Tesla shares under pressure after the EV company narrowly missed earnings estimates and warned that its expansion will be notably lower this year philbo joins us right now with more and Phil those words notably lower were their words and I think that's part of the concern yeah uh that's the concern Becky also most people expected I shouldn't.
Say everybody but most people expected Tesla to give us some kind of a number in terms of deliveries for 2024 instead you got no notably lower growth in 24 than in 23 so let's talk about the numbers first and then let's talk about the Outlook they did Miss on the top and the bottom line but the gross Auto margins excluding the zero emission.
Vehicle credits they came in better than expected 17.1% the street was expecting 15.7% but there's the key right there 2024 deliveries the company says they will be notably lower slower growth in 24 than in 23 in terms of how much deliveries grow annually when you look at their annual deliveries they hit 1.8 million last year they were up 24% in 23.
Go back to 22 they were up 40% now you're not sure how much they're going to grow in 2024 here's Elon Musk on the conference call talking about why the Slowdown is happening as they transition to the Next Generation vehicle they plan to build the post manufacturing location for this will be at our gigafactory and.
Headquarters in uh oron Texas and then we'll follow that up with other locations around the world probably our the factory we built in Mexico will be second and then we'll be looking to identify a third location perhaps by the end of this year or early next um outside of North America left un said during the.
Conference call was the fact that the EV Market overall for all automakers it is slowing down in terms of the rate of growth relative to what we saw in 2023 it's still growing just not as quickly Tesla finished 23 number one in global EV sales but in the fourth quarter it was topped by byd out of China and during the call Elon Musk talked not.
Just about Chinese EV companies but Chinese automakers overall and the fact that they are expanding rapidly around the world they're very good and if the world in terms of countries are not prepared with trade restrictions that the Chinese are going to demolish and those are that's the word that Elon Musk used demolish the competition quickly.
Take a look at shares of Tesla over the last year the energy storage business a bright spot in the report up 30% year-over-year but there really wasn't a whole lot to like in this guys largely because of how vague they are about vehicle deliveries happening in 2024 how much are they going to grow I I mean I I guess that's better.
Than making numbers up when it's a pretty hazy Outlook Phil we were just talking about it off camera Joe was making the point that if you can't move Teslas just is indicative of the EV Market overall you saw some huge growth some pushes behind it but this is going to be a very different year for everybody and remember they they have a.
Different dynamic in terms of the gigafactory in Shanghai and the competition that they are facing in China from the electric vehicle companies over there and the overall market for Autos in China has been slowing down and so you have this capacity that is there that the Chinese automakers are saying well first of all.
We got to boost our sales at home let's let's Force to cut their prices and by the way we still have extra capacity let's start shipping these vehicles around the world that's what he's talking about in terms of the Chinese automakers not just when it comes to EVS but the overall Market hey th are you going to bring us or drive a Yang Wang.
Un9 have you seen that the the ultra EV sports car from from byd they're they're serious about this is it a good car is it is it I assume that's what Elon must is a great company Joe you can't you cannot you look everybody that I've talked with who has spent time yeah they're cool looking and the quality is there not just with byd but with a.
Number of the Chinese EVS uh I've been in them in Europe you're not you're not seeing these Chinese EVs and you won't see them around here anytime soon given the trade restrictions that we have Phil I love the honesty I love the honesty that Elon had on that call which was to say if we don't do something about tariffs he's these cars are pretty great.
You're gonna have to do something here but at the same time I'm thinking to myself absolutely Elon has a huge business in China aren't the Chinese looking at him saying that saying he's walked a very tight what is going on line to this point sure they are looking at him and look you can you know uh Tesla Imports.
EVS that are made in China into North America they're brought into Canada some of some of the models that are built in China are brought into Canada and sold in Canada we we we don't bring EVS built in China into the us because of the trade restrictions there's a 25% tariff so it would make it prohibitive for a for a company to build a vehicle or for.
Chinese automakers to build in China and then ship over here to the United States but that's what he's talking about if you don't put some of these restrictions in place you can look around the world and I've been in Europe I know you guys have been in Europe I am sure when you guys were over at Davos if you took an Uber you probably were taking a Chinese.
Vehicle I did last time I was in Europe me and my producer were in Chinese vehicles all of the Ubers Phil very quickly you talk about byd's quality they're already telling us where go but I I'd love to get your opinion on the latest with Boeing um the quality issues there what this means how serious this.
Is it's very serious look they can't expand production until the FAA is satisfied that the culture the safety culture at Boeing is 100% better better I mean there's that that that's being very blunt about it the FAA is looking at at Boeing right now and saying you got to do the basics of blocking and tackling a lot better than what you've.
Been doing in the past and it's not enough to say that we're going to put inspectors and we're going to improve things we want to see it we want to see proof that you are improving your safety culture and that's why they're limiting production that production limit it'll be interesting to see what Boeing says next week about its guidance long term.
Remember they to get up to 50 per month in terms of Max production by 2025 2026 that's also going to be driving the free cash flow Target that they've set out there I think it's $10 billion annually in 2526 does that change now and if that changes that probably changes your outlook as an investor in terms of well okay am I going to hang on to Boeing.
Here and wait for it to finally kick in in terms of the free cash flow this is a significant move by the FAA
Tesla inventory is a protracted-term investment. Alpha generation and past is the EV generation. We on the present time will be six ft below sooner than the EV is on the boulevard 100%
Elon: we are able to't compete so we have to tax. They're too lawful
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