Remember that fund raise for house Haack closes tomorrow. Check it out at Hous Hack.com or email us Ous Hack.com Well, we've got some Tesla news. Some good news, some bad news. Let's get started with some good news.

We got permits for Giga Mexico which is fantastic, but we also know that Elon Musk is purposefully slow walking the building out of Giga Mexico because of concerns over the high interest rate environment. Given obviously that companies like Tesla are extremely interest rate sens, it entirely makes sense that a company would want to be conservative in an environment where we're not sure how long interest rates are going to stay this high now. Fortunately, we have some positive European inflation data this morning suggesting lower than expected inflation thanks obviously on the headline heavily due to Falling Energy prices in Europe but most importantly, even non-energy and non-f food prices core came in lower than expected. This is good.

We want to start seeing yields come down because those a really going to ultimately help those cyclical plays like Automotive manufacturing and solar manufacturing whatever it is. So getting permits federal and state for Giga Mexico is fantastic, but we don't actually expect to really hit the ground running in Giga Mexico In other news that is, we'll start with the bad and then we'll go to the good in the more not so great news we have this Herz's Embraces of Tes isn't going so well and this really depends how you spin it. You could spin this as a positive, you could spin it as a negative. and the truth is, it's a little bit of both.

So remember when Herz is like we're going to buy 100,000 Teslas Well, they're going to buy less now and the reason has nothing to do with the function of the Teslas. The Tesla's functionality is fantastic. The Tesla's cost of ownership is fantastically low, lower than their equivalent Ice Vehicles like a Toyota Camry Let's said, you know what the problem is. The problem has been renting out Teslas to drivers who are using them for ride share and then the vehicles end up getting damaged because when you use them for ride chair, it's kind of like, you know, putting a house on Airbnb It's going to get beat up more than if it was just used by somebody who has the car for their family.

It's in use much longer. It's got more people going in and out. It's got people in it who don't necessarily care about the condition of the car. And even though the cost of maintaining the vehicles and operating the vehicles is lower for Herz, the cost to repair damages to an electric vehicle are around twice as much as fixing similar issues on comparable Ice.

Vehicles Routine maintenance costs less, so notice that difference there. It's when these cars get beat up and Ride share, they're more expensive for Herz to fix and it's hard to pass those cost on to every individual person who's renting the cars from Herz to ride share them because you have to inventory after every time. you're not necessarily seeing all the damage until it Acrs and then something officially breaks. This is probably because anytime you have a newer vehicle, there are just less Parts in the supply chain for that vehicle and therefore it takes longer to get parts.

so you have more downtime. And not only does it take longer to get parts, but the parts are more expensive. It's the same in Aerospace This is very normal. So again, this is where you can kind of look at this as a pro or a con.

The pro would be hey, look, the cars are cheaper to operate. Uh, they're They're better for individuals to buy. but if you're going to put them in a fleet where they're going to have a lot of wear and tear, you might end up having more downtime because the parts aren't readily available. It's kind of like with my plane.

I'm very happy that I have a plane that is the most popular plane in America for business use because that means there'll be more pilots for it, More parts for it, right? You have. You have more interchangeability. You go get a plane that's 20 years old and there are no parts for it anymore. You're screwed.

Uh, or you get a plane in The Sweet Spot which is maybe like 5 to 8 years old and there are a ton of Parts everywhere for it. Fantastic. Uh, so anyway, diverging from Tesla but that's a little bit of bad news for Tesla Now what else is, in my opinion? good news for Tesla Well, it's actually that the competition is rolling over, so we already know this. Or maybe you do.

Maybe you don't But GM has announced that they're scaling back their plans to manufacture EVs and that's because they're burning 200 million dollar a week in profit on trying to make these EVS It's also worth noting that Elon Musk is expected to be on the Joe Rogan podcast today. I'm going to see if I can do like a viewing party on the channel. Maybe we can watch it all together. But but anyway, take a look at this.

you go over here. Uh, we're at what 197 or so right now. Tesla mind you, is almost at that 3year low level like we're We're kind of really aligned with that. Kind of sucks the Same by the way.

it's crazy to say. but it's true of end phase, right? You're about a three-year low. except Tesla just had a bigger dip at the end of last year. The uh dip for end phase was delayed though because of the big purchases during Ukraine uh, or after the Ukraine Invasion.

Anyway, going back to GM here. the United Auto Workers obviously have struck a deal with GM, but GM is scaling back from their 400,000 electric vehicle Target by 2024 because they're concerned about EVS. But most importantly, they're concerned that EVS are costing them $200 million in profit per week. $200 million of their profit gone per week to try to make EVS Sorry, just not going to be able to compete with Tesla You're actually seeing a very similar thing happen in the Solar Market where businesses are starting to leave the industry.

It's like in the EV Market more EVS that leave the business. What happens more for Tesla to take right when or take. Most similar things are happening in the Solar industry, a lot of solar competitors laying off workers, cutting their business, reducing their business. Could that potentially leave a Survivor like Enase to take over more? Maybe.

Who knows. So far, it looks like their stocks going to zero. But anyway. Uh.

with that said, it is very interesting to also see that the former CEO of Ford says that the Auto industry should not expect a quick adoption of electric vehicles. He was on a CNBC interview last week and was talking about how Ice Vehicles will be here to stay. It really sounded like he was kind of turning into a mouthpiece for the unions because the unions haven't really fully transitioned to adopt an EV future yet. so you have a lot of resistance to get to EV because it's not profitable for GM and Ford.

So in instead, what do you do? You stick with Ice Vehicles so you could pay the higher wages that the unions are demanding. Then you have former people affiliated with unions that are like yeah, yeah, EVS are going nowhere and then the companies announce yeah, yeah yeah, we're not focusing on EVS we're going to focus on profitability negotiating with the unions Tesla on the other hand, can go Full Speed Ahead on engineering the future which is actually long-term Pretty bullish for Tesla. So personally, what do I think? Well, I think you're probably at at the most difficult Point Uh, for Innovative cyclical companies. That means companies that are Innovative that are at that are very sensitive to high interest rates.

You're probably at one of the most sensitive points because you're probably in a position where rates are at their highest and we'll probably be at this high level for the next two to 5 months. It depends. Once we finally see the peak and bonds start getting bought, then you start seeing yields coming down. You don't actually need the FED to cut.

What you need is the market to start buying bonds. Market starts buying bonds, yields plummet before the FED even acts. It could all happen before the FED even acts. So you're probably two to five months of pain left with high rates.

But when the flip happens, it probably happens quick. So personally I look at this and say I know that the companies that I'm investing in are the best of class Tesla For example Nvidia For example, these companies are best of class just in a tough econom IC time. And yeah, there's always going to be good news here. Bad news there that's going to create some fluctuations and earnings quarter to quarter.

The question is, where do you want to position yourself for the long term and for me, that's in my favorite stocks. and of course house hack with a fundraise expiring tomorrow Happy Halloween And we'll see you later for The Joe Rogan podcast Thanks so much bye Why not advertise these things that you told us here I Feel like nobody else knows about this? We'll We'll try a little advertising and see how it. Congratulations man, you have done so much People love you people look up to you Kevin P there financial analyst and YouTuber meet Kevin Always wait to get you a take now I Have to read you a legal disclaimer: Even though I'm a licensed a financial adviser, licensed real estate broker and becoming a stock broker, this video is neither personalized Financial Advice nor real estate advice for you. It is not tax, legal or otherwise personalized advice tailored to you.

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