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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