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Yeah, let's go right to Tesla. It just crossed the Bloomberg terminal. First quarter adjusted EPs folks forty one cents a share, seven cents better than what the street was expecting.
That was.
That's a justed EPs, first quarter gross margin coming in stronger than forecasts, certainly a side of profitability twenty one point one percent versus an estimate of seventeen point seven percent. First quarter revenue coming in slightly higher than what the street was forecasting tim twenty two point thirty nine billion. The street estimate was for twenty two point nineteen billion.
Okay, So some other headlines crossing the Bloomberg turnel. You mentioned free cash flow, but worth repeating because it is a redhead. Carol first quarter free cash flow one point four to four billion, the estimates for a negative one point eight six billion. The Tesla communications around earnings are a slide deck, so it's kind of tough to go through. But Tesla says that the cybercab the Tesla semi, the megacap production starting in twenty twenty six, so that's this year.
Tesla also saying the first gen production lines for Optimists, that's the humanoid robot, are being installed. Tesla also saying that Cybercab and the Tesla Semi are on schedule for twenty twenty six. The company says seeing its rebounds and demand for EMEA and North America. And we should note that the company also says that tailwinds are persisting for the US autos business, and it received approval for full self driving in the Netherlands in April.
All Right, the stock, as you see though, investors liking what it has to say about the first quarter in terms of a lot of those metrics actually looking better than forecast and again looking at some of the individual businesses. The company also saying it launched unsupervised robotaxi in Dallas and Houston. As you mentioned, tailwinds persisting for the autos business, first gen production lines for optimists being installed. So much of the Tesla story is about what it's going to
be done. It's classic vintage, if you will. At this point, Elon Musk and we know we've talked a lot we're anticipating the SpaceX ipo speculation. Does everything get rolled into one company under the Tesla umbrella, whether it's the AI business, and how does everything work together? And that is certainly something we're watching and we'll be watching out for on the call to Yeah.
On that, the question is about what the identity of this company is. Investors are not, and have not for years valued it as a car company. Many people who are bullish on the company say it's about AI, it's about autonomy, it's about creating that fleet of robotaxis. You mentioned that it launched on supervised robotaxi rides in Dallas and Houston. The company also saying that robotaximile is about doubled sequentially. That's a measurement that Weimo uses as well to kate the scale usage.
You're testing a little bit of both exactly.
Well, this is usage right, yeah, but not everywhere, and it's the rollout is not as far and wide as it is for Weimo.
Dana Hall on our live blog, senior reporter here at Bloomberg, has been covering Tesla. She's saying Tesla saying high up in the deck that demand has returned. Here's the quote. We saw continued growth and demand for our vehicles in markets in APAC and South America, while also seeing a rebound of demand in both the emerging markets and also in Africa and in North America.
Okay, look at that Tesla shares hire right now, as we mentioned, just by about three point four percent. First quarter adjusted gross margin excluding regulatory credits was nineteen point two percent. That's up from twelve point five percent year over year. The headlines, though, that are important for our audience. Tesla first quarterd justin internings per share coming in above estimates at forty one cents, the estimates for thirty four cents.
First quarter free cash flow one point four to four billion. The estimate was for negative one point eight six billion dollars.
All right with us?
As Steve Man, Global autos and Industrial's Research manager at Bloomberg Intelligence. He joins us from BI headquarters in Princeton, New Jersey. Steve come on in lots of moving parts, certainly when it comes to Tesla, but it was originally all about the EV business. We can get into other stuff later. How do you think they did in the quarter.
Uh, you know, earning, Like you said, earnings beat actually not a big surprise given that production was pretty high UH in the quarter. And I think, you know, positive free cash flow is great versus the negative free cash flow consensus was expecting. That's probably a function of the higher profit UH for the for the gross profit for the quarter. I think I think investor will like this if I look clean into their investor deck shareholder deck.
