So Steve Wesley a guy who manages about a billion dollars and a former board member for Tesla just dropped a few massive Bombshells about Tesla's Future Let's watch and then let's react first. Ford and GM are both struggling to sell Uh, just 100,000 units in 2023 here and that's compared to 2 million units for Tesla. So they're supposed to be catching up here. they're at less than 5% so if those numbers drop down, that hurts.

Second, Tesla's triggering a global price war. and I I think we've seen it. Tesla's had six cost reductions this year alone. General Motors Volkswagen Ford They're all trying to keep up.

But remember the big picture. Not only is Tesla selling a lot more electric vehicles, but their net margins are 12.9% Compare that with 6% at GM 4% at Volkswagen 2.4% at for if you're raising rates or costs at those companies that's coming at just the wrong time. Now the good news here is for consumers Tesla sees an advantage. they're seizing it.

The Chinese will come to that Byd are doing the exact same thing. driving costs down EVS are going to be cheaper than ever before, but it's going to put the squeeze on automakers with high cost structures. So GM and Ford need to be careful. this will be an interesting one to watch.

Uh, again, we want to see American workers getting paid more. but in industries that are struggling to be competitive and break even. And and make no mistake, the entire Global Auto industry is going all electric. It's a race to see who can get quality EVS to the market most quickly at a good price.

Tesla's done that a little better than any Uh one here to four Chinese are putting pressure on so the American automakers are going to need to get more efficient more quickly. I Just went through the gross margin numbers or the net margin numbers, but when Tesla is at 12.9% in Gross margins GM Ford lagging quite a bit, something's got to give here. So I'm hoping that with the new battery production and so on, other efficiencies GM and Ford can bring margins up and be competitive, but they're going to have to kick into a higher gear sooner rather than later. And the Chinese are coming.

Does Tesla make batteries? Yes or no. Have they made a battery? What they do is they partner with the cats, the Panasonics uh and the LG chem of the world. But in increasingly they've taken battery production inhouse. They have a cost advantage over virtually everybody else except for the Chinese and that is part of the reason they have such high uh, gross margins which is great news.

Second, they're the Masters it's selling OTA or over the year software Services that's great. and third, they lead the world in robotization, so that's what's giving them the price. Edge The Americans are going to have to keep up. the Chinese are coming quickly.

This Market's it is fascinating. There's going to be a restructuring of the GL Global Auto market like we've never seen before. Right now, here are the numbers: Tesla has 21.7% of global EV market share and again EVS are what matters. Every Auto Company in the world is going all electric.

Byd a fairly close second. at 16.2% there's a huge drop to the other Chinese companies in Volkswagen So you've got to get EV production up and going. You've got to do it profitably and Byd is really right on Tesla's heels. They make a good car.

low cost Chinese government subsidizing batteries. That's going to be the real Smackdown But there's a lot of concern about whether people want to drive a Chinese car. Not just because they're a competitive country, but because cars are now filled with Iot devices. And do you want a car that could be or frankly is listening to you I Think a lot of people are going to think twice on that one.

So the first thing you was talking about is the fact that Tesla is actually out selling Ford and GM As far as Electric vehicle sales about 22x, so Ford and GM versus Tesla Tesla is selling 20 times more electric vehicles than both these companies combined. So that's number one, number two. He actually said something very smart is that the price Wars that Tesla is engaged in right now are only killing four GM and the rest of them VW Because look at the end of the day, Tesla has significantly higher margin. As he pointed out correctly, significantly higher margin.

So when Tesla goes into these price, Wars It's essentially the same example of let's say open up a little hot dog stand and then Walmart decides they want to, you know, take you out of business. So they set up a hot dog stand right next to you and they sell soda and a hot dog for like 10 cents a pop just to drive you out of business. Because they can afford to take a loss on this little stand just to drive you out of business. This is essentially what Tesla is doing to the rest of the industry.

They can afford to take a loss with their margin. Not a problem at all. He did mention that Byd, the Chinese company is the real only competitor to Tesla. It's not forign.

GM I Wholeheartedly agree. but I have some issues with Byd, which I will mention in a second. Right now look at the end of the day, Byd is probably the closest thing to a Tesla competitor we have in the market right now is definitely not Toyoto Know Toyota dropped the ball completely on the you know it. VW had a chance, but they decided to terminate the only guy who had the vision to do so which was Herber D Their former CEO H forign GM is a train wack as we seeing right now with the UAW putting the final nail in their coffin, there's not really a lot of competition out there except perhaps the Koreans hyai Etc, but their scale is just too small.

at the end of the day, it's Tesla and Byd right now. But here's the crazy part Byd: beyond the geopolitical risks of being a Chinese company, which in itself are quite significant as we learned from Alibaba and Jack my story, the whole thing, the Taiwan uncertainties, etc etc. not to mention the China economic situation which is in serious di. States Beyond that fact, Byd is not playing the same Market that Tesla is playing.

Byd are not trying to develop any sort of full self-driving autonomy. Nothing. Their software level is very, very limited. They're only attacking the cheap, affordable car market.

