Tesla is still a growth story, just 'not for the next year,' says Deepwater's Gene Munster

Story that in the EV world, Tesla planning to layoff more than 10% of its global workforce. Also two key executives, one named Drew Baglino and Rohan Patel have announced they are leaving the companies their senior level executives now Musk appeared to address the shake up at a post on X, saying quote about every five years we need to reorganize, streamline the company for the next phase of growth. Tesla shares fell just over 5% today, closing at their lowest level in nearly a year. As Tesla lost some its magic or is the shake up a sign of growth? To come with us tonight is Tesla, investor in Deepwater Asset Management managing partner Gene Munster. Gene, you think this actually foretells growth, but we’re talking about people leaving, being laid off. Try to square those two things. Well, Brian, I think what’s going on in the next, call it two to four quarters is going to be a decline in the business. Maybe start with there. I think that this is a reaction in part to the EV demand that has absolutely hit the wall. Just look at Google trends type in your favorite EV and look at how the amount of interest has declined. I think ultimately deliveries in 2024 for Tesla are going to be down 3%. The streets right now at plus 5% that’s come down since. Over the last few weeks, it’s still too high. So I do think we are in a period here before what I believe will be in this period. This is the classic Gardner hype cycle. We’re right now in the through of disillusionment and I think that we are going to return to growth because ultimately I believe electrification is just a more sensible way to move around and along with autonomy. And so I still believe that Tesla’s a growth story, but not for the next year. OK, but what do you, how do you feel about $99 full self driving? I think that eventually, if you’re somebody who’s born today, it’s probably never going to drive a car. I think that if you look at the, the, the value on this, there’s a piece where you can look at what the adoption is. If they get 20% adoption, I think that that can double their operating income by 2028. And so I think that not it’s not for everybody, but if 20% ultimately decide to to do that and separately, eventually all car companies, just for safety reasons, are going to have to get some form of autonomy. And it’s unlikely given what the investment cycle has been with these car companies that they’re going to be able to do it on their own. I suspect over time Tesla will license some of that. Elon said he’s open to that. That’s a whole nother revenue piece that is not reflected.