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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.

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Speaker 2: Let me tell you we have a new star.

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Speaker 3: A star is born Elon mars Juson Kennemy.

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Speaker 4: He is the Thomas Edison plus plus plus of our age.

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Speaker 1: Probably his whole life is from a position of insecurity.

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Speaker 1: I feel for the guy.

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Speaker 5: I would say ninety eight percent really appreciate what he does.

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Speaker 5: But those two percent that are nasty, they are I'll

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Speaker 5: pay in four fos.

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Speaker 1: We were meant for great things in the United States

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Speaker 1: of America, and Elon reminds us of that we don't

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Speaker 1: have a fourth branch of governments called Elon Musk. Welcome

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Speaker 1: to elan Ing, Bloomberg's weekly podcast about Elon Musk. It's Tuesday,

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Speaker 1: March eleventh. I'm your host, David Popadopolis. So this is

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Speaker 1: what a bad week looks like. I mean a very

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Speaker 1: very bad week for Elon. Not only has Tesla stock

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Speaker 1: continued a crater it dropped fifteen percent on Monday alone,

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Speaker 1: but he seems to be losing on all fronts right now.

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Speaker 1: X was hit by sporadic outages Monday that Elon blamed

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Speaker 1: on hackers. A SpaceX rocket blow up, rain debris and

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Speaker 1: grounded flights at airports in Florida. Doge is running into

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Speaker 1: more and more roadblocks from both the courts and from

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Speaker 1: within the Trump administration itself. Mosk, through it all, is

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Speaker 1: putting on a brave face, setting his sights on bigger

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Speaker 1: and boulder things for Doge to cut from the budget.

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Speaker 1: But has he backed himself into a corner. Here to

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Speaker 1: discuss all this, we have our trusty muscologists, Max Chaffkin

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Speaker 1: and Dana Hall. Hello to you both, Hey, David, Dana,

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Speaker 1: how are you good?

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Speaker 4: Good? Good to be here?

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Speaker 1: Okay? And then later on in the episode, Bloomberg Stocks

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Speaker 1: reporter Esha Day will join us to talk all about

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Speaker 1: Tesla's free fall. Okay, Dana, So let's start by going

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Speaker 1: a little bit to the tail end of last week

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Speaker 1: for those who may have missed it. There was a

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Speaker 1: cabinet meeting in Washington that Musk attended and it got

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Speaker 1: a little sporty. Tell us what happened.

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Speaker 4: Yeah, So what was interesting is that this cabinet meeting

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Speaker 4: was not on the president's daily schedule. But Sean Duffy,

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Speaker 4: the Transportation Secretary, posted on x that he was like

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Speaker 4: headed into a cabinet meeting, And so we were like, wait, what,

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Speaker 4: there's a cabinet meeting, And then The New York Times

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Speaker 4: reported that the things got pretty spicy. Apparently there was

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Speaker 4: like a testy exchange between Musk and Marco Ribio about

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Speaker 4: cuts at the Department of State, and then you know,

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Speaker 4: Musk was basically saying that these guys weren't cutting fast

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Speaker 4: enough or deep enough, and then there was sort of

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Speaker 4: pushback from the cabinets. Duffy was saying, you know, you

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Speaker 4: want me to fire all these air traffic controllers and

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Speaker 4: I've got planes falling out of the sky. And The

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Speaker 4: New York Times reported that that Trump was kind of

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Speaker 4: like watching these exchanges, ping pong back and forth, like

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Speaker 4: almost like he was watching a tennis match, and then

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Speaker 4: the kind of upshe is that Trump then basically said

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Speaker 4: that Doge is like an advisor, but that the deep

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Speaker 4: cuts are, you know, in the province of the Cabinet secretary.

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Speaker 3: So there's like a.

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Speaker 4: Little bit of a power struggle going on.

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Speaker 3: You know.

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Speaker 4: Obviously I wasn't at the meeting, would love a readout

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Speaker 4: if you were, but it's just like the sort of

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Speaker 4: the first sign that there is tension between Musk and

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Speaker 4: the Cabinet secretaries about how these agencies are basically being

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Speaker 4: overtaken by Doge.

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Speaker 3: Yeah, and just add one think, Trump after this meeting

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Speaker 3: did a truth which is, you know, the truth social

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Speaker 3: version of a tweet Nique a Nicks. And he essentially said,

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Speaker 3: we're not going to use a hatchet. We're going to

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Speaker 3: use a scalpel, which feels like a implicit rebuke or

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Speaker 3: correction or something to Elon Musk. Of course, in the

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Speaker 3: next paragraph he talked all about how great a job

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Speaker 3: Elon Musk is doing, and Musk when he posted this,

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Speaker 3: he only posted a portion of the truth. He posted

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Speaker 3: the second paragraph, not the one about the scalpel.

