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Our own Dan Hole, noting that Tesla is giving some quasi bullish guidance. The company delivered one point eight million cars in twenty twenty three. Average selling prices fell in the quarter. There was some FX impact. There was a slight top line missus. Ed Ludlow points out on the live blog. The company's third quarter automotive automotive gross margin excluding credits came in way above estimates at seventeen point one percent. Estimates were for fourteen point nine percent. We got with us the perfect guest when it comes to what's going on with Tesla. Ross Gerber is joining us. He's president and CEO of Gerber Kawasaki Wealth Managed, Wealth and Investment Management. He joins us from Santa Monica, California. Ross, we got a lot to talk about with you. We got a good bit of time. First, your reaction to earnings. Investors are certainly happy to see this.

Our own Dan Hole, noting that Tesla is giving some quasi bullish guidance. The company delivered one point eight million cars in twenty twenty three. Average selling prices fell in the quarter. There was some FX impact. There was a slight top line missus. Ed Ludlow points out on the live blog. The company's third quarter automotive automotive gross margin excluding credits came in way above estimates at seventeen point one percent. Estimates were for fourteen point nine percent. We got with us the perfect guest when it comes to what's going on with Tesla. Ross Gerber is joining us. He's president and CEO of Gerber Kawasaki Wealth Managed, Wealth and Investment Management. He joins us from Santa Monica, California. Ross, we got a lot to talk about with you. We got a good bit of time. First, your reaction to earnings. Investors are certainly happy to see this.

Yeah, I am too. It seems as if, and granted they didn't really release a lot of data yet that'll come soon, I hope, where they were able to increase margins on the vehicle and therefore beat on earnings. So I'm not sure where that's coming from, but they seem to suggest that their cost of good sold is dropping quite rapidly and that's added margin to their vehicles, which is good news for Tesla. So it's very possible that because you know, like battery demand is down so much and lithium prices are down so much, that this is finally starting to get into the supply chain for Tesla. But you know, once again, I haven't seen all the numbers and been able to really parse where the margin gain has come from.

Yeah, I am too. It seems as if, and granted they didn't really release a lot of data yet that'll come soon, I hope, where they were able to increase margins on the vehicle and therefore beat on earnings. So I'm not sure where that's coming from, but they seem to suggest that their cost of good sold is dropping quite rapidly and that's added margin to their vehicles, which is good news for Tesla. So it's very possible that because you know, like battery demand is down so much and lithium prices are down so much, that this is finally starting to get into the supply chain for Tesla. But you know, once again, I haven't seen all the numbers and been able to really parse where the margin gain has come from.

And it's interesting too when it comes to the outlook. Tesla continues to state that plans for new vehicles, including more affordable models, remain on track for the start of production in the first half of twenty twenty five. More affordable models ross. Obviously that has been a major focal point for this company.

And it's interesting too when it comes to the outlook. Tesla continues to state that plans for new vehicles, including more affordable models, remain on track for the start of production in the first half of twenty twenty five. More affordable models ross. Obviously that has been a major focal point for this company.

Yeah, I mean, there's a more affordable model, why on sale use the three year old for an incredibly good price under abound twenty five thousand or so. So, you know, really Tesla runs into the problem of cannibalizing its other cars, and that I think is what's causing them to pause. Now, what I've been saying is if they would have put a steering wheel on that robocab. It would have been a much more exciting launch for me and I think for customers knowing that this two seater, cheaper car could be something we could actually just buy and drive. The robotaxi business is not a business that I'm excited about. It's not really what I think Tesla should be doing. There already are robotaxes that exist called Weimo, and Uber is already the master of transportation. So to me, Tesla should be selling evs, focusing on making great evs with grade software, and not trying to pivot into being some sort of robotaxi company. But you know, once again, I think people want to buy the cars and they worried about selling the cars will do just fine.

