All right welcome everybody uh. I am going to hope that everything works out. I'm gon na just uh unless a few settings, but we're going to be talking about the tesla q3 results. These are going to be coming out in about 15 minutes, hoping he was hoping um and as soon as they come out, we are going to go and look through them.

We're going to look at all the data we're gon na quickly try to look at. What's changed, what the big stuff is just before we go and jump in there. I'm gon na just share some of my thoughts about what uh, i think, might be happening in there. Some questions that i think will be interesting to hear the answers to, and just just some of my personal opinions and also what the street is apparently expecting.

Uh the street is expecting the street has been expecting stuff for a while that was considerably lower than what i think most other people um in the industry, uh or analysts were we're. Looking at people, certainly who are a bit more tesla focused, but it's kind of interesting, because these have just moved. I was just checking before the video and i was looking through some of the um analyst reports and some of the updates on the usual websites and there's been um. Quite a big shift so i'll cover this in just a second um at 10 30 uk time, which is what is it 5 30 eastern time, which is 4 30 texas um? We are going to be hearing live from uh tesla with an update, so it will be interesting to see because we're not sure if elon is going to be joining this in the last quarterly update that they did.

Elon said that he will no longer attend. Necessarily all of these it would be quite interesting. Does he attend? Does he speak for a large part of it, maybe only a little bit uh but giving us the first one that they are doing um after announcing that texas is now the new hq for tesla i'll, be surprised if he kind of snubbed this one i'll say. Maybe he'll do this one as sort of the last last one, but i'm guessing um zachary the the cfo is going to be leading charge.

Maybe we shall find out a lot of changes, but anyway um last time out in q2 uh we had a pretty substantial jump in revenues and we had a substantial jump in net income and a lot of people are predicting both those to continue. I am not sure that that is going to be necessarily the case to the same degree that some other people are saying so last time that we had um automated revenues of 10.2 billion and total revenues of just under 12 11.958 hello, everybody um. I've got everyone's on here. Actually i'm gon na pop this chat out so that i can so i can see what you guys are saying on this screen.

I have a lot of screens. I have one unused um good evening from england. I am in england uh in case everyone's wondering why it's kind of dark um. I need some more lighting, some better lighting anyway um, so 11.95 8 billion in total revenue last time out and 1.14 um gap, net income, 1.6 non-gain net income, and that was that resulted in above uh.

One dollar eps on both metrics and people got very, very excited by it. Um and people are saying this time because the cars have gone up so substantially because last time out, we had just about uh over 200 000 cars in the quarter, and this time we are more like pushing 240 000. We have um an interesting situation where suddenly people are saying um uh, it's gon na be a blowout. It's gon na be completely crazy and if you have been following tesla shares over the last few days, you will notice that uh the share price over the last week, uh also has just gone berserk.

It just went through the roof, and this is quite unusual, now share price does with tesla. Very often i checked the last like year and a half two years worth of uh results just before this and the what the share price it it does. This every single time kind of like slowly moves up towards earnings and then there's usually a bit of a sell-off, even though every single time the earnings are quite good and the numbers in the earnings are quite good. So i expect probably the same thing to happen.

Not that i particularly care uh, because usually that drop-off is not very long-lasting, but at the moment there's just so much going on and we're in the same sort of situation as we were when the shanghai factory was launching. That was two years ago in 2019 and we were in the same sort of when is exactly gon na happen, and hopefully we'll get some of the answers on berlin and austin in a second, but it launched eventually, the first cars began being um sold to and Delivered in december 2019 and the share price kind of began climbing for a whole host of reasons um after that, and and i think that if we do see a sell-off, i think it may be relatively short-lived because of the huge volume of things uh coming. University's short span of um span afterwards anyway, so the market has. Apparently the market was staying somewhere in the region of 12 and a half like pushing towards 12 8 12.8 billion in revenue numbers, but um earlier i was looking um.

It was like 13 2. I think was the sort of consensus i was looking uh about 20 minutes ago. Um mine is a bit higher, i'm not sure if you guys have your opinions, whatever i'm kind of expecting to see somewhere in the region of 14.4 billion um unless their energy is going to jump and show something interesting. We're going to talk about that in a second as well um, so i'm spending about 14.4 billion, i'm actually expecting the net um gap income to not grow as much as some people think people are saying it's going to be 1.8.

It's going to be the market! Uh, a lot of people on street are saying it's going to be 1.8 and i actually think they might not hit it if they have been investing more money, as people expect into some of the um ongoing construction. So obviously, there's the new um battery mega factory that they are building in california. It's not a giga factory, but they are spending by some accounts, quite a lot of cash. It's also in california.

It's also not too far away from the fremont factory. It's a pretty busy part of the world pretty expensive by the world in taxes as well as in dollars um. So what so we'll see by that? No nuns! This time somebody say what about the nuns uh we're we're not going to be having uh shareholders speak in this one uh, hopefully, but we're going to have one shareholder, who has a a couple of shares, called elon speaking but uh um but anyway. So i i'm probably thinking that it it's gon na vary.

