Everyone me kevin here welcome back to another closing live stream. Today. We will be be covering tesla. Earnings and boy.

Oh boy. We've got a lot of important to look at for the tesla earnings. I'm pretty excited about these myself mostly because this should be should be the worst set of earnings from tesla. And they're going to be a few particular things that we really really want to pay attention to i think these will be absolutely critical for uh ultimately.

The company entirely uh so the first one that we really want to talk about has to do with maintaining cash flow. We've got to get that cash flow going strong. And it's got to be positive especially in this quarter now it has been but it could potentially turn negative because of those shanghai shutdowns. Why is it so important that we maintain positivity here not just emotionally.

But also positive cash flow well. It's so important because in this quarter. Elon. Musk.

And his discussions with the silicon valley owners club talked about how essentially berlin and uh. Texas. Texas are like money furnaces that they're burning. So much money billions of dollars trying to ramp up these facilities and the last thing investors on wall street want to hear is a company is burning money like a money furnace.

I mean the fact of the matter is since january. This stock market has been trading down companies without earnings. It's that simple and the stock market is obviously slight at least slightly nervous today about what could happen. Because why well the nasdaq's up one point six four percent and tesla's only up 15.

This is a stock that usually has a beta of at least two if not. Uh you know like a forward adjusted beta of something like a 21. Depending on what kind of beta. You're looking at usually.

We're referring to uh the s p. When we're talking about beta. But towards the nasdaq tesla usually has a two so. That means if the nasdaq is up.

164 tesla should be up 32. But it's not so why is it not where is this difference this. 225 percent here folks that 225 is literally the pre earnings jitters yeah pre earnings jitters because people don't necessarily want to buy right now uh. Otherwise.

We would see these order books get picked up a little bit more by tesla. I think people are waiting thinking. This is if there's ever going to be a quarter. This is the quarter to miss now you might think okay that's actually pretty funny uh okay so here so we're gonna look for cash flow uh expectations in terms of what happens with the stock being on this sort of topic.

I think is actually kind of funny because i like to look at the implied volatility to see hey how much is the stock potentially going to move. I got to stop using this green marker. It just ruins. My board here.

But anyway um how much is the stock going to move and one of the things that we look at is both well we look at two things we look at average and we look at the implied volatility for today for how much the stock might move and the average. I'm going to stop using this marker. Which is going to chuck it there we go the average movement that tesla moves after earnings is 42. That's the average which is hilarious.

Because it's 420 c420. There you go all right. Anyway then we have the implied volatility for the day of 673. So if you are playing options.

This is important to know if you're playing in the options market and you're buying options. Today you have to be in a. Situation where the stock. Moves either 67.

Percent. Up or down for you to uh profit. Obviously down puts and ups uh calls. Now if we look at the historic volatility to try to get a little bit of an idea on hey is there an opportunity to maybe do anything with options before the closing bell.

Which is in 19 minutes uh whenever this loads up we'll pull this here uh. But what we're generally looking at or at least. What some folks are talking about is some folks are saying hey usually going into earnings. We have what's known as peak volatility after earnings these fall so usually oh.

But volatility has been really low okay. So usually what happens is we get peak volatility before earnings and uh. What you would want to do is either sell calls or sell puts you become a seller of options selling calls would give you some premium that would protect you to the downside. Selling puts is is a bullish move that would uh give you premium if tesla moves to the upside.

But ironically uh the volatility chart right now for july 20th shows tesla's volatility right now is at 44 and that is that's a a very very low. I mean year to date. We've only hit that low three times three other times. I mean it's literally a chart that looks like this and you know there have been three times where we've hit that low of a volatility.

Which is really interesting which in that kind of scenario would suggest that maybe selling options actually isn't the best you've actually got a low option environment. It might actually be even cheaper to buy options right now. Which is usually the opposite that happens so you've got this odd low volatility on tesla of course. If tesla doesn't move.

But you know one or two percent after hours uh then that doesn't help much either. But anyway an interesting opportunity there to potentially actually be a buyer of options quite interesting so uh that's something to keep in mind all right so we talked about how tesla needs to maintain their cash flow. We also talked about how because of iv. It potentially makes sense to buy options very interesting uh.

But the second thing that we need this to be positive that's obvious though the second real thing that we have to do is we have to make sure they're increasing margins or at least stabilizing margins. Because here's the thing. Let me give you a simple example. If tesla with china has margins of let's say.

31. You know we'll put margin over here and without china has margins of 24. Then what that tells you is this business is relatively inefficient fremont nevada right relatively inefficient versus tesla. China.

And that china carries the weight this this what i've just described here. Assumes that model s and x deliveries are roughly stable right. I mean obviously. If you had a big boost in snx deliveries or a big plummet in snx deliveries.

It could really uh change. The margins here. Snx is a these are the premium vehicles. These are the high margin vehicles.