They are ramping up the cyber rollo taxi business. They have you know, unsupervised ramp up over in three different cities UH and in San Francisco area they're actually have it running with the safety driver. So I think that's a good sign. I think that we're investors, investors pretty antsy about that. You know, we're we're including myself, you know, like we're waiting and thinking, like, you know, are they
are they? How are they doing on this? So you know, I think I think they're ramping up a corneal plant. What's also interesting, and we actually wrote about this, is that the rest of the world markets for their auto sales is improving. Rest of the world basically excludes their three pillar markets, which is you know, US, Europe, and China. So you know, we we saw, you know, they're actually doubling their footprint in Japan, South Korea sales. They're starting
to get into the India market. Huge market potential. So let's let's let's hear what they have to say about the role buy. You know, I'm not as optimistic on the robot.
Well Ed Ludlow is here with us. He's going to help us make sense of all of these headlines. He is the co host of Bloomberg Tech on Bloomberg TV, follows this company and all EV companies closely. But it is it even an EV company anymore?
This is the no Surprises, no drama shareholder deck. So interesting. The return of the word demand about the core EV business is almost a surprise. We spent all week saying we look past the EV business. This is about being an aftermist, yes, being an AI and robotics company. And we talk about how Tesla trades at one hundred and eighty three times forward earnings. The rest of the mag seven those are the biggest technology companies by market cap
trade roughly thirty times forward earnings. In other words, this is what we're saying. Investors value this as an AI and robotics company, and yet the stock is up more than four and a half percent in after hours. And what they're talking about is the return of demand in markets like APA and Latin or South America and demand in other core markets like EMEA for their electric vehicle.
Is that surprising to you, given that China has been able to create and build and develop evs that can be bought in some of these markets at a fraction of the price in Tesla's can be.
In the absence of any specific commentary about China, I mean, what Tesla says, and I'm just going to read it, is including the role out of the model y L why long range or long length in markets outside of China, and more affordable trims of both models. So that that's the only real sort of specific way they've addressed China. They're not saying they saw weakness, They're just saying they saw strength outside of China. So I find that very interesting.
Shame on us for not like realizing this is still a real business, this EV business.
They've been trying to communicate to us that that's not the first.
Shame on them.
Well, I mean, there's so many ways we can go about this. In the shareholder deck they talk about in passing reference it's building the biggest ever chip fab. They don't use the word terror fab, which I find interesting. The absolutely critical cool thing for the audience to remember is that any activity relating to Tesla building its own chip factory is not factored into its full financial year
capital expenditures guide, which is twenty billion dollars. They haven't changed that in this deck, and unless I missed it, and I can check right now, but to build a chip fab that they're talking about would take in the trillions of dollars, and so one overhang that investors have been worried about. Clearly they're not. The stocks up four and a half percent, have been how much money is Tesla going to spend to get all of this done?
Like at some point they're going to have to put the money where the mouth is to get these projects underway.
Oh go ahead, Yeah, let's bring back Steve Man, Global autos and Industrial's Research manager at Bloomberg Intelligence out there in OURBA headquarters in Prince, New Jersey. You've been listening to us talk with Ed and this kind of idea that you know ev is actually still a big deal at Tesla or and they're developing and growing in markets outside the United States.
Yeah, I think I think you should think of cars from a tesla's perspective as a robot on wheels, right, Uh, you know, for them to proliferate AI in cars and then later on with the humanoid robot, you know, they do need to sell more cars, right, they need to get these this FSD approved, and they had some good
news recently at the end of last year. South Korea approved FSD and more importantly a few weeks ago, Netherland approve FSD, and and that's critical because you know that that can actually help them proliferate beyond Netherlands into the rest of Europe. So it's a big deal for them. Like you know, Ed was talking about the model. Why
the length and longer model. Why you know, it's important to have that vehicle, especially in Asia because a lot of the household over there are multi generational households, so they do need a little bit more room, a little bit more seating room for for the for the buyers over there. So that's why you were seeing that. You know, that car actually resonates. It has been resonating with the Japanese and as well as South Korean consumers there and.
Is is this a real business for the company going forward? Our investors betting the Optimist business.