It might stay relatively low, maybe like 1.5 1.6. It just depends it's hard to know what they've been spending money on anyway uh. What are people saying? Hello, everybody um, okay, so some of the updates that i want to hear about - and - and this is what's gon na happen by the way for anyone's just joining uh - here's what's gon na happen in about 10 minutes we're going to see the results come out. We're going to go through them, we're going to go through very quickly.

Some of the really highlight important things. Just like pick out some things, then we're going to in detail go through the results, because we have the time. Unfortunately, uh we're gon na have to wait an hour and a half from when the results come out until the shareholder meeting starts um. I think i'm ryan saying this uh.

That was let me just double check. That's what happened last time: uh yeah, 4, 30 pm central time, uh, 5, 30 eastern, so we're gon na have to wait an hour and a half um for the shareholder meeting to start so we're gon na have a lot of time to go through the document. In detail and pick up some important um things and i've got a few things that i'm particularly looking for that we're gon na get uh two in a minute, but the questions i want answered on the conversation after - and this is the bit that um, i'm really Excited about by the way, so if, if you're, joining um for the whole thing, we're gon na be here for like three and a half hours, probably so, strap in get yourself a cup of tea. Look, i got a cup of tea um in a in a very geekazoid mug.

That uh has a joke, which is a very so i'm not gon na go into the joke. It's it's. It's true giggle sword anyway, so we want to know what's happening with the texas and berlin factories uh, because we didn't get much of an update in terms of the specifics from elon last time around at the investicle two weeks ago, but it it um like it. It's sort of up in the air people are saying that both are very like, although austin still has a bunch of you know like glass panels missing and earth piles outside and stuff, they are saying that one of the production lines is very much close to being Ready and with berlin they're saying that um they're also ready on a production line-ish, i think like they could be starting within weeks, but they're delayed by paperwork which, by the latest accounts, is delaying it to at least sometime in mid december.

For the start at the earliest, because the german authorities have to sign up for factory before they can go and open the factory, so so it'll be interesting if they give anything more concrete than that like are we going to be seeing cars read the factory this Quarter and if so like uh we're talking, maybe november opening, he did say that at the shareholder meeting this is before the latest news about berlin came out that he expects that berlin. I think it was you're, saying uh i've lost, i lost track now, we'll be uh producing and selling and delivering cars next month. I think it was austin, but i'm not not necessarily convinced because it was so. It was elon time and elon is very well known for kind of saying that everything's gon na be ready in two weeks and then it not being uh the case so so.

Take that with a pinch, talk also once and really want to know, what's happening with the 4680 batteries. There's not been that much update that they kind of the shareholder meeting said that again, there's not much time since then, but they said that they are not expecting any sort of ramp production until later on next year. Although it's kind of weird, because it was quite a long conversation and elon at one point - er first said that they are now producing at this factory in california, enough uh of these 4680s to start production on the model wide line in austin. When that's ready to go - and then literally two minutes later said that actually there's not gon na be enough for producing cars for several months so which one of those is true, we shall have to find out all right anyway, uh cyber truck um it got delayed.

So he said at the shareholder meeting that they're not gon na they're not planning to release it and begin delivering it until late next year at the earliest. So i took it this probably not gon na be seeing it next year, probably gon na be the year after but um over the last few days, um a few videos came out, they have uh shown them test driving the truck around and it's been adjusted um In a sort of pre-production way, so they've uh lowered the front of it. They have made the windscreen longer the bonnet shorter, so they're going to adjust it to be more pedestrian, safe, they've added wing mirrors which you didn't have before, for you know legal reasons, because you have to have them elon, even text when somebody pointed it out. Elon uh put on twitter that they are putting the mirrors on, but they're, making them easy to remove by the owners if they choose to do so.

Um, which brings me on to the next point, which is um, there's been a few interesting appointments over the netser. So this is the organization in the us that oversees uh the safety and the manufacturing of like cars, amongst other things, uh amongst other transportation and stuff, and they just appointed a couple of people that um are quite um. How should i put it? Not tesla friendly, one of the missy cummings is particularly causes stir because she's been very publicly against tesla. For some time she has tweeted a lot um saying how much she hates elon musk, even tweeted videos with uh commentary.

You can go and look it up. If you want to where she very openly basically suggested, she would quite like to punch him and stuff so that person who is still on the board of a company that is trying to develop lidar and sell added technology right now. Being the person who is going to be a senior advisor to the organization that regulates the industry, that's going to be interesting and sounds like this may be some kind of conflict of interest there. Maybe, ah it's possible, you can make your own determinations.

Um there's been one other um thing that i noticed recently that i'm not sure if, if you guys have heard about or anyone who's really noticed, but on the tesla website, i'm gon na go and find it now because it'll take me forever. But they have this thing where they show you, what all the different factors are gon na be doing and um. When i checked a couple days ago, um, the texas uh factory, bit of the website, had the model 3 removed from the list of things that they are planning to manufacture there. So they were listening model y, the batteries, etc uh cyber truck, and they were moved to the model three.

