What a beautiful exchange. This is what our country needs more of. Debate in service to the Truth.

BEST SHOW EVER!!! I do have one request though. Please Herbert, let the conversation go deep when the substance is so significant. We talk about Tesla in all the other aspects so often but it is very very rare to hit a grand slam of a point with two authorities debating back-and-forth. This episode was absolute GOLD!!!!

Herbert did brilliantly here to be quiet when matt and Larry were unravelling the details. Larry and Matr excellent too, both learning from each other rather than trying to win the discussion. One of the best episodes I've watched and I watch them all.

@MyPapagio

2 күн бұрын

I agree.

What a Show. Larry is Gold ❤

@ayo9057

2 күн бұрын

Don’t sleep on Lemonade Matt.

@asafprivman

2 күн бұрын

Amazing is Larry!!!

@asafprivman

2 күн бұрын

Matt: Well if that's true we'll get 30-40% gross margins... Larry: welcome to my world 😂😂😂

@asafprivman

2 күн бұрын

Thank you Herbert for allowing and enabling the beautiful deep dive with Larry! Super important! Thank you!!!

@Longtack55

2 күн бұрын

Larry Goldberg is gold, and he has wisdom gained from intelligence and experience. I appreciate every well-considered word he utters, preferring that to a rapid-fire torrent of filler words.

Great show love Matt and Larry debating, don’t completely understand but still love listening to them.

I’m a cpa. Larry is correct on cost of good is not reserved.

@gregoryhyder118

Күн бұрын

I've been a controller and cfo for 25 years and I agree...Larry is right. The only caveat is performance miss costs, if any, would be recognized and reduce the GP $"s from the reserve recognition.

@island97

Күн бұрын

​@@gregoryhyder118Accounting is magic 😂

You weren’t losing your audience during the discussion about reserved revenue etc and cost of goods etc - it was very interesting. There is after all a right answer.

@growthaddiction4275

5 сағат бұрын

I enjoyed

Thank you Herbert for allowing and enabling the beautiful deep dive with Larry! Super important! Thank you!!!

THAT WAS EPIC!!! I finally understand Larry. It took Matt's hard headedness to push him to explain it in more simple terms, but wow, I finally see the genius in Larry. Loved the deep dive, Herbert. That's what makes us brighter. Great job, guys.

@julielaw520

Күн бұрын

Agreed! Thanks to all of you! I I can't believe i've been riveted by a conversation about accounting, but I was, ha! Larry's accent is lovely to listen to as well.

I love when the light bulb went off for Matt. What a G!

Larry and Matt are two fantastic guests. Excellent analysis by both. Love how Larry isn’t intimidated by Matt’s big brain and youth 😂. Quality of the content in this channel is outstanding. Thanks Herbert.

Bravo Herbert. You're a great moderator/host. You have a deep understanding of Telsa, but respected the convo/debate btwn Matt and Larry. I find so many hosts feel the need to interject to sound smart. Thank you. Larry and Matt, well done on educating us and making us that much smarter!

@MyPapagio

2 күн бұрын

Very good point. I totally agree. This is why long format is great and why I can't stand CNBC.

Thanks for keeping us buds got a 150K mortgage, bought 75k worth of Brett with it. YOLO from profit of 10k capital..

@claraq36

2 күн бұрын

My colleagues had a good laugh at me when I told them I started my journey with $50k capital and how I accumulated over 6 figures within a span of 7 months. They never believed me until I pulled out my P&L.

@phelps078q

2 күн бұрын

Christen wilburn was my hope during the 'bear summer' last year. I did so many mistakes but also learned so much from it, and of course from christen wilburn.

@SmithNatasha-hc7mq

2 күн бұрын

I will leave her info below this comment

@SmithNatasha-hc7mq

2 күн бұрын

SHE'S MOSTLY ON TELEGRAMS, USING THE USERNAME

@SmithNatasha-hc7mq

2 күн бұрын

@wilburn77a

When Larry Speaks.... We Should Listen. Thanks, Matt, Herbert, Larry!

This conversation is FIRE. Thank you, all!

Super exciting that megapack factories ramp so quickly. They sound like money printers over the next decades.

This was my favorite video I’ve seen on your channel. Matt and Larry are cooking. Larry is still sharp as hell ran circles around Matt with accounting knowledge!!!

Not painful at all guys, this was great. Loved it,

That was an awesome discussion between Larry and Matt💯

I'd agree with Larry. In construction, recognise cash. The 20% hold back is pure profit. No assets on the books. The 20% is often paid in tranches. Half after 1 year. 25% after 2, and 25% at end of 3 years.

The margins and potential profits are mind blowing. 🎉. Most excellent discussions as always. 😊 Ty Herbert

Herbert, margin is represented as a percentage. Gross profit or net income would be a dollar amount, not margin.

Lol I actually really enjoyed the tax discussion. Props to Larry for being patient with Matt.

I work in the power industry and we supplied 50mw to power Kennedy airport in NY this is huge tesla sold 9.5 giga watts that like 190x the power of that it’s amazing and unbelievable 🎉 party time for tesla investors

Wow, what a great debate. Larry, you are the GOAT! Accounting 101 in a megapack world!

