Hey, the treasury just extended the inflation reduction x 7 500 tax credit through April 18th. Looks like it might actually wear off after that, but that's actually good news for Tesla Gives you another two and a half weeks of pumping out those 7 500 credits and that expiration probably motivated a lot of Q1 sales here at the end of March so we'll see what happens. But uh, let's get into some of the other news we gotta attack: Elon Musk We're gonna talk yeah, some fud unfortunately, but we're also going to talk what potential is going on with China Now this I am actually very excited about. So let's start with the good news and then we'll get into some of the bad news, including some sentiment.

Fun. Not so great. Let's talk about this because as you know, I'm a huge Tesla shareholder uh I haven't actively managed uh ETF it's it's one of our largest positions. Big fan of that.

You can learn more by going to beat Kevin.com That's also where you'll be able to learn more about my courses on building your wealth. My Affiliates like life insurance or Weeble or whatever it's all at Be Kevin.com And even though I'm a licensed financial advisor I can't give personalized Financial advice to you unless you know. Obviously we had like a contract and we're doing personal financial advice but in general I like to provide Financial insight and commentary and what do we have here? So Elon Musk plans trip to meet Premiere now I want you to know this before we read exactly what's Happening Here the Chinese Premiere just gave a speech two days ago I read the entire speech well the transcribed version of it because I don't read Chinese but anyway. uh well like Mandarin but anyway.

um, the Chinese Premiere echoed a lot of what Xi Jinping talked about. and what they did is they talked about how they want to encourage entrepreneurs to come to China how they actually use Tesla as an example in Chinese propaganda media. they media they regularly actually use China or Tesla as an example of a a winner. somebody who came to China and blew up because they came to China China wants more of that because they realize their economy isn't reopening as fast as they'd like and the best way to encourage growth in GDP is to encourage more manufacturing something they're good at.

Keep in mind China has gone from manufacturing Barbie dolls to manufacturing really Advanced things and doing it better than the rest of the world not only Advanced cars Advanced phones like assembling the iPhone but also chip making. but think about this. China according to a piece, a phenomenal piece in Foreign Affairs magazine they I mean this was like a 25-page report that I read on China and what was so phenomenal was the foreign Affairs talked about how China got into the solar panel industry after 2010 and the Chinese government accelerated the solar panel industry so much that now most solar panels in the world are a manufactured in China and B the best solar panels and the most efficient solar panels are in China So Gone Are the days of Chinese manufacturing being the cheap crap, it's actually starting to get really good and in some cases better. And in XI Jinping's speech, he made it very clear that they want to promote the C word not communism.

Capitalism. That's insane. Now what was crazy about the speech and if you read it, I'm just going to give you the summer here. What was crazy about the speech which the Premiere just echoed two days ago is they make this argument about how great capitalism is for their society.

But don't worry, we're still going to have socialism so they're like common. Prosperity is still really important. Oh, but capitalism is so great Common Prosperity It was really an interesting duality. So what do you think about that in in regards to China I Want you to think about what this meeting between Elon Musk and the premiere could be about? It could actually be about something that I predicted in April of 2022.

now I was way too early about it. so I was not ahead of the curve on this one. but maybe maybe Elon Musk are listening to my to my uh my my converting converting of them that they need to copy and paste factories in China That's my opinion though. I don't know.

but I actually think copy and pasting Tesla factories in China. could be a really good idea whether it's for Mega packs which has been rumored, whether it's with battery Partnerships Although we're probably going to have a Tesla battery partnership in America with Catl. so that way they're American-made batteries. But maybe where those tax credits don't uh, aren't necessarily uh, uh impacted.

that is the inflation reduction Act tax credits which require certain percentages of cars and batteries to be made in North America which is why we have Giga Northeast Mexico uh and and uh. and we have Partnerships between obviously Canada Mexico and America to make sure that Americans can still get their tax credits via the inflation reduction act. Uh, it's important to consider that a lot of Tesla products could be made in China and I Find this quite fascinating, despite worries about Chinese American relationships called Sino-american Elon Musk Plans to visit China in early April to meet with Premier uh or the premier Uh, as reported by Reuters who cited two sources with direct knowledge of the trip, Tesla's second biggest Market this is via Zero Hedge. By the way, Tesla's second biggest market after the US is China where the company operates a massive factory in Shanghai.

