Jim Cramer & Rob Maurer Discuss TSLA Stock, Elon Musk, Tesla's Battery Day, and Tesla's Advantages

Hey everybody, Rob Maurer here. And today we have a special guest on the program, Jim Kramer, who I believe needs no introduction. Jim, thanks for taking the time out of your busy schedule to join us today and talk a little bit about Tesla. Rob, I think Tesla is the most important stock in the market because it's created a tremendous amount of fascination, which you know why I like, uh, and it's been hard to find people who understand Tesla like you do, like you do. In other words, when I say that, I mean, people understand Tesla, the car, Tesla, the stock, Tesla, the myth test, the reality, which is why I think it's so exciting to speak with you because, uh, frankly, anything Tesla I regard as the most exciting thing that's happening in the market and I'm with the guy. Yeah, I definitely agree. So I'd love to get your thoughts. Cause I think your, your thinking on Tesla has evolved quite a bit over the last couple of years. I know a few years back, you were more mixed on it. You know, you've called it a cult stock. You've gotten into some interaction with Elon on Twitter. Uh, but over the last, I think probably 18 to 12 months, you've, you've definitely become a lot more bullish, which was, you know, great timing as the stock has reflected that as well. So I'd just love to hear sort of the evolution of your thought process on Tesla over the last couple of years. That's great. Okay. Um, when it came out, I thought it was too hot. And I, I said, people should sell it. Now I know that I had subsequently met, uh, Elon Musk at a dinner party. Uh, and, uh, he belittled me. Um, he, he basically said that after I questioned his analysis of that, we'll have a giant solar field in Colorado where all of our energy is going to be provided from five years from now. It's been about five years. I haven't seen that yet. He did pronounce me, uh, as a hologram, basically, uh, 50% chance of the hologram didn't even exist. I thought it was one of the greatest put downs ever, except I wish it weren't addressed to me. Thank heavens. The former CEO of Intel was right there to say, as a mathematician, there's really only 27% chance. But here's what's happening. Uh, I looked at it as a stock. I didn't look at it. And I think that what happened is basically a religious, it was a religious, uh, conversion. I went out to California. My daughter had just driven a Tesla from Oregon where she was living to Los Angeles. And she talked about charging, talked about how fun it was, talked about the flatulence button and said, you know, dad, I've been driving for 12 years. I never cared what I drove. It's never been important. She had a beat up 2008, uh, Ford Fiesta that she'd been driving. She just wasn't a car person, but Tesla made her into car person. So then I went out to see two friends of mine, one executive in a Silicon Valley company and another former CFO. And they had all Tesla's and my wife, who is a complete car person. I mean, a nut car person just loves it. Her favorite things are 94, uh, Range Rover that she has. She said, this is it. She drove it and she said, this is it. Now we have not bought one yet because she's frugal enough to be able to say, listen, Jim, you should buy it because you live in Summit, New Jersey and can use it as a go around car. But, uh, when I was driving with it, the person who was retired was a CFO. I said, you know what? My daughter loves it. My wife, it loves it. It's so cool, but they don't have the financials that make it so that I can recommend it at 260. And he looked at me, turned to me and he goes, Jim, they could raise $2 billion like that. That was the religious conversion. The conversion was right there because then I knew that balance sheet was not in question. And I've been pounding the table ever since we caught a lot of points. I continue to recommend it. I should have realized along the way that when Jay Leno told me, Jim, this is the greatest car company that was around one 50, I should have just changed my mind, but I hadn't been in the car other than my friend picked me up and I drove a little bit. Uh, and when you have a person who's never driven a car saying, this is like the greatest thing ever, it doesn't think it was a car, and then you have the car nut, Lisa, who says, this is the greatest thing ever. And you have a CFO who's very rigorous. You said, look, they can raise the money. I said, what am I doing? Why am I fighting the truth? Why am I fighting progress? So Rob, I surrendered and it was the best call I've made this year. Yeah. So let's talk about the valuation then, because as you said, it used to be trading in, you know, one 50 to 300. And over the last 12 months, it's, you know, 10 X from sort of the lows of last June. So how do you wrap your arms around the valuation? And, you know, I think a lot of people sort of feel how you used to, where this is really just a, you know, a bubble stock or a cult stock that has no basis in financial reality. Well, Rob, you've done the best stuff, including, uh, a thesis on it. So I, I, I deferred to you, but let me give you my analysis of where we are. I think it's a technology company. Let's use two technologies. Let's use NVIDIA, which, uh, has the best chips right now in the market. They dominate the data center. They dominate in artificial intelligence, machine learning, um, edge computing, uh, game. And it's got value at 300 billion. Uh, Tesla dominates electric vehicles and it's valued at 350 billion, which is a bigger market. All those ones I just mentioned that that's, that, that, that, uh, NVIDIA plays in or is Tesla in the bigger market? Well, the total addressable market for autos is much bigger than the total addressable markets for all of NVIDIA. And