So the the interesting question is: does that mean that they are not planning to produce model three anymore? So i know model y was the first production line of a planet to start, but does that mean that model 3 will not be produced, or does that mean that maybe they are going to be adding it later or are they going to optimize it and basically Do texas produces all the model? Wise and fremont produces all the model - threes. Maybe i i don't know being from c, because that's something that i haven't heard many people pick up. Energy progress is really going to be interesting. I suspect the numbers are not going to look very good because elon said that they have not been putting any effort into it.

They've been prioritizing all the batteries pretty much, they have available for the car part of the business and he said that it's only going to be second half next year, when they're going to be able to prioritize the energy business and begin really expanding it. But at the same time, they've just got their license to operate as an energy provider in texas, they've, just uh gone and done a bunch of um, interesting moves and houston were setting up a big battery plan so be interesting to see. If something is happening over there, somebody's saying amd stock is something happening with amd that i need to know about. What's doing it's not doing very much today, uh? Well, the the amd announcement.

Isn't that when is it in a couple weeks, uh, that's one of my other big positions, so we'll see what happens with that all right, so we're three minutes out and um. Let's just check uh, what's happening, nobody's happening right now, but um, let's just quickly um check check check a few things that i want to go and look at the moment. This thing comes out: first, um automotive revenues; 10.2. Last year they produced almost 20 and more cars, so well delivered uh uh twenty percent ago.

They actually delivered more than they produced this quarter because they because the end of last quarter, they began. I think manufacturing the model s plaids, which they didn't have time to deliver, because there's only last few days and generally it kind of fluctuates um. So hopefully that means that we are going to be seeing a quite big uptick, but also a couple of things happen. The prices have been going up.

They stopped selling the cheaper versions of all of these cars um during this quarter. So in the us europe et cetera, you couldn't buy the basic versions of them, the cheaper versions, so that should increase the margins, hopefully, as well as the total revenues per car. So um we'll be seeing some interesting uh movements on that. I expect that the those numbers are going to be going up quite considerably um next um, i'm interested to see that there's the thing we're gon na i'm i'm essentially not opening it, because i want to open the real pack when the time is right, but um Interested to see what what's the factory they have a part of the standard report they produce, which talks about which factories they have.

Okay, markets have closed, so shareholder deck is going to be coming within the next, hopefully minute or two last time. It was actually like a couple minutes later. Um we'll see if somebody suddenly sees it um, holla and um on that one for texas, berlin. It just said model y and construction, no update and for shanghai said greater than 450 000 cars, but is now operating at an annual run rate of more like 670 to 680 000 cars and california has scaled as well.

California previously said that they have a capacity for a hundred thousand model s model x, um per year, which is above, where they've like been producing them for some time, even before they closed the production lines, the beginning of the year to refresh them for the new Versions, they were still only making about 16, 17, 18 000 of them a quarter so uh we shall find out kind of uh. What that's saying, but also just sometimes it's like the little things that they write in one of the paragraphs where the really interesting stuff is so we shall find out all right. Let's see have we got an update, no you're saying have i got the popcorn, i haven't got the popcorn, i should have made more tea. That's one mistake i made.

I only made one cup of tea given we're here for three hours. That might not last me very well well, i might have to go and quickly make one. The moment elon starts speaking. Otherwise i'm going to lose my voice.

Now people are talking about five or md yeah yeah um. Oh some of my some some of the stocks. I particularly like i've been talking about. Let me do doing more conversations about them from slightly different angles and trying to share some insights um.

I sort of slimmed down my portfolio recently and focused more on the companies where i see the bigger wins, uh happening. That's been playing quite well for me. I used to do this monthly video, where i talk about my portfolio and uh, not my whole portfolio, but just like this test portfolio trying to beat the market and literally nobody watched that video every month i made it. It took longer than all the other videos and nobody watched it, so i stopped doing it, but it's going quite well that one actually uh um made a video with my five most popular stocks.

At some point, all right, we still haven't, got where's my shareholder deck. It's two minutes in come on. Um we won the deck. We won the deck all right, um, the the the interesting stuff also is going to be further down um, so the pack usually has a bunch of like the the key tables.

Then then, the stuff by their factories, then some just insights and updates that are more media friendly and then we get the numbers further down. It'd be interesting to see because obviously they had the bitcoin holding in there they're still holding did they magically add to it. For whatever reason, although there was there, wasn't any announcement about that um sasha, are you beating the market like those videos, i am beating the market tom, i think, like my annualized run rate is like. I can't remember what it was 100 something percent and uh the market at that point was 3.7 or something annualized so um, it's probably a bit better for them, because the markets had a really good week.

So the the gap is probably reducing for sure. We shall see uh, we shall see what the lot this is like still only what half a year or something so we're still very early stages of that whole thing. Uh thoughts on bitcoin, i'm sure i'm going to get a lot of questions. I don't have very many thoughts on bitcoin um.

I love the technology. I love the concept. I am very interested. I was very, very interested in it, like i can't remember like say about nine years ago, uh 10 years ago, but um, but the problem i have as with lots and lots of things crypto uh to do with crypto.

