Hey guys, it's Sasha Tesla has just held their investor Day 2023 and in case you missed the super exciting announcements or maybe fell asleep during the exhilarating presentation, I am going to share some of the highlights and my thoughts. just a quick trigger warning: Tesla is the biggest single position in my investing portfolio, but I am just going to come out and call things as I see them, we're going to be calling Spade Spades If you want the rose-tinted spectacle version where everything is perfect Tesla is going to make 8 billion Tesla Bots by 2030 and how Tesla Bots will then work in factories to make more Tesla Bots and then those Tesla Bots will be working in factories to make even more Tesla Bots that will then be working in Tesla Bots making Tesla cars. Well, if you want to listen to that, there are plenty of Fanboy channels out there. Go and check them out.

You know where they are. but Tesla stock is down over six percent in pre-market trading this morning because I'm recording this video and I am surprised it's not more than that. Elon Musk Famously sent emails to Tesla employees and Twitter employees more recently saying that you can resolve most issues without a meeting. instead of meetings, send a text or send an email and the vast majority of the meeting last night's regurgitated topics that were already known already announced not in any way new.

Tesla Spent the first part of the meeting discussing Elon Musk's Master Plan Part Three: The first two parts of the master plan had actual business specifics. The first one was very explicit. It said Tesla will build a sports car, then use that money to build an affordable car the model S and the model X then use that money to build an even more affordable car the Model 3 in the model Y and while doing that work on clean energy generation Tesla Hit that plan out of the park. Then came Master Plan Part Two and in that one, they said that they would work on solar roofs with integrated battery storage.

This one is a work in progress. I Guess solo roofs have really not worked for Tesla very much so far and I'm not sure that business line will ever really pick up then expand the electric vehicle lineup to address all major segments. Well, since part one, not much has really happened on that front. A Roadster was announced but is not coming and probably ever.

Cyber truck was announced they might be coming later this year. Maybe the Tesla semi was announced and a handful were delivered to Pepsi but the specs are still not public. You can go and buy one. Production data is not reported and Tesla will have to wait a few years until the Nevada Factory expansion is complete for any meaningful volume.

The compact car that Tesla was teasing in the run-up to University has not been announced. There was a throwaway comment in the presentation that this will be announced some other day as though that wasn't in any way relevant or important even though that was clearly teased in anticipation of the meeting. so still work to do on that part of the plan. Then we have developed a self-driving capability that is 10 times safer than manual and FSD is coming along nicely for Tesla.

For sure, they are the only ones developing this sort of self-driving software which isn't geofence that isn't based on HD maps of the physical objects in the streets, but we're still a long way away from genuine full self-driving capability that is is not a driver assist feature. Tesla is increasingly in hot water for over promising An FSD Tesla is now buried under a mountain of legal challenges pertaining to a self-driving Tech including a class action suit, over deceptive advertising, a Department of Justice criminal investigation, an investigation from California's Department of Motor Vehicles and endless Nitza probes. It recently transpired that an ad in 2016 was heavily doctored to show self-driving features that did not exist and it's easy to go and point fingers at Nicola Motors laugh at them pushing the truck down a hill while at the same time taking between six thousand dollars and fifteen thousand dollars for software that is persistently coming next year where ADS were showing features that did not exist and yet this neat update on Tesla was recently published in the Daily Upside. If you love reading unbiased opinion pieces written by industry professionals with a healthy dose of humor thrown in, you can also sign up to the Daily Upside who are the sponsors of today's video.

The Daily Upside is a completely free newsletter that sends you one email a day with all alcohol takes on the hottest Finance stories. You can read the whole thing while having a morning cup of coffee and it is 100 free. There is no premium membership, no upsell. All you have to do is give them your email using my link in the description and that's it.

You'll get super useful news in bite side chunks delivered to your inbox once a day in the morning. 650 000 investors including me I already signed up, so go ahead and click that link in the description or in the pin comment. and if for whatever reason you don't love it, you can always unsubscribe. So the last bit in part Two of Elon Musk's plan was enable your car to make money for you while you aren't using it.

That bit is nowhere near unless you're talking about letting people drive your Tesla on tour. So part one was very specific and achievable and Tesla smashed it out of the park. Part two was a bit more ambitious and a little more wishy-washy and Tesla is still years away from meaningfully completing on those objectives. And last night Elon Musk announced part three and part three is to switch the whole world to using sustainable energy.