my thinking is, and I'm going to ask you in a second about September 22nd. My thinking is, is that you can have all these companies make all these EVs and nobody really wants them. I mean, right now, wall street's just trying to pump this GM by saying they could spin off some business. That's my, your Elon Musk is probably laughing about, but to me, it's a technology company that happens to be a car company. By the way, I said that Domino's was a technology company that happens to sell pizzas when that stock was at 10 and then went to 390. So I think that we can make these assumptions if we go outside the box and stop thinking about it as a car company. But what's key to my evaluation, Rob, is what will he say? What will Elon Musk say on September 22nd? Because the key to that, my evaluation is, is they can get a car battery that can run for 10, 12 hours that's on solar and then it's game set match. They're going to own the auto business, but I don't know, and you're closer to it, whether they have the goods to be able to do that. So I guess my perspective, so September 22nd, as you mentioned, that's Tesla's battery day where Elon is going to walk through sort of their battery strategy. Give us a lot more information on the manufacturing breakthroughs that they seem to have through their acquisition of Maxwell technologies a couple of years back. So I think we're going to see a lot of exciting things come out of that energy density improvements, which you're sort of alluding to there in terms of, you know, the range that a Tesla vehicle can get, I think we'll see some of that. But I think a big focus of battery day is really going to be how Tesla can go from, you know, where they're at today in terms of maybe 50 to 75 gigawatt hours of annual battery production, all the way up to a couple of terawatt hours, which would be a couple thousand gigawatt hours. Um, and for that sort of supply that could really fulfill the battery demands for a couple million or 20 million vehicles per year, plus energy storage, um, systems. So I think that's going to be the big focus on battery day. And I'm really curious, you know, I think there's a lot of hype going into the event. And I think one thing that investors need to try to understand is really what those expectations are from the broad wall street community, whether they're expecting some huge technological breakthrough or whether, you know, they're going to be satisfied with, okay, here's our plan to rapidly and capitally efficiently ramp up to a couple of terawatt hours of battery production. Cause I think that's, you know, I think there's going to be a lot of technological focus, but I think a lot of it is going to be on that sort of capital efficiency and production ramping, uh, sort of angle. All right. So let's drill down. You're basically talking about the ability, the capacity to be able to make millions of cars. What I'm concerned about, Rob, is, is that, and look, I think the scale, you just talked about answers the NVIDIA question, but I need the question answered about how long a battery can go before it needs recharge. If it's a winner, are you talking in terms of what the market expects or what Tesla can eventually achieve? What the market expects, you know, you've got these people out there saying the million mile battery. I wish they wouldn't say that. I had Honeywell one recently and said, look, we've developed a battery that we think can last nine hours and put, if it was in a car, uh, it would be too big for a car, but it could work nine hours. And when I offline, when I asked them about it, they're, they're saying, look, it's entirely possible that you could have a battery that could last 10 hours and take you all over the place. And then I started thinking, well, if you could do that battery and scale it, maybe it's what Elon has, but I also want to know, Rob, how much of it is Elon stuff? Is it owned just by him? Is it owned with a partnership? Tell me what these corporate structures. Yeah. So I think on the million mile battery, let's talk about that first. So, you know, Tesla's strategy is to create electric robo taxis that can, you know, increase the utilization of vehicles significantly, maybe five X, 10 X from where they are today, where most people are driving, you know, 10 to 15,000 miles a year. So if you think about that, that's, you know, 50,000 plus miles per year that these electric robo taxis are going to need to be driving. So if a car battery, you know, doesn't last more than 150,000 miles, you're going to need to be replacing at least the batteries or the entire vehicle every three years. So the million mile powertrain goal that Tesla has had for a long time is really about, you know, making an electric robo taxi that can last that 10 year, 20 year lifespan, uh, with, um, without having to replace the batteries constantly. So that ends up being, you know, a million mile powertrain. So Tesla's got the electric motors already developed for that. And there's been a lot of media attention around, um, a million mile battery too. Right. I think that's a little bit misplaced because as you said, that technology already exists. It's really just about the number of cycles that a battery can handle, but there's a lot of different elements that a battery has, you know, one of them is longevity, but there's also the energy density, the power density, the volumetric density, there's just so many different factors and that's what Tesla is sort of, you know, been iterating on for the last couple of decades is really just how to package up all those different sort of elements of a battery into the best use case for electric vehicles. And a robo taxi kind of changes that a little bit where it might make more sense to, you know, not optimize for as much range because these