March 1st I think Tesla's going to announce a vehicle? That'll you know they'll claim they're going to be able to produce for half the cost. You think they're going to announce a car? Oh yeah, yeah yeah yeah. I mean that they've They've definitely indicated that they're likely to. wow.

So I think they'll It'll be a new model that, um, you know will be, um, very economical and tuned to be a robo taxi probably. Uh, and that, um, you know it, it'll It'll just like set the entire industry off sites on a cost basis Again, as in, you know now kind of like the industry is trying to like design. How are we going to scale and and you know they're just I I Just think that they're designing for a cost of manufacture that is going to not have them able to profitably compete with where Tesla's at. But Charlie Munger says Byd is better.

I mean I Think that for one thing, the Chinese market is is like a very different Beast than the US market. and I do average vehicles with 13 14 000 there. our average use a new car price 47 000 somewhere around yeah I I Well, I don't know about the Chinese average, but but there is like a whole class of vehicles that's more like a neighborhood electric vehicle, so it depends on how many of those you bundle into how you do the averaging. Um, but you know in net I think within China It's more likely that Tesla sits at a premium tier and is not you know, competitive with with real mass volume manufacturers hitting the Chinese market that we'll see.

Um, but I I Think that there's like it's very clear to us that that, um, almost all of the automarket is going to become electric drivetrain based. Uh, you know we think within five years it'll be 90 plus percent of the auto market. We also think the auto market is going to be smaller because Robo taxis will take up more miles than traditional Vehicles So there's going to be a compression and Top Line Sales but you end up with like 60 million EVS sold in 2027.. Uh, and and we think you know Tesla is worldwide.

That is worldwide. Yeah, Uh, Tesla is going to command a plurality of that. You know, some 20 million vehicles or so. Uh, and um.

it's hard for me to see how at least a legacy automaker is able to successfully scale and compete. And then the startups, which I think designing an EV from the ground up is is like a better way to approach the problem. There's a reason that Ford ended up with way too much harness in its vehicle. like you said, and and it's because you know they didn't probably didn't take a first principles approach to design and um, yeah, I I Just think that there's like huge problems in in Legacy automakers.

Um, even leaving aside the pressure they'll face from Robo taxi and um, you know the fact that they have a lot of auto loans on their books that probably aren't going to look very good over the next few years. My idea is that we probably only really need a a 20 kilowatt battery for for most people, that now brings down the weight of the vehicle because you're carrying around a battery that's one-third the weight. Uh, certainly one-third the cost. Maybe even less.

And so it has an 80 to 100 mile range that's more than enough for your daily commute going to the grocery store as you mentioned, probably not. I mean it's like I think that was range anxiety is not rational as in as in um I think even the early EVS like the GM bolt they were kind of. that was their idea was hey, we'll deliver a vehicle that doesn't have. You're not going to go on a road trip with it, but it'll be your electric around town car right? I Think for the U.S buyer in particular, when somebody buys a car, they in their head say what is the most exciting thing I'm going to do with the car this year and it needs to meet that need.

So and they never do it anyway. Yeah, and then they might. It might even be over four years. It's like, why do people buy pickup trucks? It's not because they're hauling things around every day, it's because that one one day it's like they will feel really good when they need to dump a mattress in the back and they're able to do so.

and so I think when you're making a big purchase like that, it's you like purchase for that that tail event. Um, and and that's just the reality. they consumers not America that that might be. that's me indexing to the American buyer because I'm more familiar with that.

Yeah, and I think the neighborhood electric vehicle segment is really interesting and hasn't been penetrated with a compelling product. And it could be interesting. as in they all look like golf carts right now and they're expensive golf carts. but I Always thought I never understood why Apple didn't go after that segment.