So they're obviously going to lift the company's margin base. So buying options potentially cash flow being positive very very important now uh increasing margins. That's that's the one that we just talked about over here so we want to see margins at least stable super super. Important there and uh then we have to this this i don't know honestly if we're gonna get this uh.

And it's it's somewhat concerning. We also don't know if elon's gonna be on the earnings call. So we'll see what kind of uh commentary. We get on earnings this will obviously be after the release of the earnings.

We'll see what actually happens but uh in the commentary. We want to see if there's any kind of consumer forecast that we can hear so for example if we get a. I'm going to open up the chat by the way uh er. Just for a little bit here while we still have lower sub.

So if you want to chat. I'm going to make free chat poverty chat for a moment. So buy options can't wait. We talked about this with the implied volatility talk about cash flow.

Talked about margin at least being stable consumer forecast so this is really important 2022. We've seen the slowest level of car sales for or or even registrations for the three and why and so it'll be really interesting to see if we can get any kind of forecast for the consumer is the consumer actually still strong in the eyes of tesla because we know if we go into a recession. We are going to lose demand. There's there's no way you do not lose demand in a recession.

The question is to what level do you lose that demand right so let me visualize that or that visually. If this is your demand box right and then this is your current capacity. But this is total demand and this is all that tesla can actually fulfill right now and then we get to those one year wait times or whatever. If that's where we sit right now.

That's great if a recession comes in and this whole box is uh capacity. If a recession comes in and kills. Let's use the same color kills. The box going back to here now this box is gone right that part of the box is deleted how much excess demand.

Do we have this folks. This is the big question. Mark that is what determines whether or not in my opinion. Tesla stock goes up or down.

If we get any kind of commentary around the consumer. Because if it's possible that this gap here is so small that we will hit that kind of gap by uh hold on a sec. If we will hit that kind of gap. If we hit that kind of all right if we hit that gap within the next six months then all of a sudden you're going to see lead times for teslas collapse.

Right and they start getting delivered within one or two weeks and then it's like oh dang maybe maybe. There wasn't that much demand. If we see a loss of demand. But we're still question mark out let's say two years uh.

Well you're not out two years. So you're not gonna get two years. Let's say question mark demand you're still out even after the recession. Three to four months.

There we go that is still good right. That's that's a good thing uh. So i think that's very very important uh. Okay good so i'm interested here uh.

If elon's on the call to stock falls. That's funny buy now to avoid the netflix scenario. When all that is priced him. Maybe you know one of the things that i think is is interesting is netflix and you should watch my video on netflix that i posted this morning it was really really good it was a fundamental analysis.

You know i've noticed the you know people always say in the comments. They want more fundamental analysis videos. But then i post them and they just don't do as well as sort of like news updates. So you know i don't know if people are just bored of fundamental analysis or what.

But people keep begging for fundamental analysis. And that's why. Most of the time. We only do fundamental analysis in the uh course member live streams uh.

We we try to do that regularly i'd say about 80 of the time i go live. I try to do a fundamental analysis. But uh yeah. I mean sometimes lives have to be a little shorter.

But uh then we just do some q a but of course remember lives almost every day. I'm trying to i'm thinking myself all right what are we gonna fundamentally analyze today yeah i think it's great i think it's this is the kind of market that you want to be in and you want to do fondies on uh you know even if you just tune in to kind of get the bottom line. It's still kind of cool to get uh to see what uh. What we can learn from things like did you know this is just a fun fact i don't even think i mentioned this in my morning video this morning.

Did you know that 60 of netflix revenue is international did you know that 55 of tesla revenue is international and the strong dollar actually hurts these things so that's another thing we talk a lot about is is uh the dollar and does it make sense to potentially go bullish on something like udn right now we have a big. Fundamental analysis lecture that we did on udn and a dollar short uh. You know. It's it's uh.

It has implications for netflix as well so it's very very interesting. What's going on in the environment. You know i heard on fox business. Because i was on fox business earlier and the guest before me thinks that the fed's going to take off in august.

Then cpi is going to come in low and they actually think that the fed is going to pause oops pause. In september which i heard that and i'm like man what are you smoking dude even if we got a hundred basis. Points now we still gotta get to 35 to four by the end of the year and you got september november. And december you got three meetings to do that i mean i guess if you go from two if you do if you do 75 this time.

Which is what's expected and then you do 75 and 75 in two meetings you're there. But why do that when you could do 50 50 and 25 or even 25 25. 25. And get uh you know if after you do a basis point icon.

That doesn't really get you there you have to like 50 and 25 and 25. I i don't see like a pause and then like a restart the hikes that seems like kooky to me so i don't know where some people make this stuff up. But that's also not what the bond markets pricing is you know the beautiful thing is the bond market. Tells us they tell us stuff uh.