taxis are going to be around town. They can easily find a charging point when they need to. Uh, but that longevity is going to end up being a little bit more important. So I think there's just a lot of different trade-offs, um, at play with the battery technology. So I don't focus as much on the million mile battery because Tesla actually can technically already achieve that with some of the, uh, battery technology that they use in their energy products, like the Powerwall, for example, if they were to just throw that in their vehicles right now, that would already go for a million miles, so they pretty much already have that available. It's really just about the combination of, of factors, um, that they decide to optimize for when they're talking about their vehicles. Well, what you're saying may lead to, uh, you know, people want to say when they should sell it. It may be one of those events where if you don't own it, you might want to wait until after if he doesn't deliver, uh, along the, the line that, that people want him to deliver. And one of the things I like about Elon Musk is he's not thinking about what you want, not unlike Steve Jobs. He's thinking about what you will want well ahead of when you know it. So he may be over the heads of people September 22nd, and that means some people may be disappointed because they didn't get what they want, not realizing they're getting twice what they want if they would just shut up and listen. So maybe the, the trader instinct in me says, I like Tesla. I think the stock goes higher. But if you wanted to be one of these guys that plays it for a couple of days, maybe you sell it into that event or the day before, but Rob, what I've been trying to do ever since I had my religious conversion on Tesla is to say, ignore everything Elon Musk has the best device. It takes you from point a to point B, and it's just getting better and better in each iteration. Do you feel like that? Yes, absolutely. I think when you compare Tesla with any other electric vehicle, you know, the results are pretty clear. That's represented by the fact that they have 80% market share in the United States for electric vehicles, even though they actually have to compete with more federal incentives for competitors than Tesla receives. They're basically at a $7,500 disadvantage because you know, the federal tax credit of $7,500 phased out when Tesla hit 200,000 vehicles delivered in the United States, and that happened back in, you know, the middle of 2018. So that credit is long gone for Tesla, but other manufacturers haven't hit that yet. So Tesla is selling right now with no incentives federally. Some states do have incentives still, but relative to their competition, they're still getting that $7,500 credit the competition is. So even with that Tesla's achieved 80% market share, which I think just speaks to, you know, how strong Tesla's product is. And I would add on top of that, Tesla's actually shown the ability to be profitable now with electric vehicles, which nobody else has, no one else breaks those out in their financials. You know, BMW was asked specifically about that on their last earnings call, whether they would break that out. And they, you know, they kind of dodged around that saying that, you know, it's a sub-brand of BMW, things like that. There's just no pure play like Tesla is here. And I think that, you know, the market understands, um, and is respecting the value that Tesla's able to achieve, uh, by being that pure play, you know, I sometimes I make my wife Lisa watch football with some big coffee and she sits there, she never lets me turn during the commercials because I got the package. I want to switch to another game and a big fantasy bull market. I do this bull market fantasy show. She says, no, we're just watching. At the end of a game last year, she turned to me and she said, you know, I sold these ads for Ford, for GM, for Chrysler, where are the Tesla? And I told her Tesla doesn't need an ad. How is that possible? Yeah, I think, I think it's a couple of facets. I think number one, Tesla is still a relatively small player on the automotive market. You know, Ford and GM, they're selling, you know, five to 10 million vehicles per year. Tesla's right now at a 10th of that level, about 500,000 for 2020. So just by sheer market share, there's, there's less of a need to reach that broad consumer segment. And then I think the big part is just the value proposition that we spoke to before. I think Tesla's, you know, they're, they're willing to go pretty far down market. They're not concerned with staying in a luxury price band or anything like that. They're just really focused on affordability and making their cars, you know, putting every single dollar that they possibly have into making those cars better and a better value proposition for the customer, rather than, you know, spending 10% of revenue on advertising, like other companies are. Tesla's just going to put that into, you know, greater capacity or better features, um, whatever the case may be. And I think what that also brings to mind is a really big differentiator between Tesla and the other, you know, legacy automakers, especially when it comes to valuation, which is just the vertical integration that Tesla offers, you know, the valuation for BMW or GM or Ford. That's all shared with their dealership network. Half of that's going to go to the dealers or some, you know, some percentage of that's going to go to the dealers, you know, Tesla operates their own stores, their own dealership service centers. Um, so they're capturing that entire part of the value chain. And then I think that's, you know, you kind of extend that all the way from point of production to point of sale. Tesla is pretty much everywhere throughout that process, you