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Speaker 4: It's fascinating that we've gone from Musk wielding a chainsaw

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Speaker 4: at SAPAC to Trump saying we're not going to use

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Speaker 4: a hatchet, We're going to use a scalpel. So like

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Speaker 4: what's next, like tweezers, like we're going down We're going

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Speaker 4: downstream in terms of like the size and scope of

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Speaker 4: the of the implement.

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Speaker 1: Here, clearly here max hard to interpret this any other way.

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Speaker 1: Even though the reporting from inside the room that we

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Speaker 1: saw in The Times and in other places, mostly the Times,

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Speaker 1: did make it clear that Musk certainly counterpunched and was

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Speaker 1: effective to a degree, but it's really hard to interpret

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Speaker 1: it any other way than it was a defeat and

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Speaker 1: a setback for his endeavor.

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Speaker 3: I think Musk has struggled to some extent to transition

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Speaker 3: from the kind of realities of campaigning, and even in

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Speaker 3: the transition, when there weren't these Senate confirmed appointees taking

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Speaker 3: responsibility for these agencies. So like, what's changed now is

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Speaker 3: you have Marco Rubio in charge of the Department State,

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Speaker 3: Shawn Duffy in charge of the Department of Transportation. If

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Speaker 3: a plane crashes tomorrow, God forbid, Shaw Duffy is the

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Speaker 3: one who's gonna have to answer questions, not Elon Musk,

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Speaker 3: no matter what Elon Musk does, no matter how you know,

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Speaker 3: what his influence is. And that is creating pressure on

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Speaker 3: these cabinet appointees, which is now a counterweight to Elon Musk.

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Speaker 3: And I think so, and I think that's what we're seeing.

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Speaker 3: This was inevitable, this was going to happen, and here

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Speaker 3: we are it is happening because of course, none of

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Speaker 3: these Cabinet secretary, as much as they agree maybe in

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Speaker 3: principle with the idea of cutting government spending. None of

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Speaker 3: them want their departments to be cut too much, and

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Speaker 3: they're going to be concerned, especially given musks, you know,

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Speaker 3: pension for willy nilly, you know, cut now, ask questions later.

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Speaker 1: So, Dana, it strikes me that what we're seeing a

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Speaker 1: little bit here is the classic musk of putting my

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Speaker 1: head down. I'm just efing going for it. Balls to

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Speaker 1: the wall, to hell with everyone. We're just going to

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Speaker 1: go full speed ahead and just see what that what

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Speaker 1: the hell comes out of it. All that may work

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Speaker 1: to a certain degree at Tesla, at X and at

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Speaker 1: other places, but right as Max is getting out here,

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Speaker 1: the political reality of trying to do that in Washington,

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Speaker 1: it's just a it's just a different dynamic.

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Speaker 5: Yeah.

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Speaker 4: But he's also it's also making him dig in even

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Speaker 4: more because he's saying things like, well, it's like the

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Speaker 4: ideas that the quote unquote deeed State is squealing and

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Speaker 4: like you know, all of the Democrats who are in

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Speaker 4: on this or of course they're responding, and that he's

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Speaker 4: fabricated this whole thing in his mind where you know,

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Speaker 4: the media and the NGOs and government employees and federal

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Speaker 4: workers and contractors and George Soros are like all in

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Speaker 4: on this, like massive grift that he alone is like

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Speaker 4: untangling for the world. But it is fundamentally like a

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Speaker 4: misunderstanding of how bureaucracy works and how you know many

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Speaker 4: of these people are lifelong civil servants.

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Speaker 1: Yeah, so we actually have him, Dana in his own

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Speaker 1: words here he is speaking on Fox Business with Larry Kudlow.

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Speaker 1: Let's listen to that.

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Speaker 5: You're giving up your other stuff? I mean, how are

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Speaker 5: you running your other businesses.

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Speaker 2: With great difficulty? Yeah, I mean that.

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Speaker 5: There's no turning back.

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Speaker 2: You're saying, I'm just here trying to make government more efficient.

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Speaker 1: Okay, So Max, I know I said at the top

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Speaker 1: that Musk is putting a brave face on it all.

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Speaker 1: But man, those were some deep size.

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Speaker 3: You know, he does this and like that part.

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Speaker 1: Do you think it's just for you think it's it's No.