Yeah, I mean, there's a more affordable model, why on sale use the three year old for an incredibly good price under abound twenty five thousand or so. So, you know, really Tesla runs into the problem of cannibalizing its other cars, and that I think is what's causing them to pause. Now, what I've been saying is if they would have put a steering wheel on that robocab. It would have been a much more exciting launch for me and I think for customers knowing that this two seater, cheaper car could be something we could actually just buy and drive. The robotaxi business is not a business that I'm excited about. It's not really what I think Tesla should be doing. There already are robotaxes that exist called Weimo, and Uber is already the master of transportation. So to me, Tesla should be selling evs, focusing on making great evs with grade software, and not trying to pivot into being some sort of robotaxi company. But you know, once again, I think people want to buy the cars and they worried about selling the cars will do just fine.

Russ. I have a question for you that I've wanted to ask you for a few days now.

Russ. I have a question for you that I've wanted to ask you for a few days now.

Somebody did pause, so I'm excited.

Somebody did pause, so I'm excited.

Yeah, Well, I'm interested to hear what Ross has to say about this. Okay, Elon Musk. In politics, he's donated, he's one of the largest donors to the Trump candidacy, to the Trump campaign, He's got his America Political Action Committee a super pack. He's become incredibly active. I'm wondering, from the perspective of business, if, in a time when we're so divided as a nation, if taking such a clear stance and doing so much to elect one candidate is a risk to the company.

Yeah, Well, I'm interested to hear what Ross has to say about this. Okay, Elon Musk. In politics, he's donated, he's one of the largest donors to the Trump candidacy, to the Trump campaign, He's got his America Political Action Committee a super pack. He's become incredibly active. I'm wondering, from the perspective of business, if, in a time when we're so divided as a nation, if taking such a clear stance and doing so much to elect one candidate is a risk to the company.

Yes, of course, you know why are you laughing? Strategic? Well, because I think it's an absurd risk to put your company in that you could avoid, right, So, you know, I I've personally tried to stay out of this election. I don't get any positive from my clients expressing my liberal opinions, which are liberal, and you know, I think people who work at my firm know that. And but you know, as a business person, it doesn't really serve my purposes to spouse my liberal beliefs on everybody. And that said, Elon's extremely right wing beliefs turn off a lot of his core demo. Now a lot of people don't believe that's happening. But I mean, look at what the effort they have to do to sell a car today and they still refuse to advertise. So taking this stance for Elon is kind of a lose lose for Tesla because if Trump wins, you know, doesn't give a crap about evs, he supports oil, and Elon's gonna learn about Trump, which is that he's a liar. And so all this money Elon's putting into Trump to hopefully have some power, he's gonna learn the hard way about Trump, just asked Juliani. So that's a lose, And if Trump loses, it's a disaster for Elon, just per and for his personal brand and for everything that he's been working on. And it really puts Tesla in a tough position because the administration isn't going to do anything to help them, that's for sure. So I don't get it other than I guess he thinks the America is in this horrible place, but the stock market's hitting all time highs every day, and I think America is in a wonderful place. But it's all a matter of perception, you know, And so I think this is the most political I've ever seen a CEO. And that's one of the reasons we've lowered our position in Tesla is we do think it affects sales and affects the brand and ultimately margins, And we're excited about margins going up instead of going down for a quarter which is great news, you know, but this is coming from the fact that the car market is so difficult that the cost of goods has gone down, not because Tesla is making more margin because people are willing to pay more for a Tesla.

Yes, of course, you know why are you laughing? Strategic? Well, because I think it's an absurd risk to put your company in that you could avoid, right, So, you know, I I've personally tried to stay out of this election. I don't get any positive from my clients expressing my liberal opinions, which are liberal, and you know, I think people who work at my firm know that. And but you know, as a business person, it doesn't really serve my purposes to spouse my liberal beliefs on everybody. And that said, Elon's extremely right wing beliefs turn off a lot of his core demo. Now a lot of people don't believe that's happening. But I mean, look at what the effort they have to do to sell a car today and they still refuse to advertise. So taking this stance for Elon is kind of a lose lose for Tesla because if Trump wins, you know, doesn't give a crap about evs, he supports oil, and Elon's gonna learn about Trump, which is that he's a liar. And so all this money Elon's putting into Trump to hopefully have some power, he's gonna learn the hard way about Trump, just asked Juliani. So that's a lose, And if Trump loses, it's a disaster for Elon, just per and for his personal brand and for everything that he's been working on. And it really puts Tesla in a tough position because the administration isn't going to do anything to help them, that's for sure. So I don't get it other than I guess he thinks the America is in this horrible place, but the stock market's hitting all time highs every day, and I think America is in a wonderful place. But it's all a matter of perception, you know, And so I think this is the most political I've ever seen a CEO. And that's one of the reasons we've lowered our position in Tesla is we do think it affects sales and affects the brand and ultimately margins, And we're excited about margins going up instead of going down for a quarter which is great news, you know, but this is coming from the fact that the car market is so difficult that the cost of goods has gone down, not because Tesla is making more margin because people are willing to pay more for a Tesla.

