LAUREN: IT WAS A WILD AND CRAZY
2018 FOR TESLA FROM PRODUCTION
ISSUES TO THE ERRATIC BEHAVIOR
OF ITSELF CEO, INVESTORS' EYES
HAVE BEEN GLUED TO THE STOCK,
IT'S UP THIS YEAR, EQUITY
RESEARCH MANAGING DIRECTOR DAN
IVES, DAN, YOU KNOW, WHAT DOES
TESLA NEED TO DO TO IMPROVE IN
2019?
>> PRODUCTION ISSUES ON MODEL 3,
THEY GOT PAST THE 3Q, I THINK
IT'S REALLY ABOUT SUSTAINABILITY
FROM PRODUCTION STANDPOINT,
YOU'LL GET DEMAND, YOU SEE A BIT
OF A PULL FORWARD ON THE CREDIT
COMING OUT WHICH ULTIMATELY GETS
CUT IN HALF.
NOW IT'S ABOUT EUROPE AND CHINA.
THAT'S REALLY KEY FOR DEMAND FOR
TESLA AND T ABOUT MUSK TWEETING
LESS AND FOCUSING MORE ON
PRODUCTION.
LAUREN: THAT'S NOT GOING TO
HAPPEN.
HOW CRITICAL IS THE MODEL 3 FOR
CONTINUED SUCCESS?
>> FUNDAMENTALLY THEY WILL NOT
BE SUCCESSFUL IF MODEL 3 IS NOT
SUCCESSFUL.
IF YOU LOOK AT WHAT'S HAPPENED
WITH THE STOCK AND INVESTORS
VIEWING IT, IT'S THE MARKET FOR
THE COMING YEARS.
IF YOU ARE LOOKING TESLA
500-DOLLAR STOCK, MODEL 3 IS THE
KEY INGREDIENT AND RECIPE FOR
SUCCESS.
LAUREN: APPLE WAS TAKEN DOWN AND
IT'S IN BEAR MARKET, WHAT DOES
APPLE NEED NEXT YEAR TO GET BACK
ON TRACK AND CONVINCE INVESTORS
THAT CONSUMERS STILL WANT
PRODUCT?
>> A LOT OF HEADWIND FOR APPLE,
SOME OF THAT IS SELF-INFLICTED.
WHEN THEY PULLED THE IPHONE
METRIC, THAT WAS SELF-INFLICTING
WOUND AND STREETS NOT RECOVERED
FROM THAT.
THEY MISPRICED 10R, PRICE POINT
SHOULD HAVE BEEN 600.
CHINESE CONSUMERS HAVE REALLY,
YOU KNOW, SO FAR, YOU KNOW, NOT
BEEN ONE THAT HAVE STEPPED UP IN
TERMS OF DEMAND, 10 TO
15 MILLION LESS UNITS.
YOU NEED TO SEE PRICE POINTS CUT
ON VERSIONS AND FOR THEM IT'S
ABOUT COMMUNICATION AND MAKING
SURE THAT THE NEXT CYCLE IS NOT
DISAPPOINTMENT SO FAR LIKE THIS
ONE WHICH HAS BEEN PERFECT STORM
FOR APPLE.
>> ONE QUESTION WOULD BE,
THERE'S ALWAYS BEEN PREMIUM FOR
APPLE, THEY ALWAYS HAVE NEW
MODEL BROUGHT ON COOL NEW
GADGETS, SEEMS TO ME THE LAST
COUPLE OF INTRODUCTIONS REALLY
DIDN'T DO THAT.
I MEAN, THEY WERE SLIGHTLY
BETTER, SLIGHTLY MORE
INTERESTING, ET CETERA, BUT DID
NOT JUSTIFY THE BIG JUMP IN
PRICE, SO IS IT -- IS THAT AN
ISSUE IN U.S., IS IT ISSUE
WORLDWIDE, WHAT -- HOW DO YOU
VIEW THAT?
IS THAT A LEGITIMATE ISSUE?
>> THAT'S A GREAT QUESTION.
SPEAKS TO JUST WHEN YOU HAVE
750 MILLION ACTIVE IPHONES
TODAY, FOR APPLE IT'S ABOUT
KEEPING THAT INSTALL BASE IN
BACKYARD, MAKING SURE THEY
UPGRADE, FROM THAT POINT, WHEN
YOU LOOK AT LOWER PRICE POINTS,
INTERNATIONALLY LOOK AT CHINA,
IN TERMS OF LOWER COMPETITION,
ESPECIALLY WITH ANDROID TOO, YOU
NEED TO SEE UPGRADES MOVE ON
APPLE.
WE HAVE SEEN EVERY 3 YEARS
INSTEAD OF 2.
RIGHT NOW IT'S ABOUT PRICE
POINTS, THEY HAVEN'T JUSTIFIED
WHAT YOU'VE SEEN IN TERMS OF
HARDWARE ENHANCEMENT TO PRICE
POINTS WITH FOUR DIGITS.
>> LET ME ASK YOU A QUESTION, IS
TESLA ALWAYS GOING TO BE LUXURY
BRAND LIKE APPLE, ARE THEY GOING
-- DO THEY HAVE TO?
BMW DOESN'T HAVE TO.
MAKES ECONOMIC SENSE OVER JUMP
FROM CAMRY AS FAR AS FUEL COSTS
AND MAINTENANCE COST OR IS THE
WHOLE ELECTRIC CAR CONCEPT A
PREMIUM PRODUCT?
>> LOOK, I THINK THAT REALLY
RUBBER MEETS THE ROAD THIS YEAR
BECAUSE THE MID RANGE, THE 46K
THAT'S COMING OUT AND THE 35K,
SO TO ORDER MASSIVE DEMAND FROM
CONSUMER YOU NEED TO SEE LOWER
PRICE POINTS, THAT WILL BE KEY
IN NOT JUST U.S. BUT EUROPE AND
CHINA.
THIS COULD GET THEM THROUGH
FIRST HALF 2020 BUT THEY ARE
GOING TO HAVE TO GO DOWN LOWER
ON PRICE POINTS TO SEE DEMAND
SPIKE UP.