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Elon Musk to announce Tesla Model Q · Elon Musk Podcast

0:01
Hey everybody. Welcome back to the Elon Musk
0:04
Podcast. This is a show where we discuss
0:07
the critical crossroads, the shape, SpaceX, Tesla X, The
0:11
Boring Company and Neurolink. I'm your host, Will Walden.
0:17
Tesla will report a second quarter earnings this week and
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investors want to know whether the company score business has
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finally turned around. The main question going into
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this report is what are the company's next Gen. vehicle?
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The Model Q will offer enough financial and strategic clarity
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to reset expectations after months of declining margins and
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stagnant delivery growth. And all that stuff that happened
0:41
with Elon in the past with the politics and the growth has been
0:45
slowing. Is that over now?
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The stock price, which has dropped nearly 30% year to date,
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has rebounded slightly this month on renewed optimism.
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But the company still needs to show proof of a viable path
1:00
forward with this Model Q. Now, Deutsche Bank issued a rare
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bullish note ahead of these earnings.
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They said that Tesla's Model Q announcement is an important
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moment for the company's turn around and said it could be the
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clearest inflection point in years.
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Now they believe that the Model Q, this is the Tesla's planned
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compact EV priced at around $25,000, which is would be very
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welcome to a lot of people. A lot of people don't have 45 to
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$50,000 to spend on a car. But this vehicle $25,000 vehicle
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could become the company's highest volume car ever.
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Now, Tesla told investors in the past that it expects to launch
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this vehicle by the second-half of 2025.
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Deutsche Bank expects Tesla to release more precise production
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and cost details during this earning call, and they said that
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such disclosures would likely reassure investors about future
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profitability. The Model Q would not just
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expand Tesla's product portfolio, though they have a
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lot of cars already. It would also allow Tesla to
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compete directly in the global mass market EV segment,
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especially in Europe and Asia, where competitors like BYD and
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Renault have aggressively priced electric compact vehicles, some
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below $20,000 USD now. Tesla's ability to hit the
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$25,000 price target will depend on cost efficiency in battery
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manufacturing, simplified production lines, and in house
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hardware innovations. And analysts have speculated
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that Tesla's planned Mexico Gigafactory and its revised
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unboxed vehicle assembly process are central to making the Model
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Q roll out in probably next year, probably not later this
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year, to be honest with you. There's no announcement yet.
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So they haven't started manufacturing.
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They're still going through the phases of design and
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development, and they're right on the cusp of probably getting
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it ready for manufacturing now. This earning call will also face
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pressure to explain some very important things.
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How Tesla plans to reverse declining gross margins.
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And that fell from 18.2% in quarter 1 to 17.4% in quarter
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two last year, and they're expected to drop once again now.
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Tesla's consistent price cuts across the Model 3IN Model Y
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lineup throughout the first half of 2024 have narrowed the
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profits even as sales volumes have flattened the Wall Street.
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Analysts estimate that Tesla's automotive gross margin,
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excluding regulatory credits, could fall to around 15% for
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quarter 2. Now, beyond this Model Q, which
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we don't even know if it's coming out yet, Tesla needs to
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show off AI, robotics and software and how they're going
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to contribute to real revenue. Right now the robots don't make
3:59
them any money and the AI which is integrated in their vehicles
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and robots doesn't make them any money and their software in
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their vehicles makes them money. And the AI in the vehicles makes
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the money as far as when you buy a vehicle.
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But after that there's no real profit after the the purchase of
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your vehicle. Now during the last earnings
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call, Elon emphasized progress in self driving software and
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also the robotics, but gave very few concrete financial targets.
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And investors are growing impatient.
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They have vague timelines. Analysts at Wedbush wrote this
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week that the July 23rd earnings call will be Tesla's most
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important in years because the company has to clarify how it
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will commercialize full Self Driving, and there are some
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theories. Elon has mentioned this a few
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times, but the full Self driving could be purchased from other
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manufacturers or license from other manufacturers depending on
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the play here. But if they do license it from
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Tesla, if Tesla can figure this out and they can figure it out
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and the safety is right there is perfect, then other car
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manufacturers will jump on board with full self driving.
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They'll just license it. That will be another revenue
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generating stream for Tesla. Also optimist, how are you going
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to scale it? What is it going to do?
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We have very vague ideas of what Optimist is going to do.
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Warehouse, some manufacturing probably, and in home and other
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things. That's pretty much all we know.
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We know we can walk down a hill, we know we can dance, we know it
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can serve popcorn, but we don't really know anything else other
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than those things. And Elon really hasn't said.
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Basically, he hasn't put into writing and he hasn't set any
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concrete, put any concrete data forward about what Optimus is
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going to be used for other than it can be used for anything
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because it's going to be a humanoid robot.
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It'll do human things. But those are the things that we
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think are going to happen in the the first iteration of Optimus.
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There's going to be some warehouse things.
