What to Expect in Roadster Demo; Impacts of Tentative SPCX & TSLA Merger

SPEAKER_1 (0:00)

And I want to ask Garrett Nelson and Lauren Fix all about this. Garrett Nelson, Equity Analyst, CFRA Research and Lauren Fix, Automotive Analyst and Founder of CarCoach Reports. So obviously a big day. Elon Musk even saying that it could be the greatest product demo of all time, and this demo will be a banger, probably metaphorically, though some chance literally. He's certainly hyping it up here.

Some of your thoughts here, Lauren, on the Roadster announcement tonight.

Lauren Fix (0:29)

Well, I think there's been a lot of excitement. Of course, remember, Elon knows how to bring the attention. That's one of the things he's fantastic. I've always called him the pied piper. Wherever he goes, there's always someone following. Deposits of $50,000 shows some serious attention to that. That's a lot of money to put down on a car. But what we're seeing is a car that's supposedly going to do under 0-60 in 1.9 seconds, under 2 seconds. We're talking about top speed of over 250 miles an hour, which I hope you will never ever do in the street. But there's not even a track that you could use that on, so it's a bit goofy anyhow.

But as far as the vehicle itself, they claim it might fly. That's what he was telling Joe Rogan. I don't know if that's going to happen. It's called cold gas thrusters, which might allow it to hover. That would only give it one foot above the ground. He did apply for an FAA application. If all this is true and it can jump, it can hop and I guess it can fly.

That will change the whole dynamics of the auto industry. Although I fear the way people drive today, the last thing I want them is flying because it could make things even worse.

SPEAKER_1 (1:34)

I mean, the first thing I think of are New York City potholes.

You guys don't live in New York City, so you don't want to experience this. Also, I mean, another thing would be, let's say if you have a hurricane or flooding, I mean, you can maybe in theory get up and out a bit. What are your thoughts? I mean, Garrett, you've been following this forever. Tonight's the night for the Roadster unveiling. What do you think may be our takeaways tomorrow morning when we're doing the four or five points of the, oh my goodness moment? What do you think we're going to be saying about the Roadster tomorrow?

Garrett Nelson (2:05)

Well, we do think this is going to be a more exciting demo than we've seen recently from Tesla, such as their CyberCab rollout event last month, which Elon Musk didn't even attend, so or the semi-unveil. So there's been a lot of speculation reporting rumors coming out regarding this event. A lot of it stems from the patents they've applied for, certain approvals they've received. But really, what it comes down to for us are specifics.

When is this vehicle going to be available?

What's the price point? What are the costs and what's their initial production capacity and full capacity? So that's what we really need from an analyst perspective to get a better understanding of how to model and the earnings impact to expect. But I think you're right. We've seen Elon Musk who has a lot of PT Barnum in him. In typical fashion, promoting the event, saying it could be explosive, quite literally. All very typical. What we know from past product announcements is that there tends to be a sell off following the event. So we'll be curious to see the reaction in the stock tomorrow and after that.

SPEAKER_1 (3:27)

Is there any speculation here on the price point that you heard, Garrett? I mean, he was here on X. He did note that the new Roadster is beyond movies, imagination, human. And yet it's still made by the humans here on Earth. I'm paraphrasing, but he's obviously talking about that this is something very different. I mean, what kind of price point do you think ranges could be, Garrett?

Garrett Nelson (3:49)

Yeah, we think something in the range of 200,000 to 300,000 isn't unrealistic when you consider the amount of R&D and the amount of time, the amount of money they've spent just developing this vehicle. The initial Roadster Gen 2 unveil was back in 2017 They said that would be in first production in 2020 So here we are six years later and nine years after the initial unveil, and there's been a lot of R&D spent on it. So especially with some of the features, the good thing Tesla has going for it is the average Tesla consumer is very affluent, is a higher income consumer.