Hello everyone. We will continue our earnings discussion today with Tesla.

Earlier today, Apple announced an upcoming online event on Monday evening (8 pm ET). I believe this is the first time Apple is holding an 8 pm event. Based on the following images, the Mac will be in the spotlight.

My initial thought was that the 8 pm ET time suggests the event is being held when more people will be watching it on their TV sets at home. This would imply some Apple TV+ announcements to go along with Mac news.

Tesla 3Q23 Earnings

For the past few quarters, there have been an elevated number of questions surrounding the Tesla story. Elon Musk’s decision to slash vehicle pricing was a sign of slowing demand (lower pricing is said to offset higher monthly financing costs). This has put Tesla’s +50% vehicle sales growth (annual) target in jeopardy.

The big takeaway from Tesla’s 3Q23 earnings is that the company’s auto growth story continues to evaporate. Musk thinks the difficult operating environment will continue as long as interest rates stay where they are.

Musk is now saying that Tesla is “hitting law of large numbers situations” as they run out of people who can afford Tesla vehicles. Musk, who for the first time said Tesla will do some limited advertising, doesn’t think advertising will help as Tesla would be informing people of a car that they can’t afford. It’s “a big deal,” he says.

The average cost of a Tesla vehicle was

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We kick things off with Neil’s thoughts on Tesla earnings. The discussion covers two themes that are beginning to appear in both Tesla’s results and the broader EV space. We conclude with how these trends stand to impact Apple’s transportation goals.

Happy Tuesday.

Before we get to today’s stories, a little follow-up to yesterday’s "Barbie" discussion. The $150M marketing budget for the film was an estimated figure. There is little to no disclosure regarding how much is spent marketing films.

While it would not be unprecedented for a film’s marketing budget to exceed its production costs, the thing that truly stands out about "Barbie’s" marketing budget is how unique the dollars were used. Warner Bros. was able to leverage its marketing budget. On Twitter, Aakash Gupta shared 50 Barbie marketing examples including building a Barbie house in Malibu, a Barbie-themed hotel, catchy billboards, and plenty of other websites, interviews, and licensing deals. The marketing wasn’t really about a movie, but rather about the Barbie brand.

As we see with other shows like "Ted Lasso," it is possible for other films and shows to play in the zeitgeist. In some ways, that is the goal every streamer is going for: to have some shows become part of culture. Warner Bros. succeeded in that goal with "Barbie." However, the question still remains, what would alternative methods have looked like for "Barbie" distribution? What if David Zaslav had introduced an ultra-premium tier to Max that allowed fans to watch "Barbie" at home, at the same time as the theatrical release?

Tesla Earnings

In a sea of change and evolution, we are starting to get glimmers of a trend materializing in the auto sector. This trend was seen with Tesla’s latest earnings release that came out last week.

A few weeks ago, Tesla reported 2Q23 delivery and production volume. The numbers were good. However, we needed to wait for earnings to see how profitable those vehicle sales were.

Not surprisingly, Tesla’s auto margins are falling. Higher sales volume has not offset the negative impact on margin from substantial price cuts.

The following comment from Elon Musk on Tesla’s earnings Q&A jumped out at me:

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Tesla 3Q23 Earnings, Musk Realism, What Happened to Tesla CFO Kirkhorn?

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Tesla Earnings, Tesla's Cost Reductions, Apple’s Project Titan Implications

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