That's what they're going for. their software, their self-driving the driver assist features. There's always going to be three four levels below Tesla. so they're going for that market segment that Tesla is really not attacking right now.

When Tesla drops the model 2 whatever, it's going to be called the $25,000 car which won't have the same features, then we will see the actual competition with Byd. Right now, Byd is playing this you know, cheap category with no competition and it's killing it for sure. The second thing he mentioned is that El is right on the fact that the UAW is killing whatever is left in Ford and GM I Wholeheartedly agree here as well. Obviously Forign GM cannot afford any more wage costs they're basically scraping by as it is.

Their cost structure is absolutely abysmal. They're literally losing money on every EV they're selling right now and EVS is where they want to get to. But now when your employees are asking to work one day less and get paid 30 40% more, I mean there's no way you can do it sustainably. Obviously, the UAW understands these numbers and what they're driving for is a bailout.

So the UW understands that what they're asking for is not affordable, not sustainable. But they know at the end of the day because the President and the government they love the UAW so much, they're going to bail out forign GM politically and they will get paid on the backs of the American taxpayers. The problem is that this is not sustainable. This communist way of thinking is not sustainable because you're essentially what you you're of making forign GM Non-competitive on the global stage.

Me, there's only so many times you can bail them out. Meantime, the rest of the world is going to bypass these companies, so that's not a good solution if you want to try and keep a forign. GM Globally competitive Bailouts is some some of the most commonest things you can think about. Um, look at the end of the day I Understand people need to get paid, but the you know if it doesn't make sense then don't do it.

If it doesn't make dollars, it doesn't make sense then it. needs to undo it. Very very simple now. Um, he said that for GM U should bring up margins and he's hoping they can do it.

How I can't see I mean they can't figure out a way to make EVS at the even at cost at this point how they're going to bring down cost I don't understand, especially with what seems to be an imminent raise across the board for wages which is going to be absolutely insane Now he was asked about the battery and I think the question was a little bit misleading and I'll explain. Look, um, she said well, does Tesla actually make their own batteries? And of course we can talk about the 4680. But look at the end of the day, um, there's a very clear definition of what making your own battery means. Obviously Tesla makes its own 46 80s.

The thing is like if I make my own if I design my own if I control my own battery I have my own technology in it. but I send it to contract manufacturing at a certain plant that's me manufacturing I don't have to physically build the battery myself if it's my design and I'm just using a contractor to produce the actual Hardware So that's what we're talking about here and probably at the end of the day within a few years Tesla will even do that completely 100% on grounds. So yes, Tesla makes their own batteries. That should not even be a question.

A very ill-informed question by the host here. I'm quite surprised that this even came up. Um, now at the end of the day, there was a question here about you know what happens with the entire EV industry? Who wins, Who loses And he mentions look, Tesla has 20% of the global market, Byd has 16% and there's there's there's a huge drop off. There's nobody there who's going to be number three.

God knows it's wide open. they and it's wide open because of the malpractice of the rest of the industry. Pretty much so. Is it going to be Toyota VW Who knows.

At this point, they're so lagging behind forign. Jam is probably at the bottom of the barrel here, unfortunately. But here's the thing. As I mentioned earlier, Byd is number two, but Tesla isn't competing with BD right now on the low $25,000 segment.

By isn't really even chasing full step driving at all which which will be the next big kind of esur for the next big auto manufacturer. Plus, as I mentioned, China is a train r so a Chinese company God forbid. So I'm not really confident on Byd for those reasons. If Byd can beat Tesla when Tesla actually plays in that segment, it's going to be very interesting to see I don't think they can.

He also talked about the fact that Tesla is currently valued at a reasonable rate because at the end of the day it's a tech company. It's a tech company. It's an energy company. It's growing at a 40% rate and it's very cheap multiples if you consider it not a car company if you look at a car company.

Yes, it's expensive, but that's again another misunder understanding of you know the the people who work on these talking head shows. Um, so yes. He also talked about the fact that Tesla has a huge manufacturing Advantage It takes them onethird of the time what it takes to rest the industry to assemble a car 10 hours versus about 30 hours for the rest of the industry. Um, how can you catch somebody who's better at you at producing cars who's better at you at generating the next big thing which is FSD Tesla is currently sitting at what almost 200 million miles and accumulating about a million miles a day? Nobody comes close to that.

They will solve FSD Autonomy driving first. Before of everybody else, their manufacturing is the best. It's getting better at the fastest space among all others. The Battery Technology is the best.

The 4680 is absolutely insane. Their supercharging network is unrivaled. They also have insurance business they they obviously they're developing. General AI They're talking about massive Global expansions with more factories underworld and they have Elon Musk the secret weapon which none of the other companies actually have.

Um, and look at end of the day, who's going to be Tesla I don't I don't know even who's going to be number two. So this race is over. He's 100% right! We're currently at this trying to figure out who's going to be number two and three because the Gap from number one is so massive and some people still refuse to understand that. and that's fine.

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If you haven't seen it yet on the side, this is a video of Ron Baron absolutely annihilating the CNBC panel about Tesla's future must watch. I'll see you in the next video.