The precise timing of the visit hinges on the premier's availability. However, Musk's previous visit in China occurred in early 2020 when he hosted an event at the Shanghai Factory one year earlier. Uh, he we met with others uh during uh, Well, the same Premiere uh, who wasn't the premiere yet during which Chinese officials praised the billionaire for investments into the country? This is the same thing that that has been happening and it's actually phenomenal now. I Will say something we talked about yesterday in the course member live stream.

This is what we do. We regularly talk about fundamental analysis and ideas that course members have in the course member livestream give you a quick rundown on some issue that came up with Tesla is the possibility that in 2024 individuals won't actually get their tax credit for cars as a rebate on their tax return a year later, but that car sellers now specifically quoted as dealers which we're not sure how that will apply to Tesla since Tesla doesn't have a dealership model, but that could potentially have some cash flow implications for Tesla. Think about this: If Tesla sells about, you know, say, 1.2 million United States vehicles. they could have a cash flow impact of about nine billion dollars.

Because right now, if somebody buys a Tesla, you buy a Tesla right now, buy Tesla Right now, here, in March of 23, you don't actually get your tax credit of seventy five hundred dollars. Uh, until April of 2024. When you go file your taxes right unless you file quarterly and you do the accounting to try to adjust for that earlier. and then you pay a little less in.

that's pretty rare. Uh, for most people, they're not actually going to see that money until April of 2024 And the beauty for Tesla is Tesla gets. Let's say the car sells for 50k Tesla gets the full 50k right away whereas the user doesn't get their 7 500 rebate until April of 2024.. So that creates a lag time for users Now by moving that credit up over here, what you actually do is you and you motivate the buyer to buy a vehicle sooner, which is good because that could lead to more sales.

However, now it puts the onus on Tesla to actually recoup that 7 500 Which means Tesla would only be getting uh 42 500 and they would be getting an asset of a of basically a payable a payable of 7 500. Now it's possible that Tesla could negotiate with the US government and say look, I can't wait a year for this money because on 1.2 million vehicles that might be something like nine billion dollars. that kills our cash flow. Okay, Tesla had free cash flow of like 1.2 billion dollars I think it was last quarter quarter.

Okay, that's like per year. This is like two years of current free cash flow. That would suck now. Tesla could open a line of credit, but then they'd be paying interest on that 7 500 for 1.2 million vehicles for a year and obviously it wouldn't be lumpy or it wouldn't all happen at once.

It would be spread out over the year. so maybe it wouldn't be 9 billion for the full year. Maybe they'd sell more Vehicles because of this. And maybe it's also possible that the government helps sort of provide these rebates earlier like I said quarterly for corporations, so maybe it wouldn't be that big of a cash flow impact, but it is something that I personally think.

Bottom line: Tesla will probably end up figuring out, but something that'll actually end up being net positive for the consumer. So I'm not too terribly worried about that. I think what's more interesting is actually the sentiment change that's occurring in Tesla I Notice a lot of Tesla bulls and and I really consider myself more bullish on Tesla now than I have uh in the past which is crazy because I I feel like I'm I'm already pretty bullish on the company, but I'm also willing to address fud right a lot. I feel like there are a lot of folks who Could See No Evil with Tesla and it's just no, no, no, no, no, there's no evil with us.

