Big news from Elon Musk expansion plans When he's gonna sell stock again or is he? We also learn potentially about a cheaper car. What does he think about the FED Boy, we've got so much to cover I'm just gonna get right into it I Spent over an hour on a Twitter space is called Ross Came in, he talked to Elon directly. it was great. Uh, let's go through everything that we learned.

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So I hope to see you there. Elon Musk believes we are going for a hard Landing he would Express his openness to talking to Jerome Powell and suggested that Tesla would be open uh to a stock buyback. that Tesla board currently is open to a stock buyback. but Elon believes we need to see how bad this recessionary environment that's being forced by the FED is going to be.

He believes that we're all in an ocean together and even though he thinks that Tesla has recession resilience which I believe as well, he believes that we don't know how big the waves are going to be and we need to be prepared for potentially 2009 style waves. And and be prepared for those. And then we hope for smaller waves, right? So hope for the best plan for the worst. And he doesn't want to be in a situation where they spend a bunch of money doing stock buyback and then all of a sudden you get a 2009 style wave of recession and you're not prepared I actually think this is really wise.

He Also mentioned that it's not a should we invest in Tesla more Uh, for like Capital expansion or should we do a buyback. He kind of implied it's not an either or he basically said look, we're expanding as fast as we can when it comes to Capital invest assessments into the company if we spend any more he said he believes it would be Capital inefficient. They'd basically be wasting money and so they're okay doing a buyback, but they just want to see how the Market's going to play out first. So maybe if the FED u-turns you could potentially see Tesla do a stock buyback if Elon Musk and the board deemed the stockist quote absurdly low.

So if you see Tesla do a buyback, that means they think the stock is absurdly low. So what did Elon say about his stock sales? Well, he said that he doesn't plan to sell any stocks under any circumstances in 2023 and he potentially won't sell stocks for 18 to 24 months. So he potentially won't sell in 2024, Which means he might not sell any stocks again until 2025.. Now you have to remember some people hear that and they think Kevin it doesn't matter if he sells, it's a small portion of the daily volume in the stock.

But this is wrong because your take taking shares that were Hodler shares and you're selling them. Which means in order for the stock price not to plummet to the two to three and a half billion dollars every time he sells, you need to have that many more Hodlers come in to take his place. And unfortunately, retail just doesn't have that much money. Vandetrack said that two weeks ago, retail spent 650 million dollars buying the Tesla dip.

It would take over five weeks of retail buying just to offset one of Elon sales and that just brings you back to par with Hodlers. This is so you don't want to look at volume because that's trading volume, right? So Elon saying he's not going to sell is actually a bullish. Catalyst for Tesla's talk and trust me, we need bullish Catalyst right now because the stock is so far removed from fundamentals here on the you in the meantime or or in the short term personally. I think that actually creates and I I added to an active ETF I Can't mention the name here, but I add it to an E-active ETF today that has about 24K 25 exposure to Tesla Uh, and you know it's a pricing power thematic ETF and I did that because I think look, if Tesla shares double or triple that active ETF can rebalance without passing on capital gains to me.

ETFs are really capital gains efficient because they can do that. They can trade stocks without passing on capital gains and that's huge. So Elon Musk gave us this update about selling shares. He did say when it comes to new products, he can't announce any new products here.

But one of the things that he was kind of saying is that let me put it this way. the question he was asked was Hey when's that less than thirty thousand dollar car going to come out and he's kind of like I can't really announce anything but let's just say that's our goal so it's still a plan of theirs and he talked about how soon they're going to hopefully be announcing the next gigafactory location. They kind of left the door open to the idea that you know, is it Northeastern Mexico or is it somewhere else He didn't mention a specific area, but he thinks he says they think they have a location picked. It's probably the northeastern Mexico gigafactory and that is one that's rumored to either do cargo vehicles in the future after starting with components or doing a cheaper, uh, like a model to Tesla And that's potentially because the labor costs in Mexico are on average about three dollars and thirty cents an hour.

Compare that to the minimum wage in California At about fifteen dollars and fifty cents, an hour is about five times less expensive. Something interesting to think about and that's actually good for the economy there because it could drive up minimum wages for everyone in that area, which is kind of neat. Now regarding Commodities Elon Musk Did say there is going to be some lag time for margin costs, so input costs to come down so you could actually unfortunately see Tesla prices have to come down and costs stay high because there's about a six-month lag thanks to signed contracts for commodity costs to actually start coming down to that margin to expand again. So that's something you have to pay attention to in the short term.

As a Tesla investor, he also mentions that they are building a Lithium refining facility. That's because they don't believe that mining lithium is hard. It's abundant, it's everywhere. It's not like oil where it's rare, but the hard part is refining it.

and they think they can get their own Lithium refining up for probably their 4680 cells within the next two years. which is really, really exciting. Uh, one of the individuals in the chat talked about how in the 2009 recession there was a two a 36 drawdown in Auto Sales and I Think that's uh, that's you know, something to be kind of nervous about I Personally think we can offset that a little bit though, with the idea that hopefully, hopefully wealthier buyers are still willing to buy a Tesla, especially if they can get instant gratification, even during a recession. Remember, Tesla has a median income uh, for somebody buying a Tesla of over 120 000 120 to 140 000 so you could potentially see some resilience given that they're not appealing to lower end uh buyers yet, at least at this point.

Additionally, Elon Musk Uh, talked about how Tesla's kicking, but uh, he's a kicking ass. they're firing on all cylinders. He says the execution is outstanding. He stands by the prediction that Tesla will be the most valuable company in the world, and he's pretty confident that will be the case.

He seemed open to the idea about having a Twitter app on Tesla's and uh, when he spoke with Um with Ross Ross Actually, we have to give Ross Credit Ross got out of Elon that Elon won't be selling anytime soon, so that was great. Uh, Elon made it clear that he doesn't hate anybody, but he doesn't want people to subject pronouns onto him or other people. He doesn't think that's right, so he gave a little bit more clarity there. and uh, he does say that margin gives us room to cut prices if necessary.

Keep in mind they did just, uh, increase their credit to 7 500 for if you buy between now and the end of the year and a lot of people are saying the available inventory in their area is literally flying off the shelves across the country. Uh, so uh, just take a look, go to Tesla.com see the available inventory yourself, put your ZIP code in and see if that's true. See what you think? anyway? Uh, this was some pretty insightful stuff. honestly.

I I mean I think you know I'm pretty bullish on Tesla I Think one of the best things you can do. Uh, you know, look I am a financial advisor, but this is not personalized Financial advice for you I Think something you can can consider is investing in an active, manage, actively managed ETF that has high exposure to Tesla So that way if Tesla doubles, triples, quadruples or 10xes in the future, it could be rebalanced and you're not paying capital gains on it because you're just holding the ticker the ETF so you basically get the benefit without paying taxes. It's just like I'm so excited about that I Just learned about that within the last like 18 months and ever since then I've been like all in on this idea and and like sharing this idea because I just think it's the greatest thing ever. It's like it's like having an unlimited retirement account.

Uh, because you get the tax benefits and like a retirement account, right? So anyway, thank you so much for watching folks. We'll see in the next one.