know, more heavily vertically integrated in the supply chain all the way down to that consumer. So I think when people look at Tesla's valuation and compare it to the other automakers, they're not really factoring that in and then all the technology elements that we, that we spoke to earlier too. Right. I mean, that's why I keep coming back to this hit. It's not a car company. It's a technology company that sells cars because what you just described is a wholesale different model from what really is, uh, what GM does or Ford. I mean, I remember when Alan Mulally's from 40 said, you know what we're going to do, we're going to brand it the Ford store. But it wasn't the Ford store. I mean, sometimes these, uh, you know, the dealership could be even antithetical to Ford. A lot of what they do is about financing and it's really focused on the financing. The one place that it's not as focused on financing is where they actually have demand would be say the Ford F-150, which I happen to think is a fantastic vehicle. I bought a super duty once. You don't call them the 350, the super duty. Phenomenal works really well. Shouldn't have bought it. We should have bought it with diesel, not with gasoline. But, uh, let me ask you, I look at that, uh, their equivalent of the Ford one 50 and I find it ugly. I find it this time. It may be the car too far. Uh, I thought the Y might be the car too far. I was wrong about that. Is it possible that there could be a blunder here that, that, uh, pickup truck is, isn't just, yeah, I think it's always possible. I think that was the big concern when the cyber truck was unveiled. You know, a lot of people initially did find it to be not an attractive vehicle to say the least. Uh, I think the more that you see it, uh, the more that you become, you know, familiarized with sort of the unique looks of it, and I think that's actually attracted a lot of people is just, you know, the appeal of something different and Tesla's able to offer that, you know, the truck market is pretty big. I think Ford sells, um, a million F-150s a year, roughly in the United States alone, and that's, you know, predominantly the truck market is the U S but, um, the cyber truck now, you know, Tesla hasn't released the reservation data, but from sort of, you know, people piecing things together online, the speculation right now is that Tesla's got about a million reservations for the cyber truck already. Elon has said that it's been sort of the most, um, most successful product that they've unveiled so far, which is saying something because the model three had, you know, 400,000 reservations in and of itself. So the reservations are cheaper for the cyber truck. They're only a thousand dollars versus a hundred dollars versus the model three was a thousand, so it's not directly comparable, but I think, you know, regardless of whatever the reservation level is or the reservation price, Tesla has shown that there's. Massive demand for the cyber truck, which I think can, you know, ease any concerns from investors, even if they don't necessarily themselves like the look of the truck. I think the, you know, the demand is shown and the specs on the vehicle. It's it's again, comes down to the value proposition. Maybe you don't love the looks of it, but it's an incredible vehicle at an incredible price. All right. So tell me what makes it so incredible. So for example, the top of the line cyber truck going to cost $70,000. It'll have a range of 500 plus miles. It's going to be able to charge at 250 kilowatt hours or 250 kilowatts plus, which would be the fastest, you know, charging rate that's really available on the market. Uh, to get something like that for $70,000 is really not, there's just nothing even close to that, that any competitor is out with, you know, lucid air, they're an electric vehicle startup, they are lucid motors with the lucid air, they, they just talked about their, their, um, 500 plus mile range electric vehicle test on the EPA cycle. Uh, so that, that car is going to cost about $150,000. So that kind of gives you some context for, you know, where Tesla is versus some of these other electric vehicle competitors, you know, the Porsche is another good example that runs $150,000, $200,000. Um, I think the lowest trim is around a hundred thousand, but, um, you know, those are getting you ranges of 200, 200 to 300 miles, and this is a, you know, a massive vehicle. So it just shows Tesla's, you know, powertrain advantage, uh, that they're able to offer something like that for such a low price. Yeah. I was looking at the one 50 as, as something that my, I remember my wife's a car person. I said, let's, let's go look at the one 50. By the way, by the Bronco, we get rid of the, uh, of her current car. And I said, listen, we still have a hundred thousand. We have a hundred thousand miles in current. Let's go further. But we were shocked at this. We had real sticker shop at the F one 50. I mean, that was a car that was, that was a truck. That was a very affordable truck to the working person. That's not the case anymore. Rob, what you're talking about is a car that a truck did actually the Tesla's cheaper than in a lot of cases. Yeah, totally agree. I mean, I'm not exactly sure what that one 50 starts at nowadays, but I think it's like 30, 35,000 plus just for the very opening price point, even higher. Yeah. So the cyber truck's going to start with a 250 plus mile range at, um, $40,000. So when you factor in the electricity versus gasoline fuel savings, you know, over a five year ownership period, the, the cost of ownership is going to be much, much lower for the cyber truck than even the opening level F one 50. And hopefully for, uh, you know, more utility out of that vehicle, you can do things like charge your power tools on site without