Bloomberg Audio Studios, Podcasts, radio news.
This is Bloomberg Business Week inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news as it happened This Bloomberg Business Week with Caro Messer and Tim Stenebek on Bloomberg Radio.
All right, Well, shares of Tesla are higher in the after hours right now as investors continue to digest those first quarter earnings numbers. Global vehicle inventory rose to twenty eight days. It's a huge jump from the fifteen days at the end of last quarter. Shares higher right now by just about five percent. First quarter revenue coming in at twenty one point three billion dollars that was below
estimates of twenty two point three billion dollars. That also a missed when it comes to EPs adjusted EPs, I should say that coming in at forty five cents versus estimates of fifty two cents.
Shares a Tesla up about five and a half percent in the aftermarket, but also Tesla to accelerate the launch of more affordable models at getting a red sticky by our team here at Bloomberg. All right, so let's get to it with us Ross Gerber, president CEO at Gerber Kawasaki Wealth and Investment Management, and also Bloomberg BusinessWeek columnist
Max Chafkin. Ross out there in Santa Monica, California. Max here in our Bloomberg Interactive Broker studio getting ready for another round of Tesla Bingo will getting do in just a moment, Ross investors like it. What do you make of this report looking backwards looking forwards?
Well, I think the good part of the report, because this is really the only good part of the report, is them saying that they're going to accelerate the production of this next gen vehicle platform, and they were pretty vague about what they're calling this or you know what robo taxi is or is a model to coming, And
I think that'll be clarified on the conference call. So you know, once again, we don't really watch after hours trading because he really doesn't represent all the participants and so, and we haven't seen the conference call yet, so we'll see how this doc trades next several months. But there really isn't any other good news in that report other than them saying they're going to accelerate production, even though they just fire all the people that are.
In charge of accelerating production.
Hey Russ, remind everybody take a step back here, because Carol and I were looking at the terminal a little earlier. You've you know, you are a longtime Tesla bull until you weren't, and you were a longtime believer and have been a long time believer in the company. You guys still own a substantial number of shares over at kerber Kawasaki. But what is your position right now in Tesla moving forward?
So my position is that Tesla is a wonderful company that has enormous potential with the CEO who has become so divisive that people won't buy the cars. And that's why saying is just going to produce more cars doesn't address the real issue is why they're not selling cars today, and that's the issue that needs to be addressed that isn't being addressed. So as a shareholder, we have to assess what the future earnings potential of a company is
based off what their business model is. And when we you know, we start investing in Tesla over ten years ago, and we've had a great run up until the purchase of Twitter, and so we've been lowering our position because what we feel is that Elon's behavior has hurt the brand in such a way that consumers actually don't want to buy a Tesla. It's just the best car on the road at the best price, so people buy the
car reluctantly at this point. So I think, you know, we've got these problems to solve, and I'm not sure if that will be addressed on the conference call today. And that's you know, And I don't like being called a Tesla bear, because I actually think they could turn the company around pretty quickly if Elon changed his behavior and stopped attacking everybody.
But I just don't think that's going to happen.
And so so I think the bigger issue that isn't being addressed is doesn't matter how many cars Tesla makes if nobody will buy them.
All Right, So Max chaff can come on in. You guys do the Elon Inc. Podcast. You're constantly looking at what he says, what he does. You're looking at his kind of his assets, his portfolio, your initial thoughts on kind of the headlines we got.
Yeah, just to kind of under Ross is saying something like this, but like the note about the new products is very vague. It doesn't say we're going to have a model too, and it's going to come out on this date, which is what investors, many investors have been hoping for.
It says.
It sounds like it's saying, I'm reading it correctly, they're going to try to essentially make the current models more affordable. Now that obviously could allow them to sell more cars, but it's a slightly different spin on things than what
many people have been inspecting. The other thing is, as Ross is saying, you know, on a Tesla earning's day, what Elon says, and more importantly, how he says it is just as important as as what's in these numbers, because he is going to hopefully anyway clarify some of this but also hopefully get a sense of like where things stand with robotaxi, where things stand with potential affordable cars, and investors seemed to react to based on his optimism,
you know, a couple quarters ago, when he was in this kind of dowur mood, we saw the stock go down. So it's do we get an optimistic version of Elon or the kind of very dour, pessimistic Elon.