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Speaker 3: I think it's both a performance, but I think it

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Speaker 3: is also genuine, right, Like, I mean, obviously he is

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Speaker 3: struggling to run his companies and do the job that

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Speaker 3: he's doing, as his comments indicate. I do think that

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Speaker 3: there are ways in which the kind of the sort

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Speaker 3: of practical ins and outs of what he's trying to

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Speaker 3: do in government, and also the kind of impression, the

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Speaker 3: branding of what he's trying to do conflicts with who

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Speaker 3: he is. Like his thing in the past has been

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Speaker 3: putting himself almost deliberately into these crises and sleeping on

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Speaker 3: the floor, which you know, dramatically right. But now like suddenly,

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Speaker 3: this this performance is coming off a little bit differently,

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Speaker 3: partly because what he's doing is just like fundamentally not

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Speaker 3: gonna be as popular as building an awesome, super fast,

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Speaker 3: super cool electric car, you know, or whatever, and or

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Speaker 3: taking the planet in mars, like like being really good

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Speaker 3: at like cutting parts of the federal budget, even if

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Speaker 3: you're awesome at it, even if there's none of the

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Speaker 3: sort of negative press, even if you don't accidentally fire

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Speaker 3: you know, a bunch of nuclear engineers or air traffic controllers,

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Speaker 3: Like I still think it's just inherently not gonna be

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Speaker 3: as cool. And then when he admits like, yeah, it's tough,

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Speaker 3: Like if I'm an investor in one of these other companies,

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Speaker 3: like ooh, this is gonna give me a feeling that

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Speaker 3: is not great. It's gonna confirm some of maybe my

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Speaker 3: worst fears about what where this thing is leading where

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Speaker 3: Musk is at once distracted so that he's not spending

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Speaker 3: as much time with the companies as he once did obviously,

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Speaker 3: but also eroding his brand. And I'm just sort of

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Speaker 3: watching my investments lose value day by day.

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Speaker 1: Yeah, So, Dana, those size bring me to a question

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Speaker 1: that I meant to and failed to ask last week.

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Speaker 1: So I will ask you it now. Elon Musk, knowing

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Speaker 1: what he knows now, had he known this on oh,

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Speaker 1: I don't know, say June the first of last year,

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Speaker 1: or October the first of last year, or November fifth,

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Speaker 1: would he say yes to doing it all over again?

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Speaker 2: Yes?

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Speaker 4: I mean this is why he donated to Trump's campaign

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Speaker 4: and he pitched this idea. Like Elon Musk has has

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Speaker 4: always been driven by two goals, getting to Mars and

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Speaker 4: getting rid of regulation. Those are that is what is

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Speaker 4: driving him. Maybe he didn't expected to be so bumpy.

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Speaker 4: Maybe he expected more people to like applaud his efforts

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Speaker 4: and not to get the kind of pushback that he's getting.

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Speaker 4: I mean, you're seeing all these protests at the Tesla showrooms.

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Speaker 4: But no, I mean I think that you know this

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Speaker 4: is like he proposed this idea that there is a

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Speaker 4: reason why he donated to the campaign.

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Speaker 1: And but so so you don't think you don't think

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Speaker 1: he feels like in hindsight, it was just a bridge

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Speaker 1: too far.

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Speaker 4: No, because he loves to create. This is sort of

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Speaker 4: who he is. Like, and I've been through so many

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Speaker 4: cycles of this with Elon before, and it's like every

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Speaker 4: time we get to like a new quote unquote crisis,

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Speaker 4: everyone's like, oh my god, this is it. But like

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Speaker 4: we've been through this countless times. In twenty eighteen, when

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Speaker 4: he tried to like fake the buyout of going private

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Speaker 4: and when he bought Twitter, like everyone was like, oh

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Speaker 4: my god, Like this is the end. He's going to

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Speaker 4: be so distracted.

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Speaker 1: And then you're telling me, you're telling me he actually

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Speaker 1: loves this. He's this is his this is his Okay.

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Speaker 4: Yes, he creates chaos on purpose, right, Okay, that's how

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Speaker 4: he throws That's how he.

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Speaker 1: Okay, we need to move on from Washington and go

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Speaker 1: to x, which was down for users at different parts

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Speaker 1: of the day yesterday. Max tell us what transpired.

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Speaker 3: You know X Twitter has long had issues with uptime.

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Speaker 3: This is a site that gets at times like huge

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Speaker 3: amounts of traffic and you know, over the years, like

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Speaker 3: has gone down numerous times. There have also been numerous

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Speaker 3: incidents like this where there's some sort of denial of

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Speaker 3: service attack or cyber attack. The site went down yesterday,

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Speaker 3: I should say, there were sort of intermittent outages over

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Speaker 3: a period of time across you know, a number of countries.

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Speaker 3: I was not able to use it, you know, you

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Speaker 3: know me, I'm a big X user. I was not

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Speaker 3: able to get on weeks from no weeks is I

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Speaker 3: was not able to get on for hours yesterday. So

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Speaker 3: from my own personal experience.

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Speaker 1: Is that why you're in such a crappy mood today?

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Speaker 3: Yeah, I didn't get my fixed. It seemed like a

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Speaker 3: particularly bad, you know, sort of crash or whatever.