Great discussion. All sides had insights and the push back showed an actual conversation and debate.

Well played gents, a good old fashioned debate, I learnt more from this than a one way conversation . Hat off to you .

Cost go on the books as they occur. Holdbacks for lien accounts and performance are not recognized as revenue until received.

Briilian show - bit technical but Larry and Matt proved their expertise

Wow!!! Very bright!!! Holy moly i was excited about energy now i am static!!!!

Good one Herbert. Let them run 👍 I'm loving the split screen. Sweet.

This is amazing. Top notch discussion 👍

Great discussion!!! Love it.

Great show thanks Larry and Matt.

Tesla business has so much depth to it ,its ridicilous! There a numerous facets from the company to montize any service that have. NOT just a car company!!!

Larry is right regarding recognition. Performance obligation has nothing to do with units being deployed in the past.

LARRY IS A G! Hahahaha love this dude! Matt ur great too, hearing you both go back and forth was awesome and hilarious at the same time. So much valuable info in this video, both Larry and Matt are very well spoken and smart dudes. Thanks for putting it all together Herbert, ur work is amazing

Not painful. Brilliant chat. This is what we are here for!

$1 billion in gross margin from energy in Q2 alone? I’m up to my eyeballs in TSLA but I just might buy more calls tomorrow morning. Can’t believe how info packed this episode was.

Thanks to Herbert, Larry, and Matt. Very enlightening.

The Tesla powerwall is also my favorite of all powerwalls. It's just so much better than the rest

There's not anything basic about any kind of accounting to me! Great job, guys!!

@island97

Күн бұрын

True. Accounting is magic at this point .

Herbert did excellent to let them speak but then to also summarise and focus them. I was so lost! But it is clear even to me how significant these calculations are.

Most analysts have no sense of value what a GW of energy is....without thinking hard. it will be a while before Wall Street and commentators begin to recognize its revenue value. let alone the ompact on EBITDA.

The undelivered element will be service etc on the megapacks ..Gary is correct . The main cost which is battery etc is recognized in full upon delivery , the ..service cost will be cost of people services the site ..it’s not pure GM for the undelivered element but should be high margin ..

GREAT PANEL💪❤

I enjoyed that really deep dive into the accounting!

Thank you for going Full Nerd on us, that was great. Exited to see the real numbers in a few weeks. If Larry has it right, the next years will blow up!

What impact does the plug and play mega pack have on the grid operators? They no longer have to develop substations so only distribution becomes their part of the planning.

Recognizing Performance obligations is conditional. If Tesla fail to meet the condition, Tesla needs to pay back the buyer (the customer). So the accounting entry will be Debit Performance Obligation, Credit Accounts Payable (to the customer).

Omg, what a great chat, thank you Larry, Matt and Herbert, awesome debate, thank you for allowing this great chat wow

Great discussion Guys, thank you.🤓

Really appreciated the detailed discussion and explanation of accounting and grid connection issues.

Given the demand for static storage - I am wondering why Tesla is not looking at starting a 3rd factory somewhere in Europe?

Great to go so in-depth, thanks for the insight gents!

Great content. Thank You!

How good is Larry

Well worth the time they took to explain it. WOW!

Does the margin calculation include the assumption that cell costs will drop dramatically?

I'm loving this!!!

Thanks!

This week is so beautiful

Amazing analysis from Matt and Larry. I had this on in the background and ended up watching it with rapt attention. That grid survey and approval process is a real problem that I don’t think a lot of people realize as Matt mentioned.

San Antonio is listening. :) Have owned Tesla for a few years.

Epic! ❤

such a good video 👍

What does this do for the q2 bottom line?

Larry is correct about the accounting. The challenge is that under a period of hypergrowth, the amounts getting deferred will be greater than the portion of the deferred revenue recognized each quarter. The outstanding amount will continue to grow.

@LamsCryptoverse

2 күн бұрын

are you sure ? I don't remember this is my CFA studies..

Never a waste of time to clarify thoughts and positions so every one is on the same page and not misunderstanding! Sometimes that takes a min and several back and forths and to me thats MORE than fine, it's desirable, the more conversation required the more important the topic and the greater justification for talking it through, win win win.

The newer data centers use much less energy than previous technology by a margin of 90%.

Best show by far . I loved the accounting back and forth between Larry and Matt and I believe we all learned something very important today. To be honest I was on the camp where Matt was in regards to accounting recognition so this is bonkers . Thank you Larry for explaining this to all of us . This question should come up with Tesla to explain as I have a feeling Wall Street is also getting this wrong .

I don't understand why investor relations can't be contacted to clarify this accounting confusion

What a fantastic chat - you guys are the best - it’s going to rip again today 😊

This was Tha, very insightful information thank you for the great discussion

For the energy problem there is the company Radiant is building mini micro portable nuclear plants, can be installed and connected to grid in a few days. Can also be turned off and on at will. Private company no IPO yet.

