EV price war, Tesla demand boom, cheaper EVs, and more
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one we are live for a new episode of the check podcast i'm fred lambert your host and as usual i'm joined by steph wentram how are you doing this week set i'm good all right a little different decor for me a little different setup i apologize i hope that the audio is uh is is pretty good um i'm i'm not on my usual setup right now and i forgot just i i brought my traveling setup with me i just forgot one little adapter that changed the whole game so i don't have my microphone

But I'm using my gaming headset and microphone right now, so hopefully that is going to be enough. But we have plenty of good electric news for you this week. We're going to start out a little bit sort of more like high-level discussion about something that we're starting to see. Not exactly happening just now, but maybe the first few steps of the first real EV price war.

That would be interesting if it does indeed is happening. And I just posted an article on it today that is starting to get some traction that implies that Tesla sort of started it with that big price drop this week.

Tesla didn't necessarily intend to start a price war it was kind of um I mean if you believe what they said as we discussed last week they said it's due to cost improvement everything but we know that they needed it they needed the price reduction just to accelerate some demand here and um and it's working um we just we just report reported earlier this week that Tesla is seeing unprecedented demand in the U.S. so we have some good sources within Tesla in the U.S. and um

They told us that many stores are seeing the record orders, new orders coming in for a single week. So that's awesome. They're even thinking if it keeps going at that rate, they believe that they're going to run out of build slots for this quarter. So when we're talking about not even three weeks into a quarter, this is special because

Normally, as you know, Tesla allocates certain bills. They calculate their production capacity for a certain market. In the US, it's only Fremont factory and Gigafactory Texas now. So they calculate that capacity, how many of which are going to be exported, how many are going to stay in the local market, and then they start taking order for that allocation. And normally,

That doesn't fill up until the end of the quarter, but in this case, it might be already filled up or about two in the next few days. So this is very exciting for Tesla. And obviously, this is a combination of the giant price drops and these Tesla being eligible again to the federal tax credit in the US. So those two kind of happen together, resulting in the cost of acquisition of a new Tesla vehicle being greatly reduced.

We discussed the pricing last week, so we won't get into the details on that. But we've seen over the last few days and over the last week since Tesla announced those price drops, there's a few companies already have to reduce their price. Xpeng, most notably, one of the Tesla's closest competitors in China. And the...

They saw based on the early data coming out of China, they saw their order dropped significantly after Tesla reduced their price. So we're using China as a good example because Tesla reduced the prices in China a week earlier than they did in most of their markets, including the US. So it's sort of like a preview of what might be coming soon in other markets, including in North America, which obviously we focus more on in electric. So

Expang dropped the prices most likely in response to Tesla. We saw VinFast also, obviously a new company, but with competition in similar segments as Tesla, also announcing discounts to counter the Tesla effect with the prices. So we might very well be seeing the very first steps into this EV price war that could be happening. So

I think it's worth exploring what could be the effect on the market with that. And obviously, why did I start my title with Tesla started an EV price war that it will likely win is because there's one main metric to follow in a price war is who can absorb the price reductions better and who can do that is who has the best gross margin and ultimately the best net profits.

And Tesla is by far the industry leader on that front. In both cases, actually, like in gross margin, they have massive gross margin here. So routers put together some data points here, putting some of the biggest companies together.

And Tesla obviously leading in gross margin by a wide margin with NIO actually the closest. So I'm not the one covering NIO, so I don't follow them too closely, but this is pretty good margin, $8,000 to $10,000 per car. Volkswagen also, well, no, actually, excuse me, it's not, it's not, it's the average compared from 2020 to Q3 2022, so.

Now the average is 10,000. Oh no, it's the other way around for NIO. Excuse me. This is a bit confusing. The chart is not the best chart I've ever seen. NIO actually went down. NIO's margin went down over the last two years from 10,000 to 8,000. Tesla went up from 11,500 to closer to $16,000. Obviously, that was due to the price increases that were steadily coming in over the last two years. But

They're going to take a hit on that. By how much, it's going to be hard to tell because we don't have the exact mix of models that Tesla is selling. But I would assume that it's going to be close to like a 15%, 20% hit on the gross margin due to the Model Y most likely being the Model Y long range being the best seller right now. And it is the one that saw the biggest price drop at $30,000. All right.

BYD also saw a significant drop in its gross margin from $15,000 to $5,000, but still one of the top four leaders. Then you can see that the other like $3,000 to $5,000 is what you see from the big companies like Toyota, Ford, GM, Hyundai, and so forth. Now you go to net profit per vehicle, and that's even a bigger lead for Tesla.

Of course, Q4 2020, that's when Tesla just started making profits. So $1,500 per car shot up to almost $10,000 per car in Q3, by far the leader in the industry. And then you see GM making $2,000 per car. So that's the closest competitor to Tesla in net profit. GM at $2,000 per car versus almost $10,000 for Tesla.