And hey, I completely 100 wholeheartedly agree that this is a great ambition. It is a great long-term Target It is great that there are people working to do this. This is absolutely where the world has to go and based on Tesla's positioning, they will be one of the leaders pushing that agenda forward in the coming decades. and all all the Tesla Fanboys started drooling all over all these slides about how many terawatt hours of energy it would take and that this would only need 0.2 percent of the earth's land mass and that we have the Reserves of all the metals we need on the planet, blah blah blah.

It's important to remember that this was an investor Day presentation Tesla Said that this was a presentation for everyone, not just Tesla shareholders which this has sound great as a sort of sound bite, but as a Tesla shareholder and an investor, it is critical to separate your personal interest and Tesla's long-term Mission and a critical understanding of whether these announcements are good. For Tesla investors, it is incredibly important to take yourself out of the moment and understand that there is a massive difference between liking Tesla the company liking Tesla the product liking Tesla and what they stand for and what they're doing and at the same time trying to understand if this is good for Tesla The stock Tesla Talked a lot about a new architecture that will allow them to create and next generation card that will apparently cost half as much to make as the model Y which is amazing. Great, but no actual specifics were really given other than some pretty looking diagrams and stuff. When this might happen where it might happen exactly how is going to happen in which particular facilities this will be a fundamentally new way of manufacturing a car.

Instead of assembling all these different pieces, they're going to go and assemble giant chunks of the car and then put them together at the end to speed up the process. This will require a lot less need for factory space. This will be an enabler of making cars a lot more quickly. They have a new drivetrain that will have no Rare Earth minerals at all.

This is also amazing because nobody has been able to do this level of engineering. Then there was an announcement about switching to a 48 volt architecture, which apparently is also another major big step change in EV design. All these things are phenomenal, but remember that Tesla Announced the Cyber truck four years ago and production still has not started or as close. We're probably looking at the end of this year and best for the first cyber trucks rolling out of the Austin Factory and are longer than that for any meaningful scale production.

we've seen how it's taken Tesla way longer to ramp the 4680 cell production than they originally anticipated in the original plans. They were going to start producing mass-producing cars with a 4680 structural packs in the fall of 2021, and that obviously didn't happen. Innovation in Manufacturing is hard. Tesla is doing a lot better than many other companies.

a lot better than pretty much any other car company, but it is still hard. and whenever they do announce the Next Generation vehicle because they didn't last night, it will then take years for the first cars to roll off the first production. Lines By the way, in the presentation last night, Tesla did reiterate their Ambitions on making 20 million cars and a whole load of storage. But there was one important difference.

this time, the date of 2030 has now gone. it's just been deleted. It doesn't exist anymore because before today it was always 20 million cars by 2030. And everyone just parroted this as something that is out 100 going to happen.

If you don't believe it, you're just a hater. You're just saying stuff that you don't understand, you're a dumbass. And I've been saying for the last two or three quarters that Tesla's lack of new Factory announcements means that hitting 20 million cars by 2030 if that's becoming impossible. while everyone else was telling me that I'm an idiot and now suddenly the goal posts have shifted.

Miraculous I know because it takes a couple of years, even for Tesla who are doing it much faster than everybody else. It takes them a couple of years to go and build a factory from when they first start working on it, and then another couple of years for that factory to scale production. and you need a heck of a lot of factories to make 20 million cars a year, even if your production process is miles ahead of everybody else now. Three hours into this event, three hours into this event, at the start of the Q, a Elon Musk announced a new Factory that was already leaked by Mexican officials.

Probably the most significant announcement of the day is that we're excited to announce that we're going to be building a gigafactory in Mexico. The factory will be built near Monterey, but no specific dates were given at all. So presumably this new Factory is still in some kind of early planning phase. maybe three years at best from when production may start.

And here is the issue: as an investor, you do care about the long term. You do care about what the company is trying to achieve, but there's also the small element of a discount rate in company valuations. If you use a 10 discount rate which some might say is Conservative, then dollars that any company earns in 10 years time are worth 65 percent less in today's money. Evaluation: In 10 years, time is worth 65 Less In today's money, if you use a 12 and a half percent discount rate, those same dollars in 10 years are worth 74 less.

And there was a question in the Q A on when all of this Innovation is going to come Tesla Spent three hours talking about all of this amazing new tech. So is this being implemented this year? Maybe next year. Very exciting plans about the Uh, the Next Generation vehicle and powertrains and and batteries. I Was hoping you can maybe talk to us a little bit about the timeline for deploying this and it sounds like it's more than just a vehicle.

