down by a lot
- Elon's old message is that Tesla can sell cars at cost but customers will keep coming back for the software features. Tim thinks this is an unproven thesis
- Tesla seems to want to drive competitors insane by slashing prices
- Even with this Operating Profit Margin (OPM), they are generating cashflow
- So long as they can generate cashflow, but keep margins low, they can drive away competitors.
- Elon thinks if Tesla can get car costs to a low level, they can win even more market share. Tim thinks this is not "a lie" as Tesla has a meaningful brand. If prices drop low enough, they can win customers over, if the alternative is an ICE of the same cost.
- Elon says they have the best AI team, and the FSD system is a "baby AGI". Tim thinks it is too early to make claims on Generative A.I. as it relates to Tesla. He says it is a terrifying idea, as he prefers that the Generative A.I. is assisting the drivers within a sandbox so it doesn't run the risk of causing errors.
- Elon Musk says Optimus can do Yoga. Claims that it has a brain, unlike the Boston Dynamics acrobatic robots. Tim thinks this is a distraction, and it does not matter so long as they focus on generating cashflow. It was noted that Musk did not provide much details on Optimus
- So long as they focus on cashflow, they are a huge threat to the rest of the industry.
- Tim thinks Elon Musk is killing OPM, driving costs down, so long as cashflow continues, it drives down unit cost of producing cars, it will make Tesla a fearsome competitor.
- If the cashflow disappears, and Elon Musk says they can make it up via volume, then it is worrying. Tim thinks they need to be unit cost profitable.
- They pointed out they have other areas of growth such as superchargers etc.
- The Cybertruck will take 18 months at least to be profitable according to Musk. Tim thinks this is unlike Musk because he doesn't under-promise to over-deliver. He does the opposite, so Tim thinks it is a niche product that has a small hardcore audience.
- The real growth driver is the under 40,000 cost car
P.S. this is the Boston Dynamic robots Optimus is compared to
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