No, no, there are problems at Tesla too. But one of the interesting things that I'm noticing is a sentiment change. I'm noticing a sentiment change amongst a lot of retail and this is totally anecdotal, but it's a totally anecdotal sentiment change that I'm noticing on people who are like leaders of Tesla owner clubs or previous like massive Tesla Bulls who all of a sudden are like less enthused about Tesla like people who have described themselves as an 11 out of 10 on the Tesla bull scale are like I'm still a Tesla bull man But but I'm like an 8 out of 10 right now on Tesla and I'm thinking to myself are are you scarred because the stock went down like is this is this dare I say emotion that we're seeing Of course, people are always going to get emotional. There's no question of that, but I do see a sentiment change that I think is actually some somewhat unjustified for Tesla But it's something that I think is worth pointing out because it is if you see people around you a little bit more bearish on Tesla where Tesla is probably firing on the cylinders of manufacturing better than ever before, even though their gross margins are expected to take a hit here.

Uh, in Q1 I I think it's really interesting that, uh, that sentiment is changing in a way that implies that Tesla might have a little less retail support than it used to have. So I think that's something to pay attention to. it's anecdotal, so pay attention to it in your area and see what you're seeing. But personally, I think probably the biggest reason for that would be the stock went down I think it's emotion that's playing through now I Do want to talk about what the Financial Times just said in two different areas about Tesla uh and uh.

these These are potentially not the best uh stories, but I think they're worth addressing? so I want to to address those of course right before I Do I want to remind you to check out the programs on building your wealth link down below I Think I've got phenomenal programs on building your wealth link down below. You can now use Buy Now, Pay Later to join them. You can also get life insurance in as little as five minutes. you go to Metcaven.com life.

do it on your phone and you can actually Apple or Android pay for it recurring and it just Auto pays. It's super easy. it's super convenient, super cool. But on top of that I encourage you to get 12 free stocks with Weeble So that way you could do uh as I do and hop on over here and track your favorite charts uh, including Tesla which is up one percent in pre-market right now.

Track these and uh and yeah, check out Tesla and invest. So get 12 free Stocks by go to Mycam.com Free! Okay, so now we gotta look at a Financial Times pieces here. The first piece is this one. it says Tesla Cars lose value faster than rival models after price cuts and they basically say look after Tesla cut its prices test Tesla Used vehicles have suffered substantially more depreciation than other vehicles, for example.

uh, they say here in contrast to a Model 3's predicted decline in value of 46 percent, a pole star bought in January would be worth about 35 percent less. so they suggest there's a steeper depreciation in Tesla models, potentially making them more expensive to finance or lease in the future specifically leasing since leasing factors and depreciation whereas financing doesn't since that depreciation is on you, whereas leasing is on the the lease or the lessor. uh, the company that actually owns the car still and uh, it's it's just a it's a it's a piece that really I think what it's trying to do is suggests that look because Tesla cut its prices so aggressively they're probably getting a hit a little bit harder on depreciation curves. I Think that could end up being temporary, but it's something to pay attention to because total cost of ownership for the vehicles could go up because of that.

And then a second Fud story that came out was this piece Tesla's price War in China backfires as Byd sales Surge And really, what they're doing is they're talking about Tesla having cut prices, leading Byd to also lower some prices at dealerships and all of a sudden, Byd sales are growing 80 percent year over year. Now, what they do not do in this article which I think is unfair, they do not separate out the growth of Byd's plug-in hybrid and battery sales. They actually lump those together, suggesting that their sales increased 40 percent year over year from 34 last year, while Tesla China only grew 7.8 percent year over year in China. Now I think that's a little unfair because you're really comparing this plug-in hybrid world.

You're lumping these two together and comparing those growth rates to Tesla and I think that's a little disingenuous. Those should be divided out so I'm not so terribly worried about that. So with that said, look: I think Tesla is still a phenomenal play I Think the valuation is fantastic I do have some concerns about a sentiment, but in terms of fundamentals: I think Tesla is in a phenomenal position and I'm not terribly concerned about the future of Tesla. If anything, I'm super excited about Tesla and I hope you're excited about Tesla as well, because yeah, they're always going to be some fun stories.

but I think Tesla can do some great things in China and actually help China's GDP explode. Thanks for watching! Thank you.