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Speaker 1: Any work of the Ukrainian he blamed.

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Speaker 3: Yeah, well he said he didn't exactly say that. He

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Speaker 3: said there were IP addresses in Ukraine. Of course, he's

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Speaker 3: What he's trying to do is suggest that somehow Zelenski,

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Speaker 3: in addition to like not saying thank you or something,

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Speaker 3: set the hackers on Twitter. Certainly possible, although there is

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Speaker 3: a group, a hacking group that has taken responsibility. They're

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Speaker 3: a sort of pro Palestinian aligned hacker collective. So again,

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Speaker 3: we don't I don't think we know yet who did it,

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Speaker 3: But of course it's not good for business and it

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Speaker 3: and when you when you layer in all of the

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Speaker 3: other things that we're going to be talking about, it

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Speaker 3: doesn't necessarily communicate command or having having their stuff together.

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Speaker 1: No, Dana. Meanwhile, a SpaceX rocket launch late last week

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Speaker 1: was quite a show, but I suppose for for the

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Speaker 1: wrong reasons.

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Speaker 4: Yeah, I mean, it launched okay, but then it blew

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Speaker 4: apart and then debris kind of like closed air travel

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Speaker 4: in Florida for a little while. I mean, I think,

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Speaker 4: you know, in SpaceX's defense, they would argue that every

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Speaker 4: time they have a mistake, they learn from it, they

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Speaker 4: get better, they iterate, they improve on things like you

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Speaker 4: don't make advances in sciences and technology without a lot

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Speaker 4: of experimentation. But you know, Musk has always been someone

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Speaker 4: who is spinning a lot of plates. And as Max

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Speaker 4: and I wrote earlier this year, you know, he is

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Speaker 4: running six companies and now he's got a seventh, which

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Speaker 4: is running the government. And it's only a matter of

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Speaker 4: time before like one of those plates comes crashing down.

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Speaker 4: So how long he can keep them all spinning as

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Speaker 4: anyone's guest, but he's we've sort of been in these

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Speaker 4: crisis moments before.

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Speaker 1: So Max Dana points out that SpaceX and Musk love

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Speaker 1: to learn and iterate from these blow ups, and they

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Speaker 1: kind of, to a certain extent almost even enjoy them

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Speaker 1: in the sense that they then get to autopsy the

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Speaker 1: whole thing and go on. That's fine, learning and iterating

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Speaker 1: is one thing. But raining so much to debris down

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Speaker 1: that airports are shut down for a while, Is that okay?

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Speaker 1: Is that normal?

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Speaker 5: No?

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Speaker 3: And it's not. And so obviously yes, it's true that

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Speaker 3: like they're not going to get to Mars or even

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Speaker 3: get this uh spacecraft working on one launch. By design,

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Speaker 3: these things are are not going to work out. They're

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Speaker 3: not launching any real cargo yet. For this very reason,

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Speaker 3: I believe there were some rocket was by the way,

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Speaker 3: this was a starship rocket. This is the This is

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Speaker 3: the spacecraft that Elon Musk sees as the Mars vehicle

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Speaker 3: for now, though SpaceX has a contract to land this

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Speaker 3: is a lunar landing craft for for the Moon mission, right,

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Speaker 3: but musks that that's the contract that they have.

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Speaker 1: Moon is for losers.

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Speaker 3: That's what Elon Musk says, but now, but the challenge

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Speaker 3: here is that, well, first of all, one challenge is

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Speaker 3: there are a lot of people who who don't think

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Speaker 3: the Moon is for losers, and and those people include

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Speaker 3: many of the other companies who have contracts UH to

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Speaker 3: send people and parts and so on to the Moon.

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Speaker 3: There is going to be political opposition. There already is

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Speaker 3: political opposition to any effort to sort of like as

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Speaker 3: Musk has sort of hinted, like, cancel the Artemist program,

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Speaker 3: which is the Moon program and replace it with a

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Speaker 3: Mars program. The other day, Trump actually brought up Mars

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Speaker 3: and said it, well, it's it's not that big a priority,

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Speaker 3: which I would say is in start contrast to how

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Speaker 3: Elon Musk s is it. These launches are have scientific

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Speaker 3: and engineering value, but they also are political. And we

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Speaker 3: learned that during the campaign trail when Trump over and

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Speaker 3: over and over again talked about how beautiful it was,

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Speaker 3: how amazing the arms they lived. You know, we all

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Speaker 3: heard this over and over again. Dan and I heard

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Speaker 3: it in person in Madison Square Garden. Trump loves like

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Speaker 3: cradling a baby like Trump loves to talk about it

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Speaker 3: because and of course he loves it because it is

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Speaker 3: like a perfect illustration of Elon Musk's competence and at

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Speaker 3: and so when we see the opposite, it doesn't convey that,

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Speaker 3: and it makes it all the harder for Elon Musk

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Speaker 3: to argue that the United States should bet on this

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Speaker 3: technology which is a new technology, which is not totally

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Speaker 3: figured out, which could fail. Right, Like, so, yes, the

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Speaker 3: failures are by design, but they're not good.