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They're already using Optimus in production lines in Tesla
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factories. And also like I said before,
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they're serving popcorn with it at the new Tesla stop in
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California. So other than that, we don't see
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it in any homes. We don't see it in any other
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manufacturing. We don't see it in warehouses.
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We don't see it in places that it could be used for in a, in a
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more operational sense, in a more scaled sense.
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But hopefully Elon will come through with some concrete
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evidence of that. And then also AIXAI, of course,
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Elon's AI company with Grok and Grok has been put into Tesla
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vehicles recently. Some people don't want it there.
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Some people love the idea of having a chatbot in their car
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because they could just ask it to do things.
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They could say, hey Grok, what is the chance that Godzilla
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would destroy Captain America in a fight?
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Or say, like, hey Grok, what if Godzilla were to fight Luke
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Skywalker? What would happen?
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And then Grok would answer them. Of course, some people are
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skeptical about this because of all the this conspiracy theories
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and everything else that Grok has been doing recently.
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They don't want that in their vehicle.
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Because think about if that were to happen and you said
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something, you prompted it in a way that it would say something
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anti-Semitic or pro Hitler or something like that.
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People are skeptical about that. So Elon has to make sure and he
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has to really just say this, that Grock will not do this ever
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again. He just has to say it, you know?
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And I know there are mistakes and I know people have prompted
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it in ways to manipulate it to say things that were not very
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great. But Elon has to come forward and
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he has to say, look, man, this is never going to happen again.
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That was horrible. I don't want it to happen again.
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So we're going to put all the checks in place.
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And XAI has come forward and said, we've put put this in
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place. But Elon has to do it in this
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talk. Elon has to come forward and say
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it. And if he doesn't say that,
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investors, you know, investors won't be as happy.
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So if he doesn't say that, he says, like, look, we've worked
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on the problem. We know what the problem was and
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we put up barriers, we put up guidelines for it to never say
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those things again. So if you want like an open a
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free speech chat bot in your Tesla, then there you go.
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That's a grok for you. But if that's important that you
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can talk to your car, that's great, that's awesome, good for
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you. A lot of people won't like it.
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Some people don't want their data and their conversations
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recorded, but most people don't really care if they have a Tesla
9:15
anyway, so it's all good. Cybertruck now.
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They haven't really scaled volume production yet, and
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statements suggest that Tesla still faces logistical and
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engineering issues. At Giga, Texas in June, Tesla
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admitted that Cybertruck ramp up has taken longer than expected
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due to the complexity of stainless steel manufacturing
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and production automation. Analysts now expect Tesla to
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produce fewer than 100,000 cyber trucks in 2024, which is far
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below earlier projections. But I want to ask you a real
9:48
quick question. I've noticed, I'd love to dig
9:51
into our analytics here at the show.
9:53
And I've noticed that 24% of you are subscribed to the show,
9:58
which is amazing. Thank you for your support and I
10:01
love when you come back and listen to more episodes because
10:04
I want you to have all the information about Elon's
10:06
companies and Elon himself. But the other amount of people,
10:11
the other percentage of people haven't yet subscribed to the
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show. So I want to ask you for one
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second of your time and I'm going to give you the next 10
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years of mine. If you just hit the follow
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button on whatever podcast platform you're on right now,
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I'd greatly appreciate it because you'll get Tesla news,
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Cybertruck news, SpaceX news, Elon news, Neurolink news, XAI
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news, X news, all the Elon news every single day.
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It's every day and it's around 10 minutes of your day.
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And then you can move on and think about what a great thing
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Elon has given to the world as far as Tesla goes.
10:50
And I bring that to you every day for free.
10:53
So if you could just do me that little favor, one second of your
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time, you'll get, I guarantee you I'll be here for the next 10
10:58
years. Been doing it for five years.
11:00
Not going to stop. I have almost 1000 episodes.
11:04
I'm going to guess somewhere on there I'll get back to you
11:07
tomorrow with that estimate, but I'll give you a full rundown of
11:11
all the episodes and how many episodes we've had.
11:14
So thank you very much. I appreciate your time.
11:17
Now let's get back to some of the the the details about the
11:20
upcoming talk with Elon Musk. So we have to think about Elon's
11:26
public behavior too, and what he's been doing with politics
11:33
and his own finances. They've added uncertainty to
11:37
some investors. In April, shareholders approved
11:41
a controversial pay package that could net Musk 10s of billions
11:46
in Tesla stock. More big investors,
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Institutional investors voiced concern that Tesla's board had
11:54
prioritized Musk's interests over long term corporate
11:58
strategies. And they warned that Musk's
12:01
attention is divided between all of his companies.
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Tesla, XXAI, SpaceX politics, tweeting at ungodly hours in the
12:13
morning and at night and just his attention is all over the
12:17
place and he's not focusing on Tesla.
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So they're, they're worried about his execution risk across
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Tesla's many simultaneous initiatives because Tesla isn't
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just, they don't just make A1 car anymore.
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They make numerous cars. They make a truck, they're going
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to make this $25,000 car. Also, they have AI, they have,
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you know, the, the Grok integration.
