1/12

Tweet thread with my thoughts on $TSLA earnings.

A bad ER for investors focused on the short-term (financials), but it contained some really great nuggets for long-term investors.

Let's start with the reasons why financials were weaker than deliveries might've suggested:

2/12

Automotive GM suffered from heavily discounted S & X. Comments during call suggest this was partially to get rid of inventory, but also partially to give customers a discount on the now 'old' version. Doing the right thing for its customers will pay off long-term.

3/12

Energy & Service GMs also suffered, due to focus on the future. Solar Roof is ramping and weighing on Energy GM, but these investments will pay off big time over the coming years. Service GM was also weak due to investments for the future. Both of these are likely temporary

4/12

OPEX may have increased a lot, but a lot of this year's OPEX was one-time expenses related to the CEO Comp Package.

Likely also part of it was due to general growth. It's been shocking how little OPEX increased over the past 4-5 quarters, in spite of massive growth.

5/12

Fluctuations in various margins and costs are completely normal for hyper-growth companies like Tesla. Don't get overly hung up on short-term financials, and focus on growth and the long-term, especially if you only hold common stock.

6/12

Now let's talk about the great stuff. For me there are 3 great take-aways from this ER:

First, regarding customer service and communication, Jerome is on it! I was very happy to hear him elaborate on what he's doing, and I trust that it'll become amazing in a few years.

7/12

Second, I still am somewhat skeptical about Tesla licensing tech, but the fact that Elon keeps talking about it is BULLISH imo.

I think they realise there's nobody that can really compete with Tesla in automotive nor autonomy, and that they're trying to already position...

8/12

themselves well in case they end up with a (quasi-)monopoly in these industries. If this comes to pass, Tesla's size and power will be truly enormous, and it'll have to be seen as cooperative and the opposite of a "walled garden", in order to not face regulatory scrutiny.

9/12

What got me far and away the most excited this ER is Tesla's AI potential. I don't have any good estimates for how big a role AI will play in the world in the future, but if AI ends up being a massive industry, the company with the best training computer (service) and...

10/12

best AI chips could be very valuable. Dojo as a Service and Tesla's AI chips (that might have synergies when used in combination with DOJO), could mean that very valuable company will be a division of Tesla.

11/12

I'd love to do some more research on this topic when I have time, but if I were $NVDA, I'd keep a very close eye on what Tesla is doing in this space. This looks like it has much higher potential than HVAC. Perhaps Tesla AI could be similar size to Energy & Automotive

12/12

In summary, $TSLA financials were slightly below expectations, due to investments for the future. Nothing to worry about for LT investors.

Instead, focus on the LT vision, production growth, FSD progress, and how exciting the AI opportunity is.

Can't wait for AI day!