This is a kind of a paradigm change on how vehicles are assembled, how batteries are put together and everything. and does that also just get reconfigured into everything that you do. so the model wise that are being built here will be built very differently in the future. Maybe just give us some feel for what happens from here and what's the timeline for implementation? Well talk a little bit about that.

But um, broadly speaking, the most profound architectural changes will be in future. Vehicles Retooling a factory means bringing the factory down for an extended period of time and uh, that's that. Would prefer not to do that I Think so Tesla is not planning to upgrade the current model 3 Model y production lines to integrate the new manufacturing process because they would have then have to shut down the factory for months. So the first cars that will be maybe benefiting from these upgrades are waiting for new factories to be built because the existing facilities do not have space for major new production lines.

And so far we have one new Factory announced in Mexico last night. that is maybe three years away at best. and that's it. There's no new phases being built in Berlin No new phases being built in Shanghai no new phases being built in Austin At the end of the Q A there was another question asking about the new generation car and where maybe it was going to be built.

Thanks for taking the question I Have a few follow-ups on the next Gen vehicle. Um, First, when do you think we'll get a look at it? Maybe a prototype? Second, are there any details that you think you can share in terms of the the size, the content, the performance, and then the third? I Think you mentioned that you would produce it in other plants in addition to Mexico Should we take that to mean that you can launch it at an existing plant before you're finished constructing the new plant in Mexico I Think we'll actually have to probably decline that answer? Uh, we will have a proper sort of product event, but we would be jumping the gun if we were to answer your questions. maybe another question and again, the question was completely flat out ignored. An investor is asking a very pertinent a very important question based on what they've just been told and Tesla just didn't really want to say anything at all.

They didn't confirm the final specs in the Cyber truck either. And remember at the end of last year they were still saying the production of the Cyber truck will start in June. but I am guessing we're probably going to have some details in the final design and pricing if we were just three months out from the first. Cyber trucks literally rolling off the production line and being sold to customers.

Production in 23 in 2024 for Tesla is going to grow. There's no doubt about that because Giga Berlin and Giga Austin are continuing to ramp. So because they are such a low starting point, the total production volume for Tesla will grow this year. It's also going to grow substantially next year because they're still in the early stages of ramping right now.

But in the last earnings score Elon Musk Said the Giga Shanghai is at capacity and will not have any major output increases in the near term and Fremont is constrained. So while it's nice that we get shown pictures of Next Generation production Next Generation Powertrains, these will not be moving the needle on company performance for several years at all. And from 2025, the long-term goal of achieving 50 growth rates per year for Tesla will suddenly not be feasible unless something magical happens because Tesla doesn't have any new factories under construction to provide the extra capacity, the energy generation business, and the energy storage business will probably contribute somewhat, but the ramp there is nowhere near fast enough to provide that level of overall business growth. Growth in the long term is only valuable if it comes on the back of growth in the short and growth in the medium term.

If there is no growth for the next 10 years and growth only then starts in 10 years time, then for an investor, the stock perhaps doesn't look quite as interesting. Investors will be looking at their models and trying to understand where the growth is going to be coming from. In 2025, and in 2026, Tesla themselves said that they will need at least 12 car producing factories by 2030 to make those 20 million cars, and based on the current volumes of those 12 car, factories will have to have multiple phases as well. on average, and at the moment Tesla has four with one more announced in Mexico plus the small scale semi-production in three years maybe in Nevada.

Tesla's valuation is heavily based on a very aggressive rate of growth continuously over the next decade and Beyond and if that rate of growth slows meaningfully in 2025, because you know Elon Musk has been too busy saving the world buying Twitter to focus on building new factories and expanding the existing ones, that that may well become an actual issue. I Have a feeling that Tesla the company is going to do exceptionally well. The technology is astounding. They're clearly leaps ahead of any competition.

Their design is streets ahead of anyone else Manufacturing because but Tesla the stock is not the same thing as Tesla the company and even baking in a much slower rate of growth I still see a significant upside in the stock, hence why I am invested. but I will be lowering my personal expectations as I recently have been on growth after today and so will many other Wall Street analysts. and they won't be doing that because they are dumb because they don't get it because they don't understand the future bro. but because of very real issues that I just discussed.

And while these valuations may still be indicating the Tesla stock is undervalued, that the upside will continue reducing in those valuations until analysts start seeing indications that growth and the midterm is supported by concrete production announcements, concrete model announcements, concrete Factory build announcements, and concrete new phase building announcements. Remember to sign up for the daily upside using my link below is completely free and please do smash the like button for the YouTube algorithm if you found this video useful. Thank you so much for watching I Really appreciate it and as always I'll see you guys later.