Well, we've got some news for Tesla. Not only do we need to talk Investor Day lithium shocker, but we gotta talk about rumors around that small car. But first, let's see what Morgan Stanley has to say with their Tesla Investor Day Preview: Here's how EVS will be made. Dot dot dot.

Yes, that's literally the headline of the investor day. Uh, presentation preview here from Morgan Stanley and I Have to say the dot dot dot is actually a really brilliant placement of a dot dot dot. Now you might be thinking Kevin What do you mean like it's just an ellipse? It's not that big of a deal. Why would the dot dot dot matter? Well, the dot dot dot actually matters a lot.

I'll show you why in just a moment. First, remember what Brett Whitten said with extreme confidence that Tesla was probably going to announce a new vehicle on investor day. That kind of shook me to the core a little bit. Brett Witton's obviously from Arc Invest and I'm like, really it? I I mean I I thought the next Master Plan 3 the MP3 uh, who remembers playing MP3s on like a Walkman back in the day? Anyway, uh, Master Plan 3 MP3 you know I Thought it was going to all be all about scale, right, copy and pasting gigafactories which it may be.

but I didn't think they were actually going to announce a new car. Brad Whitton from Arc Invest thinks they are going to. but now I'm talking about this dot dot dot and why am I doing that? Is it? Because I have a flash sale going on built around Master Plan 3's reveal for March 1st when the mass and the Flash sales already begun but it'll expire on on March 1st. Well maybe or it has to do with this dot dot dot right here.

look at what Elon Musk says Elon Musk says Kevin's courses are amazing and you should join the private oh so I'm reading a different screen uh okay, Ev1 to t0 to Tesla Roadster the original the OG Tesla Roadster to Model S 3 X and Y to semi-truck to cybertruck space dot dot dot Elon Musk himself teasing the dot dot dot which is in reply to Tesla uh, talking about being the largest manufacturing employer and uh, you know, starting as a long shot startup founder 20 years ago in San Carlos And so this tease right here is really teasing, something missing something to come. and it's also fascinating because that's what bread at ARC Invest suggests. and it's also what at least this title is toying with from Morgan Stanley So what is Morgan Stanley say? Well, first of all, they have an overrate weight rating for the stock, so they're bullish. They have a price target of 220 dollars for the stock and let's just read what they say with investors a Tesla's investor day just one week away from now, investors are focused on what can change the narrative.

To continue to Stock's recent rally, we look for Tesla to unveil a suite of Technologies where crowd required for the mass adoption of EVS at far lower price points a critical component of Master Plan Three. Now this is where one of the things that we've talked about was this idea that if Tesla can reduce their margins by 50 percent or reduce their cost of goods sold by 50 on a vehicle, they could reduce the cost of their vehicle their headline price of a vehicle by potentially 35 to 40 percent which is phenomenal. Now some people challenged me on the math on that because they they in my opinion they were doing it wrong. They're trying to take like the pers to go like wow, 50 costs less of 0 earlier.

Anyway, let's let's just do the math together really quickly and then you can see uh, if this seems logical to you. So a model 3 right now uh sells four If we pick a brand new model three right now the least expensive Tesla vehicle sells for. here it is on screen 42 990. But you don't want to.

uh oh, I didn't get to really show that you don't want to take 50 of a cost reduction off of this number because that's actually not the number. You've got to pull the margins right. So if the cost of the vehicle is 42 990 and now what we're going to do is we're going to minus the margin, Let's go ahead and take off 20 as margin. today as things are still potentially relatively expensive today.

So if we take off 20 right now, the cogs cost of goods sold for this vehicle are Three Four Three Nine Two. If we can take 50 off of that, then what we're really doing is taking off minus 17196, right? So now we're saying Three Four Three Nine Two minus 17 196, which should just be half right? What we're doing with that is, we're saying the car now costs 17.196 So that's that means the new Cogs equals 17 196.. Well, if Tesla is trying to achieve a 25 margin, then that actually represents 75 percent. So we can just divide that number by 7 75 percent.

And if we divide that number by 75 percent, we get to a new vehicle price of Twenty Two thousand, Nine Hundred and Twenty Eight Dollars. Look at that. there's your 25 000 vehicle If they can reduce their cost of goods sold by 50 percent and they want a 25, uh, cost or a profit margin if we change this to 70, which would be a 30 profit margin, That is the long run goal, right? Thirty percent profit margin. Well, now all of a sudden the new vehicle price would actually be.

