Tesla Earnings: Pras on Price Cut Demand Boom

Yahoo Finance’s Pras Subramanian gives his take on Tesla’s Earnings Call.

You can see the entire show here.

Video Transcript

- You know what let's see what Yahoo Finance's Automotive Reporter thinks about this-- Senior Auto and Mobility--

- Don't forget the Senior.

- --Reporter. Don't forget the Senior. Yes. Let's bring in Pras Subramanian, Senior Mobility Reporter over here at Yahoo Finance.

- Yeah, that's right. That's right.

- Mobility now. Wow, Pras. Wow.

PRAS SUBRAMANIAN: Senior. Senior, right?

- Wow.

- When he trains automobiles--

PRAS SUBRAMANIAN: I mean, he did at the time. I want to talk about how after the price cut, it was the strongest first year to date that they've seen in their history because of those price cuts, so we are [AUDIO OUT] some sort of [AUDIO OUT] follow through with actual [AUDIO OUT]. The question is right, Soz.

Like, how can you afford that? Can you keep that, you know, at least 20% automotive gross margin going forward through that? So he did touch on that. Also touched on the fact that yes, Cybertruck, yes, not volume production, but lead production starting in the second half. And I think that was a really kind of a thing that they were glomming onto. But also, yeah, back to that production overall, you know, he did mention that we could build 2 million units a year this year.

But we can't control, you know-- what did Elon say? Kind of, like, the things that happen-- the events of the world, the global events. We can't control that. So we're not going to take 2 million.

- Do you think the market-- do you think the market gives weight to that 2 million number, then, knowing how they've kind of couched that?

PRAS SUBRAMANIAN: I mean, I don't know. I mean, maybe they're thinking about, yeah, maybe they could actually theoretically do this. They're not supply-constrained, right? It's not about-- it's more like a demand thing. So maybe they are.

But I have to tell you, they're actually kind of downplaying those sort of expectations, right, Soz? It's like, 1.8 million. They put that in there. That is not the 50% carrier from last year.

- No, it's basic math. I don't even know why they put that on there. They didn't even push back on that, Pras. It's just ridiculous. You would think, from a math wizard like Elon Musk, he would have gotten that math right on the earnings release. But again, he seemed very sleepy on this conference call. He has a lot going on.

PRAS SUBRAMANIAN: Yeah. I think you're right. So he even noted that he might need a nap. But I think you might be right. I think he said, late last night, I was talking to the AI team about Dojo and that. It's, like, dude, focus on the production, not on supercomputers and the robot optimists, right? It's, like, that's way down the line.