Well, let's get back to one of our top stories. It's about Tessa with its third quarter revenue figures and they fell shy of analysts estimates. Let's get over to David Welch Bloomberg Detroit Period chief. David give this festival in the overview of what test that did right and wrong and what the company was saying. Yeah, I think one thing they did right. So they did beat Arnings for share our fire they beat by a couple of
but four pennies bypennies not terrible. But what the markets reacting to in the last I work shares with down four a half percent in after market trading, is they missed on revenue and also missed on vehicle sales value. The reasons they say are less to do with semiconductor chips and that sort of supply chain stuff and more
to do with shipping. But investors still worried because they don't know when they're going to get all of those uh, supply chain and transportation issues fixed, and you know that could pretend for maybe you know, missing sales again in the four quarter. Euan Musk said that they're still going to be able to hit their target of boosting sales production this year, but they're going to have to have a really real knockout fourth quarter at the plant level,
will be able to do that. They're gonna build about five vehicles, so there's some doubt about that, and the shares are done. I think people are taking a cautious look. Let's take a closer look at China. It's it's understandable in some ways that you know, we know what's happened in China this past year and it's not likely to change overnight. But that would investors not give Tesla a little bit of a pass over that or do they actually blame Tesla for so much exposure in China given
the way the country has moved. Um, I don't think the investors are going to blame Tesla for having exposure there. It's a good ev market, it's huge, the government mandates in some places that that's pretty much all you can buy, and they're a leader there, so they've got to be there. They've got to capitalize on the growth that Chinese actually
really like that brand quite a bit. But they're gonna be bumps here because of COVID, the way the government's handling it and the economic issues that they're having in the market, and everyone's going to have to weather through that. Investors may take away and see attitude, and I think they are in the case of Tesla, because the shares are down thirty seven percent, which is a bigger drop
than the SEP has seen. So you know, clearly Testa was taking once not only because of their exposure in China on a sales basis, but I think their shares are exposed to it as well. And you know, what once was a high flying growth stock that was immune to all of these different global economic inputs is now kind of suffering along with everybody else. Yeah. But given that, and given what's happened, what is the company saying about
its targets? Do you want must saying they can still hit their their target for the year, but again that that requires a grade fourth quarter. It's possible. There's often a lot of up demand. A lot of times there are vehicles that are built but not completely finished because maybe it's chips, or there are things that just need to u get shipped out or shipped in, and you
can can finish things quickly. Living here in the Detroit area, we don't have Tessa production, but I can tell you there are a lot filled with GM and four vehicles, a C nearly finished trucks that are just waiting for some semiconductor or some module and and so sometimes production can be made up very quickly if it's just a supply chain issue. But they're really gonna have to knock it out of the park of the seventy in in a quarter of the time. That's a third, that's more
than a third of what the yearly target is. So it won't be easy, but again seasonally good period. Uh. But the competition is coming for you. Are they not
there yet? Uh? This has been something that that analysts investors have been watching for for quite a while with Tesla, and I think when people question why didn't Tesla hit their their sales targets, I don't think it's the case in the third quarter they missed their sales targets because competition is here, although board others are and the Korean automakers are starting to sell more electric vehicles, but that
does kind of hang over the stock. I think the markets looking for that moment when all the other carmakers, the legacy carmakers as we call them, Mercedes, BMW, General Motors scoord Volkswagen on Ikea start to sell a lot of electric vehicles and cut into the market share of Tesla, and they will, and because they're all gonna be selling
expensive vehicles. And I think, look, some of those other car companies may be better positioned to capitalize on growth in the mass market than Tesla, because Test those vehicles are all expensive. You're gonna see uh Korean e v s, and you're gonna see Ford and g M ebs that sell forty or less. In the case of General Motors, you're gonna see some on as little as thirty thousands, and Tests it doesn't have anything like that. Their vehicles
are selling Fords. So yes, we see the market go to e vs. I think others are better a position to capitalize on mass market growth. Yeah, I've been joking that, you know, investors are selling the dream. Tesla's down almost fifty in the past year, selling the dream, buying you know, more sort of stodgy, old fashioned, old American companies. Maybe after hours down five point four percent today. Um, so definitely a story that investors not all that comfortable with
these earnings. David Welch has been with us Bloomberg Detroit Bureau Chief