the need of a generator. Cause you can just go straight from the battery right into the power tools. So it just offers a lot of flexibility and utility like that, that you can't get out of an F one 50. No. And a lot of small business people just use it to go around town. Um, that's their core business area. So this is very bad. Okay. That really, that helps me tremendously because I mean, a lot of people are excited about various things. Like a lot of people, Rob say to me, um, Jim, are you excited about the Tesla? Because cause Tesla might be out of the S and P 500. And I always come back and say, no, that is of no interest because that's a one day pop and there'll be a lot of jokers in there for that lot of other people want to talk to me about the split. Now I think the split will be meaningful because so many people are interested in what you and I are talking about. But what nobody ever asked me about is the price, the value proposition. Now, this is like when Intel started making its chips and people were saying, wait a second, those chips are your, how are they ever going to charge a million dollars for those chips? Because it's, it's as powerful as an IBM, but IBM costs a million, a million. What are they going to do? And the guy who invented it said, listen, we're only gonna charge 200. And people said, well, that's crazy. You can't charge. So he can't be made, but I'm listening from you is that you've got a much better delivery vehicle for a fraction of the price of what you should expect today. Is that just because of the engineer and Elon? Yeah, I think so. And I think Tesla's also just willing, as we said before, to just go down market and push the affordability as much as they can. They're not sitting there being greedy and capturing margin, you know, and that goes back to their mission of just accelerating the advent of sustainable transportation. That's their laser focused on is just making sure that they're, you know, providing that value proposition, creating as much demand for the vehicles as they possibly can. And at the same time showing other automakers that, Hey, this is a superior technology and you guys need to get on board. Otherwise you're going to go out of business. So let's talk about the farm market. Uh, I happen to have one of the great choice that I had was, uh, uh, last year we went to the Lamborghini factory where they're making five Lamborghinis a day. Look, what can I do? My wife went to test drive a Lamborghini more than anything else in the world. So we got permission. The CEO gave us a car. We were allowed to take it on the streets of Moderna and drive at 160 miles an hour for an hour and a half before they took the car away from her. Uh, and what I realized if they were only making five cars a day, the Europeans have a surprising addiction to great cars, even if they're not that much money, a lot of the Lamborghinis probably do go to China, but the one thing you would never think about doing, and remember Moderna's ordinarily might as well be Southern German. The one thing you would never think about doing is going up against the Bavarian motor works, going up against Mercedes, going to the heart of European cars, Germany, and thinking you could be successful. And yet Elon seems to challenge it as if the it's a chocolate. Yeah. I mean, and they've, they've proven, you know, Tesla has proven to be very successful in that, you know, the, the model three has taken the three series market share, you know, predominantly the midsize luxury sedan market leader before, and Tesla came in with a model three and just in a couple of years, they have completely taken over that market with greater than 50% share. So selling outselling sort of the Mercedes or the Mercedes C-class, the BMW three series, Audi A4 slash S4, all those combined in the United States, Tesla has outsold with the model three, which again, I think comes back to the value proposition and the total cost of ownership benefits that you get from an electric powertrain over gasoline over, you know, a few years. Okay. So two years ago, I was in the, it's not sold here, but it has been shipped over the largest BMW that's either. And the person who had it said, this is what's going to stop you. It didn't. Why not? I think there's so many different answers for that. The one that I would come back to though, is just the focus for Tesla versus these other companies. They're, they're focused on their profitability. They're focused on pleasing their shareholders, which are in many cases, you know, more value oriented shareholders versus growth investors. Versus, you know, Tesla's investors and stakeholders and management, they're all focused on, you know, that growth that can play out for three decades, the other automakers have already gone through that. They've already established all their assets and all their investments in, you know, the legacy internal combustion engine infrastructure and technology, and they're hesitant to, you know, write all that off and invest in the new technology because they're not going to see those immediate returns. You know, Tesla went through a 15 to 20 year period of pain where they didn't show profitability and, you know, the market was sort of relentless for attacking them for that, but that's just what you have to do sometimes with new technology, especially on the scale of autos, which is, you know, so capital intensive. So I just think that the return on the investment for the time horizon that, you know, the management for these other companies is looking at is just not, it's not there. They're not going to see that for their, for the rest of their tenure. I like that analysis. When people are coming to me and looking for the stock, it makes a lot of sense. I've come up with two analogies. One is I remember