I want to talk a little bit more about Elon Musk. Matt Levine calls it the attention auction, you know, the there's just a lot of things competing for Elon Musk's attention. And you know, he's been involved with multiple companies for many years, of course, but now politics feels like a new wrinkle there, of course, and he is heavily involved when it comes to the Trump campaign. This has been discussed before, but I am curious to hear your opinion on whether or not the fact that Elon is so spread thin across these different efforts, how you're thinking about that when you're taking to look at your Tesla position.

I want to talk a little bit more about Elon Musk. Matt Levine calls it the attention auction, you know, the there's just a lot of things competing for Elon Musk's attention. And you know, he's been involved with multiple companies for many years, of course, but now politics feels like a new wrinkle there, of course, and he is heavily involved when it comes to the Trump campaign. This has been discussed before, but I am curious to hear your opinion on whether or not the fact that Elon is so spread thin across these different efforts, how you're thinking about that when you're taking to look at your Tesla position.

Well, this is probably one of the biggest issues is he doesn't actually work at Tesla, you know, like you go to work at your company every day like you're the CEO. I don't think that's what he does. And I don't think that Elon gets more hours in a day than you or I do so, so he might sleep four hours a day instead of eight. Well, you know where that's going to cost him is at the end of his life, because it's super unhealthy to live this way. You know. There's this sort of opinion that, you know, like he has some super human ability. He doesn't. So he's spending his time working for Trump right now and doing politics, and he's not spending his time getting his full self driving to work, which it still doesn't. And so this is really the issue for me as an investor, is shouldn't the CEO of your company be there every day or at least pretend, you know. And then the second thing is and I was just talking to a guy about this who's been following Tesla for a long time, and we were having a nice discussion about Tesla, and I said, the biggest difference between Tesla now and the Tesla of twenty nineteen, twenty twenty that made us all really wealthy was that Elon worked at Tesla every day. It was the fundamental thing he focused on one hundred percent of his energies and efforts. And that's why Tesla became successful because they were about to fail. Okay, so this lack of attention to what needs to be done, especially around full self driving, is really troubling to me because I see the competitors all over the place. I'm here in the heart of EVS right, and Rogue taxis away moo just drove by me just a second ago, you know, like they're everywhere. They're working in extremely difficult driving conditions that my cyber truck can't even come close to tackling. So I just am like, get back to work, focus on the job, or maybe it's time to just get a real CEO like when shot Well, you know she hasn't Yeah, yeah, I mean I think she deserves a metal Russ.

Well, this is probably one of the biggest issues is he doesn't actually work at Tesla, you know, like you go to work at your company every day like you're the CEO. I don't think that's what he does. And I don't think that Elon gets more hours in a day than you or I do so, so he might sleep four hours a day instead of eight. Well, you know where that's going to cost him is at the end of his life, because it's super unhealthy to live this way. You know. There's this sort of opinion that, you know, like he has some super human ability. He doesn't. So he's spending his time working for Trump right now and doing politics, and he's not spending his time getting his full self driving to work, which it still doesn't. And so this is really the issue for me as an investor, is shouldn't the CEO of your company be there every day or at least pretend, you know. And then the second thing is and I was just talking to a guy about this who's been following Tesla for a long time, and we were having a nice discussion about Tesla, and I said, the biggest difference between Tesla now and the Tesla of twenty nineteen, twenty twenty that made us all really wealthy was that Elon worked at Tesla every day. It was the fundamental thing he focused on one hundred percent of his energies and efforts. And that's why Tesla became successful because they were about to fail. Okay, so this lack of attention to what needs to be done, especially around full self driving, is really troubling to me because I see the competitors all over the place. I'm here in the heart of EVS right, and Rogue taxis away moo just drove by me just a second ago, you know, like they're everywhere. They're working in extremely difficult driving conditions that my cyber truck can't even come close to tackling. So I just am like, get back to work, focus on the job, or maybe it's time to just get a real CEO like when shot Well, you know she hasn't Yeah, yeah, I mean I think she deserves a metal Russ.