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Speaker 1: As we wrap this segment here, Max, I'll just say

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Speaker 1: that Musk, like I knows that stocks go to the moon,

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Speaker 1: starships go to Mars. Come on, I don't.

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Speaker 3: I don't totally know what that means.

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Speaker 1: But okay, all right, okay, So we're now joined by

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Speaker 1: stocks reporter Esha Day. Hello, Esha, welcome back.

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Speaker 2: Hello.

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Speaker 1: So I told you to come back on when you

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Speaker 1: had something interesting to talk about, and man, do you

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Speaker 1: so the Tesla, the stock has been in free fall,

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Speaker 1: notwithstanding a little bit of a bump back up today.

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Speaker 1: Hit us to start with with some superlatives that capture

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Speaker 1: the move in recent days.

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Speaker 5: Sure, let me absolutely spoil you here. So Tesla says

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Speaker 5: a down forty five percent last I checked for the year.

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Speaker 2: It's really volatile today.

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Speaker 5: But let's go with forty five percent, and then it's

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Speaker 5: down fifty three percent from the all time high that

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Speaker 5: it touched on December seventeenth. So in the process, the

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Speaker 5: stock has now lost more than eight hundred to be specific,

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Speaker 5: eight hundred and sixteen billion dollars from its market evaluation.

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Speaker 1: So at and its peak, its market value was.

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Speaker 2: One point five trillion.

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Speaker 5: Yes, and currently it's worth around seven hundred billion and change.

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Speaker 1: Yes, and I believe it is the biggest decliner in

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Speaker 1: the S and P five hundred index.

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Speaker 5: Since that's right, yesation, right, yes, you you completely snatched

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Speaker 5: the words out of it is the worst decliner on

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Speaker 5: the SMB five hundred right now by a decent margin,

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Speaker 5: I would say.

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Speaker 1: So, I get the sense that even the bulls out there,

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Speaker 1: the Tesla perma bulls, are starting to get to get

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Speaker 1: starting to get a bit nervous. What are you hearing?

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Speaker 5: Yes, that's a great way to put it. The perma bulls,

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Speaker 5: some of them extremely vocal and art in Tesla fans,

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Speaker 5: I would say, who absolutely believe in this kind of

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Speaker 5: long term vision of Tesla becoming this pioneer in the

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Speaker 5: fully self driving vehicle, the robot taxi and a much

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Speaker 5: more sophisticated real life AI applications such as humanoid robot

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Speaker 5: and all that. Even those people, when I talk to

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Speaker 5: them for in a very long time, and I have

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Speaker 5: been covering this stock for a while now, this is

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Speaker 5: the first time that I'm hearing them being a little antsy.

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Speaker 2: They're not sure. They're still on the sideline.

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Speaker 5: So despite a fifty what seems like a fifty three

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Speaker 5: percent discount, So clearly these people think, and they say

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Speaker 5: this in as many words, that they think there's more

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Speaker 5: to go in this decline. And why is that? The

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Speaker 5: reason is simple, Like you know, the the boom that

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Speaker 5: we saw after the election, it was really not driven

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Speaker 5: by anything fundamental. So now that all that speculative frenzy

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Speaker 5: has been taken out of the stock, people are starting

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Speaker 5: to look at the fundamental. So where do fundamental stand

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Speaker 5: compared to say November.

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Speaker 2: Of last year. They look weaker. So there's no reason terrible.

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Speaker 1: Right, I mean, in Europe, in parts of the US,

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Speaker 1: sales are way down. The brand has been damaged with

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Speaker 1: the significant swath of consumers out there. But Dana Trump

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Speaker 1: came out last night in truth it was I believe

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Speaker 1: it was last night, and he said He's going to

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Speaker 1: go out himself and buy a Tesla to show support

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Speaker 1: for his man mosque. Is this is going to turn

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Speaker 1: this is going to turn the stock around?

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Speaker 4: Well, I mean, it's it's remarkable that the President of

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Speaker 4: the United States is saying this, and his exact quote

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Speaker 4: on truth is I'm going to buy a brand new

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Speaker 4: Tesla tomorrow morning, meeting today today as we speak, as

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Speaker 4: a show, as a show of confidence and support for

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Speaker 4: Elon Musk, a truly great American. So, first of all,

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Speaker 4: I don't see how this works in practice, Like, are

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Speaker 4: we supposed to believe that the President is going to

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Speaker 4: like waltz into some showroom in Washington, DC and like

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Speaker 4: roll out with the cyber truck or something like. I

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Speaker 4: just don't really I scrutinize this very concept.