when GM had to deal with Toyota and they knew that they would have to give up a certain part of their audience if they were going to compete against Toyota and they refused to do it because of legacy. And then GA GM became a fraction of its former self. The other, and a better example when it comes to technology is that when I first started trading, there was an ethical bunch and that was Burroughs and it was Univac. Okay. It was control data, which became Ceridian moved on Honeywell, which of course got out entirely of the computer business and, and NCR, that was the end. And NCR became, went back to being national crash registry. These were all against IBM and everyone had different systems that they tried to compete. Univac still trades at Unisys, but they all had, but they thought superior products, but they didn't have the technology that people really wanted. So IBM wins. Then out of nowhere comes Wintel, comes Windows and Intel. And there were people who felt that Microsoft was outrageously overvalued. Now, look, I helped bring that company public when I was at Goldman. And, and I just, you know, I got to know these guys. Steve Ballmer had been during, was the business manager when I was editor of the Harvard Crimson. And he convinced me that, look, Jim, this is not IBM. This is something very different. It's software. And, you know, you're gonna be able to do amazing things with it. And then I met one of the founders of Intel and got friendly with a lot of people at Intel and I realized like, look, this is not, this is going to destroy IBM. They're going to maybe even make, let IBM make a PC from it, which they only did that idea at the peanut. But what was incredible to me was they destroyed the legacy and they destroyed digital equipment and they destroyed, uh, a data general. Uh, they destroyed bunch and no one saw it coming. And then even when it started coming, Rob, here's what they said. Overvalued, overvalued, overvalued. The idea that you could have something this big, that would be more powerful than IBM. No, that is ridiculous. So you had to fight these people. Now, unlike me, when Tesla started, I didn't fight it. Why? Because I knew Steve Ballmer and I knew Max Blesky, who was a professor of logic, who went to work, who's the fifth person at Intel. I think that unless you're someone who is deeply within the, uh, Tesla weeds, like you are, you end up being one of these people who just says, Hey, listen, it's never made a problem. Uh, listen, it's done with government subsidies. Listen, it's all because of this showman, uh, who's really a shaman. And, uh, it's all because of a guy who is not even focused. He cares more about SpaceX. So what you're up against here, Rob, is a blow up of a legacy that only happens a couple of times in our lives. Most of the time, the legacy prevails. And I think that that's one of the reasons why it is just so darn hard, Rob, for people to get their arms around why this stock could go up substantially from these levels. And I think that what we're talking about is a recognition that people don't seem to understand. Uh, the bears were watching us or saying, Oh wait, two guys who love Tesla. One guy was made a real study of Tesla. The other guy like hops into a Tesla, looks at the balance. She was, but no, I mean, we're talking about a revolution and you understand the revolution from the inside. And I see the revolution by analogy, but we both get there at the same time. And then, well, you were ahead of me, but we get there and we get at the place that makes it. So it's kind of an unassailable, no, I'm not hopping off it. I'm going to let it play out situation. And what you're saying basically is listen, they can blow up the whole industry, correct? Yeah. Yeah, I think so. I mean, Tesla's goal is really to grow a 50% compound annually per year for the next second. And I don't see any reason that they can't do that. Um, maybe that makes me sort of blindly bullish, but I think when you look at the value proposition and you look at the competition out there, there's just a very clear path there and you know, if you do the math on Tesla selling 20 million vehicles per year, uh, you get to a pretty undervalued situation right now, even at the, you know, 330, $350 billion level. So I think there's a lot of, a lot of room to go. Here's my problem. When I go in the conference call, when I read, I keep thinking that it's like Henry Ford. There was nobody, although Henry Ford has political needs that I didn't like, but there's like, where's the bench here? Because if the, if there's no bench and the guy's focused on SpaceX is the biggest, biggest risk to this stock that one day he gets up and says, you know what, done now, I'm going to go do something else. Yeah, I think so. I think those fears were probably more significant in past years. Um, personally, I feel really good about the management team that Tesla's got in place. They don't get, you know, the notoriety or the credit that Elon does. Uh, but they've got a really strong team in place. I think Zach Kirkor and the new CFO has done an amazing job over the last 18 months of really driving the operating leverage, and I think that's one of the reasons the stock is, you know, reacted as just Tesla's ability to show that sort of consistent profit and that continuing, um, operating income and more operating leverage. So I think Tesla's done an amazing job with that. You know, they've got some people in automotive and technology, Jerome Guillen, president of automotive. He took a couple of year hiatus from Tesla, but he's been back for two or three years now, and he's just been, uh, seemingly really, really doing a great job with automotive programs. Model Y got launched early. The Tesla semi now is heading into production for next year. Cybertruck