Well, I wonder if you have a question for Ross Max.
Yeah, Ross, what is your reading on on this product?
On this paragraph about the product?
Well, I think you're dead right about the two things you just said. Number One, they're of course vague because of the legality of it. If they put this down and they don't do it right. And since nobody seems to know what Elon's going to do, and I'm sure that everybody understands that nobody within Tesla knows what the business plan is either, because they just don't at this point.
But I think secondly, a.
Lot of it will be how does Elon answer these questions from investors during the conference call?
And what you said is right.
If we have sort of a very pauseitive Elon and he's refocused and he's going to be working at Tesla more, and you know, he can play the room right, maybe we get a little rally on the stock, but it doesn't change the fundamentals. If he doesn't play the room right, this becomes a blood bath. So you know, I'm just hoping that he understands the damage that he's done and starts to mitigate this versus diving in and sort of doubling down.
It will be interesting to see if Twitter comes up or sorry X comes up, you know, because there is this question in this sense that he's spent ge whiz a lot of time talking about X, tweeting about X,
doing X related things. There's even a potential or they're going to have a Grock integration inside of the Tesla's And I think that to people who are really bought into the ev story rather than the you know, Elon Musk genius story, which those are two important constituencies here, I think for Tesla Stock, you know, they would like to see him spend less time on his social media network.
Yeah, well, it's not just less time, it's what he's saying, you know. It's like it's not the time, it's that what he's saying oftentimes is super divisive and basically racist. So it's like, it's really hard to sell products to people when the CEO says things that are really hurtful to people, including me for that matter.
Now and we've talked with you about that, absolutely ross. What could Elon say on the call, or Elon and company say on the call that would make you more excited about the company or once again say, you know, kind of owe Elon really.
Well, if I had my dream come true, he'd say, I'm coming back to work at Tesla, because he basically doesn't work at Tesla, and he would say, I'm done tweeting all this garbage and politics.
I'm going to really.
Focus on advancing sustainable transportation and energy and that we're going to release this lower you know, priced car and the.
Strategy that we all bought into three.
Years ago, you know, and when the stock was at all time highs and earnings were going up, you know, fifty hundred percent a year.
You know, it was like it was like a different world than today.
And it's amazing to me he doesn't understand this difference that that really is his responsibility, and so as a shareholder, I have to say it's an extremely distressing time because the valuation of Tesla is premised off all these great technological innovations, none of which have come to fruition yet.
So his focus is one hundred percent what needs to be happening right now.
Hey, Ross, I do want to just end with one last question about the cost of producing these vehicles. It seems like Tesla is doing everything I can to bring down the cost of producing these cars.
The cost of goods sold to.
Are they what numbers do you want to see there?
Well, they are, but their margins continue to go lower. If you look at the report, which I've only had a minute to look at, you know, their vehicle margins continue to go lower. They're operating margins go lower, their net margins go lower. So they're able to lower the price of the car. But what they're not able to do is keep that going as fast as they're they're lowering the price of the vehicles, so it's still hurting them even though they're lowering the cost of the car.
And it does bring in a bigger market, but you're not creating any demand. And this is I have said it a hundred times. Every company in America advertises or reason. People need to know why your products are superior. And all the Tesla people have bought in teslas, you know, so all these YouTubers can tweet all they want, but everybody wanted a Tesla bought a Tesla. So you've got
to get new customers. And the new customers are being told that charging sucks and evs are bad and this and that, and Donald Trump says they're bad, and this is all they see all day, and then it's like, why would they go buy a Tesla because there's not one ad anywhere that tells you how great the cars are because they are right.
Right, and you still own them right real quickly, yes or no, yeah I do.
I just don't understand why they don't tell people how great their vehicles are.
All right, Russ Gerbert, so appreciated. We know you've got to, I think run over to our TV guys. President CEO Gerber Kawasaki, so appreciate you joining us