Watch this. It's Eerie 24 564 dollars. There's your 25 000 vehicle. So if they can reveal how to get their costs down fifty percent, the twenty five thousand dollar vehicle is basically in the bag.

Hey quick note: Ricky Carruth on YouTube Made a phenomenal review of his shadowing experience with me. So if you're interested in that, learning more about me or my personality and what I'm like in real life or those programs on building your wealth linked down below, use that flash sale. We've got a 69 off discount for you on all the programs on building your wealth. The most common right now are zero to millionaire real estate investing and stocks and Psychology Money which would come with trading, fundamental analysis, long-term analysis.

My thesis on the Market q A with me at Daily Market Open Live Streams and in the Elite Hustlers Course we've got custom live streams on the weekend. Wild. Uh, so as we wrote about in its 1913 all over again, Tesla's recent price cuts are close to unprecedented in the auto mode in Automotive history since the early days of mass vehicle production when Ford launched the Model T Henry Ford introduced the moving Assembly line in Highland Park Michigan in 1913, revolutionizing auto manufacturing. Subsequent deflation transformed the competitive landscape and drove out much of the industry's players at the time.

Now that's really interesting because if you think about it, who are some of the competitors that are not profitable on EV Ford is not profitable on 2020 on EVS probably won't be until 26. GM probably not profitable on EVS They're not showing us the numbers Toyota is not even trying, not even trying, right now. although they will in the future. Byd is barely profitable on on EV and they're probably only profitable because they're doing hybrids.

Lucid and Rivian are basically a joke in reference to profitability. I mean they're spending money, hand over fists just to get people to buy their cars. and Lordstown Motors I mean we don't even need to talk about them. They've produced like 32 cars and they just pause production because they can't figure it out.

I Think Ford's actually still under pause because of their their Uh production issues as well. But anyway, look at this comparison. they're making the Model T production line compared to Giga presses over here. Uh, it's uh, you know, quite quite impressive.

We think the investment community may be underestimating the obsolescence curves underlying much of today's EV and Battery Technology in production. It is very possible that Tesla's March 1st Investor day may have greater significance on the Market's perception and ultimately valuation for Tesla's EV competitors then for Tesla itself. In other words, maybe Tesla stock doesn't move much, but maybe just maybe what happens. the other companies start trending more towards bankruptcy because they realize they're not even close to what Tesla's doing.

and that just makes it easier for Tesla to compete. For Tesla to become a massive Mass Market manufacturer, introducing lower price points is necessary to have a meaningful impact on the carbon footprint. However, for this to be possible, Tesla will need to successfully lower the average price of their offerings. Ideally also cut Marge or cut costs to leading to into you know, sustained margins basically.

but this is their suggestion. We or with a stated Target of a competitive offering at twenty five thousand dollars, Tesla will have to make significant progress on their costs of good per vehicle. A redesigned interior of the Model 3 project Highland and the subsequent learnings could be a step in the right direction. Yeah, I mean this aligns with the math that we were just pointing out right totally aligns and this is where I I have long term had the belief that Tesla is actually going to be relatively Recession Proof Now I know that sounds like a joke because obviously Tesla has done horribly over the last year.

but I think a lot of that is driven not by Tesla's performance or their valuation. Sure, in part maybe there's some there get given that growth has moved from about 50 percent to like 38 percent, right? I think most of Tesla's Pro performance was actually due to Elon Musk selling and some people laugh at me when I say that. but then I don't think they know the data that remember Elon Musk sold about 24 billion dollars of Tesla stock last year. How much in billions did retail huddle Like buy and huddle last year? 15 billion? That means if retail just hoddled and bought and that's net right? 15 50 more.

So like if you bought ten thousand dollars of Tesla last year and you and everyone else bought another five thousand, so fifty percent more, you would have just broken even what. Elon sold. Okay, he milked like pardon my French here cover the children's ears. He milked the out of us.

Okay, but anyway. Uh, Tesla's Model Two. Okay, so this is potentially the idea that maybe the Model 2 will be what leads to these margins. Or will it just be a refined Model three? Who knows what does Morgan Stanley say Reuters Reported in in November that the aim of project Thailand is to significantly ramp the Model 3 components and interior.

