Now we've gone to talk a Tesla and a boy oh boy. we've got a lot to talk about from new firings at Tesla What the heck is going on with the supercharger? Network And what does it have to do with the White House and billions of dollars? What's going on with Mr Old School Charlie Munger Lashing out at Tesla and what's going on with the European Union We've got a lot to cover. Let's see how quickly we can get through it. First, two days ago we heard roses are red, violets are blue.

We have a flash sale for you that's 69 off on the program. so I'm building your wealth expiring Friday at 11 59 PM we extended that flash sales, take advantage of that and get lifetime access. and yes, that is actually what I said two days ago. But then I Also followed that up with saying that two days ago, individuals at Tesla Buffalo New York ended up circulating at the autopilot labeling team which is kind of where you have minimum wage starting at 19 and you kind of sit and push a button like yup, looks right? Yep, no look looks wrong.

Yes, no, yes, no, yes, no, Yes. all day long. They were pissed about apparently not getting snow days that they wanted and uh, being monitored for how long they were spending in the bathroom. which I I Don't know.

What's more weird, the suggestion that the employee is concerned about people monitoring how long they're spending in the bathroom or the company monitoring potentially how long people are spending the bathroom. I'm not sure it all sounds a little weird, but they circulated a letter saying roses are red, Violets are Blue Unions start with you and somebody at Starbucks thought it would be a good idea. Apparently, like somebody who helped start unions for Starbucks decided to be a good idea to connect with people over at Tesla and try to start a union at Tesla And so they got about 25 people to put a letter together and email Elon Musk and say yo, we're unionizing and uh, pretty much every one of you called it in. not only the comments on the live chat or uh, in the uh, the what's it called, uh, in the comments on the actual YouTube video and what did you end up getting, Well, what you ended up getting was, as you all called it, you're Fired Tesla Fired all 25 of the individuals who started suggesting that they wanted to unionize.

Goodbye Unions Now Tesla has been slammed for this in the past. My expectation is even if Tesla were to get sued for firing people for threatening to unionize. although they'll probably use a different rationale, it would be years before that sort of litigation actually ends up playing out. So we'll probably come back to the roses are red, Violets are Blue argument in 2025 and by then, honestly, I think Tesla's going to be in a lot larger of a place than uh, well, where we are today.

Uh, now. another thing obviously that we've got to talk about is what's going on with the Tesla Supercharging. Network Now this is actually interesting: The Wall Street Journal did a phenomenal piece on this I think they they put it together the most clearly and then we'll get into Buffett and some of what's going on in Europe because there's a lot to talk about. Uh, but we'll look at this.

so Tesla is expanding their non-tesla Supercharger pipe lit and basically what, uh, what they're doing is look, they have 40 000 superchargers worldwide and the White House gives like massive Mega subsidies if you end up opening your supercharger Network to other electric vehicles. And this makes sense because the White House wants more electric vehicles in America. But the big thing that everyone's worried about in America is premature electrification of course. Remember the Dodge the Ram ad for a vehicle that doesn't even exist yet? Anyway, people have range anxiety when it comes to buying electric vehicles.

There aren't enough superchargers and a lot of superchargers are just not super. They suck. They're very slow from other companies. Tesla By far has one of the most robust supercharger networks, one of the most reliable networks.

uh, and Tesla now plans to open at least a 3500 new superchargers and existing 250 KW Chargers to drivers of all. EVS By the end of the year, the White House is bragging about how wonderful this is for everybody. It actually is a good thing now. Tesla is expected to receive potentially billions of dollars, billions of federal subsidies to continue to build their supercharger.

Network Because they're doing this now. think about that. That's incredible. So Elon Musk actually visited Uh with the Biden Administration about a month ago and I wouldn't be surprised if they ended up talking about the supercharger Network and how they were going to announce it.

Apparently, in addition to him actually visiting with the Biden Administration Elon Musk Participated in a call with their infrastructure coordinator and they discussed about basically. their discussions revolved around improving Highway charging and this right. Here is what I love about Elon Musk is he's a very reasonable person. uh, they they say here quote He was very open, very constructive and at the time he said his intent was to work with us to make the network interoperable.

