So Tesla Reported Q1 earnings yesterday and all hell broke loose. The stock is down. There's literally half and half. The world is now divided into two camps: People who are saying that this is the worst quarter in any company's history, and people who are saying that this is the best quarter ever.

The Cheerleaders and the haters now. I Honestly cannot find a single proper video with nuanced analysis of what happened with Tesla with the results. With what's going forward, it's either cheerleaders or haters. I Mean there's not a single proper analysis out there who has a little bit of Nuance a little bit of balance.

It's either Tesla is basically the best thing ever or this is the worst thing ever. I Was like what the is going on. So if you're looking for a cheerleader or hater, there's thousands of channels. go right ahead.

If you want balance, nuanced analysis of what happened, the good and the bad, and somebody to tell you that a piece of turret is a piece of third and not some chocolate bar, step right in. So let's talk about what happened. Number one, um, not the best Tesla quarter. Let's be honest, this is not a record-breaking quarter like some people claim.

No, no siree. Bob The earnings call felt a little bit rushed. the Q a part didn't feel very straightforwardy so earning call get for me probably a C plus not more the quality of the financials. the quality of the results probably a B minus B plus somewhere in that range.

Nothing anywhere close to an A but in that range. probably closer to a B minus. Now look, the numbers are lower than expected. You cannot sit there and say that this is a record-breaking quarter when the numbers are lower than expected.

Price cuts are also part of it. Price Cuts Lower EPS Lower margins. These things will scare investors no matter how good the company is. And as an investor, you probably want to know this.

and a lot of these channels who are hyping it up are not saying that now. I will get to the good part. So the way we're going to do this: I'm going to cover everything. the good and the bad.

So stay with me. There's also really good parts about these earnings goals. Now, the EPS The earnings per share. Lower than expected.

Not gonna sugarcoat a piece of turret and give you oh hey, this is chocolate. No. EPS is lower than expected earnings per share. Which means profitability is not as good as expected.

Ah, not good. However, however, there was a Hidden Gem in those earnings, which is absolutely very much excites me. Which is the energy business. Specifically, the storage.

The storage business. The energy business is doing phenomenally well. It's still relatively small a couple hundred million not compares to the Auto industry, but it's growth. Its margins.

Everything about it Still small. but the storage business is doing really really well. It's trajectory. Now let's talk about raw numbers here a little bit.

Auto Sales Give or take a couple right? About 20 billion as expected. Automotive Gross margin went down to 18. Oh my. God I'm from 19 to 18.

the world is ending. The sky is falling. No, this isn't a sky's falling situation. And it's not good that the margins are dropping, but it's not necessarily a bad thing.

I'll explain. Obviously, it's not ideal, but you have to remember two things here. Number one, at eighty percent One, eight, eighteen percent gross margin Tesla has doubled the margin than any other player in the Auto industry, including Toyota So best margin in the business. Still, yes, it dropped.

It's not good. Still, light years ahead of the pack. Number two: Margin erosion can happen when you're trying to increase volume. If Tesla is trying to sell more cars, and it's gonna, you know, use price cuts to do so.

Margin erosion is part of the equation. We won't find out until the end of the year how much it worked out if you sell the margin of 22, but you only said a thousand cars. And if you reduce the margins to 18 and then you sell 3 000 cars, it's a better deal for you as a manufacturer, so remains to be seen. TBD Now 11 Operating margin.

it's lower. Not a good thing. Price: Cuts is where it's at. Everybody knows it.

but again, it's not going to be negative if it leads to much more sales. But unlike what some of these cheerleaders are saying, there's no proof that more sales will come that we either need at DeLorean to go in the future. and Doc Brown Find out or wait. but it it is a plausible scenario.

but again, nobody ever wants to see margins getting eroded. It's not a good thing. it's not something to celebrate. It's a very interesting gamble, which I think Tesla is rightfully doing with increasing you know, production and sales through the loss of margin Viet Price: Cuts But the proof is in the pudding and that pudding ain't going to be ready until the end of the year.