Is that the the vast majority of what the people are doing with it - or you know like this whole, like uh, investing to get millions of percent and all the tokens and the block like all the stuff in the crypto space? That is not really pushing the sort of the agenda that i think was created for and that just that just saddens me a little bit as a mathematician as somebody who just um likes the pure version of it, but really hates pretty much everything that's going on With that space at the moment and uh same with nfts same with nfts like if, if you saw a video, i did recently most people didn't um. I just shared my frustration really because, like i think again, it's a very interesting concept, but we haven't had a very good application of that concept. So far there we go. What is my thoughts on the chip shortage effect in the car industry? This is a funny one, so elon has said that this is a.

This is a really big deal and the problem is, i keep saying the same thing. I'm gon na repeat it again, it's more a case of a massive spike in demand for those chips than a chip shortage. The companies producing these chips, including amd, including a bunch of others, are doing very very well. I think amd is going to have a crazy quarter because of their deal with the cloud computing, uh providers so well the numbers there will be interesting but um, but it's interesting because, yes, there is the spike and it is harder potentially to do the deals.

But if you are a chip manufacturer, you are going to be picking to work with companies that use the doing very well into the next five to ten years right right now, you're gon na dump on the guys who you don't think have a particularly good future In this space, because you want to do well long term and it's interesting that somehow tesla is managing to get all these deals and all the supply lines and everything like that with reasonably good volumes, while many of the others uh apologize, my cat is uh wanting To to go somewhere, oh here we go shareholder deck. Let's go all right: we've got the update, we're gon na stop talking. Okay, we are on 13.757 billion in total revenue that is below where my expectation was. It is above where the street estimate was uh, so so that's good.

I i hope for a little bit higher uh. We have a net income 1.6. I was saying i'm expecting about 1.5, so that's pretty pretty close to where i expected it to be. So that's all good um people are going to be happy.

The streets can be happy with earnings per share street had for non-gaap and the 1.25 for gap. So these are both good um. What we've got automotive didn't go up as much as maybe people hope, because we had 10.2 and we added more than 20 in like in what people expected in revenues um. We have a continuous decline in regulated credits, which is what people expected.

But - and this is the interesting thing with even even the the numbers are kind of they're - okay - we have uh a margin of 30.5 now this is. This is really good, because this margin is in a time when we're shipping all the european cars over from shanghai. So the shipping costs and the duties and stuff that applies to them. We are not having the test uh the berlin factory open for the european market.

Yet so this number should increase um, but obviously the the fact that they're, not they're only selling the most expensive ranges of all these different cars at the moment is helping and that's what i expected. So that's very, very good and look. We have a 26.6 uh total gap. Gross margin so highlights here.

Look good uh, we're gon na read through everything in just a second: let's look at the numbers, so we already saw the production lines before 237.8 manufactured 241.4 delivered, but i'm interested here so solar didn't really care storage. Ah, this is a. This is a loss, and this is what elon was referring to. I think when he was talking two weeks ago at the shareholder meeting or whenever it was a week and a half ago um.

I people were expecting this to begin ramping and being delivering something, but it hasn't really moved and it does ramp towards the end of the year so year and year, which is what they're showing here. We have the 71 growth, but there was there's so much fluctuation at the moment that that cyclical behavior is just not really paying attention. Hey tom, so nash is in the house. Everyone say hello, um.

So that's interesting! This is disappointing on the energy front. For me, i kind of expected a bit more and that's probably why this is probably why we're sort of not quite breaking the 14 billion revenue here, um, it's not really because of the cars. I think it's because the energy storage hasn't moved at all supercharger stations. Again disappointing for me, because elon in the last quarter of the update made this big promise, saying they're going to be opening all of the supercharges to all the different car providers.

All that kind of good stuff, um and the rate of growth here is not really accelerating um, as perhaps it should, especially in percentage terms if you kind of look at what has been doing quarter and quarter like if you salute the the one of jump, if You kind of look on averages through here uh we're only seeing a 10 quarter on quarter growth um in terms of superchargers in connection, so i didn't think that vision that he sold last time around was one of the big sell points in q2. Update is necessarily materializing because their cars are coming along so fast. They. They need to be doing this just to support the existing network, so kind of hope that potentially maybe this would uh be a little higher.

This is funny look they're still saying: shanghai is producing model 3 model y at a rate of over this hasn't changed. None of these have changed at all. Um except texas did texas have model 3 in the last version of this document. I don't think it did, because this is the no, it didn't all right.

So this is exactly the same. They have the greater than 450 000, even though they've been producing 56 thousand a month last month and apparently they're maintaining that rate through october um, they're still saying 500 000 over here in fremont and 100 capacity for model s model x, but it'll be it'd, be Quite interesting to see what q4 numbers for production on the model s model x. Look like all right. Let's go and have a look at some of the highlights further down, and what we'll do then is we will go back up to the top and actually read all the important stuff uh to make sure we haven't missed anything all right.

So the first uh. Let's look at the balance sheet, i'm interested in what have we got with the digital assets? Nothing, no movement, uh. So nothing really happened with bitcoin remember this is before the recent run up in price. So nothing particularly exciting cash stayed flat, so they're obviously spending a bunch of it uh on these mega factories and gigafactories they're building um, because when you're making three point whatever it is: six six billion dollars uh in the quarter, it has to be going somewhere.