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Speaker 1: I could see him rocking a cyber truck.

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Speaker 4: But secondly, if the whole issue is brand erosion and

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Speaker 4: Tesla's longtime consumer is being very upset that Musk has

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Speaker 4: thrown in his lot with Trump, the idea that Trump

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Speaker 4: is now going to buy a Tesla is just going

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Speaker 4: to further cement Tesla as a brand into like a Magamobile,

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Speaker 4: which you know, Max and I wrote about like two

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Speaker 4: years ago. So I don't see how it helps Elon

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Speaker 4: at all. I just think it's not good.

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Speaker 1: This is a key thing. And I guess my first

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Speaker 1: reaction was when Trump said he was gonna go buy one.

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Speaker 1: I was like, one, you're gonna buy one Tesla? How

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Speaker 1: about three hundred thousand, buddy? And I guess my question

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Speaker 1: for you, Max is and it gets back to something

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Speaker 1: it's been nagging for a while for me, which is,

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Speaker 1: for every five or ten or twenty buyers Musk loses

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Speaker 1: in Blue America, is there some offset in Red America,

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Speaker 1: some of any kind? And is Trump perhaps nudging those

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Speaker 1: red buyers to get up off the couch and go

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Speaker 1: buy Yes.

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Speaker 3: I want to remind people. This would be Trump's second

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Speaker 3: cyber truck. He actually got one from a podcaster in

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Speaker 3: twenty twenty four. I believe we talked about this. It

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Speaker 3: was like it had like I remember stickers on it

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Speaker 3: or something. Anyway, Yeah, it was like a campaign stunt.

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Speaker 3: I don't again, I don't know if he still has it.

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Speaker 3: But it could be a second one could be a

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Speaker 3: Trump fleet. You could have Eric and On Junior both

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Speaker 3: driving cyber trucks. I suppose I do think like there

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Speaker 3: is a universe of of sort of hardcore Trump supporter

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Speaker 3: who has already embraced Elon Musk. We've talked about this

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Speaker 3: a lot, like it's not like there's no sort of

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Speaker 3: like maga buyer coalition, But like Danna saying, this doesn't

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Speaker 3: really help because Musk is already completely Trump coded, I.

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Speaker 1: Guess the pushback on that would be that, yes, that

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Speaker 1: maga crowd that loves the that loves Musk or likes

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Speaker 1: must buys the stock right has been buying the stock,

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Speaker 1: and that was part of ESHA right, the big pop

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Speaker 1: we saw last year in the stock. Can you get

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Speaker 1: them through something like a truth like this to go

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Speaker 1: doing that from buying right, from buying the stock to

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Speaker 1: then no, no, we need you to do more, we

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Speaker 1: need you to buy the vehicle itself.

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Speaker 4: I just think that, Listen, the economy is really uncertain

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Speaker 4: right now. People are losing their jobs, people are seeing

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Speaker 4: their retirement savings go to hell. They don't know if

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Speaker 4: they're going to have Social Security and Medicare, Like, this

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Speaker 4: is not the time when people make a big purchase

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Speaker 4: like buying a car. There is a reason why Q

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Speaker 4: one sales are going to be crappy, and it's like

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Speaker 4: just buying a car is a huge purchase. It's often

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Speaker 4: the largest purchase that someone makes outside of housing or

436
00:22:59,440 --> 00:23:02,440
Speaker 4: like a college education. So I just don't think you're

437
00:23:02,480 --> 00:23:05,840
Speaker 4: seeing people like rushing to the showroom to buy a vehicle.

438
00:23:06,200 --> 00:23:10,280
Speaker 4: And also, like Tesla's lineup, it's super old, Like Tesla

439
00:23:10,359 --> 00:23:12,479
Speaker 4: made a big thing of how they're now, you know,

440
00:23:12,680 --> 00:23:16,520
Speaker 4: selling the refreshed Model Why. So some people are waiting

441
00:23:16,520 --> 00:23:18,719
Speaker 4: for the Model Y, but there's like the new Model Why.

442
00:23:18,800 --> 00:23:20,960
Speaker 4: But there's like a ton of inventory on the Tesla

443
00:23:21,000 --> 00:23:24,920
Speaker 4: website right now. And yeah, I don't think that like Trump,

444
00:23:25,320 --> 00:23:27,000
Speaker 4: I don't think you're gonna see like a ton of

445
00:23:27,000 --> 00:23:29,720
Speaker 4: people moving to buy a car right now with so

446
00:23:29,800 --> 00:23:35,200
Speaker 4: much uncertainty in the wider economy.