You know they the bond market can really give us a heads up to a lot of things that are happening for example inflation right. We look at those break evens and it's like oh man that inflation seems to be plummeting. We'll see if it turns out uh it comes to fruition. But well you know what's interesting to me is elon musk tweeted.

The other day he also uh responded to one of my tweets again. Which was really really cool the same one he responded to the last time which i was also kind of shocked by because it's kind of like elon are you sad that i kind of said that it looked like you kind of got a blow from the judge. Like bad news from the judge. And then you went to my profile and you saw that one twit.

It pinned. But then you re replied to that one if so that's okay you're right you know i've kind of had to like change my stance because i'm like crap you know twitter actually has a good argument twitter. Never had an obligation to count how many bots they had so i i don't know i don't know but uh. We'll see what happens uh all right so uh okay good so we've got uh tesla now coming up in 19.

Minutes which will be very. Exciting we're going into the close up 112. On the day sitting at a tesla 744. Oh.

Yeah. And i was going to say elon musk. Did suggest that prices could come down if inflation comes down now. I thought this was really interesting because i it made me wonder if uh if elon was trying to almost prep us for like any any kind of like weaker demand right so.

If you think about it. If elon is seeing weak demand. And he kind of thinks okay we're going into a recession. Or whatever.

He might want to try to prep investors. That hey hey don't don't worry don't worry we will reduce prices as inflation comes down. We will be nimble and uh when prices come down. We'll uh.

We'll drop prices and we'll get that demand right back up. It's interesting you know it's a thesis. It's kind of like i don't know elon did you really have to say that but you know it works it works. Yeah you could do this you could sell strangles on options.

If you wanted to this would be selling a call and a put potentially for the same date. Maybe. 30. 45 days or something like that and uh.

An ivy could get crushed sure. But the problem is we're at very very low iv. Today we are at the lowest historical iv. That we've seen all year uh matching three other instances.

We've been this low. It's very weird that iv is this low i mean we're half the implied volatility of last week which is quite shocking uh you know another thing uh that we yeah. These are the things okay we'll talk about that too so the other things that i don't really think are going to be earth shattering updates for tesla. But i call them my margin of safety.

So we're going to call it the m of safety right these are things that i really don't like to price in my theory of the margin of safety is give me more of that tesla insurance. Okay not only is it insurance. Which is sort of like a pun for being part of margin of safety. But seriously.

The tesla insurance. Just the fact that they give you a rating of your driver. Safety score makes people who actually pay attention that score try to improve it and so subconsciously people become better drivers like i remember i went to florida and i'm like yes. I had a i had a porsche in miami and a bmw in tampa.

I rented them on touro or whatever yeah. And i'm like oh. My gosh. I'm free of the safety score you know and so i had more fun uh with the cars uh and uh and with with uh with my tesla.

I drive the thing like a freaking baby. And it's like why do i even have a tesla. It's because oh you want the safety score. Because maybe.

Maybe you'll get the full self driving beta. And it's like man. That's a joke. Like i have been i have had the models uh the model x since 2017.

I was one of the first youtubers making tesla videos talking about how great it was people have copied my tesla videos uh and the content in it and got millions of views on it uh you know. But whatever that's what people do on youtube. They copy each other and uh. And and like what the heck still no full self driving beta for me and uh.

My model s. So i'm actually thinking about selling my model s. But uh more on that coming so i don't really care about the full self driving beta anymore just because i don't think i'm ever going to get it because i think they know and this i don't know i hate to be jaded. I hate to be jaded.

But i really do think that uh there's the potential that maybe somebody's like yeah. No don't give kevin full self driving because he'll be too honest. This is a problem because i'm all for being as honest as possible and and this is one thing like the only time i tried fsd. I'm like yeah.

No it'd be this fsd for me i don't know why it says fsb. But whatever uh fsd is maybe dyslexic turning dyslexic uh fsd to me is kind of just like that click bait to help incentivize the insurance and then when you actually get it you probably don't use it too much uh because it's just not perfect. Although it could be wrong maybe. It's gotten a lot better uh maybe.

It's gotten a lot better uh recently who knows who knows so uh. I will be reading the earnings report as it comes out so anyway insurance. Part of the margin of safety full of driving part of the margin of safety. The bots part part of the margin of safety for me uh honestly at this point the cyber truck is kind of in here under margin of safety because we've got plenty of demand for the other uh deals and uh.

So is the semi truck and so is energy. So if you kind of look at it and you just buy tesla for this one word. I'm gonna put on the board who knows what this word is gonna be okay let's start we'll do a hangman all right hang man. What's this word gonna be okay.

We're already and he needs eyes and a leg and then and then he dies. Okay so this is part of the margin of safety. This is what you're buying tesla for okay. I'm gonna help a little bit that's what you're buying a uh.