Gotta we gotta go. We gotta let you get back to work. We do appreciate you joining us. It's always a treat when you are on our air, especially post Tesla learnings. Ross Gerber, president and CEO over at Gerber Kawasaki Wealth and Investment Management. I want to go now to Ed Ludlow, who's standing by in San Francisco, because he has had his eye on the live blog. He's had his eye on the numbers. ED shares surging in the after hours. Now, good report for Tesla what sticks out to you.

Gotta we gotta go. We gotta let you get back to work. We do appreciate you joining us. It's always a treat when you are on our air, especially post Tesla learnings. Ross Gerber, president and CEO over at Gerber Kawasaki Wealth and Investment Management. I want to go now to Ed Ludlow, who's standing by in San Francisco, because he has had his eye on the live blog. He's had his eye on the numbers. ED shares surging in the after hours. Now, good report for Tesla what sticks out to you.

Yeah, I think we still need to do the math on like all of it. So where would you got me to stop?

Yeah, I think we still need to do the math on like all of it. So where would you got me to stop?

I mean, Mark, let's do it. Where are those gross margins? Where did that beat come?

I mean, Mark, let's do it. Where are those gross margins? Where did that beat come?

Yeah?

Yeah?

Actually, I think at the end of the day, remember that Tester is a public company and it prepares a very thorough earnings deck for investors. In that deck, there is a section about revenue and profit, the headwinds and tailwinds for the top and bottom line. And what they're telling us about the bottom line is that while there were lower average selling prices for their consumer cars, the cost of producing them is also coming down, both from sort of the technology they use to manufacture in the process, but also raw materials. The thing that really jumps out at me is they're now listing the sale of full self driving software as a direct contributor to profit, which I find really interesting because of two recent catalysts. FSD is available to cybertruck owners very recently, and they also have this actual smart sum and I won't give you the acronym feature that is also contributing to the bottom line. And I think that Ross was talking about that right, He was trying to understand where this margin boost was coming from if you strip out the impact of regulatory credits.

Actually, I think at the end of the day, remember that Tester is a public company and it prepares a very thorough earnings deck for investors. In that deck, there is a section about revenue and profit, the headwinds and tailwinds for the top and bottom line. And what they're telling us about the bottom line is that while there were lower average selling prices for their consumer cars, the cost of producing them is also coming down, both from sort of the technology they use to manufacture in the process, but also raw materials. The thing that really jumps out at me is they're now listing the sale of full self driving software as a direct contributor to profit, which I find really interesting because of two recent catalysts. FSD is available to cybertruck owners very recently, and they also have this actual smart sum and I won't give you the acronym feature that is also contributing to the bottom line. And I think that Ross was talking about that right, He was trying to understand where this margin boost was coming from if you strip out the impact of regulatory credits.

Okay, Yeah, So that's where we're trying to figure out, and certainly there's going to be a lot of number crunching that happens, and I imagine a lot of questions from analysts too. I did want to get your thoughts on my line of questioning to Ross about political risk here, because I cannot name a CEO. In fact, you have CEOs right now coming out and avoiding talking about the election, whereas Elon Musk is going all in on this. In a different time, maybe that would make sense. But incredibly polarized country right now. Are analysts talking apart from Ross talking about the risk here? Yeah?

Okay, Yeah, So that's where we're trying to figure out, and certainly there's going to be a lot of number crunching that happens, and I imagine a lot of questions from analysts too. I did want to get your thoughts on my line of questioning to Ross about political risk here, because I cannot name a CEO. In fact, you have CEOs right now coming out and avoiding talking about the election, whereas Elon Musk is going all in on this. In a different time, maybe that would make sense. But incredibly polarized country right now. Are analysts talking apart from Ross talking about the risk here? Yeah?