Remember the numbers that I just showed you were based off the model 3. you could actually turn the Model 3 into the Model 2 pricing of a 25 000 vehicle. Like you don't actually have to announce a new, cheaper car even though there's some speculation of that I kind of. I've been convinced by what Brett Whitten at over at ARC Invest says and the convincing he gives is that you know what you do not need a cheap vehicle in the American Market because people won't buy it.

People want a car for that odd time, they're going to go a long distance. They don't want a smaller car. Now there is this suggestion that what about that design of a smaller car that Tesla teased when They announced their uh, their Shanghai expansions? We'll take a look at Uh, let's see here. Oh, hold on I Want to share the screen but I broke something uh Tesla basically a teased this smaller form factor Tesla in sort of a mock-up design.

There it is. it's on screen right now. Tesla has previously teased the smaller car, but maybe Tesla doesn't actually need that. Maybe they just need to make the model 3 so much less expensive to build.

They've got the 25 000 car in the bag. Alternatively, there's also this idea that a smaller like model 2 gets announced in China only. So for like the Chinese and Indian market where smaller vehicles are actually normal, they're not heavily. They're not super normal out here.

so that's possible. Continuing more with Morgan Stanley Here, images of the model 3 with a covered front rear end have sparked further debate about whether the exterior would also see changes. Why it matters? Well, obviously because of margin. And then they say here.

Ultimately, we believe if Tesla is to successfully fulfill the goal of having a 25 000 model, there will need to be further improvements related to the gigapress and Battery manufacturing. Now look, battery manufacturing is great. I mean the 4680s are phenomenal, right? We saw that on battery dim. I Do have my speculation though about how great the 4680s really are.

Now I Know that sounds kind of Blasphemous as potentially like a Tesla Bowl but uh, you know we could jump on over here and just sort of draw this out. but I Want to ask you this for a moment and this is just me being super jaded. Okay, super super jaded. but watch this.

Jade Okay, and I think it's mind-blowing Jade Okay, I'm gonna draw a very bad drawing of a battery and let's call this. Have you ever heard of a C cell battery? Of course you have. They're the big fat round ones right? And then have you ever heard of a D cell battery which is bigger like you put it in your Nerf gun, guns and stuff, right? Okay, like I don't know exactly what the numbers are, but the D cell is obviously 25 larger. You use like 25 fewer cells.

It's got more energy, right? The 4680 in my opinion, might be cheaper to manufacture and create like cost benefits of maybe 15 to 25. But is it possible that some of the excitement around the 4680 and again I'm tinfoil ahead? I'm not an engineer here and I know they're going tablets design? Maybe it'll be cheaper to manufacture? Okay, we can get rid of Cobalt and stuff on, but is it possible that a lot of the excitement around the 4680 is is just because it's a larger cell, right? I Mean, think about it when they pitch on battery day. Uh, Hey Look, it's it's got more energy or whatever. Well yeah, it's a larger cell than the prior battery.

So like, for example, let me show you this this screenshot over here. if I show you this screenshot from investor day and then I hide myself, they're showing larger cell that has five times the energy, sixteen percent more range, six percent or six times more power. I'm like yeah, it's a bigger cell, you know, like I'm sorry a little tin foil you hat there. Don't get me wrong, I do think there will be some cost improvements, but I think the better battery is really just about better margin for Tesla which obviously has a Tesla Vestro I'm a fan of, but you know I I I don't get as excited about the 4680 as other people do.

sorry I just I just tin foil hat in here a little bit, you know? anyway. Uh, so I mean like eventually you know I Was talking to people about this yesterday as we were looking at real estate and one person's like, you know, maybe they'll just have one battery cell in the future and then we're all joking like this battery is a thousand X more powerful than the 4680 because they use about a thousand forty six eighty cells per car and it's like, well, if it's all one cell, it's a thousand X more powerful. It's like you didn't really engineer anything other than a larger battery. So right again, I'm not trying to tin foil hat I Just think some of what we saw on battery day was kind of clickbait I Hate to say it.

But anyway. so uh, announcing the introduction for the the Giga press of the model Y at battery Day 2020. Okay, now we got five Giga presses. Obviously they'll be the Giga press for for the Cyber truck.

Okay, these are things that could help us reducing uh uh, components right. Going from 80 pieces to one of the rear floor, going from 90 to 100 pieces to one other structural components. Whatever. Like all of these unibody castings, Big deal.