This will help this will help i see some of the guesses. This is why you're buying tesla okay uh not this this is the bonus insurance fsd bots cyber semi truck energy that's why you care about uh or this is your marginal safety. Why do you buy oh there it is he got it uh. It is blau got it ramp.

That's it this is why you buy tesla you buy tesla not because you actually think. It's worth. What it what it's selling for today. You buy it because when they perfect berlin and texas.

When they perfect this and actually ramp this up they're going to copy and paste this freaking factory. They're going to copy and paste. The factory and we're going to have 10 of these in the next five years and then all of a sudden you're going to get wall street. That's just going to lose their freaking minds.

Because they're going to go what we were expecting tesla to be able to maybe get to like two million cars and be sort of a niche uh you know luxury automaker. But now inflation comes down that's the game plan. Here for tesla. Okay.

That like literally here's your game plan. Okay. Number one perfect the ramp you perfect the ramp after you perfect the rant at the same time as inflation comes down you lower prices as ramp takes off and then wall street. What the f and wall street estimates will go from something like this let's do this.

23 24. 25. Oh. I'm off the board.

A little bit okay. That's fine. We'll put 25 right. There wall street estimates will go from something like that uh or of these years.

I'll give you i'll give you a barclays. Let's see yes okay so wall. Street estimates for deliveries will. End up going from we.'ve got 14.

To 197 to. 23 to 25. We'll go from those kind of vehicle delivery estimates to. In my.

Opinion. 14. 25 to. Probably 35.

To uh probably in the direction of five and and so. By. 2025. Wall street in my opinion.

After this ramp. Word ramp inflation come down. It comes down you lower prices. As we ramp.

You you announce you know three four five new giga factories in a few years. All of a sudden by 2025. You're projected to do five million vehicles. Instead of two and a half now all of a sudden these companies have to double their valuation models and then they see holy crap elon can actually ramp okay that's why you're buying tesla folks that's why you're buying tesla don't talk to me about the margin of safety or all the other crap that's why you're buying tesla all right that's it so now we got the market closed.

I'm traveling right now so i'm just going to be your bell. Uh you know okay nasdaq's up uh 157. And ding ding. Oh.

It's like a it's like the good old days where kevin used to do the market closes and the market opens. I don't know should i bring those back some people are saying hey when you're back from vacation in august bring back the opening closes. I don't know but. Anyway we've got the dow jones just closed up.

014 we've got the. S p 500. Up 059 and the nasdaq up 1058 with the russell up 162. Tesla.

Stock. Which is what we are here for closes. At 7 42. 50.

Which is up eight tenths of one percent. All right folks. So we've talked about a lot of things so far we at the beginning of the video talked about what tesla really needs to do and what maybe there is for us to do do we buy options do we not buy options. And i gave you a little bit of some hints in terms of what you can do whether that's selling options to take advantage of iv crush or considering the fact that we are at a pretty terrible point in uh in historical volatility for for selling.

Maybe you even buy some options right so we talked about that we talked about what's really important for tesla. In this next. Earnings report. Which is not only that margin.

But positive cash flow and the reliance on shanghai excuse. Me also any kind of hints on the consumer or even future ramps. Although. Usually these events uh like earnings calls are not the opportunity for speculation uh over uh you know future product announcements or whatever sometimes we get some hints and i think a great opportunity for discussing uh.

The you know the company's future with products. But usually elon says now is not the time for uh product announcements and we also don't know if he'll actually be on the call. I think after the blow from twitter. He'll probably be on the call because uh you know it'd be well.

If the earnings are good. I think it'll be on the call. Let's put it that way um anyway. I'll bring back the opening closes.

Yeah. So we are now eight minutes from earnings. Let's write that down here eight minutes from earnings and we are also eight days from the expiration of that coupon code for any of the programs linked down below or the bundles on building your wealth specifically the most popular one that we're getting right now is real estate zero to millionaire and stocks and psychology and money that way you're getting all the sort of fundamental analysis. The real estate analysis uh lectures that help you teach how to do it and then of course the live stream access.

But anyway so uh okay eight minutes from earnings. We have our numbers up let's go ahead and why don't we write down. What the expectations are per. Bloomberg's consensus eps is all over the place for individual companies.

But let's go ahead and write expectations down and then that way when they come out we can uh. We can actually compare them so expectations. There we go right at the top of the board perfect all right expectation. Today uh.

Yeah. You know it's it's funny. Some people like oh. But the coupon doesn't end every time we say the coupon expires.

What happens is the price gets revised up and the percentage stays the same so somebody net pays more money so there's an incentive to getting in earlier sometimes to as much as 75 to 100 bucks uh you know which which is huge. But anyway so okay we have this is the bloomberg consensus estimate is eps. Adjusted we are going to be looking for 1831 for eps gap eps gap. We are looking for one five three one five three okay revenue revenue.