A lot of people say hey, like is Tesla seating a competitive Advantage for doing this and I think the way to look at this is yes. To some degree the Tesla supercharging Network motivates people to buy a Tesla right? That obviously is a draw. However, if you now let other people use the electric vehicle Network What you really potentially do is you increase congestion For people who have Teslas you kind of take away that whole like Tesla Club feeling exclusivity when you drive through a mall and there's just like a row of backed in Teslas and it looks really badass. I Mean it's like the best ad ever and if you start seeing like Kias and Nissans or whatever plugging into the Tesla superchargers, it's kind of like okay, it's not unique to Tesla anymore.

Not there's anything wrong with Kias or Nissans. Okay, I'm just saying not unique anymore. But well, so let me first say yes, there is some form of uh, potential negative in sort of that competitive advantage or that Tesla might have. But I think the reality is people buying Teslas are probably not buying Tesla solely because of the supercharger Network they're either buying a Tesla because they want the full self-driving the technology.

How fantastic the freaking car is in terms of acceleration. uh, and and just how Sleek it is, right? you're buying it for all of these other reasons. And the supercharger Network I personally believe is just icing on the cake. Uh, and and the reality is, people who are not going to buy a Tesla probably just aren't going to buy a Tesla Anyway, in fact, somebody very close to me and I was really surprised by this, but somebody very, very close to me.

They actually I asked them I go hey have you um uh, they refused to buy a Tesla by the way and I asked them I go hey did you see my latest Twitter post and he's like no I uninstalled Twitter after Elon bought it and and I kind of like paused for a moment and then I just said the quiet part out loud and I'm like I literally never thought I would meet someone in person who actually uninstalled the app because Elon bought it and and he's like yeah, yeah, I'm one of them and I'm like I'm not even gonna start. It's like we could still have beer. but I'm not even gonna start because that's insane and ludicrous and silly. but whatever.

everybody is entitled to their opinion. My opinion is very obvious. But anyway, those people, whoever whomever they may be I don't dislike them I don't disrespect them for that I think it's crazy, but that's okay. I Also think in many regards, I'm crazy.

but then again, I think you have to be crazy to wake up at three every day and work until you know, work basically two jobs. but anyway. uh, which that's not to say that oh, working two jobs, no big deal. A lot of people work two jobs.

Okay point of this is to say uh, that people who are not buying a Tesla are probably not buying a Tesla for other reasons outside of like the supercharging network potentially being available to them, right? So the way to look at it is the minus of of of people not buying a Tesla because of opening up a supercharger. Network I personally think anecdotally is nominal. In addition to that, the plus is that Tesla's probably going to get billions, billions of dollars of of money to expand the supercharging network. which I actually attracts people to Tesla in the first place, right? because you actually get cheaper charging rates in the Teslas But it also potentially gives Tesla money to invest in their manufacturing ability.

So you're getting more manufacturing subsidies to actually produce the uh Tesla uh uh charging vehicles or not the charging Vehicles the charging stations. That's because if you actually look, let me see. where is it. Where is it? Where is it? If I look at housing in the Wall Street Journal article, they basically talk about how the Inflation Reduction Act requires a certain percentage.

here. it is that of the steel enclosures or housings needing to be manufactured in the United States starting immediately and I think Elon Musk is going to look at that and he's going to be very smart. He's going to go well. I Mean if you want us to manufacture more of these housings in the United States we're going to need some big old tax credits to help us expand Giga taxes or whatever, right? And by 2024, at least 55 percent of the cost of all components needs to be manufactured in the US Okay, hey, give us some bills so we can maybe mine more whatever we want to do in the United States So I actually personally think this is absolutely fantastic I Think this is this is great.

The loss you have is nominal. The subsidies you're getting are absolutely huge. Now we got to talk Charlie Munger in just a moment. But I Just want to on the topic of subsidies talk about.

Here's a Barclays piece. and I mean I'm seeing stuff like this daily about talking about how Joe Biden's inflation reduction or reduction Act is a serious competitive threat to the European Union because of how many subsidies are going into battery storage and electric vehicles tax breaks for manufacturing them like what we just saw for the EV network. And remember if you actually go through Uh Tesla's document on uh, you know what they end up like, how it's going to end up working. That's this particular document here.

You basically download the Tesla app and you can plug in other vehicles by just marking which charging stall you're at and then you pay through the test lab. I Do want to make it very clear though, on this note of subsidies and sort of a tangent, there is an additional cost for non-tesla members. So non-tesla members do pay a little bit more money. So I wanted to clear that up.