So that's where you can see where there's margin to absorb those big price cuts. And that's having those margins. Everybody else basically has no room to decrease their pricing here. And then you look at Xpeng and NIO, obviously not looking good in the very, very negative net profits. But I was still impressed with NIO having a positive gross margin.

still a young company, staying growing up, still deploying service centers, still expanding in new markets. All of these things cost you a lot of money that you won't see any return on for a while. So it's kind of normal. But this might be one of the first, like we've been talking about this for years, electric, and for a long time, a lot of people thought we were kind of crazy and everything. It was like, there's some giants that will fall from this transition to electric vehicles, like some big company that will not survive. And

this might be one of the like chapters in the story where you start seeing that happen more in the industry. Like you start seeing the cards fall in place. What do you think, Seth? Yeah. I mean, Tesla has all the, their ducks in order, basically. They, they've, you know, five years ago, 10 years ago, they were already thinking about this situation. They've been,

ramping up their battery production, which is kind of the big bottleneck in the industry. So nobody can make as many batteries or order as many batteries as Tesla. They've got their four factories now kind of almost at full strength. Obviously, there's more vehicles in the pipeline. But right now, I think they've spent basically the last two years almost entirely focused on

ramping up Model X or sorry Model Y and Model 3 production mostly Model Y which is like you know the sweet spot in the in the world and I think a lot of people uh inside and out of Tesla think the Model Y is going to be the biggest seller biggest selling single vehicle next year in a lot of almost this year a lot of markets yeah this coming year in 2023 so uh Tesla is well positioned um

they might i mean as you said they might not have been thinking price war when but maybe they were like look you know we can make electric vehicles less expensive and and you know more of them than everybody else combined really and why not take advantage of that situation while we have it i mean before uh they weren't getting the 7 500 tax credit

And now they are. They had run out. The GM had run out as well. But as it stands now, it's like they've got a lot of headwinds. Or what do they call that in investor talk? Momentum? The winds are going in the right direction for them. So why not? I mean, I feel kind of like there's so much electric vehicle demand at the current moment that nobody's really freaking out.

But, you know, once once all the demands kind of filled, you know, people who are thinking about buying a Mustang Mach-E for sixty thousand and, you know, all of a sudden a Model Y for forty thousand shows up. That's kind of like, hmm, think about that a little bit. So, yeah, I think there's going to be some issues ahead. And then, of course, there's the Toyotas and Hondas and

Nissan's of the world that have kind of just let the last 10 years go by and are just coming out with like their first or second generation EVs. And, you know, they're coming in high priced, low volume. They're not going to they're not going to do well when, you know, there's proven technology out there with Tesla's and some of the other brands.

So I agree. I don't know if everybody makes it out of this. I mean, companies like Mazda, Subaru, you know, the other thing like with companies like Subaru, Subaru's, you know, focus is all wheel drive. They make really good all wheel drive internal combustion engines. But like now it's not rocket science to have all wheel drive, you know, efficient all wheel drive with electric vehicles. So what is Subaru's advantage now? Like everybody's doing all wheel drive.

So I don't know, a lot of factors, but I agree with you strongly that somebody is in trouble. Yeah. Yeah. A lot of people are in trouble. And the mind share thing is a big part, too. So when you're coming from a Tesla, it's hard to switch to something else, too. So if you can get them like a lot of people in early and fast.

place their order right now because that's the other thing that people have been thinking about too much is like when Tesla increased the prices they did it incrementally over a long period of time and they did it while they still had a massive backlog of orders for the Model Y specifically also for Model 3 in a lot of markets so what did that do is that Tesla delivered those vehicles over a long period of time and so

even though they were increasing prices, they were still delivering a lot of the cars that were placed on order before those price increases. So these lower price is a time to order and build a giant backlog and then Tesla can afford to maybe like again gradually increase prices where they need to if gross margins are tighter and on some specific trims and models.

and then still enjoy a huge backlog of order that he can deliver while still squeezing in a few new orders at higher prices. That's basically what happened over the last two years. And some might just have hit the reset button. So I think that, yeah, I think this is going to be a massive problem unless, like I said, I wrote in the post, there's some wild cards still, like the biggest one obviously being Elon. Like, you know, we don't know what he does with that. Also, the Cybertruck might be the big difference too.

uh in in terms of um like how smooth they can bring into production so if it's a smooth production ram goes to gross positive gross margin quickly and uh volume production this is uh potentially like a game changer obviously and would put a lot of pressures on company like like ford with f-150 lightning which i i have my doubts if they're making any money on it like right now and uh

Same thing maybe for Silverado Electric coming and so forth. Those are going to be like, because historically speaking for US automakers, namely Ford and GM, the big profit centers have been the trucks. So if you start taking big chunks of that, that's not a good sign. Like 2008, 2009, all over again. Especially if we head back into an economic downturn on top of it, that is just a cherry on top of the cake.

I think I think this is sitting pretty with the $20 billion they have in their pockets right now. This is a big difference. Yep. Lots of cash. They can weather any storm. Yeah. All right.

Tesla, we were noticing sort of a ramp up in communication as Elon Musk became more controversial. So we discussed this last month a little bit when I wrote an op-ed begging Tesla to launch a PR department again. I mean, in the US and a global PR department because some markets do have PR departments. Tesla has some PR departments in some markets. There's a strong one in China, actually.

a decent one in europe but uh in the us and as a global organization tesla does not have a pr department which is just ludicrous and i won't go into all the reasons again except for the this one that's more like the newer reason is that everything since the dissolving of the department everything has been funneled through elon musk he has been a de facto spokesperson and facto face of tesla and

As it becomes more controversial, especially more political, which is not exactly the norm for big tech CEOs for good reason, it's just bad business to be too political.