Uh, and so look at Holy Smokes Wait, what is this? Our forecast has the global Tesla Oh. Car park. Okay, okay, okay, yeah. uh.

so basically they Morgan Stanley actually thinks that Tesla's going to get to 33 million vehicles on the road by 2030 and they think that Tesla's going to deliver 7.2 million Vehicles by 2030. Okay, uh yeah. I think Arc invest is at like 20 million vehicles and I'm about 4 million for 2025.. Interesting.

Okay, uh, they think we expect 2.6 of that. So about a third of that to be the model 3 or a future compact vehicle I think any future compact vehicle will end up just being in China Okay, fine. front end gigapress is now available. 4680s running off the line? Fine, lets you change sort of the structural battery pack.

That's another benefit, right? Obviously, structural battery pack. helps. Gigapress has multiple advantages. Okay, I mean this gets a little like now.

they're just trying to get a little bit you know, detailed here showing you how they're going from look lots of parts to one part. Ooh, lots of parts to one part. I mean we've all seen this kind of stuff before. Uh, this is quite interesting though.

they've got there. You know this whole presentation? sort of reiterating the structural uh information that we learned on battery day like hey, look, you know, planes put their fuel in the wing so why not put our batteries as part of the structural elements of the car? So that way, uh, we we have maybe a stronger car that is more simply designed to increase margins. So in other words, what they're really suggesting Morgan Stanley here saying hey, um, we're just going to give you an update on all of these advancements that we've made in manufacturing to get, uh, margins up? That's Morgan Stanley's take here. But I did promise Steve that I would talk a little bit about Commodities So let's just touch on Commodities a little bit for the lulls.

so uh, sorry Steve but Lithium prices are plummeting lithium prices even though production has remained stable. apparently. in China, you've got a substantial decline in EV demand which is a potentially red flag for Tesla unless Tesla is the one holding up demand and other EV demand is slowing, although that's unlikely. that's kind of like the Goldilocks hope.

Apparently the China reopening has not really supported much of a floor in Lithium prices and Lithium prices are down 30 percent in China. And recently here and demand is down 52 percent for Lithium in China and Lithium prices in America are down about 10. Now that's quite interesting and maybe actually really good for Tesla margins as well. And who knows, maybe we'll hear about that as well.

Uh, on investor day, but what do we have over here? Goldman Sachs Talks about this being the first leg, potentially of many lower for Ev Uh. pricing on Uh pricing pressures on Lithium Lithium now dropping to a 12 month low, broadly unchanged production, leading to a rise in inventories and a bigger correction here than expected for Lithium pricing. Obviously some other Commodities are still moving, but apparently here's some charts: Weak battery supply chain activity has halved Lithium demand in China. Catl's actually been reducing their prices, trying to become more competitive.

Catl is a Chinese battery manufacturer. Tesla actually buys a lot of batteries from Catl and they're actually reducing their pricing. Very interesting. Why would Tesla consider buying a Lithium? Miner If prices are going to come down and say down, damn Checkmate Steve's back at it again.

Damn it. that's it. Cancel the deal, Don't buy the mine anymore. That wasn't nice.

Steve I was supposed to be right. Yeah, that's a good point, but but anyway, uh, look I mean Commodities are very volatile. Uh, but obviously if commodity price pressures can come down and Tesla can buy cheaper uh batteries from Catl Lithium prices come down. That's phenomenal, right? That ultimately helps because it on the way up, they've been hurting margins more than I expected I didn't think Lithium would I Know that's a big deal, but I didn't think it would hurt as much as it has for Tesla But but it has been so uh now we got Muhammad Alerian saying the Market's starting to doubt whether the FED will ever get to two percent.

I'm so exhausted at all this talk about the January reports over and over again. but we'll see what happens as the day evolves and then obviously, uh, in in the next season here. But anyway, that's my thought on uh yeah. Okay, so there's a question about whether this this drop in Lithium is seasonal.

This is this weakness is greater. uh, and this correction is greater than what would be expected for seasonal adjustment that's talked about as well in the Goldman piece. And they talk about basically, uh, they go into so much more detail honestly. I don't really want to go into it, but but yes, that that is talked about and they suggest that this is worse than typical Uncle Jesse wants has a message for you Steve Uncle Jesse says go fondle your rocks Steve.

.