447
00:23:35,400 --> 00:23:39,280
Speaker 1: So I actually have esha a theory that came to

448
00:23:39,320 --> 00:23:42,399
Speaker 1: me the other day on the Model Why refresh. It

449
00:23:42,440 --> 00:23:44,640
Speaker 1: was an epiphany I had as I was walking down

450
00:23:44,680 --> 00:23:46,680
Speaker 1: Park Avenue and I saw a cyber truck on one

451
00:23:46,760 --> 00:23:49,320
Speaker 1: road and I saw an old Model Why in the

452
00:23:49,359 --> 00:23:53,119
Speaker 1: other and I thought, Man, the problem with this refresh

453
00:23:53,280 --> 00:23:56,760
Speaker 1: is possible buyers of the new model Why because it

454
00:23:56,880 --> 00:23:59,720
Speaker 1: looks distinct and unique and new and different than the

455
00:23:59,720 --> 00:24:03,520
Speaker 1: old ones. They lose plausible deniability. You cannot sit you

456
00:24:03,560 --> 00:24:06,600
Speaker 1: cannot own it and slap the bumper sticker on it

457
00:24:06,640 --> 00:24:09,160
Speaker 1: and say I bought this before I knew Elan was crazy.

458
00:24:09,600 --> 00:24:11,800
Speaker 1: It's just no. Everyone's like, oh man, that's a brand

459
00:24:11,800 --> 00:24:15,040
Speaker 1: new car. So the theory is that rather than helping

460
00:24:15,080 --> 00:24:20,160
Speaker 1: them turn sales around, it could deepen their slump. What say,

461
00:24:20,240 --> 00:24:21,800
Speaker 1: you hit me with it.

462
00:24:21,800 --> 00:24:24,200
Speaker 2: It's a possibility, right, jeez, that's it.

463
00:24:24,240 --> 00:24:25,000
Speaker 1: That's all I get.

464
00:24:25,280 --> 00:24:26,240
Speaker 2: Here's what I'll say.

465
00:24:26,440 --> 00:24:29,800
Speaker 5: So it definitely seems like you know, when I talk

466
00:24:29,920 --> 00:24:33,080
Speaker 5: to like bullish just tesla investors or analysts, a lot

467
00:24:33,119 --> 00:24:35,200
Speaker 5: of them will push back on this idea of the

468
00:24:35,560 --> 00:24:36,959
Speaker 5: of damage to the brand.

469
00:24:37,320 --> 00:24:40,560
Speaker 1: But why what do they say when they push back

470
00:24:40,560 --> 00:24:42,040
Speaker 1: and they say, you're overstating it.

471
00:24:42,160 --> 00:24:45,080
Speaker 5: King, Yes, they think it's just being overstated by the media,

472
00:24:45,160 --> 00:24:46,040
Speaker 5: it's just being hyped.

473
00:24:46,080 --> 00:24:49,440
Speaker 1: But when they see sales down seventy percent in some places,

474
00:24:49,480 --> 00:24:51,399
Speaker 1: they think that's a blip that will go away.

475
00:24:51,520 --> 00:24:55,480
Speaker 5: They say that it's not entirely clear what exactly is

476
00:24:55,520 --> 00:24:58,760
Speaker 5: going on. Also, Europe and like smaller Europe chemakets like

477
00:24:58,800 --> 00:25:01,280
Speaker 5: you know, let's first see what's happening in US, because

478
00:25:01,280 --> 00:25:03,840
Speaker 5: that's kind of the litmus test, right, like what's happening

479
00:25:03,880 --> 00:25:06,080
Speaker 5: in the US market, which we do not know yet.

480
00:25:06,160 --> 00:25:09,360
Speaker 5: But my point is the risk of brand damage has

481
00:25:09,400 --> 00:25:12,080
Speaker 5: to be real enough that it pushed Trump to tweet

482
00:25:12,280 --> 00:25:16,000
Speaker 5: last night, right, Like it's kind of an acknowledgment of

483
00:25:16,040 --> 00:25:19,040
Speaker 5: this brand damage that they clearly are seeing happening.

484
00:25:19,800 --> 00:25:24,359
Speaker 3: Even maga people, even the tard cor Donald Trump people

485
00:25:24,720 --> 00:25:29,320
Speaker 3: do not like people who throw Nazi salutes or salutes

486
00:25:29,359 --> 00:25:34,359
Speaker 3: that look Nazi adjacent. Right, Musk's antics have seemed, I

487
00:25:34,400 --> 00:25:39,399
Speaker 3: think even fairly extreme for some conservatives, and like the

488
00:25:39,480 --> 00:25:44,480
Speaker 3: idea that there's no brand damage just seems like almost

489
00:25:44,680 --> 00:25:48,440
Speaker 3: disconnected from reality. I mean, like we're seeing in those

490
00:25:48,480 --> 00:25:52,800
Speaker 3: European sales numbers that Asha just mentioned, serious brand damage,