Yeah, and in the U.S., there's a very sharp political divide. So automatically, no matter what it is, anything you say political is going to piss off exactly half of the populace or very close to half. Yeah, and that's a problem in itself that the U.S. should definitely work on. And if that wasn't the case, maybe this wouldn't be so much of a problem. But for now, it is. And no clear solution in sight, at least not in the short term. So Elon doing what he's doing right now is a big...

it's a bad move for Tesla. And I, and then when I say that, that like big tech CEO are not really political. I know that a lot of people like fight back, like claiming that, Oh yeah, but like, well, like all the Silicon Valley people are all woke and everything. And they're like, I mean, there's difference with like, I think some like consider like woke policies that people talk about and like openly like

Calling for voting for a certain party and calling the other party, the party of eight and all that. This is completely different. He's actively alienating a big part of the population. And that's just bad business. And we've seen that affecting Tesla. We've seen in terms of surveys, in terms of demand, these things started to affect Tesla. There's no doubt about it.

So we suggested that Tesla, because of that, Tesla should build itself a stronger voice of its own, not directly linked to Elon. So using its personal social media instead of everything going through Elon's Twitter, more direct communication with customers, more blog posts and all that, basically things that the PR department was doing before.

And we're starting to see things happening. So basically, internally, we noted that Tesla was doing a lot more of these treads here. So these treads have been popping up on Twitter, on Instagram, where Tesla is highlighting specific features, existing features, because that's always obviously used to post on social media and blog posts, new features being launched, new products, obviously.

But now Tesla is just using its voice to highlight existing features and doing more direct communication. So I tried to see if actual data would back this up. And sure enough, on Twitter, as you can see, like until around October, Tesla was not

posting that actively and then it showed up about 300% on an average over the last four months. So that's I think is notable. Same thing is happening on Instagram. Like a lot of what you see on Twitter is also shown on Instagram. On the stories though, so it's not as easy to quantify in terms of data, obviously.

And the blog post to Tesla had two blog posts in 2022 before September. And then after September, they had six blog posts. So that's that's sometimes when like a whole year without like with one or two blog posts. So that's that's a big change, too. So a lot more direct communication with customers and not officially like distancing themselves from Elon, obviously, but at least building their own voice that doesn't have to

go to to through elon because i mean a lot of people were like a lot of tesla fans used to follow elon's twitter for tesla news and now like those tesla news on his twitter feed are far and few in between and uh yeah a lot of noise yeah a lot of noise a lot of conspiracy theory a lot of uh just whining about the woke mind virus and all that like just it's like uh like i said before

I'm going to be back on the Elon bandwagon when he's going to seem... I'm not saying that he's more excited about it, but if you follow his Twitter, sometimes it seems like he's more excited by the next QAnon drop than the launch of the Tesla Cybertruck. So that's what I want to see happen. Some excitement for Tesla rather than political...

Yeah, it's almost frustrating because he kind of kidnapped the Tesla communications and, you know, by putting it in his feed of craziness, like tons of people, including I think you and I have to look at everything he's talking about, which is a lot of craziness. And then to find those few, you know, Tesla news bits.

which would be like, you know, maybe we should create a Twitter account where it's Elon tweets, but only Tesla related. Oh, that's smart actually. Yeah. Did you just come up with that? Yeah. Write that down. Someone, by the time this show is over and we can actually do something about it, someone would have done it. Send me a link. Whoever does it, send me a link. I want to get on that. Yeah. We'll all follow that and then we'll promote it on the next electric podcast episode. Yeah. That's the deal.

All right. Speaking of communication, that would be one of those things that Tesla should have communicated to buyers here. Oh, clandestinely. I didn't write that. Someone changed my headline here. Clandestinely. Does that work? Yeah, it works. Yeah? Okay. Anyway. I can't remember. I think I had like sneakily or something like that, which I guess... Yeah, it's the brakes on the Model Y Performance, which...

I would argue is the biggest difference between the Model Y long range and the Model Y performance because you basically have the same powertrain now.

you have the bigger wheels but i mean that's a plus that's a negative depending on how you look at it i mean right now i have the 20 inch wheels on my mobility performance in quebec in the winter and i can tell you that uh i'm i'm tired of it i'm really tired i would i would kill for some 18 inch wheels right now but um which i can because of the bigger brakes but that's another story uh so yeah the bigger brakes are the bigger differences so

There is, of course, the faster acceleration, faster top speed, but those are just software locked, basically. So the powertrain is the same. But you do sort of need bigger brakes in the rear in order to handle that higher power that is unlocked. So, yeah, they had this big-ass rainbow brake, like the very top-notch, top-of-the-line brakes, or calipers, I should say, in the back. In the front, it was always the same.

But ZEV-centric, they build accessories for Tesla vehicles. They are the ones who found this out here that Tesla actually changed the Model Y performance brakes in the back for smaller brakes, not as thick brakes. The rotor is 2 millimeters, not as thick, and the calipers are smaller brakes.