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They also have robotics. They're an AI company 1st, and
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they're a car company second now.
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So, you know, there there's some other things like the energy
12:52
business that have shown promise but remains too small to offset
12:55
core automotive declines. Battery storage installations
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hit record levels earlier this year, and the company has ramped
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up Megapack deployments globally.
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However, this division still contributes less than 10% of
13:09
total revenue for Tesla. They want clarity on whether
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Tesla sees the segment as a future growth engine or just
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kind of like a side hobby. Like they have this so they can
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make batteries for people's houses for their cars.
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So, you know, if if this is the thing that they want to continue
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doing, you know, with solar and batteries, battery packs, they
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have to really drive home like why they have this for some
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investors now, Tesla began offering leasing deals for Model
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3 and model wise with lower monthly payments and reduced
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down payments as well. That was last month or last
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week. I suggested the company is
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actively trying to clear inventory or stimulate demand
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ahead of a Model 3 refresh and the Model Q reveal.
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So the Model 3 refresh will probably, you know, they'll
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mention that in the call too, but lower lease pricing might
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boost short term delivery numbers, also weighs further on
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gross margins. So they're basically trying to
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get in the like every sale or every lease that they can get
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every any kind of revenue they can get to come in before this
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call. So they can bump up the numbers
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a little bit. They do this every year and it's
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just, it's a how corporations work.
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They put everything on sale for a little bit, make a little bit
14:26
extra money and be like, hey, look, look what we did last
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round and like what we just did last week.
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So, and it hypes people up too, when they know that they're
14:36
getting a deal, the people that are actually buying the vehicles
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and when they're getting a deal. But also it hypes up the
14:43
investors because they see these numbers coming in and they see
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the Tesla has sold X amount of vehicles in the last week or
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leased them and made this X amount of money.
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Then they know that they're really working hard for the
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money, you know, so that's happening right now too.
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The leasing is happening right now and if you have a chance, go
15:06
check it out. But what we really are
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interested in is the Model Q progress.
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They haven't really said anything about it.
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We know what's happening, but we want some positive news on that.
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Could it drive a sharp rebound for Tesla?
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Because right now it's kind of stagnant.
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The cyber truck was like the big thing for a little while, then
15:27
that kind of faded out. You see, we're on town, but no
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one's really like super hyped about it.
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They're like, hey, that's a cool truck, but it's not like it once
15:35
was like, wow, that thing is wild looking, you know, just
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another truck now. It still looks a little wild on
15:41
the roads, but you know, you see them all over the place and
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centimeters died down. They're expensive.
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They're hard to find or they're hard to buy because they're so
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expensive. If somebody, you know, if you're
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in the market for a vehicle and your price tag is around
15:54
$30,000, you're not going to buy a cyber truck.
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You're going to want the Model Q.
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But Tesla still, after all this, they remain the most valuable
16:03
car company by market cap. It's lead in EV technology no
16:09
longer looks unassailable as it did two years ago.
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Other companies are jumping in here.
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They're taking on Tesla, Hyundai, Honda, even Subaru.
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I'm a big Subaru supporter. They're coming in with some EVs
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and they're not taking a huge market share.
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But you know, they have an EV, so Tesla needs to make something
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that's good for everybody. And they usually, you know, they
16:37
have the high market, the high end of the market, and they have
16:40
to like the mid high and then they don't have the low market,
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which is the 20,000 to 30,000. I mean, also like lower than
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that. It's like 15.
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But they're not going to make a $15,000 EV.
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There's no way they can do that. So we'll see what happens.
16:57
It's going to be the wild ride. So some analysts have said that
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earnings per share will fall year over year, with consensus
17:11
revenue estimates just over $24 billion.
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Now, the direction of Tesla stock in a second-half of 2024
17:20
was OK 2025 will likely depend on what the company says about
17:25
the Model QFSD adoption and also margin recovery from all of that
17:31
downturn. This is going to be a pivotal
17:34
moment for SpaceX or sorry for Tess.
17:36
I have a SpaceX video coming out after this, so I'm getting ready
17:39
for that too. You can check out our YouTube
17:43
channel too, Stage 0 news for SpaceX news, and some of these
17:48
podcasts are posted up there too.
17:51
So there you go. It's going to be an interesting
17:55
call on the 23rd, July 23rd and then we'll see, you know, we'll
18:01
see what happens with this call. It's going to be really wild to
18:05
see if Tesla can bounce back from this, this downturn.
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Right now. Tesla stock is down .13% right
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now as I'm recording this, and this is 7/21/2025 at about 3:38
18:22
PM Eastern Time. So it doesn't look really
18:29
promising for Elon right now at this moment because stocks
18:34
should be boosting up if they know good things are happening.
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All right, that's it for now. Please take a second, hit the
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subscribe or the follow button on your podcast platform.
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I appreciate you and I will see you in the next one.
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Hey, thank you so much for listening today.
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