There's a distinction between going forward and near term, median term, long term.
I mean, well, that's the Tesla story.
The language is so specific. Preparations for our first large scale Otomous factory will begin short put in the ground, yeah, exactly. Well, we just don't know, and I'm sure that they'll get questions on it in the in the cool You know, Steve's absolutely right that they did discontinue production in the Modeless and X, but they also for a very long time Musk himself said they only made that vehicle for
sentimental reasons, right, it was so low volume. I find it really interesting that the second part of that paragraph, the first generation line for Optimus, designed for one million robots a year, will replace the Modeless and Modern X lines in Fremont. Fremont, California. We are also preparing Gigafactory, Texas for the second generation line, which is being designed for long term annual production of ten million. I think that's a really significant piece of news for the Bay
Area and the state of California. That actually just in writing confirmation that Optimist as a program starts at that Fremont facility. You know, that's a big it's a big deal.
I mean, given what Elin has said about California, the moving out of California.
Was Gavin Newsom, Yeah, Gavin.
Newson said that Elon called him, and this was in Matt Winkler's opinion piece recently, that Elon called him and said, we can't find the talent that we're looking for outside of California.
And also, like, I'm not saying this is barnstorming breaking news. I'm just making an observation that they've set the plan out in writing for something that's hard for many people to believe. Steve makes a very critical point again, Tesla
talks about this. The first use case of Optimus is within Tesla's own facilities in the manufacturing context, and he's talked about selling it to the general population as a babysitter or is a care for the elderly, or as part of the labor to address the deficit in labor
in various sectors. But I'm just saying, like they outlined a plant and if you think about the history of this company, the big tent at Fremont that they put together, Yeah, you know, the Frankenstein's monster of a factory that it once was. It's interesting how they do things.
I also want to bring in Ross Gerber. He's president and CEO of Gerber Kawasaki Wealth and Investment.
We'll get a round table. Can you guys talk to each other and we're going to talk to you.
The firm has about four billion dollars in assets under management, So talk to us a little bit about your first impressions when it comes to these results. This idea of seeing demand in certain parts of the world for the auto's business, what's your take.
Grill couldn't be happier to see demand for the auto's business. That's the business. I'm in EV business. I care about climate. I want to see them sell as many EV's as possible in the world. And they still make the best evs And so I was like, the fact we're talking about cars, I'm so happy because like that's how they actually make money and that actually matters. Nobody needs another cab service. Okay, there's plenty of cab services. If you're
in Santa Monica, you can take a ROBOTAXI. Right now, we got Amazon up next. I haven't seen a Tesla. Yet, I'd love Tesla to come here where it's really hard to drive and test it out. But that said, you know, I'm excited about I'm an EV guy, I'm a climate guy. It's Earth Day. I hope they sell as many EV's as possible.
Guys, I'm just gonna jump in here, Ross, thank you for joining the show. It's not my show. I'm going to ask you to please hold and stand by, and you guys, forgive me for that one. Something just dawned on me. So last quarter they didn't either. But typically in the third page of the deck they'll give you a financial summary where they put the headwinds and tailwinds to the top and bottom line. And I didn't even realize last course. So they didn't do it in Q
four and they've not done it this time. So, for example, we don't know what the impact of volume changes is or FX as an example, or any other specifics, what the impact of operating expenses is on profitability. They haven't spelled it out, and I'm just making that observation.
Well, all right, so let me I agree with that observation.
So what do you make of that?
Ross, Well, you've got to wait for the SEC documents to drop, you know, but I kind of was surprised by the number, so I was trying to parse through why it was better than expected, because with all the extra access excess inventory that they added should have hit
cash flow harder. So I'm just you know, I want to see their numbers didn't add up with my numbers, basically because of the access inventory, which they now have twenty seven days of inventory, which is actually a high for them, but yet that didn't hit cash flow at all, so or maybe it did. Bec there was one point four billion they say a free cash flow, but the actual cash that hit the books was seven hundred million. But I just want to see how these numbers are pars doaling