And no one noticed it. We don't know exactly when it happened, obviously. But based on ZV Centric, what they saw in terms of their customer vehicle and their own vehicles, it happened sometime before September. And at least the first vehicle that started showing up with these new brakes were Armando brakes. It started showing up in September. And...

And the weird thing about it is they still put a cover on them to sort of hide them, hide the smaller caliper, which is...

which is kind of uh misleading it is deceptive like you don't you wouldn't know unless you well i mean the kind of way if you if you really dig into them you can actually see but um it's a lot harder to realize whether you have the new brakes or you don't uh so that's kind of a bad move and uh zv centric uh kind is literally asking tesla to to send them the brembo brakes because they paid the same price for it as they would if they had the brakes on them and uh

And now they don't. Tesla never communicated the difference. They never said anything about it. So it is good old Tesla communication right there. Not telling you anything. All right. Oh, we're talking about Tesla price decreases. But there was a price increase this week for the arm charging station, the Tesla wall connector.

So that was kind of a surprise here because this actually dropped the price of that thing a lot while they were increasing the price of the car. And then they also took it out. Sorry, they made it more expensive.

Not necessarily. They made it more useful by removing the mobile charger that came with the vehicle. So now you kind of want a home charging solution because a lot of people were just using the mobile charger at home. That's what I was doing here on my condo. I was just using the one that came out of the car. But now that they took that off, either you buy one of those or you buy a wall connector at home.

And Tesla had decreased the price to $350 in December, which made it like the lowest ever and made it also the cheapest 48 amp level two home charger that has Wi-Fi by far. But now this week, Tesla decided to increase the price by 20% to $425. So now it's even higher than it was before December, before the big price decrease in December.

So not sure what this is doing here. Maybe they're trying to recuperate some of the gross margin through the wall connector. But obviously that will make a big difference. And of course, we reported also last month, Tesla started selling it to Best Buy for the first time to third parties. And the price went up at Best Buy too. So I don't think that's going to

There was a lag as soon as the, I think there was like maybe like a three or four hour lag. And I know a lot of people made the move to go on Best Buy as soon as they saw it going up. But it's still, I mean, it's still the best value out there. I don't know what the kind of thinking was there. You know, maybe I think those J adapters that you get, that you can charge non-Tesla EVs with.

uh are like 75 bucks so i think uh maybe some people were doing that instead of buying the other product or something i don't know yeah that could be a solution but yeah you're right though it's still like the best value every that 425 bucks is still the best value um all right this is interesting i don't know if you remember this we talked about this a few months ago uh the battery passport so this is an initiative from the global battery alliance and um

they are trying to build a system to track every material inside the battery, which is obviously a problem right now for the federal tax credit that requires a percentage of the battery materials to come from certain countries. So now it's going to be a lot easier to trace, but also it's going to be just a better understanding of where your battery comes from down to every single material because that has been basically an attack vector from

EV naysayers that say like, oh, the mining is worse than burning gas and drilling for petrol, which is obviously nonsense. But if we can track every material better, it's going to be easier to show exactly what is the impact of building a battery. And then obviously also when you recycle it and the battery passport actually is going to account for recycled material in it.

Now, it's nothing, obviously, because most batteries are still in operation. So it doesn't have much of an impact. So what happened this week is that the first proof of concept of that battery passport is coming out. And Tesla and Audi are the first two to participate in it. As we previously reported, a Tesla executive and an executive from the Investment Quebec group are the two people leading that battery passport project. So it makes sense that Tesla is the first one to try it. Though Tesla only did it for Cobalt. So...

They put together this little tracker here that shows only 1% of the battery materials are IconTec for. Again, only cobalt, so it's nothing. So this is for a battery pack that Tesla builds in China. So 78.05 kilowatt hours. So it's the long range, probably long range Model 3, long range Model Y battery pack using chemistry NCM M50. So it's a nickel cobalt manganese battery.

chemistry and the battery cell is built by LG Energy Solution in China. So already a lot of interesting little tidbits of information. When you go to materials, that's where like the information gets a little bit less because again, it's just cobalt. So yeah, cobalt, 100% of the cobalt from that battery comes from Glencore Comado Copper Company.

which is in the diplomatic Republic of Congo, which is a problematic area for cobalt. But here's the good news. So that's one of the things that, again, I like to use the word attack vector. That's been an attack vector for people. They've been saying, okay, like cobalt all comes from artisanal mines in Congo where you use children and you use people in terrible mining condition. And that's true. That's true. And that's a real problem that needs to be addressed.

However, most of the cobalt does not come from those kind of operations because it's not an efficient way to operate a mine. It's just not. And the Glencore Camado mine is not like that. It's nowhere near an artisanal mine. It's very modern. I don't know if I would go as far as saying very modern, but it

Compared to artisanal mine, it looks extremely modern. But it's EV machinery. It's qualified people working there and hopefully well paid. I don't know exactly the salary there. But if you look at the mining operation, it's not an artisanal mine. So at least that's good.