If they were going to do a car, why not do like a fifteen thousand dollar Apple car that was an around town car. Yeah, or twenty thousand dollars either even. And you have like a set of buyers who would probably be like oh, that's it if it looked cool. Yeah, yeah.

like you would massively open up your design engineering space because you're no longer designing it to hurdle along the highway, right? 70 miles per hour, right? And so it could be like a really interesting product. Now on the robo taxi side. you know the um there because it's driving a bunch of people around. You still need a relatively big battery because they'll probably have to go 200 or 300 miles.

maybe even a day, right? And so then it then it's like you actually don't get down to that small battery size. That's interesting. So your thought is, uh, this next vehicle that Tesla might announce wouldn't necessarily be something smaller battery. it's Robo Taxi.

It's the direction I think so and I think I Mean if I had to guess I I Think that there's a optimization they could do in providing a robo taxi that at least has two or maybe four separate passenger compartments that are independent of each other. As in, oh, wow. So part of the problem with Robo taxi, in our view, is that you will, um, uh, you'll massively increase the number of miles that people drive on roads. Okay, because it's going to be much less expensive and much less convenient to ride around in a car.

Sure. Uh, and so it's like I don't go to downtown L.A because it's like an hour and 15 minute schlog and it's you know, expensive and an Uber and driving myself, It's like exhausting exhausting. Uh, but if instead of costing three dollars a mile, it costs 30 cents a mile. Yeah, uh.

and I'm just riding in the back seat. Not only will I do it, everybody will do it. And so traffic will get worse because because the pain of sitting in traffic isn't as high and it's not as costly to go from place to place. Sure.

Okay, and and so then, like you know, Uber had this great idea. They're like we'll do Uber pool people along the route to ride with other people along the Route and um, but that's weird people. Yes, people didn't use that because then you're like sitting next to a stranger, right? you know? and so uh, you definitely won't want to do that in a robo taxi because in a robo taxi, you're either by yourself, you don't even have the Uber driver right? You're just by yourself or with a stranger. No way.

you choose the stranger to save yourself. Like five cents a mile. Yeah, right. But if you can create a robo taxi that has like separate compartments that open up and it's like your own little pod.

and since it's like you don't actually care how long it takes anyway because you're just, you know, whatever. watch Netflix Anyway, then you could have something that enabled that kind of pooled concept to work. That's interesting. They might do that because they also have some um FCC patents that, but in my opinion are starting to suggest maybe they're trying to get Starling into cars that could potentially align with this idea.

Who knows. Sure I mean I Think that Starlink on all I Mean you know they already have Starlink for RVs I think I Think that? Um, you know and this is Sam's work. Who covers reusable rockets for us? But uh, we think there's you know, tens of billions of dollar opportunity and attaching star links to moving our low earth orbit satellite constellation comps to moving Vehicles cars, planes, RVs boats? whatever. Yeah, maybe you? Yeah, it's I think there's a like then you're weighing like um, yeah, the cost of the antenna versus like the utility you get uh out of having it on the vehicle but it seems like um, if they're doing something like um, uh uh, enabling people like connectivity in their ride.

Absolutely yeah. So that's actually interesting. So initially yeah, because you all have a very strong bull thesis on uh, self-driving Auto taxi um, the um I think your your Tesla projections almost exclusively in your bowl case, give most of your weight to the taxis. It's like two two-thirds of the value of Tesla from five years five years from now is in our view, driven by Robo taxi versus at the 132 electric vehicles.

Um, and but but I I suspect the product they'll they'll release will be a This is an inexpensive vehicle platform to manufacture that's optimized for adaptation to Robo taxi, but also we can sell it into people who you know are the um, kind of like median car buyer, not just the average car buyer in the US which is a lower price point so that would be the 25-ish thousand dollar car plus maybe some inflation since then, right? right? And yeah, I don't know what the price point would be, but think about, you know, half the half the cost of produce of the model three. And so if the average model 3 is selling for 50, yeah, maybe 25 or 30.. And why do you think they would announce that now? Why? Because I think that they are gearing up to manufacture it because they are even before cyber and semi? Well, no right. I Think they as in they'll announce that they're doing it.

They'll reveal just like they did with the Cyber truck. they'll reveal what it looks like and then they'll go through kind of engineering for manufacturing so that'll take a year or two. Yeah, yeah, yeah. wow.

Wow. Okay so uh, all in on Tesla except when Jerome Powell gets angry. Huh?.