Hopefully, we'll see what's moved, let me just compare compared to where we were okay. I've got i've got it here. Okay, um, you can see here, we have property, plant and equipment has gone up by well like 1.7, whatever is 1.8 billion dollars. So that's part of what i was talking about earlier uh, so some of the money is landing in there.

We have 400 million dollars uh in what is this inventory nice uh? This should make for good q4 delivery numbers uh. These are cars that weren't delivered. That are on the balance sheet, uh that may be in the process of sort of sitting in car parking lots before they actually go and um ship them out or whatever or sell them um, although, as the company scales that will naturally go up anyway, we've got Another 400 million in lease vehicles over here, okay, so um. This hasn't really gone up.

What have they been paying uh paying down some of these liabilities uh? This is interesting. What do we got? Accounts payable uh? I don't care, and can i get that um yeah? Okay, uh we've got debt. Reducing this is this. Is this is big look.

There was a big move last time by 1.2 and they've done another the same over here, so they're, paying down uh that but what's increased over here. What have we got? Uh current liabilities have increased and current what we got accrued liabilities, another okay, so just just bau, manufacturing and bills and stuff like that so boring stuff, uh, but but long-term debts coming down, which is good, um. Anything else interesting in here that i can see. I can't see anything so far: um cash flows, uh 3.1 billion and that cash provided by operating you see: okay, okay, so um.

I think it's time i can't really see anything to decided, adjusted the ebitda 3.2 again. I hope that it would be slightly higher uh because we had this big jump over the last two quarters um, but still i mean it's going up. It's going the right direction. I think it's the energy business uh, the the disappointed this time around, i'm guessing, i'm gon na be the only guy out there who was disappointed by this uh by the energy business um, because everyone else doesn't really care.

Anyway, let's go and read what they're saying: let's read some of the highlights at the top uh. We have tons of time uh in case you're, wondering look at capex you'll, find it there, i'm not sure what they're saying um all right: operating cash flow, less capex of 1.3 billion dollars in q3, net debt and finance lease repayments. This is, this is the bit that we just looked at. I should have read this firstly uh.

This is a bit that we that i pointed out in the balance sheet. They paid down a ton of uh debt, which is good they're, not not a ton. I mean they still have like 10 times that money sitting around in cash, but you know it's good. In total, 164 million dollars decrease in cash and cash equivalents.

That's what another thing that we just pointed out: uh. It hasn't really moved. Uh, profitability, 2 billion gaap operating income, 14.6 operating margin, that's very good for a car business, uh 40.6 on an operating basis and we've got 1.6 billion gap net income 2.1 non-gaap yeah. We just saw that 30.5 automotive gross margin, which is 28.8 without credits.

It's interesting. I don't remember, did they do this last time? I don't think they did because everyone everyone when the results they did, they didn't do it last time everyone begins to calculate these out. I think it was the quarter before when they didn't have them record vehicle production deliveries. We all knew that started roll out of fsd streets beta.

We already knew that in case you haven't uh. Some selected group of people who have the right cars with um who have fsd purchased, are now trying it out and a lot of people in the us, mainly their competitors, and the regulators and uh are not very happy about it. Uh, because it is gon na put all of them out of the out of business. Basically but uh there we go um michael berry is not short in tesla uh.

Thank you for pointing it out tom. That is correct. He he said it was just a small trade. You know uh, which is hilarious, he'd been following because you know his fund has to do quarterly reports, just like everybody else uh.

So i'm not i'm not sure everyone kind of just said. Oh okay, then uh. When you publish that anyway, let's read this, the summary the third quarter of 2021 was a record quarter. In many respects, we achieved our best evidence, income operating profit and gross profit.

Additionally, we reached an operating margin of 14.6 exceeding a medium-term guidance of operating margin in low teens. This is good because operating margin uh for a car company. This is basically the the profitability of the company, after all costs other than accounting and finance shenanigans right, uh. So this is basically actually take all the costs of the business out other than uh debt costs, or debt or income in that investment income that gets paid to you, after without all of that which doesn't really it's not really to do with the business.

If you like so 14.6, just means that on, if you ignore the what the accountants do in their in their spare time - and this is the profitability of the business - that's that's - that's very, very good for a car manufacturer, especially one that has so few localized factories At the moment, because that could could well go up in the next two to three quarters: okay, perhaps more impressively, the self profitability was achieved, while our asp excuse me, uh, decreased by six percent year on year, the receiving price decreased in q3 due to continuing makeshift Towards lower priced vehicles - okay, this is i'm guessing the chinese cars because in china, so this is in europe. The lower priced cars in the us have been withdrawn from the market. You can't really buy the standard range. You can only buy long range or plaid or performance or whatever, but in china you can buy them and obviously, towards the end of the quarter.

They went and sold a crazy number of cars in china in september and i'm guessing the six percent decrease in the average selling price is down to the fact that they sold so many of these basic cars over in china, which outweighed the benefit of not selling. Those cars over in the markets in the us and uk and europe, so so, that's probably partly why that total revenue number wasn't quite as high as some people thought it would be uh. That's an interesting insight. There ev demand continues to go through a structural shift.