uh audi also participated in it and audi had a little bit more uh information in theirs so it's about uh they didn't say the model but based on the information here i would assume that's uh oh 114 kilowatt hour that would be maybe like the what's the new uh gt maybe yeah maybe the gt all right uh the seller producing hungary by samsung

that's interesting they use an nca chemistry so a lot of cobalt in that too and then you look at the materials so now you have both cobalt and lithium so it accounts for actually 10 of the materials in the battery pack so a lot more than the test i was doing um this i'm not sure like it was review in progress so it's not exactly clear but because they split up

in a different percentage of cobalt but it all comes from the drc so the congo and lcm means large-scale mining so i guess they don't tell you the exact mine here so this is i assume the review in progress will tell us the mines and it's going to come for like three different mines that's my understanding from from this but they haven't confirmed them yet and um lsm i would assume that

it lets us know that they can at least confirm that it's not Artesol mine but obviously I would like to know the actual names of the mines so that we can confirm that for ourselves. Same thing for Lithium, LSM, Chile, they don't tell us the actual supplier here. A lot of Lithium mining in Chile obviously. Well, obviously, not everyone knows that I guess. Alright, moving on from Tesla news.

And we're 30 minutes into the show. If you do enjoy the show, please give us a thumbs up, a like, subscribe, notification button, all that good stuff. It helps the show tremendously. Of course, don't do it if you do like it. And if you're listening on your podcast app right now and you enjoy the show, please give us a five-star review. That helps the show tremendously. It takes a second to do and we read every single one of them.

And if you have any questions for us, you can put them in the comment section right now because we are live and we're going to take your questions when we are done with three more news items that we want to discuss real quick. And then we're going to get into your questions in just a few minutes. All right. The new Volvo C40, XC40 EVs are the new, I guess it's the 2023 version.

It's hard to say right now. It's like right in the middle of the model year. Yeah, it's kind of late for a 2022 version. But they are being released with improved range, faster charging, and a rear-wheel drive option. So not much is new in terms of the refresh. There's a small refresh, but you would recognize the C40 and XC40, which obviously the only difference is the, what do you call that? The sport coupe back, the sports coupe back, I guess. Sports back.

Here you go. So let's go with the EPA. Now, the single motor gets 240 for the XC, 245 for the C. If you go with the single motor, but extended range, you go up to 270 to 75. So that's a decent increase. That's big, yeah. Why don't we have the twin motors?

Well, I mean, if you look at the WLTP, it should be just going to be between the two of them. So probably around 260, I would say, around 260 miles of range on a single charge. That would make sense. A 3% increase in output for the rear-wheel drive motor.

Yeah, they got the increased range through cooling efficiency improvement because the battery pack is still a 69 kWh battery pack for the standard one and an 82 kWh battery pack for the extended range one. And yeah, what's up with the twin motors?

Okay, instead of having two exact 150 kilowatt, they now have an 183 on the rear axle and a 117 in the front axle. And conveniently, it adds up to 300 kilowatts. Yeah. The same as before, but...

They're geared differently normally. Having two different power, one is going to be more geared towards cruising on the highway, where the other one is going to be more for city driving. So you do generally tend to have some efficiency improvements with that. Yeah. Yeah, it's good to see these. I mean, one of the bigger complaints about the XC40 and the C40 was the range wasn't nearly as...

as far as Model Y or even kind of the competitors like from Hyundai and Kia. So it's good to see. Yeah. And like a lot of these legacy automakers going into EVs, they were big on like on battery buffer and not having like a big efficiency. So if they can do efficiency improvement and not instead just sticking bigger batch back in there, that's a good trend that we want to keep going that way. All right. That was your post this week, Seth.

this uh you called this byd a chinese knockoff of the bowl tv i know i know i i got some flack for that and and i'm not saying that china is a knockoff uh manufacturing hub or anything like that but it just i mean if you scroll down a little bit the the

Yeah, I mean, yeah. The side view are definitely right that it does look like it. Yeah, I mean, it's not exact, but it's also kind of seems remarkably similar. Anyway, what's interesting about it is that the specs on this, so it costs like eight, just under $9,000 in China, obviously. And they're exporting it to a bunch of places, Brazil, Chile,

So a bunch of places in Latin America, which is like we know don't get a lot of EVs currently. So that's good to see. So the price is eight or nine thousand bucks at the base level and they have higher trims and faster trims.

But the, you know, what do you get for that? You get about a third of the battery, a little bit more than a third of the battery as a bolt. So you're maybe a half the battery. It's like a 30 kilowatt hour battery and you get about a third of the power. And that's going to be about a 75 horsepower motor, which obviously will get a lot more range out of a smaller battery because, you know, you're not able to kind of juice it.

So these they're talking about 300 kilometers WLTP cycle. So, you know, in reality, probably closer to 200 miles, still pretty solid, like especially for, you know, an $8,000 car. And I think one of our commenters was like, you know, this is basically like the Yugo of electric vehicles. Jose Venegas said that. So.

For better or worse, Latin America and other markets that are maybe not used to very expensive cars, they need EVs too. The world needs everybody to go to EV, so good for everyone. Yeah, it's definitely an option in an underserved market is city cars.

All right, Hertz and Uber have been like these unlikely partners in electrification over the last two years, in a big way, really. Since Hertz had this giant hoarder of 100,000 Tesla vehicles that they deployed in North America, and 50,000 of them ended up going to Uber to...

to enable for the drivers to be able to rent them through Earth so that they can offer the ride-sharing services. And that's been a very successful program. Actually, we learned that this week, nearly 50,000 Uber drivers have rented Tesla through this program. So they basically have all been rented out already. And now they're extending it to Europe.