But anyway, back to the subsidy stuff. The amount of money that's expected to flow into State Support subsidies in the United States alone is expected to be somewhere around 440 billion dollars into energy storage, green, solar, electric vehicles, you name it. And the same is expected to happen in Europe to somewhat of a smaller degree, but also massive. So sectors that are going to benefit from the subsidies: mining, energy, semis, capital goods Autos chemicals, construction, materials, utilities these invest assessments are going to be huge uh and I mean keep in mind we expect not only the United States to throw hundreds of billions of dollars in tax credits and subsidies at this uh at Green vehicles and battery storage and that but also Europe to compete and after Europe Guess who else China massive Chinese subsidies 450 billion of euros worth of subsidies in China's Five-Year Plan to invest in Uh in in Chinese electric vehicles.

So the amount of money that you're going to get thrown into batteries and EVS probably over the next decade from governments is gonna is probably going to exceed a trillion dollars. I mean this is like a huge stemi check to the industry, it's absolutely insane. but you know who's not stimulating I Hate to say it, but it's Mr Charlie Munger Mr Charlie Munger has some uh Choice words for uh Tesla versus Byd so let's listen into that and uh, here we go. Question from Steven Spencer Uh, who writes in from New York New York He's curious why Mr Munger prefers an investment in Byd to Tesla Well, that's easy.

Tesla last year reduced its prices in China twice Byd increased its prices for direct competitors. We're so much ahead of by Itd. I Mean Byd is so much ahead of Tesla in China It's like a it's just. it's almost ridiculous.

It's almost ridiculous that that's actually not true. I Mean, if you actually look at the real data, what do you end up having is you have Byd? uh, selling half Ice vehicles and hybrids? Well, those are hybrids are Ice Vehicles right? and the other half are fully battery electric. If we just look at battery electric, Battery Electric vehicles sold by Byd were about 900 000 units in 2022 and a Tesla sold about 7 000. Sorry, 700 A thousand? uh in in China of the battery electric vehicles, right? So you're talking about 900 versus 700 talking about 28.

I Don't know if that's so far ahead. The numbers I think are a little bit more worth looking at and keep in mind Byd sells vehicles for 15 to 30 000. On average, the average selling price of a Tesla is knocking on the door of, uh, fifty Two thousand dollars. so you have a massively different audience.

you're appealing to smaller Vehicles versus larger Vehicles Let's also look at the numbers. when you look at the Byd investor relations information. What do you actually have for the numbers for Byd? Well, you're looking at numbers that aren't anywhere near Tesla's numbers. In terms of margins, you're looking at, maybe maybe a net margin for Q4 sitting around a 3.4 percent, it's better than it's been in the past, but 3.4 percent on Net versus Tesla's 13 to 17 percent net.

Bottom line: Numbers: Or if you look at the gross margins Byd gross margins maybe 13 14 Tesla and gross margin 20 to 25. but whatever. Monger Let's keep listening to you for a moment. and if you look at Byd which no mostly I've never heard of, if you count all the manufacturing space they have in China to make cars, it would it would amount to a big percentage of all the land in Manhattan Island and nobody ever heard of them a few years ago.

All right, let me jump to another question. This one comes from Michael Aseo who says did the this is regards to some movement at Berkshire some sales of Berkshire stakeholdings. Did the sale of some Byd and Taiwan semi shares have anything to do with the relations between the United States and China or was it for purely economic reasons? Well be what he's talking about. 50 times earnings? That is a very high price.

Oh, come on man, now he's bagging on his own thing. I Mean, come on. I'm starting to lose a little bit of respect and I don't want to go on for this forever. Here on Munger you know what? They've got their opinions.

That's okay, But look, this is where Warren Buffett and Berkshire Hathaway sold Taiwan Semiconductors see it at the pit of that blue line. There to me that looks a little bit paper handy. Now don't get me wrong, they bought low, but that looks a little bit paper handy. and now you're telling us how great Byd is with the lower margins and it's still trading for 50 times earnings.

You're basically saying it's trading for roughly the same valuation with worse margins and less expensive Vehicles than Tesla. In fact, Bloomberg themselves expects that margins for Byd will suffer more than Tesla's and this is despite the fact that Tesla has adjusted prices down a little bit versus Byd up a little bit. Again, substantially cheaper vehicle versus much more expensive vehicles in Teslas. Tesla's just became the third most popular vehicle in Europe And you know what? Look I I don't know.

I I'm a Tesla So maybe I'm jaded. but hey, you know what? Sorry Charlie Munger I ain't buying it. We got good news here on the anti-union move I Think you've got a good news here on superchargers? You've got great news on Uh Tesla Overall with margins, I'm a big fan.