47:30 I wish I could have heard more about our huge problem blocking progress on this stuff

That was a good accounting lesson, Larry and Matt should think about producing Tutorial videos , using Tesla as case examples

Best show yet , I hope Larry I correct about how the delayed contract payments are accounted . As this would be a great bonus to the profits that along with energy growth could double the stock price going forward

Beautiful debste.. beautiful show:)

A correction for larry regarding high tension power transmission. High tension lines are three phase a c. Thomas edison pushed c power, but it required a power station every few blocks in new york city. Nikolai, Tesla and Edison collided. The two kinds of electrical. Nikolai, T and Westinghouse built the first AC. Power plant at niagara falls.

This has been one thesis of why i invest in Tesla. I feel confident i will make multiples on my investment on the energy business alone. And to think Robotaxi and Bots are a pure option play???? (Gravy:).. truly amazing. Imo this energy news derisks the stock. Great show Herbert.

Great question for the next quarterly earnings call to clarify.

We need to do this again once we have a clearer understanding of what’s right

My bet is when they get a purchase order they schedule the building of the Megapacks which takes time. After built and shipped to site they probably can invoice for a portion and the remainder of the purchase order price is not paid until the Megapacks are installed and commissioned. this timeframe is likely very much driven by the specific contractors and location of site (politics). My bet is the po to being paid is about 6 to 24 months.

Matching principle is not a requirement for recognizing revenue. Used to be, not anymore

Will any of the institutions begin to assign substantial teams of analysts to coordinate automobile, tech, AI, robotics and electric storage expertise and reporting?

AC or DC Electric Power Transmission - YOUR BOTH RIGHT!! Larry and Matt! But there’s more: > In THE BEGENNING of electric power proliferation (100+ yrs ago), Thomas Edison and Nicola Tesla had different ideas. It worked out that Tesla’s long distance power transmission by AC worked with manufacturing capabilities at the time, and Edison’s attempt to use DC required a DC generator every TWO miles; that didn’t work well at all. Tesla clearly understood the physics while Edison didn’t. But, Edison understood business, and Tesla didn’t. > WHEN did extremely long distance electrical power transmission by HVDC (HIGH VOLTAGE DC) become practical: the 1970s. Practical conversion of power between AC and DC became possible with the development of power electronics devices such as mercury-arc valves and, starting in the 1970s, power semiconductor devices including thyristors, integrated gate-commutated thyristors(IGCTs), MOS-controlled thyristors (MCTs) and insulated-gate bipolar transistors (IGBT). > INTERCONTINENTAL connections become possible - Most HVDC links use voltages between 100 kV and 800 kV. However, a 1,100 kV (1.1 megavolts) link in China was completed in 2019 over a distance of 3,300 km (2,100 mi) with a power capacity of 12 GW. With this dimension, intercontinental connections become possible which could help to deal with the fluctuations of wind power and photovoltaics. BINGO!! > I’m thinking Larry just finished a biography of Edison (which influenced me to be hearing an Audible on same myself). I identify with Larry getting tongue tied on the subject (now it depends on HOW FAR - as for AC or DC). It’s come full circle, for around 300 miles (< 600 miles) old timer AC has been the way forward. With way-off - off shore wind and distant solar (or earth bound atomic - most prefer the fusion reactor for free in the sky), going DC, has tremendous potential and earth saving value!

Awrsome content.

This "interconnect" issue... is it possible to create a new company to bypass these "archaic" processes and interconnects? Could a new company lay wire underground between grids and create an underground smart grid that can pop up from Boring tunnels into willing jurisdictions? What I'm saying is fixing the old grid is one thing but what if a new grid could be superimposed over the old one slowly piece by piece while upgrades are still done to the old grid in the conventional way. Capacity interconnect contracts could choose between the old process and the new process once there's a connection. In this way the grid is "pulled" forward naturally instead of the tougher job of "pushing" from behind and converting it into a modern day smart grid. This is just a sketch of an inkling of an idea...

Love the going into the weeds

Larry is Tesla Yoda

Is it possible for Elon to acquire the electricity he needs without utterly demolishing the current archaic energy systems? What does the energy industry look like four years from now?

Well, they both can’t be right……. How do we break the tie? Let’s get GJ in here.

Keyword: Grid-Forming capability - Tesla Megapack’s competitive advantage

Geez, I’m a bit confused. Herbert please simplify the value added by energy based on this new information in a new show. I like how Matt simplified the current valuation based on future installed storage. Trying to explain complex accounting can create large mistakes and confusion. I cannot go back and listen to that again, but I want to revisit this potential of the Energy business. One of the reasons I invested in TESLA back in 2019 was I knew the Energy business would be huge.

I'm team Larry!

Tesla said on Q1 earnings that deployed energy would grow AT LEAST 75% this year. Larry was projecting no growth for energy for 2024? O.o They also said capacity would go from 20 GWh at the start of the year to 40 GWh by year end.

Removing the grid from the problem space seems likely to remove most of the grid issues, also. How many of Elon's projects can function on power supplied solely by combinations of solar arrays and Megapack batteries plus Tesla power management? It seems worth pointing out that is exactly how his Mars colony factories may have to work, and it is likely how some of his international projects may need to function not many years from now.

Herbert is the real steadfast bill.

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