This one should be relatively close to being accurate because we know how many vehicles were delivered. Because that's what gets pre. Announced so that's not that big of a surprise. 1688.

It's going to be all about this net and eps and margin right so net comes in is expected to come in at 214. And then we've got uh let's go ahead and pull up the last report and let's see what we've got okay let's see here we're gonna now pull up just so we have the news. It's scheduled to come out in about six minutes uh oh tesla's out tesla meets oh. It's already out it literally just came out seconds ago uh okay revenue comes in at 169.

That's a meat of expectations. Where's the bottom. Line oh here it is oh adjusted eps beats big 227. No freaking way they're releasing early.

Oh we got good news. How what tesla still sees 50 growth. This year. Uh.

Wow. Uh that is you know elon musk did hint at 60 percent. But that's crazy uh. I i'm really surprised by this no freaking way uh okay.

I'm this is definitely coming out earlier than expected. But let's go ahead and get the letter. This is incredible. I can't believe we beat on eps that much that's insane.

The q2 letter is out i'm pulling this up right now it's halfway downloaded uh. But again they still see a 50 growth revenue meet expectations which we said it should have. Uh but the fact that they came in at 227. On eps.

This is freaking amazing uh. I mean i i don't know how they did it uh. It's it's really really good. This is an incredible incredible beat here folks uh in in what was expected to be literally the the worst uh quarter here.

So very very good beat. Let's go ahead and get into the pdf here and see what we got this is uh. This is quite remarkable uh okay we are into the q2 update. Let's go let's go okay.

What do we got operating cash. Flow. Yes. Look oh.

Yeah increasing. Cash let's. Go it's only 08. Billion.

In increase of cash. But it's positive cash flow. That's one of the things we were looking for was so we beat on eps and we beat on cash flow. Let's go we've got operating income here uh.

Let's see here getting the quick. No tesla up three percent and after hours whatever don't really care about the after hours. Okay margin fell uh in q2 279. It's it's not exactly stable.

But it's decent uh. You know we're down off that 30 number we definitely lost about two percent of the margin. There so we've got a little bit of a hurt here. I'm going to go ahead.

And say sad face here i'll take the positive cash flow here uh more than 1 000. Vehicles produced in a single week at giga berlin. That's great that puts us on pace for the 50k. This is as expected so i'm going to write this down.

That's as expected. This is very very good on in terms of rant highest solar deployment in four years folks this right here is good for end phase. I'm actually really surprised by this that homeowners still are not giving up their willingness to spend so uh that that does come as slightly a surprise. We continue to make significant progress across the business during the second quarter.

Though we faced certain challenges. Including limited production shutdowns in shanghai uh for the majority of the. Quarter we achieved operating margin among the highest in the industry 146. Percent positive cash flow of 621 mill uh okay that's a little different from here so we'll have to look at okay operating cash flow less capex.

Okay that's fine. It's fine. We'll look at the cash flow statement new factories continue to ramp. This is exactly what you're buying.

This company for austin produced its first vehicles with the 4680s not yet in berlin. We've got energy business making progress achieving higher volumes for stronger unit economics. Customer interest in our storage products remains strong and well above production rate remember these batteries can be used in cars or they could be used in batteries for uh tesla storage homes and the tesla storage products so uh you know that's not that's not a big deal. But what it does say is uh.

If tesla can't keep up with the production end phase could be a recipient of that battery production so i'm still bullish on end phase. Though i expect i really think that at some point homeowners are going to say no we got to take a break if a recession is coming. But so far we're not seeing that and enfa stock is is nicely green here today it is a great company automotive revenues. Okay let's look at the margin here so what do we got here's our drop.

This is the worst margin folks the worst margin that we have had uh in uh in in the last year. The worst margin in the last year. But it's still phenomenal uh still strong despite being the worst margin in uh in 12 months. That's quite incredible so something to pay attention to here.

We've got uh also lower regulatory credits than last quarter though we're going to want to look at margin without regulatory credits tesla now up four percent in after hours tesla did see a continuation of manufacturing challenges and shutdowns uh. I i'm really shocked that uh they are uh they're still here i don't see any update yet on bitcoin. Though we do know we're probably expecting some kind of impairment from. Bitcoin there it is look at that bitcoin.

Impairment there's that us. Dollar impact. I told you 55 percent of tesla sales are international. So we're definitely seeing some some negatives here the for the dollar here's the thing folks okay the dollar falling the dollar falling uh oops falling will be bullish uh for tesla given 55 international deliveries.

So that's very very good uh also uh btc impairment shouldn't be an issue. But oh we've converted 75 of our bitcoin into fiat. Oh they sold bitcoin oh no that was uh that's unexpected we got to tweet that uh tesla tesla cells what did what did they say here so they said quarter in cash cash equivalents driven mainly partially offset by debt repayments at the end of q2. We have converted approximately 75 percent of our bitcoin purchases into fiat.

