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May the odds be ever in your favor. This iconic phrase from The Hunger Games applies as much to Elon Musk's upcoming cage match with Mark Zuckerberg as it does to Tesla's floundering global rankings, replete with promises of an unmatched theatrical spectacle in the former's case while brimming with all of the angst and melancholy associated with the loss of face in the case of the latter.

2022: $TSLA most profitable carmaker. Q2: drops to 4th. Ex-credits, to 7th (LEFT). $TSLA cut prices while most rivals hiked (RIGHT).

Truly pathetic, yet $TSLA has 2x'd. Street sees 2024 EPS +44%. This is unlikely, given rivals' strength.

See the report in my pinned tweet pic.twitter.com/jgftvl9EJ8

— Motorhead (@BradMunchen) August 10, 2023

We noted in a previous post that Tesla's automotive gross margin fell to 18.10 percent in Q2 2023 on the back of aggressive price cuts and is slated to fall further as Elon Musk continues to show a willingness to sacrifice profit margins to drive volume growth, banking on the eventual solution to the FSD conundrum to drive much higher profits in the long run. However, the full carnage of Tesla's strategy becomes evident when one looks at the pre-tax profit margin. This metric has fallen from 19.30 percent in Q2 2022 to just 11.80 percent in Q2 2023, corresponding to a decline of 7.6 percent and relegating Tesla to merely the fourth most profitable automaker in the world. In fact, no other major automaker has experienced such a sharp drop in its pre-tax margins.

2/17... price cuts/incentives, $TSLA saw the lowest level of Shanghai plant sales in 7 months. In fact, these weak sales created the largest inventory build (i.e., production - sales = inventory) EVER SEEN at the Shanghai plant (i.e., the largest excess $TSLA has seen in... pic.twitter.com/rAUTAl0JOy

— Gordon Johnson (@GordonJohnson19) August 10, 2023

What's more, Tesla seems to have a persistent demand problem in China, with July sales the weakest in seven months. Of course, the upcoming refresh of the Model 3, dubbed simply the Highland, might be a factor in this ongoing sluggish demand in the pre-launch phase. But for a stock that trades at nosebleed valuations, this demand slowdown is currently champing at the proverbial bits for its pound of flesh.

Exact date is still in flux. I’m getting an MRI of my neck & upper back tomorrow.

May require surgery before the fight can happen. Will know this week.

— Elon Musk (@elonmusk) August 7, 2023

Meanwhile, after appearing to backtrack over the past few days on his commitment to meet Meta CEO Mark Zuckerberg in a cage match, as evidenced by Elon Musk citing the need for an MRI – and potentially a surgery – as well as his professed preference for a "battle of brains," the Tesla CEO has again placed the much-hyped physical altercation on the proverbial cards.

This strange saga began when news emerged that Meta was seeking to launch a Twitter rival called THREADS. Elon Musk then challenged Mark Zuckerberg to a cage match. The CEO of Meta responded by asking Musk to choose the location of the hyped-up cage match. The answer from the CEO of Tesla was simply a one-liner tweet: "Vegas Octagon."

The fight will be managed by my and Zuck’s foundations (not UFC).

Livestream will be on this platform and Meta. Everything in camera frame will be ancient Rome, so nothing modern at all.

I spoke to the PM of Italy and Minister of Culture. They have agreed on an epic location.

— Elon Musk (@elonmusk) August 11, 2023

Today, Elon Musk tweeted that the cage match will be live-streamed on Meta and X, with the CEO of Tesla already having secured an "epic location" somewhere in Italy after talking with the country's minister of culture. The proceeds from this epic clash will be donated to the veterans, as per a separate tweet.

The situation at Tesla and X appears to be in a near-constant state of flux. Perhaps no other word better encapsulates this unceasing churn and upheaval, not all of it bad, of course. Against this backdrop, the planned cage match between Elon Musk and Mark Zuckerberg can only serve one purpose: an all-consuming distraction.