And they said that they're going to start with 25,000 new electric vehicles going to the European capital cities by 2025. So over the next two years. And they said it's going to include Tesla vehicles and Polestar vehicles because after the 100,000 Model 3 vehicles, Hertz also added Tesla Model Y vehicles and then the Polestar 2. So the same ones are going to be offered in Europe.

European cities. So that's great news for electrification. I mean, 25,000 is not a giant number, but I think the big thing too is like a lot of Uber driver, they might like get into it through that and then decide maybe I want my own vehicle to Uber with electric vehicles and that creates kind of like a snowball effect and a lot of ride sharing services. I think I'm just going to go all electric just because it's

It makes so much sense with how much gas savings you get if you're driving a lot like you do when you're a ride-sharing driver. That's interesting. GM used to have a company subsidiary called Maven that would kind of rent out Chevy Bolts to Uber drivers. But I think they shut that down.

Yeah. But, but it's a good model for a couple of reasons. One, the drivers are like, Hey, like electricity is really cheap compared to gas. Like maybe this is something I should really do in real life. Um, but it also makes the, you know, the barrier to entry a lot lower for, uh, Uber drivers and maybe some Uber drivers don't, you know, maybe they live in New York and they don't own a car or they, uh, you know, they don't want to get their, their car full of, uh,

passengers or something so i think it's a good thing all around and obviously there's money to be made in that space so good for that good for everyone all right let's get to the comments all right has anyone gotten photos of tesla semis charge connector i feel like we've seen something like i mean we've seen the first one that they made but now the test is making it sound like uh the regular connector is going to be the charger connector ultimately

yeah the north american charging standard uh charger we'll see if that happens all right uh andrew c question does rivian's financial situation make you guys cautious about buying one future service parts etc i mean that that's certainly a concern um the one thing rivian does have going for them is they have enough cash to get through the next you know year or two but they're not making progress in in

getting the cost of their vehicles down on a per vehicle basis. What do you think, Fred? Not exactly that. I mean, I think this next earning is going to be important. I'm going to take a close look at it and see if there's any meaningful improvement in gross margin. And if there's not with 10,000 vehicles produced last quarter, I think there's going to be some serious questions to ask.

in terms of do they have the ability to turn this around because it's one thing saying like, yeah, they have a ton of cash to last like maybe a year, two years of this trend going. But at the same time, now they've been in production for a very year and we have seen no meaningful improvement in gross margin, no meaningful improvement after a year. And now they achieve volume production in many ways. 10,000 vehicle a quarter is decent volume production. So

How much more leeway can we give them? That's my question. Yeah. All right. Seth Love, probably not what I'm thinking. They have the charger infrastructure set up too. That helps. He's referring to Tesla having the advantage over the, I guess, legacy automakers. If you ask me, like in 2014, 15,

Do I think that Tesla is going to be the only one still in 2023 to have the only global charging network branded for the automaker? I would be not. That's crazy. Someone else will catch up at this point. Nope. No one has. It's crazy. I mean, I guess you could say Volkswagen has the Electrify America network, but not really.

Not catching up anyway. Jesse Seastrand, I've always been disappointed with Subaru. They tell such a great story with very little substance beneath it. They should have been the first to make an electric, in my opinion. I agree. You know, they're about the woods, about being green, about, you know, all-wheel drive.

it seems like perfect fit i think they are that's a result of their environment though like they are based in japan and japan has had some serious link to hydrogen fuel cells that has slowed down a lot of uh japanese companies commitment to all the cheap vehicles are unfortunately richard kuhl says why can't the new giga texas plant do the midnight cherry red or quicksilver paint jobs like you got berlin is doing what do you think yeah that's a good question i mean um

I would assume that Tesla has invested into the same or similar like advanced paint technology in Texas as they did in Berlin, but apparently not. Otherwise, that would be the case. Yeah. All right. Here's a good question. Did the Bolt really start the price war? It would have if GM had made it more compelling and made a million more vehicles, but they didn't. Also, there's just like the price point is...

there was it was not even already like big competitor to model three like so it's making it even much cheaper it's for like a segment of the buying the buyers that uh like they're still completely open and the kind of form factor that they want and like it's because the big thing with the ball is a long distance travel it's not really an it's an option but it's not convenient right

Question. If Tesla has billions saved, should they reduce margins to their cars or do share buybacks? In my opinion, for growth, cut prices, plus open their supercharging network. What do you think? So for growth...