We believe that's putting it very lightly right uh. Nobody wants to buy a gas car anymore. I don't want to buy when i'm when it's my turn. When my jeep dies, there is absolutely zero chance, i'm not buying an ev and i think a lot of people.

It's now cheaper, if you consider the lifetime value of owning that car, servicing gas etc, it is far cheaper to buy a an electric car, so i don't see why anyone would not now if they can, if they're sure, if you, if you're in not a position To buy a car that costs more than 17 19 20 000. You know if 40 000 equivalent is point for a new car and whatever the second-hand version on the second-hand class, pretty much the same at the moment, it's too much sure at the moment. That is a difficulty, but i think that's going to be overcome, but if it's possible, if people can buy them, i think they're going to be like the demand speaks for itself. Anyway, we believe more vehicles, the more vehicles we have on the road, the more tesla owners are able to spread the word yeah.

So this is their. They don't do marketing, they don't do adverts and stuff, but they don't need to. While fremont factory produced more cars. In the last 12 months than in any other year will believe there is room for continued improvement.

This factory is tiny. You've got to remember so this is a factory they purchased from an incumbent, and so they had to repurpose it. The access to it is far from ideal. It is in the middle of a relatively built-up area.

It's only like down the road from major other hubs: uh major other, like uh silicon valley. It's not silicon valley, it's across the the bay from silicon valley, but it's sort of silicon valley, right um. It is if you look at the maps of the different factories in terms of the space that they have and the buildings and stuff the fremont factory is just minuscule. When you begin shanghai factories like big and then you have berlin, and then you have austin austin's like a city, i think austin would be larger than several like it's larger than the whole of monaco.

I think anyway, uh there's a lot of space to build a lot of things over there uh their hq included anyway. Additionally, we continue to ram gigafactory shanghai and build new capacity in texas and berlin build new capacity. I want to know what they're actually going to say in words on this one. Ah yeah tom nash is still here.

Look not not just passing through all right a variety of challenges, including semiconductor shortages, i'm sure we're going to be hearing a lot of that when they're talking as the reason why uh they aren't scaling as quickly as they potentially could congestion at ports. So this is, there was a few different issues. Generally, the sort of uh shipping was affected significantly. If you remember, there was also a suez canal thing.

Um was i during this course for the previous quarter. I thought forgotten now, but the shipping costs in general have gone up a lot for a million reasons, um rolling blackout, so china has had some power issues um. Actually, i think did you see some of you just mentioned that as well. Yeah um have been impacting our ability to keep factories running for speed.

We believe our supply chain, engineering and production teams have been dealing with these global challenges, with ingenuity, agility and flexibility that is unparalleled in the automotive industry, but would like to thank everyone who helps advance our mission. So one of the things that tesla's been doing that nobody else has been able to come close to is they have had issues with sourcing some of the specific chips that they are using for particular processes within the car. So the way the car is structured is is maybe not somehow it's not like. There's one computer in there that runs everything just like you know.

I have one computer that runs everything at the moment. There are lots of several uh. There are separate several different systems. Two kind of main groups of systems, one being the one that operates the car stuff if you like, and the second one that operates the entertainment and all the other non-function, not non-critical stuff, so that the two don't use the same resources uh, mostly but um.

What they've been doing is when they can't find some particular chips that go into the particular places where the code for the machine has already been created to operate with that chip, they've gone and rewritten the code and redesigned the the process to use other chips. In relatively short spaces of time, which is pretty incredible like when you're running a production like that, it's not something you want to be doing on the fly, but that's what they've been doing over the last couple of quarters, apparently according to them um and that's. What's helped them um hit the numbers when everyone else was failing right, um. Let's look at the numbers in a little bit more detail again.

Have we missed something? Regulatory credit's down revenue is up 12. uh. So so this is not a huge drop, but this is going to zero because everyone else is making their navs just to take their box. Um total revenues are 13.75, that's actually pretty good.

I should probably open my model uh that i have just to see uh, where i thought we were going to be at and compare i'll do that in a little bit um gap. Gross margin is, is very strong, 26.6, but you can see the difference between this one. This 30.5, and this 26.6 over here is uh. That four percent gap is because the automotive business is the only one that is really turning a profit at the moment.

Everything else is uh, not they're spending a ton of money, investing a ton of money, building a ton of stuff they're building. You know the new factories for the battery production, doing all that kind of good stuff, but they're not seeing the the revenue uh come in through that. So that's why the total business uh numbers on the margin front, don't look quite as good all right! Ah, there's people talking what so you say. Your name sounds slavic cyrillic yeah.

I i was born and grew up in the soviet union. That's right! Um operating expenses, one point, six, five, six incoming operations. So i'll probably imagine this is the the number they're particularly proud of, and you can tell why, because so q3 last year was 9.2 and that was very, very high and they're saying it was even substantially higher than that. But obviously we saw a drop um over here in subsequent quarters.