Conversions in q2. Added. 936 mil to our balance sheet. Wait a minute did they just do that to get positive cash flow.

That's going to be interesting. We'll have to look at the cash flow statement for that uh. But uh that's very very interesting. So we're going to write that down tesla.

Uh dom 75. Percent uh of their bitcoin. Did they do this to get to to to prevent a negative to prevent a negative cash flow this quarter uh looks like it oh interesting okay. I just tweeted that feel free to i tweeted the section of it if you feel free to retweet it if you're on twitter.

I'm at real meat kevin on there that's really interesting to me so let's go ahead and jump into here. Wow. Okay. So again the dollar falling will be bullish for tesla.

Given. The 55 international deliveries btc impairment. Shouldn't be an issue now now though i mean i was going to say it shouldn't be much of an issue because you know maybe they're still holding it it's kind of started to move up. But no they they dumped uh that's pretty incredible adding 936 ml to the balance sheet.

Now that makes me very curious. I'm going to go quickly to the cash flow statement here because statement of cash flows net income positive net. Income you see this positive net income here 22. Bill adjustments to reconcile net cash provided by operating activities.

Including depreciation stock based comp changes in operating assets and liabilities. Where's the net cash uh. No no where's the bitcoin purchase of marketable securities. That could be negative.

No capital expenditures. Where did they put it net cash flows hmm. Where the heck did they put it is it here is it no change in operating assets and liabilities. It's not here q2 depreciation.

Oh impairment i found it okay no no it's right here. It's right here depreciation amortization and impairment 922. So they would have been net cash net increase in cash. Oh.

My gosh had it not been for bitcoin. Folks. They would have been um oh. Wow.

That is that is shocking. Uh. Let's go. Ahead.

And throw. That uh. Oh wow. Okay.

So that's very interesting. Cash flow. Statement. Shows.

922 million dollar. Uh. Cash flow bonus from bitcoin sale. Uh cash flow change was 847 million.

That means without cash from btc sale tesla would have been cash flow negative yikes yikes. Okay. I don't like to see that that they basically like it almost kind of feels like they kind of dressed up the earnings a little bit by just dumping btc to increase the cash flow. Feels like earnings were dressed up uh not not happy about that one at all that's quite interesting and obviously the margin decline.

So i just added that to the thread. Let's see i want to make sure i got the right lines and everything net increasing cash equivalents uh effective make sure we got this right net cash user. Investing activities. This is the impairment uh this this is the right line.

I'm going to make sure really quick. We're just going to draw a line because i you know i could be wrong. No. That's the right line.

That's the right line net increase in cash right there. It's here. I'll hide myself for a second look at that folks you could line it up right there i mean. It's it's not bad.

But it's uh. It's it's just it's lame. Let's put it that way okay ah damn. It tesla okay well let's let's go back to the the statement over here.

So okay still strong despite being the worst margin. That's kind of where we left off. Oh no we left off on the next page. Let's go through this over.

Here. Uh. Okay. What are you doing dude.

Uh. There. We go okay. So uh.

Then we've got. Oh yeah okay. I was talking about this increase in average selling price. That's fine growth in vehicle deliveries.

Duh growth and profit of other parts of business fine. Lower stock. Based comp. Good uh.

Yeah. Because the stock has gone down um. Because the stock because the stock fell well. I mean.

It's true like if you're gonna give a thousand shares of compensation right and it's worth nine hundred dollars per share versus. You know a lower uh versus six hundred dollars a share. But okay i mean it also depends how they exactly they account for it. But we can look at that later so okay let's keep going so looking at s and x production.

We've got we've got a nice okay. This is a nice movement here in snx production. And this is actually slightly an issue because it shows that margins actually got hit a little harder like i want to see that production go up because it means. Good demand but that is a.

154 increase 154. Percent increase in s x. Production from q1 that definitely padded. Margin.

Which already came in bad slash. Not good due to shanghai. So interesting kind of thing to think about that even though. We're looking at at some of these.

Numbers. Like oh yeah. S. And x.

Oh. It's doing great yeah. It's easy to say that but imagine if it stayed stable dude margin would have gotten green tesla here man that's uh that's a big move. Although that's production versus deliveries deliveries is actually tighter so deliveries is what what makes the money.

So actually uh. I should be dividing that number one six two because that's actually oh that's not as bad. Then no it's still still about nine percent uh and nine percent sales there i'll clarify that still like nearly ten percent okay solar deployed let's go the highest solar deployed yet uh. I mean like i'm happy about that for tesla.

I think that's actually also bullish for uh end phase. But my gosh when are homeowners going to stop spending freaking money man. They're contributing to all this inflation. You know it's it's it's almost as bad as somebody uh you know raising course prices.