I mean, for cut prices, cut prices doesn't make sense with their cash on end. Cash on end is just like you're not going to use your cash on end to give discounts on the cars. As for growth and the charging network, the thing with Tesla is I believe them when we say we are spending our cash as fast as we can do it efficiently.

it's hard to spend on much cash this is making like this is spending a lot of cash every quarter like this is billions and billions of dollars in expenditure so

that's hard to spend efficiently. Like if you just say, okay, like we have $20 billion cash right now, this quarter we'll just spend an extra $5 billion on a bunch of things. It's like that $5 billion won't get you $5 billion worth of thing because you won't be able to efficiently spend that cash during that quarter. There's going to be a period of time. So no, I think

Well, a share buyback program would make sense because of just how low the shares are. Obviously, at the same time, it feels like it's only compensating for Elon selling shares. So it kind of feels weird in that sense, like using company money to counter a huge impact that the CEO himself had that the company was selling. So there's something kind of sketchy about that. I don't think there's anything illegal about anything like that, but it doesn't feel right to me. But

I don't know, maybe like dividends or I don't know, something like that would make sense just to compensate the shareholders who had a tough, tough year. Yeah. All right. All right. Getting to politics. Is there any good data on the number of liberal-leaning customers of Tesla? With California being the biggest market, it would seem to be like it's pretty high. I think it's pretty high. I would say 70%, probably, probably.

lean liberal if not higher what do you think i mean you didn't send me like a survey about that this week that shared something around those percentages you just gave and they said like there was no meaningful change uh on the conservative side at least so meaning that uh while this has definitely needed some liberals it has not gained conservative to compensate for it

But that survey was extremely limited. I look at the methodology and it was like, I don't know, like a few hundred people. It was not crazy. So I don't know. Like you said, I mean, Tesla's biggest market is California, which is obviously a more liberal state. And so also just for personal experience, I would say that though there are conservative people that just like they want a great car. For sure.

Tesla sells great cars. So like, and they're not like, as long as they're not closed up to the idea of electric vehicles, which a lot of conservative are just from, unfortunately, the way they consume news, they consume news from places that have been more willing to take money from oil companies and share misinformation over the years. That has been less of the case lately. Yeah.

And that's a good thing. But the impact is still being felt. I was talking to someone about it this week. She was telling me, one of her friends, she was describing why he didn't like electric cars and everything. Literally, everything she was listing that he was saying was all points that have been proven misinformation by other companies. So you see that impact is still there for other people that we need to counter that. Otherwise...

It will slow down electrification, and it has, and it still is slowing it down. Great. All right. John Ketchages, there are 18-inch aftermarket rims that fit over the Model 3 performance brakes. Hey, hey, hey, send that my way, John. Yeah, where's the link? Give me a link. Give me a link. Oh, maybe we're not allowed links, so give me the name of the company or something. I'll check that out. Yeah.

all right jonathan root uh when q anon conspiracies are more important than the mission of clean transport even duped by the algorithm yeah elon has been due by uh an algorithm that he now owns right uh stephen frock jar a lot of interesting files there uh well the break story just to show that tesla is trying to make more money

for themselves i guess uh yeah i mean there's been a lot of cost cutting from tesla that's what i wrote in an article like removing like the lumber support on the passenger side and the ultrasonic sensor and all that like those are all things that people like raise eyebrows at because like it seems like unnecessary and that's one of them like okay like they probably save a few bucks on this but mullowai performance was probably already like the biggest gross margin that they had right now so

kind of felt unnecessary yep all right so uh our elon tesla only tweet uh bot uh apparently has been created and using python code in chat gbt so that's that's very exciting we'll just uh take that link whenever you have it um fun fact this is actually interesting if it's true and we need to see evidence if you end up canceling delivery of your tesla wait until the last minute

You'll get a coupon for $200 off or a free charger. If anybody wants to try this and send us a video of that happening, we would love to write a story on it. Hopefully we can get some people some chargers and some cash. Jesse Cstrand, why would Volvo have a car with a much smaller range compared to others? I love the C40, but I can go much further in my Model Y, which keeps me from changing.

i yeah i agree i think volvo does all the all the things that kind of new ev companies do they have a huge battery buffer um they probably don't do the optimistic uh mileage that companies like tesla have started to employ um the c40 and the xc40 are not terribly aerodynamic cars they're kind of uh chonky in the front

So they could probably... They're high, too, right? Yeah. Yeah, they're high, and they have big tires as well, which is great for stuff like, you know, off-road or, you know, other things, but not super aerodynamic. So they didn't kind of bend to those things. But Volvo's, you know, making the right moves, and I'm actually really excited to see the... What is that, the EX90? That car looks really nice. Mm-hmm.

Okay, here's a not best question. Is Tesla Shanghai exposed to the China demographic crisis? And I think that is the China demographic crisis is Elon tweeting about China's population no longer growing, which I think is probably a little silly to equate. Yeah.

What do you think? I mean, specifically, is this the Shanghai, like the factory? Or do you mean the market? Obviously, if the population is not growing, the market is not growing. So that will have an impact on any company. But I don't know why it's the Shanghai particularly. I'm not sure. Yeah, I think maybe we're running out of workers to throw at this thing. Any guess when someone brings an EV like the BYD Seagull to the U.S. market with lower price than a Civic or Corolla? Who and when?

I mean, so I just looked up the Corolla is like 21 something and the Civic starts at 25. We've already got the Chevy Bolt. Yeah. It's already done. It's happened. Custom ownership gets even cheaper than that. And yeah, I mean, like if you're talking specifically about the BYD Seagull, Candy tried to do it in the US at one point. Oh yeah, I forgot about that. That didn't work out.

Yeah, I think, you know, by the time you do all the things like airbags and making cars quite safe and giving them reasonable power and range, then you start getting, you know, up to 25,000. So I think the Bolt is probably the best you're going to get for a little while. How would you compare Rivian's challenges to Tesla's ramp in the 2017-2019 production hell phase?