Okay, next operating Expenses: Normal, Consistent as usual. no drama Tesla Somehow live through this whole inflationary cycle with absolutely no increased costs I Have no idea how they freaking did it. That alone is freaking impressive if you take anything from. Tesla The fact of the matter is, their operating expenses are pretty much flat and they're selling 20 more cars.

Absolutely insane. Gotta Give Them Credit In that also, don't forget Model Y top selling car car not electric car multiple countries I Mean this is going like hotcakes Tesla has its Ford F-150 Now for the F-150 the best-selling truck in the United States Model Y That's the next Ford F-150 as far as sales Reliance that's the how should I put it the golden egg laying Goose for Tesla very nice and Auto Sales growth year over year. a little bit shy of 20 percent. Look, it's not good.

It's shrinking. Sure, it's not 40 50 growth like we got accustomed to, but hey, the economy is in the toilet and the rest of the competition. If you actually look at the benchmarks, you look at the competition. they're all bleeding.

These guys increase double digit sales. 20 sales in this economy. Not brilliant, but I'll take it compared to the competition. It's actually pretty good.

Now look the bad part about this and again: I'm gonna say it like you know I'm gonna call it like I see it? Sorry And the market has been looking for reasons to be bearish on Tesla for a long time. A water like this gives them just enough ammunition to go as fast. And that's why you see price. Definitely because people are looking for better signals for Tesla and this is one of them.

And I don't agree that this is a bearish quarter, but I mean there's enough in there to get people kind of worried. which is exactly what they're trying to do. And at the end of the day as an investor, look at this and see a car. So a company that, yes, I also see a car.

but a company that's doubling the margin compared to the competition that's growing at 20 percent. 20 billion dollars in cash, 400 million dollars of free cash flow this year? Yes. Revenue Growth is slowed. Margin is slowed.

It's not good. But hey. lots of profits, Lots of cash, lots of sales. Nothing to worry about.

Not as good as expected. They can do better, but hey, this is not the end of the world at all. Look, you have to remember Macroeconomics: They dictate issue like people don't buy cars. It's forty thousand dollars when economy is bad.

So Tesla is holding up nicely with this economy. And at their price level, they're not selling a 20 000 car. They're selling offensive cars. So macro is hard.

People are basically not spending as much and they're still selling 20 more cars every year. Um, I Think there's a lot of overreaction to the margin erosion right now, or the margin have dropped by one percent. Oh my. God You know all the analysts are losing their minds.

come on, bro. And I think a lot of a lot of what people aren't really talking about is the fact that look, Tesla consistently sells a lot of cars. And obviously we can talk about the fact that they keep collecting more data through their FSD and through their autopilot and through their cars which is basically a walking sorry, a driving computer. Tesla is getting ahead of the pack as far as information as far as data.

as far as prepping the FSD God knows where it's going to be ready on Elon time. It probably should have been ready this year. but I mean so much data picked up because of all the cars they're selling and margins Again, probably not going to be as good as we got accustomed to, but hey, if their volume increases, they won't care. and I think it's important here to look at the big picture Gestalt and not the little details because sometimes you can look at the forest and not see the trees and look.

think about it this way. There's two options from here. either the economy gets good and Tesla sells way more cars because people are, you know and more inclined to buy cars with the economy is good or the economy is bad. If the economy is bad, the first ones to get destroyed is Ford and GM it's not.

Tesla Tesla will weather any economy so Tesla wins no matter how you kind of twist it. Yes, the earnings are not amazing, but hey, economy bad competition ties Tesla wins economy grade Tesla still outsells competition Tesla wins So hey, and for those of you who are that worried about margins, go: Google How much money it costs to ramp up two Factories at the same time talking of course about Berlin and talking of course about taxes right? 2 factories being ramped up at the same time will not only take it all in your margins, it will bankrupt companies. The fact of the matter that Tesla only lose like a couple percent of margin because of what's going on right now with ramping up two factors is hella impressive. So for those of you who are looking for a cheerleading section of Tesla how it's amazing, No, could have done better.

Not the best quarter, but hey, this guy isn't falling. It's still on the same trajectory for those who are hating on this. Lane Would it be to take a dump on it? Not gonna happen. The numbers are too good.

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