Because demand is so high contributing to inflation. I'm sorry about that. But i'll cheer you i'll cheers you to this this is hold on let's cheers. This and then keep going what is this this is a jack daniels tennessee whiskey berry blend you know it's 10 alcohol it's not that good not that good um.

I wouldn't recommend it okay. Now supercharger stations. Ah. Yeah.

I mean i i didn't think that we were going to get to my higher level supercharger stations that i'd hoped for when i talked about this uh in my uh in my last video but we still did pretty decently. Here. 24 that works out too about 66. That's not bad not.

Bad let's go and write that down that's about 66. Percent up in the quarter right because that's an annualized rate. Annualized rate of supercharger growth is let's see six point six times four. That's an annual rate of twenty six point four percent.

So in theory we could be at you know if i do 39 71 stations times 126. If we stay at that rate. We could be at 5 000. Supercharging stations by uh next year q2 right that's that's pretty good you know super charging stations are one or lack of or one of the reasons we we don't like to see um sale of digital assets 936 not 922 okay well i mean that's pretty close okay hold on guys hold on uh.

I mean. It's still pretty long because they said it was the impairment sale oh sale of digital assets oh. It's even worse well that's even worse that's literally even worse. It's actually this line right here.

Okay. I'll i'll just quickly throw that on my tweet chain. It's actually worse than expected uh digital assets. Which makes this math even uh even worse uh okay i updated that tweet thank you i mean i appreciate.

Y'all. Saying that uh yeah okay great okay so yeah. It's worse uh shout out to whoever found it uh xlo. If that was you or whatever it it doesn't matter.

But that's more cash contributed from the sale of bitcoin. Which means. We would have been more in the hole uh had it not been for that btc sale. I mean that btc sale bailed tesla out uh this quarter from negative cash flow.

I don't know how i feel about that we can we saw a continuation of manufacturing challenges. This is q2. I don't really care about q2 uh. They're trying to get shanghai to over 250k and obviously these guys to sorry over 750k 250k for over here.

That's fine uh fremont uh 650 over here for fremont that is wonderful. I like to see that let's throw a nice little boxer over here that's fremont shanghai was shut down fully and then partially for the majority of q2. So now this is look we have to be real here right like you still had a kick butt quarter despite all the craziness right despite the fact that shanghai was fully shut down for a while and then partially shut down. So big kick in the butt for a while with shanghai and q2 and you still had amazing margin.

I mean a year ago. We would have looked at this margin and thought wow that's actually really decent uh and um. You know you you had the biggest solar deployments ever. Yeah okay you you basically had a negative cash flow.

So you sold some bitcoin to go positive. But whatever uh you know we don't expect that kind of pain again next quarter. Because we actually think that shanghai will be open hopefully over a hundred thousand drivers had access to the fsd beta. We relaunched enhanced autopilot option in north america for those only interested in highway autonomy.

Fine uh amer in north america. You can now automatically adjust to a more comfortable ride height before encountering a section of rough road great uh. Some software updates that's fine thanks to large casting and parts consolidation. The robot count in our body shops in new factories.

Dropped by over 70 per unit of capacity compared to our first iteration of the model. 3 body shop. And this is this is why tesla is probably one of the best robotics factories. So you know i gotta stop being angry about the cash flow.

I got to get a little excited here about the fact that you've got a company that's still freaking kicking butt energy storage. This folks the only reason this is not higher this will boom once capacity increases is once that capacity comes up that energy storage is going to absolutely kill it services return to positive gross margin. That's incredible. I actually want to look at that because i kind of don't believe it we'll look at the the income statement.

In just a moment actually let's just go to the income statement. Right now income. Statement the services and others line item service is another. Line item.

1466. Billion and the cost of that was 1410. It's not much of a margin here it's not like it's gonna actually change anything. But uh.

It's uh. It does something all right let's see here. Then we've got okay the balance. Sheet look.

Folks we ended the quarter with 183. Billion dollars in cash cashola. That's really really good don't care so much about the inventory on hand current. Liabilities what do we got in terms of.

Liabilities we got 218. Billion dollars of current liabilities. But we want to take out deferred revenue here so if i take out deferred revenue. That would be right here.

That's the 18 figure that takes out about that takes us to about 20 liabilities accounts payable customer deposits whatever current portion of debt and deferred revenue net of current portion that's fine okay so that puts us somewhere around almost washing. If we take the short term. Marketable securities. Here or the accounts.

If we take cash short. Term. Marketable and accounts receivable. We can wash that with current liabilities cash ar and marketable washes.

All current liabilities. However. We do still have long term debts here total liabilities are about 30 of that we've got deferred revenue that i'm not so concerned about other long term liabilities. 39.

Billion in debt and debt and finance. Leases net of current portion. Okay. I'd really say plus about roughly.

