This episode of The Brainstorm podcast discusses Tesla's recent earnings call, the challenges of ramping up production of the Cybertruck, and the impact of increased interest rates on car affordability. The hosts also explore Tesla's advancements in robotics and AI, institutional interest in Bitcoin, and the resilience and potential use cases of decentralized assets like Bitcoin. They also discuss the current state of the auto market and its potential impact on Tesla and traditional automakers.
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Quick takeaways
Manufacturing the Cybertruck is complicated and time-consuming, similar to the challenges faced with the Model X and Model 3.
Bitcoin is gaining increasing institutional favorability and is considered a quality asset and a flight to quality for institutions.
Deep dives
Tesla's Cybertruck production challenges and high price elasticity
The podcast discusses Tesla's recent earnings call, which focused on the challenges of ramping up production for the Cybertruck. While there is high demand for the unique vehicle, manufacturing it is complicated and time-consuming. The hosts compare it to the difficulties faced with the Model X and Model 3. Additionally, they highlight the importance of considering the high price elasticity of demand for vehicles, emphasizing that reducing the sticker price significantly increases the addressable market.
BlackRock CEO's view on Bitcoin as a quality asset
The discussion shifts to Bitcoin, particularly highlighting recent comments made by Larry Fink, CEO of BlackRock, regarding Bitcoin as a quality asset and a flight to quality for institutions. The podcast hosts note that this view aligns with their long-standing belief in Bitcoin's value as a store of value and a quality asset. While acknowledging the potential vested interest in Bitcoin ETF approvals, they express optimism about the positive shift in perception regarding Bitcoin and the increasing institutional favorability towards the cryptocurrency.
Concerns over rising interest rates and potential impact on the auto market
The podcast raises concerns about rising interest rates and their potential impact on the auto market. They mention a significant increase in auto loan delinquencies, surpassing levels seen during the 2008-2009 recession, with subprime borrowers particularly affected. The hosts tie this concern to Elon Musk's emotional reaction to interest rates during the earnings call and highlight the importance of Tesla's strong balance sheet and cash position compared to traditional automakers. They conclude by suggesting that the spotlight should be on traditional automakers rather than Tesla when considering potential damage in the industry.
If you know ARK, then you probably know about our long-term research projections, like estimating where we will be 5-10 years from now! But just because we are long-term investors, doesn’t mean we don’t have strong views and opinions on breaking news. In fact, we discuss and debate this every day. So now we’re sharing some of these internal discussions with you in our new video series, “The Brainstorm”, a co-production from ARK and Public.com. Tune in every week as we react to the latest in innovation. Here and there we’ll be joined by special guests, but ultimately this is our chance to join the conversation and share ARK’s quick takes on what’s going on in tech today.
This week, Associate Portfolio Manager Nick Grous Autonomous Technology and Robotics Director of Research Sam Korus are in studio together this week to discuss Tesla Earnings and Bitcoin.
Key Points From this Episode
Tesla Earnings
Bitcoin
For more updates on Public.com:
Website: https://public.com/
YouTube: @publicinvest
Twitter: https://twitter.com/public
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