Tesla hosted its annual shareholder meeting today. Here are our takeaways:

1. Musk was calm, confident, and articulate in a way that we haven’t seen in his last several public appearances. He was less combative and more measured in his remarks about Tesla’s roadmap, even admitting, “I’m often too optimistic about time frames.” We heard fewer hyperboles and more transparent answers to shareholder questions than we have come to expect. At the risk of overanalyzing the event, we see this as a positive sign for the company’s performance. In the past, when Tesla has been struggling, Musk has been visibly troubled himself, and we didn’t see that today.
2. Elon reiterated that “there is not a demand problem,” and predicted that deliveries for Jun-19 will be near a record. This implies ~91k deliveries, which is above investor expectations of 75-80k vehicles. We believe Tesla will reiterate their target of 360-400k deliveries in 2019 on the next earnings call.
3. While demand commentary will likely be upbeat, investors will continue their wait and see posture. This is due in part to the history of missing guidance, but also because much of the optimism around demand is based on historical sales numbers. While Model 3 continues its impressive sales track, it is unclear how much of the demand is from pent up early adopters and what true baseline demand will be long-term.
4. Shanghai is on track to produce vehicles late this year or early next year. This will eliminate tariffs that Chinese consumers are currently bearing on Tesla vehicles, which Musk said have ranged from 15% to 40%. As a reminder, China is the world’s largest EV market, and Tesla vehicles, as they do in the US, still stand head and shoulders above competitors.
5. Musk is taking a more realistic stance on the timing of full autonomy. Previously, he had suggested full self-driving would be available within a year pending regulatory approval. At today’s shareholder meeting, he adopted more conservative language, saying that drivers would still need to “supervise” autopilot and was altogether less emphatic about the usual narrative that you will be able to fall asleep in your Tesla in the coming years.

Retailers are racing to provide faster, cheaper, and more personalized service. In early June, Amazon announced Prime Free One Day shipping, a move that will again raise the bar for consumer expectations on delivery. Four days later, Walmart announced InHome Delivery to bring groceries directly to customers’ fridges.

The Limitations of Fulfillment Centers

But Amazon’s and Walmart’s networks of fulfillment centers — about 150 each in the U.S. — can only support a certain level of service. Each Walmart distribution center, for example, supports a 150+ mile range. Amazon has focused more on population dense areas and Walmart has its network of 3,568 U.S. stores, but free, instant delivery remains “the future of retail.”

We believe convenience stores represent a critical piece of the future of retail. 93% of Americans live within 1 mile of one of the 155,000 convenience stores in the U.S., according to the NACS.

Investing In Skupos

That’s why we are excited to participate in Skupos’ recently announced $26M Series B round of funding, led by Insight Venture Partners. We initially invested in the company’s A round in August of last year.

Skupos provides real-time, SKU-level data to over 7,000 convenience stores in the U.S. The company leverages data from more than 6 million transactions per day to deliver insights to those retailers, their distribution partners, and the brands of the product sales they track.

This same data will enable C-store retailers to survive, and even thrive, in an on-demand retail world. Convenience stores are an important set of nodes on the distribution network required to achieve free, instant delivery without restrictive minimum orders.

We’re proud to continue our partnership with Jake, Mike, Linh, and the rest of the Skupos team to help build the future of retail.

In May, Samsung was the first manufacturer to ship TVs with Apple TV integration. Vizio, Sony, and LG have also signed on to this effort and are expected to release TVs later this year. Our takeaways:

• Four years ago, our belief that Apple would make a TV became a fairytale when the company shut down its standalone TV hardware development.
• Since then, Apple’s approach to the living room has been a slow hobby in the company’s words, led by Apple TV which we estimate is now used in 26m US homes monthly (21% of US households). We believe there are 53 million active Apple TVs worldwide.
• This year Apple’s living room strategy took a step forward with the start of integrating the Apple TV interface with third-party TV manufactures. We believe, eventually, many major TVs will embed Apple TV software. This adoption curve may be similar to CarPlay, which Apple recently reported is available in 90% of new cars sold in the US, and 75% globally.
• The goal is simple, expand the distribution of Apple TV software to grow the reach of Services (Apple TV+ and Apple Music subscriptions, along with content rentals and purchases).
• This will have a fractional positive impact on Apple’s overall revenue, and a measurable impact on the Apple TV installed base.
• We believe this strategy will expand the US installed base of Apple TV by around 2m units annually, on a base of 26m, resulting in about 10% growth. This is based on an average smart TV life of around 6-7 years , 90% of major TV brands selling integrated Apple TVs by 2021, with 10% of those buyers converting to new Apple TV users.