I think that you know, whether they are sell side analysts or retail investors and institution investors, that there is a likely chance that Musk is asked a question about this on the call within the next hour. There's no mention of the election or either candidate. Sorry my mobile phone is ringing. Who knows who that is?

I think that you know, whether they are sell side analysts or retail investors and institution investors, that there is a likely chance that Musk is asked a question about this on the call within the next hour. There's no mention of the election or either candidate. Sorry my mobile phone is ringing. Who knows who that is?

You?

You?

Either candidate could be doubt it, either candidate in the deck. I think what's interesting that the important point to note here is that throughout the period of the administration, and the impact already to consumers are the benefit of the Inflation Reduction Act. There has not been a lot of sort of vocal support of the Biden administration for Musk. That's gone very quiet. The Harris camp has not talked much about Musk, where the Musk practically talks about them in the context of earning school, I would say, on balance, he probably will, but we'll have to find out.

Either candidate could be doubt it, either candidate in the deck. I think what's interesting that the important point to note here is that throughout the period of the administration, and the impact already to consumers are the benefit of the Inflation Reduction Act. There has not been a lot of sort of vocal support of the Biden administration for Musk. That's gone very quiet. The Harris camp has not talked much about Musk, where the Musk practically talks about them in the context of earning school, I would say, on balance, he probably will, but we'll have to find out.

I mean, given given Elon's comments over the last few months about Kamala Harris, I don't imagine if she wins that they're going to have a very friendly relationship. Ed before we let you go, there's still a lot of you know, we're still wedding on the call. There's still a lot to get to when it comes to understanding more about these numbers. But is Tesla on its way out of the woods yet?

I mean, given given Elon's comments over the last few months about Kamala Harris, I don't imagine if she wins that they're going to have a very friendly relationship. Ed before we let you go, there's still a lot of you know, we're still wedding on the call. There's still a lot to get to when it comes to understanding more about these numbers. But is Tesla on its way out of the woods yet?

Well, it's really interesting. So the stock's down year to date, but look at prior years of performance on the stock. They're telling us that they're going to grow modestly on the ev side, And if you do the math, as our bn F colleague Corey Cantor has done, they're going to have to have a record breaking fourth quarter to achieve that growth or beat the one point eight million units they did last year. No one ever really talks about the energy storage print that seems to be doing really well record energy storage and energy generation, and I go back to my earlier comment. They're listing it as a contributing factor to profit in a positive way in the earnings deck. Maybe we'll hear a bit more about that. But at the end of the day, the frustration Ross gave you is shared by many types of investors, which is, you keep steering us to a future where you are not doing the thing you currently do, which is selling cars to consumers. In the future, you're going to be an AI and robotics company with a proprietary ride hailing app. There's not a lot of mention of that in the deck, and I think on the call that that will be at least where the questions are asked whether or not Musk wants to go there of his own volition.

Well, it's really interesting. So the stock's down year to date, but look at prior years of performance on the stock. They're telling us that they're going to grow modestly on the ev side, And if you do the math, as our bn F colleague Corey Cantor has done, they're going to have to have a record breaking fourth quarter to achieve that growth or beat the one point eight million units they did last year. No one ever really talks about the energy storage print that seems to be doing really well record energy storage and energy generation, and I go back to my earlier comment. They're listing it as a contributing factor to profit in a positive way in the earnings deck. Maybe we'll hear a bit more about that. But at the end of the day, the frustration Ross gave you is shared by many types of investors, which is, you keep steering us to a future where you are not doing the thing you currently do, which is selling cars to consumers. In the future, you're going to be an AI and robotics company with a proprietary ride hailing app. There's not a lot of mention of that in the deck, and I think on the call that that will be at least where the questions are asked whether or not Musk wants to go there of his own volition.

Hi Ludlow. He is the co host of Bloomberg Technology on a Bloomberg TV each and every day. Also check them out on Twitter, Instagram and the like. Tesla shares right now surging in the after hours,

Hi Ludlow. He is the co host of Bloomberg Technology on a Bloomberg TV each and every day. Also check them out on Twitter, Instagram and the like. Tesla shares right now surging in the after hours,