I'm just going to estimate here about 5 billion quick mental math there 5 billion of debts. This is not that big of debt of a deal longer term debts and you know that doesn't even consider the fact that you do have other assets. Obviously as well so not terribly worried about their debts here. Though you know it's it's not like they're like cash rich.

I mean some companies you look at you're like man they have you know endless amounts of cash. But as long as they remain cash flow positive. This is good and i think that's why they sold btc as long as we're cash flow positive. We gucci is uh.

You know my assumption here okay good now let's do by the way after this we'll do a little catch up in the uh course. Member live stream uh and we'll do a little bit of q. A. Which will be right after this in case.

You're a course member you can meet me after there we'll do some q. A right after this we got some pictures here two million cars. Produced you can kind of look at these yourself here's a paint shop here's texas yay they're putting solar panels on here's the body shop here's the exterior you know here's uh. You know someone working.

Okay. Cool uh. What do we got here. Seat belt tensioning.

Hey. Vision based seat belt. Tensioning. You know seat belt.

Tensioning. Is something that mercedes has had for like decades you know they tightened the seat belt before it crashed basically so they've got the uh. A cyber shareholder meeting. I didn't get invited whatever.

It's fine. I'm not mad operating cash flow. I mean this right here is uh. It's just their their their free cash.

Flow. Numbers a little bit like uh a little misleading on car uh. But whatever that's fine. This is sort of their their annual rate 12.

It's trailing 12 that's fine because this quarter would have been negative had it not been for bitcoin. But okay all right i'm fine. I'm gonna stop complaining about it research and development actually fell take a look at that research and development felt decently. What do we got over here.

We got uh 667. Divided by 865 wow. 23. Decrease.

In r b. In r. D. So.

I i mean interesting. I wonder if this has to do with like the autopilot layoffs or or what's happening over here. Or did we just have sort of big temporary boosts in r d. Spending.

But i mean. It's been a gradual climb. So. The fact that we've kind of seen.

This gradual climb in r. D. And then this sudden. Cut over.

Here. Is is definitely something i would be paying attention to in the earnings. Call. Why did that happen that r d.

Cut. I do think that's fascinating restructuring. Another big deal okay earnings per share beat heavily at two dollars and eighteen cents. Which is phenomenal uh stock based compensation fell whatever uh at least it's not like skyrocketing while the price is going down right then it's just kind of like a slap in the face okay.

So uh. Let's uh. Let's do kind of a quick rough conclusion. I'd say uh margin.

I'm not happy about the eps. This was oops. I can't even spell anymore time for another drink okay uh eps uh exceeded beat. But you know honestly some of this let's go to the income statement.

Really quick because it's probably wait did we take a loss over here though let me see the hold on a sec. We probably took a loss on the bitcoin actually ah let's see if we have a loss in here. That would be really interesting services and other selling restructuring expense total operating expenses other income or expense. It's not there.

I don't know where they buried that it should be somewhere under these these other this other section over here. I don't know where they hid that impairment though. I'm gonna have to dig for that a little bit. I don't is it is it selling no it wouldn't be under here total operating extent.

No that makes me a little curious in terms of where the loss is for btc you know i would expect a decent loss over here. But i don't actually see it unless. It's buried in like services and other no i don't know uh restructuring another maybe let's see restructuring another 142. I mean could that be the loss you know.

10 over here. I mean maybe maybe it could be this it could be restructuring. Another which that's not that much. But it would have changed eps right because if we took eps and we went from uh two two six nine two two seven nine that's fine attributable non controlling oh okay so okay attributable shareholders two two five nine two two five nine divided by i'm not gonna give you the numbers.

Oh here we go weighted average shares 1037 to ah that i okay well yeah. Now i'm going to take off minus the 142 loss potentially from btc that would put us at it would still be they would have still beat on eps. They would come in at two dollars and four cents. So eps beat regardless of uh btc.

So that means. We didn't actually have that as bad of a margin impact as we thought a lot more s's and x's. Which was very interesting the s and x. Way up nicely.

I mean nine percent plus in the deliveries. Eps beat. Beat uh even with btc uh even with btc loss. We have assuming that's what that was margin kind of sad face.

But i get it and then cash flow would have been negative if not for b2c. Which is not so great so we'll see what the earnings call calls earnings call brings. But that's what we got for all of this and uh. Yeah.

Thank you so much that's um really appreciate you all being here. And i will see you all in the course. Member live stream coming up next. If you're not already a course member remember you get lifetime access and uh.

I'm not leaving even if uh if if i have to change my mind and go all in or go all out at least you're the first to know about it and you can get some more perspective as to why you know i'm not here to to you know mess with anyone's melons. It's just hey if i see something going on i'ma tell you about it that's the thing about me is if i see something i don't like i'm gonna tell you about it if i'm wrong i'll correct myself you know but uh i i just appreciate y'all. I'm gonna go over a course member live now within the next 60 seconds. We'll see you soon thanks bye.

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