Yeah, I mean, that's the good question, obviously. However, you cannot compare it perfectly because if you compare just the production, again, Tesla had already been able to build a car with a positive gross margin in volume and similar volume as Rivian is doing right now. And that car was a Model S. So now 2017, 2019, that was a Model 3, they issued.

And that was a whole new volume level that Tesla was trying to achieve. And yeah, there was a ton of issues and Tesla was on the brink of bankruptcy during that time. Had a lot less cash on end than Rivian around that time. That's true also.

But Tesla was much quicker to turn a positive gross margin, even though they didn't turn a positive net profit around that time. Gross margin was positive, and we're just not seeing that from Rivian, not even close. So, yeah, we need to see something happen. All right. Here's something that I think a lot of people are thinking right now. I now have to separate the car Tesla from the man Elon. I love the car, but sometimes cringe when Elon does says stuff.

Here's an informal thing. What if you had a bumper sticker to put on your car and it said...

I bought this car before Elon went full Elon. Would that be? Or I love the car, but I don't support Elon. Maybe people are still buying the car even without wanting to encourage Elon. Yeah. I would not. If you're in the market for a good EV right now and you have the budget to buy within Tesla, I'm not not recommending Tesla because of the CEO is saying some stupid things on social media.

it's still, I think, the best option, especially with the price drop. Especially if you can get one of those Gigafactory Texas MLY at like $50,000 before tax credit. Man, if you can get like a $43,000, $44,000, $45,000 MLY, that's a good deal right there. All right. Here's

Quick one, test the Model Y order page. It says $7,500 federal tax credit is in effect for deliveries until March 2023. Is that accurate? Please share your thoughts. Well, it's until March 2023 when the battery chemistry thing kicks in. Yeah, or at least they're going to release the guidance for it. Like it was supposed to kick in this month, but they haven't made clear exactly how that's going to work, the requirements. So, yeah.

IRS is supposed to give an update and basically there's a three months grace period happening right now where they don't have to get into the weeds about the battery pack in order to get the full tax credit. So yes, it is accurate and it might still keep the 7500 passports or it might not. That will depend on what the IRS in terms of the needy greedy stuff regarding both the battery materials requirements and also the battery manufacturing requirements.

All right. Norm SM says Wall Street Journal published today that Elon's December Tesla stock sale might trigger SEC investigation. You seen that one yet? Yeah, I've seen it. And it's a lot of conjuncture, to be honest. It's basically claiming that Elon might have knowledge that Tesla had some issues with demand issues.

but this has never even acknowledged them in issues anyway so it's not like so it's if yeah it's it's hard to tell really and you and also it's not like elon was selling stocks before the the man issue became more clear to the market and led to further drop in price he didn't do it to like save himself a few bucks on that he did it because

Twitter was losing a ton of money and didn't have any revenue and was about to go bankrupt. So he needed to funnel a few billion dollars through it. And the only way he can do that is by selling Tesla stocks. So even if there is an SEC investigation, he's going to found that Elon didn't do it maliciously. He did it because he had no other option. And the guy is like, I don't like how Elon is selling his stocks to Tesla and funneling the money to Twitter. I think it's dumb. I think it's stupid.

His idea that he can turn Twitter into this beacon of free speech is completely delusional. I think that at best you can make Twitter a less fucked up place, but you will never make it a place where good discourse happens. There might be some good discourse, but 99% of Twitter will always be nonsense in my opinion. You can maybe get that down to like 95%, but is that making a beacon of free speech? I don't think so.

But he's still completely allowed to sell stocks at Tesla and funnel it to the garbage fire that is Twitter. There's nothing illegal about that. If anything, if there's anyone at fault around this issue, it's the board. It's Tesla's board where Tesla should have communicated to investors that they were having some demand issues. But

They decided not to. All right. Last comment. Oliver Guerino says earlier today, a video on Tesla's YouTube channel was released informative short piece about the heat pump. We'd like to see more stuff of that coincides with increased activity of Tesla on socials. We were actually just talking about that before the show. But you know, I think that is though.

Because Tesla released a video in China, very similar video, just a few days prior. So I think Tesla is just like recycling the work of Tesla China PR, basically. I think that's what's happening. Well, I don't know if they're recycling it, but they're kind of riffing on it, I guess. Yeah. All right. Maybe one last question from William. Thank you. Are you guys satisfied with the Tesla Semi specs and data? Yeah.

No, we discussed that a bit before, but no, we would like to have a bit more data in terms of the weight of the tractor, the exact weight of the tractor itself, so we can stop speculating with the cargo capacity. That would be nice. We know that Tesla has a limit of 82,000 like any class 8 electric trucks, but to know the exact cargo capacity, we need to know the weight of the truck plus the weight of the trailer.

We don't have that. That's the big thing missing. And then we'd like to know an update on the price. I don't think that is the same price that was announced in 2017, but we don't have anything on that. So that's it. Thanks, everyone. Thanks, everyone, for listening right now. If you're still listening, an hour and one minute to the show, we appreciate you greatly. You're one of the real ones. And we're going to see you same time, same place next week. Have a great one, guys. Stay safe this weekend. Bye-bye.