looks to be on, on great track. Tesla's making great progress with all their gigafactories worldwide. Not all that comes from Elon. There's a really strong team behind him doing those things. Um, I think the perception that it all comes from Elon is huge. And obviously if something were to happen with Elon, or if we were to leave Tesla, uh, the stock would, I think, go down very significantly. Um, and, and for good reason, you know, Elon, I think his management style facilitates a lot of that. Uh, but hopefully that culture has been instilled with Tesla that at least if something were to happen, or if Elon were to move on, uh, there would still be a really strong future for, for Tesla. Much like there has been for Apple, uh, since jobs obviously, um, unfortunately passed away. Now, all of what you're saying to me brings to mind the fact that there are a lot of people who feel that the reason why the stock's where it is, is manipulation, and yet what you're talking about is the grounding for a long-term, uh, business that has nothing to do with manipulation. Why do you think so many people continue to think, and I look at my Twitter feed every day, there's someone who says, Jim, you're part now of the manipulation gang, you are part and parcel bought by Elon, even though I said at the beginning that, you know, it's not, you know, the guy is, is, is not a friend. Um, but it, to me, uh, this whole manipulation, uh, situation is a smokescreen by people who do not understand that even as he calls me a simulation, I accept the fact that he has every right to call me that because he is a genuine genius and he's not manipulating the stock he was trying to buy the company and what looked like people were saying a hype price when money was really getting with would have been a great deal, correct? Yeah. I mean, I'm very thankful that that didn't go through. It would have forced our retail investors in most cases at $420 a share. Now we're sitting in 1900, so, you know, I'm personally pretty happy that that didn't happen. But, um, I think the manipulation conversation is, is super interesting and one that I hope we can go into a little bit more detail on here, because that has sort of flipped over the last 18 months where, you know, previously it was all the Tesla bulls that were saying Tesla stock is being manipulated. Held down by, you know, short sellers, Tesla had a 20, 30% short interest at one time, so a significant vested interest against the company, you know, Tesla was reliant at that point on the capital markets. So there can be sort of that, that financial, you know, crisis sort of where the perception becomes a reality. And I think that did happen with solar city at one point where Tesla was kind of forced to step in then and take it under its wing, just because solar city couldn't get the financing. There's that crisis of confidence. So I'd love to hear just your perspective on that. And I know this is something you've talked about in interviews in the past, just how, how this manipulation does exist and how it sort of plays out. Well, I think that there are a lot of people who felt that, uh, when Ron Barron would come on squawk box and when the stop is a 200 and say it would go at some wild price, they would say, well, you know, let's say it was saying it was going to go to 1200. It was a 200 people said, okay, that's just blatant manipulation. The guy is naming some price in order to get it to pop. But you would have to think that with that, if he was really doing that, if he was pumping, he would be dumping, but he wasn't. So that was argument one that people were pumping so they could dump that has been refuted time. And again, the second argument is the numbers themselves and whether they are made up. And people were always looking at the cars on the lot, or they were saying that, you know, we mentioned this a hundred dollar, uh, price that you use a hundred dollar deposit to put down that it's all like, since you can take it back, it doesn't mean anything. So that that's manipulation. Then they used to talk about how the manipulation was with the electronic vehicle, and if you backed out the cert, if you didn't have the federal, uh, uh, 1500, then the numbers would fall apart. And then the manipulation was that there really is no cash on the balance sheet. I mean, endlessly, they came up with it. And there were two people who were sending me manipulation stories every single day. And I have to tell you, both of them were unbelievable investors. And I wasn't getting, I was doing, I was getting, but you know what? As the stock climbed, if you kept an open mind and you kept listening, you realized that one by one check, check, check, check the manipulation claims. We're wrong now, just the other day, I said some very positive things about Tesla and a short seller came to me and said, Jim, you know, I've lost all credibility, lost all credibility. Now people feel that I've lost all credibility because I came in at 260 and people think I've lost all credibility because I liked it at 1800. I mean, so both sides hate me. I know I'm right. But now the battle is, uh, basically, uh, by the shorts saying that guys like me are, uh, are playing this thing of being added to the S and P, uh, and that, that once it gets out of the S and P will be the squeeze of a lifetime and then it's all over. And what's incredible to me is I would much rather have them say, listen, on a macro environment, maybe no one's going to start buying cars because things are so bad because of COVID. Or maybe if the fed turns off the liquidity, uh, uh, that it's pumping the economy and never, maybe people can't buy cars because they don't have debt, um, loans that those are valid. And that's why, when we talked about the value proposition of the truck versus the, the