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00:00 Speaker A
Now, Seth, to to Adam’s point, which is well taken. There’s a lot of Tesla investors. They’re not in this company for the EV business, they’re in it for the Musk vision, they’re in it for the the AI opportunities. But let on the EV business. Uh, team at Canaccord, here’s what they say about it. They say Tesla, they say that EV business stands alone, they say, in the US with a truly scaled integrated EV franchise. In other words, they say EVs in the US, Musk is top dog.
00:39 Speaker A
Do you agree with that? and what is EV demand overall? what do you see for that market going forward, Seth?
00:54 Seth
Yeah, so Tesla is still the king in the US for EVs. They’re the only one that can offer a long-range mid-sized SUV or sedan at an at an affordable price that isn’t too much greater than the greatest uh the best selling internal combustion engines in that category. So a Model Y, not too much more expensive than a Honda CRV or Toyota RAV 4 with the new standard prices. And so, I think that does make Tesla still the king of the US EVs. But for the first three quarters, we’re going to be lapping the end
01:31 Seth
of the EV tax credit that ended in September. So I expect EV sales in the US will be down for the first three quarters. Now, Tesla might be down by less if it can make a compelling argument for the Model Y by improving its full self-driving software. And so we’ll we’ll as the year plays out, we’ll look for that, but ultimately, I think EV sales and Tesla sales will be down in 2026.
02:08 Speaker A
Seth, what about FSD, full self driving system. You saw this how Tesla’s now saying it will be only available as a subscription. How as a finan- financial analyst did you read that? Do you read that opportunity?
02:29 Seth
I think that was always the plan was to transition this to a subscription only uh basis and eventually Elon Musk wants to raise the price once it gets to an unsupervised full self-driving when it becomes either level three, level four, level five. Either way, when Tesla takes over and as the passenger, we no longer have to be paying attention to the road. We can look at our phones, we can take a nap, read a book, do something else. And I think that’s going to unlock a lot of extra
03:10 Seth
profits as they can raise prices with those software-like very high gross margins.