Um it'll be interesting to see what happens with this, like, i think it's going to maintain and probably grow from here, rather than drop, but um we're going to discuss why, uh probably later in the video okay adjusted the ebitda 3.2. This is the number that i'm particularly interested, because, if a lot of people when they're doing all of these kind of forecasts, so if we take we, if we don't go the full whack and don't go all complicated in terms of how you value tesla and like Build a forward forecast if we go with the sort of the novice approach. Just take a number multiply by something here. We have 3.2 billion in adjusted ebitda go multiply by four in order to get here we're going to get a trusted casio so 3.2 times four.

We get 12.8 uh billion dollars of um annual ebitda go and multiply that like by say 30 or 40, and suddenly we're sort of roughly at the ballpark uh of where uh tesla is uh. Whichever right am i what 12.8 40 yeah okay a bit more, but what we're saying is, like people keep referencing this kind of point where uh they're saying the multiples are so high they're in the thousands they're like 400 they're 500 and like yeah, every single quarter. If you're, looking at the annualized version of the current quarters ebitda and looking what the share price is doing, this is growing far faster and it will continue growing far faster and then that those multiples are just dumping. And that's why? For a hyper growth company or a company that has just broken even or a company that is still heavily investing in building factories and as a result, not maybe turning the sort of profit that they should be if they were in a stable position.

That's why these multiples are relatively pointless and irrelevant, but anyway um. Let's have a look. What they're saying over here in the financial summary revenue grew 57 year-on-year uh. This is primarily chief regression vehicle delivery as well at growth in other parts of the business same time, vehicle asp, regurgitating the same thing.

Um our operating income improved to 2 billion in q3 compared to the same period last year, resulting in a 14.6 percent operating margin. Profit level uh we've got ceo 190 million dollars uh in q3, prime manager of my new operational milestone has become probable, so this is just uh elon continuing to receive um some shares that he's due, because, although he's pretty much maxed, almost all the big stuff, i Think, which is maybe why he's getting more and more excited about spacex, but anyway, operating income increased substantially year in year, mainly due to vehicle volume, growth and cost reduction. Positive impacts were partially offset by asp decline uh, so this average selling price of the cars we discussed because china uh is selling cheaper cars and growth in operating expenses. Lower regulatory credit revenue, additional supply chain costs, bitcoin related impairment.

This reads funny now right when we're breaking ground, so this is sort of irrelevant, really um quarter end bitcoin raise the impairment, meaning that they had to sort of write down a technical loss on their balance sheet. That uh, when bitcoin price, went down uh because they bought a bunch of it, then sold at the previous all-time high, and then they kept the remainder cash quartering cash and cash equivalents decreased to 16.1 billion in q3, decreased as a it. Pretty much stayed flat, driven mainly by net debt and finance lease repayments yeah. We just saw that at the beginning of the video 1.5 billion partially offset by free cash flow of 1.3 billion, so the free cash flow is basically after you do all your accounting mumbo jumbo.

How much money has literally entered the bank uh if it has a very basic way of putting it a total, because profit and loss is not really a a good way of knowing that you have made money in terms of physical cash in a bank account? It is more like a technical element, so, for example like like, i have a consulting business and i could, in one quarter, go and sell a little consulting, then go and do it and then go and invoice the customer and the moment you invoice a customer. That is a an item of revenue on your p l and you can then say, look i made so much revenue and then you have all your costs and you have a ton of profit. But if the customer then takes a year to pay it or only pays part, and you have to wait for the rest, whatever that money is not sitting in your bank account, so it might look pretty on paper uh. But that's why you have like the different ways you have the cash flow way of looking at the business.

You have the p l way of looking in the business and you have the balance sheet. Looking uh, where look in the business, though they're all a bit different, i made a video earlier today about looking at pnr for beginners uh, which nobody is ever going to watch, but but maybe some people will find it useful all right. Operational summary. This is just mainly about car production.

Here we see that energy business has not moved anywhere at all um car production up by 30 000 deliveries up by 40 000. This is all very good. This increase over here is interesting, uh subject to lease, and this is largely driven by the fact that they restarted selling the model s cars uh model x is only starting this month, so they started. What a week ago, uh last weekend delivering model x, cars but model s, has, i think, a 20 percent uh ish uh number of people who take out leases versus more like six seven percent.

I think on the model three model y um. So that's. Why? There's a greater number of cars over here on these, so these cars obviously don't generate the same level of profit because you don't book it all up front because you're kind of taking money uh, it's not quite as simplified as that, i'm probably probably uh, not explaining The best way, but but but that's partly playing into it um least vehicle. Can you can see here it's gone up, uh by 13 000, but it was going up in the previous quarter as well, despite them not really selling any in the last quarter, so that so it's interesting, they didn't go up more potentially, but again they didn't sell That that many, that what did they do like less than ten thousand um nine thousand uh model lessons all right.

Uh superchargers already covered they're growing. But if you, if you look at their cars uh their car production, that this is going by ten percent and does tesla have 2.4 million cars on the road, i don't think they do um. So it's kind of important to remember that, like this has to grow just sustain the fleet of cars uh that tesla has so relatively speaking. I think uh this could potentially be growing more, but obviously the home charging situation, home charging networks etc are also improving at the same time.