F one 50, or we talk about how a battery and how it can be charged my save versus oil, those are the arguments that must be made because I actually think that with the unemployment situation, you typically sell the stocks. When you see this many people unemployed in this country, you should not own a car stock. And by the way, how right is that? We're just six bucks. So what people have to recognize is you have to continue to have a decent macro environment when it comes to automobiles in terms of liquidity. They want to borrow money and you can't have a step down. If we have another fall of COVID where it comes back hard and we have to close the economy up, then I think that you would have to take some profits in Tesla because nothing can last forever. But, um, I'm betting that that won't be the case, but that's the real worry. The real worry to me is nobody can afford to buy a car. So nobody buys a car and believe me that that's a worry that they got at the Lamborghini factory. It's a worry that they haven't poured. And I think that even that even, even Tesla can't, uh, can avoid the gravitational pull of the depression. But short of that, Rob, I think that what's happened is you could have some periods where it goes down, but those are periods where you got to buy because it'll be going down mostly because of stories you hear, like what I happened in this morning in my Twitter feed, there's a video of a car going off the road, uh, and then it be looking like it's incinerated. And it's someone who says, this is a Tesla. This is an absolute, this is an honest video of something that happened last night in China. And of course the China case is important for Tesla's valuation. And immediately a dozen people said, wait a second, that's a Mercedes. It's not a Tesla. So the manipulation is still out there. There are people who need the stock lower, Rob. Uh, but the more they gin up things like a video that looks like it's made up, the more likely it is that they will have to cover at a higher price. So unless you told me that there's no demand in China because of COVID, that the Berlin experience is bad because of COVID and United States, because of the depression from COVID, I think it's just a very good technology stock. Not unlike Nvidia, not unlike Microsoft, but not unlike, um, the Google, not unlike Amazon, it's in that it's in that, uh, that Pantheon and those who think it should be in that Pantheon, I think are people who think that it's a side-by-side comparison versus a, a Jeep, which are cool. The Jeeps are cool. I mean, I've seen people ride Jeeps around the beach. They look great, but they're cars. These aren't cars. I mean, it'd be, you know, the Jeep has real appeal. It's a nice looking thing, but I don't think that what's under the hood with the Jeep is as good as what's under the hood with the Tesla. Yep. I definitely think we're seeing that come to fruition in terms of the market share. The other thing I would add to about the technology point, which is, this is sort of my favorite one to rebut anyone that, you know, claims that Tesla is just an automaker, show me the other automakers that are selling an $8,000 software option. You know, Tesla does that with, you know, maybe a 25% take rate or so. Average across the fleet, that's 200,000 or $2,000 additional in pure software margin that Tesla's getting on average per vehicle sold. So until I see another competitor that's able to capture that sort of revenue from software, then obviously Tesla's gonna, you know, trade it to premium to those companies. So I think anyone that is not willing to acknowledge that or appreciate the impact that that can have on the business, especially as Tesla scales, um, needs to probably take a second, look at that specific, you know, option. That's right. I have analog devices on tonight and they make some of the, the, uh, battery management systems. And again, I mean, people, the software, I think is a much better example. There's battery management. I don't know if people can pay for that. It's lumped into the value of the battery. I said, Rob, I just want to end with something that I think explains, uh, the wonder, and then you can put some meat on the bones of this. Uh, the people who convinced me and my wife, Lisa, that this was something different, that it was technology. And remember, uh, the wife is a premier technologist. Frankly, he's known pretty famous in the Valley. Was it, we'd gone to the Sonoma restaurant and it's very good restaurant and people had parked too close to us. And we were very concerned. My wife said, listen, someone's going to lose you. We're going to open the car doors and then we'll have this beautiful Tesla. And we're either going to hit the cars to our side and people are going to come out or we're going to hurt your door. So what do we do? Who wins? Who loses? And our, uh, host, um, grabbed the key chain, pushed the button and the car inched out toward us and nobody's door got hurt. And my wife said to me, how do you put a price on that? Isn't that the type of thing that we've come to expect from Elon Musk? Yeah, I absolutely think so. And I think that's what people don't recognize is that, you know, maybe robo-taxis autonomous robo-taxis aren't here yet, but the features that Tesla is building on to eventually achieve that are already valued, adding value to the. Well, look, I think that this is a conversation. I want to continue with you. Uh, you know more about Tesla than anybody. It's a great honor to speak to, uh, the streets, Tesla daily writer, Rob Moore. And Rob, you know what this is makes me feel terrific. Why? Because the markets come so far and so high that I am sick of defending it, but you just gave me the ammo I need. Thank you so much, Rob. Thanks, Jim. Likewise. I really appreciate the time.