So that probably helps because you know even a few years ago there wasn't so much propagation of people being able to charge at home, but now apartment blocks are installing charging stations and stuff like that. So anyway, people are saying: oh, is my camera in the way? Sorry, let me just shove it good good who said that uh sorry about that. That's good good, spot, j, nemesis um! If people, if people are wanting to suggest some stuff uh, this is good yeah i didn't realize i was just looking i didn't realize. I was in the way, sorry um, so we've got um california model s model x, uh.

None of this has changed. Let's read: let's read these updates in the factories. This is where it might get a little bit more exciting. Nothing here.

Sequential growth remains like gold. Okay, they're saying that again they're putting all these sandbagging factors, they're saying outside factors are going to determine uh the magnitude of their growth. So they're saying you know, they're expecting the chip shortage to continue. All of that um this chart is interesting.

If you look at how fast china is growing, europe has sort of picked up speed again: uh us everything's, looking good on the the on the on the the raised by region. So all happy with that uh. Let's read our freemont factory produced over 430 000 vehicles in the last four quarters and we believe there is room for continued improvement model s. This remember over the last two quarters.

They previously didn't produce any model s model x, cars. So that's pretty good. It's pretty close to um capacity, then uh still with room model s production continued to ramp successfully in q3, a model x, production, ramp and first deliveries have begun. Uh yeah, so we just referenced.

Gigafactory texas is progressing as planned. We're in the process of commissioning um and fabricating our first pre-production vehicles um. This is this is good okay, so so so this is the first public. I think statement they've made i'm trying to remember.

I think it's the first public statement they made that they are actively producing um. So when you're producing pre-production eagles, that means the production line is set up and you're rolling them off and then you're you're like essentially checking like uh, some of the production, setups and you're. Okay, this bit can be done better you're, adjusting things, you're automating, some things that are manual to become less manual to become more automated and so on. So this is.

This is indicating that austin is very close to being ready um when they so they began. Pre-Production runs for the very first time in shanghai. I think it was very late august into september and they began delivering cars. I think it was early december, and that was two years ago.

So, presumably the speed of the austin development should be at least as fast. Potentially faster because they hopefully have learned some things, and also it is in austin, rather than halfway across the world from their hq shanghai for all of q3, china remain a main export hub in maine being exclusive export hub. I don't think they exported any from the us, maybe like i don't think they did. Production has ranked well in china and we are driving improvements to increase the production rate further for standard range vehicles, we're shifting to lithium-ion phosphate battery chemistry globally.

So this is interesting. So um there are different chemistries that you can use in batteries, and elon has been talking a lot about using more batteries based on iron over here uh, rather than uh, more expensive uh was it cobalt or whatever uh they're using for shorter range batteries? It doesn't really matter as much there are it's not it's it's. It has some range impact, but i think it's more. The the power and the sort of the the access to the uh to the storage that is affected uh by using iron rather than other chemistry and and and it's a good solution, because people who are buying this underage cars will never like th.

The car does not allow you to use stuff at a rate where this would be a limiting factor, and these are far cheaper to produce some people are saying they might uh last longer as well um. I don't know so. This is also like cheaper for tesla uh, which helps but they're now sort of confirmed because eagle's been speaking about this, for i'm not sure how long um, definitely in the last quarterly update, definitely in the uh shareholder meeting um autopilot self full-star driving okay. This is one of the exciting bits that i think we're definitely going to be hearing, questions on and we're going to be hearing some kind of updates, because everyone wants to know um.

What was this million miles driven between collisions, they're, saying that and they're sort of beginning to with this kind of stuff over here trying to show the world that um all the people who are saying, because there's a massive test, like you fun thing on twitter and Everywhere else saying how bad tesla is for testing this completely unproven, really awful software on public road people are going to be killed. It's horrific, i'm forgetting that you know people fall asleep. People take drugs, people drink and everything else, and it's just going to show. Obviously, the green line being the average u.s rate of uh people crashing um.

So this is millions of miles driven since how far they drive before they have a crash. What was about 500 000 um miles, and then we have no autopilot. So this is just a general tesla car, with the basic features that you know alert you for things, things that things are not going well or tesla has automatic, maneuvering things if it thinks something is about to crash into it, but then autopilot up here and they're, Not drawing fsd on here yet, but i will be really curious when they begin doing it as to what this looks like. Ah, that would be quite an interesting graph.

If we get it, will it be above autopilot at this stage i don't know um all right. Um, what are they saying in q3, with yesterday uh? This was a recruiting event to attract the best ai talent. After presenting our end-to-end vision of full autonomy, fleet data collection, labeling simulation neural net training, vehicle processing, as well as our next generation neural net training, chip and humanoid robot project, we have received an overwhelming number of applications, and that was the ultimate because people took that Day to mean the wrong thing, people said: why are you presenting all this stuff? Why are you showing us a robot and the key? Wasn't it wasn't for investors? It wasn't for tesla customers, it wasn't for the market, it was to attract people who want to work in the best ai company around um. So they, if, if you saw elon, plays a tweet where he showed a graph of the applications and it was like flat at near zero and then just like exploded after a year day, um so they've achieved what they wanted.

They're getting the talent and that's what's going to be driving the next bouts of innovation over the coming months and years, and so that's a they achieved what they wanted, which is good.