491
00:25:52,840 --> 00:25:55,040
Speaker 3: and we're seeing in the China sales numbers. We're seeing it,

492
00:25:55,080 --> 00:25:57,280
Speaker 3: in fact in some of the US sales numbers, and

493
00:25:57,720 --> 00:26:00,520
Speaker 3: even leaving that aside, like these protests in front of

494
00:26:00,760 --> 00:26:06,760
Speaker 3: Tesla dealerships are real. And it's so interesting because Musk

495
00:26:06,880 --> 00:26:09,359
Speaker 3: has responded to this and we should say by essentially

496
00:26:09,440 --> 00:26:12,399
Speaker 3: saying it's a it's all a big conspiracy, right, this

497
00:26:12,480 --> 00:26:15,119
Speaker 3: is like Act Blue, some Democratic activists, and.

498
00:26:15,440 --> 00:26:19,359
Speaker 1: This is what Trump was saying lesson right, And I.

499
00:26:19,680 --> 00:26:22,960
Speaker 3: Think this is a case where actually, like, and he's

500
00:26:23,119 --> 00:26:25,320
Speaker 3: of course blaming the media, but I think this is

501
00:26:25,359 --> 00:26:28,879
Speaker 3: really a case where the media has been behind the

502
00:26:28,880 --> 00:26:31,679
Speaker 3: ball on this, where like the media has not fully

503
00:26:31,720 --> 00:26:33,760
Speaker 3: realized and I think a lot of Wall Street has

504
00:26:33,800 --> 00:26:38,879
Speaker 3: not fully realized how significant the opinion shift is, and

505
00:26:38,920 --> 00:26:42,080
Speaker 3: how like this has become the way that people who

506
00:26:42,119 --> 00:26:45,520
Speaker 3: are mad at Trump expressed that anger at Trump. You

507
00:26:45,560 --> 00:26:49,199
Speaker 3: cannot there's nowhere to protest Trump right now. Like I

508
00:26:49,200 --> 00:26:50,919
Speaker 3: guess you could go to the White House or something,

509
00:26:51,359 --> 00:26:56,840
Speaker 3: but there are opportunities, you know, every day, a cyber truck,

510
00:26:56,960 --> 00:27:00,800
Speaker 3: right or whatever to express your displeasure. And like, Musk

511
00:27:00,960 --> 00:27:04,560
Speaker 3: has made this choice. You know, we talked about it

512
00:27:04,720 --> 00:27:08,040
Speaker 3: on this podcast, and Bears have been worried about this

513
00:27:08,480 --> 00:27:12,119
Speaker 3: for years, that he was going to polarize the brand.

514
00:27:12,920 --> 00:27:14,359
Speaker 3: And I think it would have been less of an

515
00:27:14,400 --> 00:27:17,040
Speaker 3: issue if Trump had lost the election. But Trump did

516
00:27:17,080 --> 00:27:18,960
Speaker 3: not lose the election. It also would have been less

517
00:27:18,960 --> 00:27:21,320
Speaker 3: of an issue if Musk had not taken a job

518
00:27:21,359 --> 00:27:23,320
Speaker 3: within the Trump administration, It would have been less of

519
00:27:23,320 --> 00:27:25,720
Speaker 3: an issue if he had taken a less controversial job

520
00:27:25,840 --> 00:27:28,199
Speaker 3: in the administration. But he has run headlong into this

521
00:27:28,280 --> 00:27:32,000
Speaker 3: controversy and the electorate is reacting as you'd expect.

522
00:27:32,200 --> 00:27:35,280
Speaker 1: Dana, one of those bulls that Esha had mentioned earlier.

523
00:27:35,359 --> 00:27:38,520
Speaker 1: Dan Ives at Webbush called this a moment of truth

524
00:27:38,640 --> 00:27:43,280
Speaker 1: for Musk and Tesla, and in that Fox Business interview yesterday,

525
00:27:44,000 --> 00:27:46,800
Speaker 1: when asked about how he was running Tesla and his

526
00:27:46,840 --> 00:27:52,400
Speaker 1: other companies, his response was with great difficulty. Well, I

527
00:27:52,440 --> 00:27:55,160
Speaker 1: guess I wonder is he even running them at all?

528
00:27:55,480 --> 00:27:59,480
Speaker 1: And given what it's going through, that can't cause or

529
00:27:59,520 --> 00:28:02,040
Speaker 1: given there's a whole lot of confidence as they watch

530
00:28:02,080 --> 00:28:03,040
Speaker 1: the stock crater.

531
00:28:03,280 --> 00:28:06,879
Speaker 4: Right and the board has been completely silent on Musk

532
00:28:07,119 --> 00:28:08,920
Speaker 4: since the election. I mean they have not put out

533
00:28:08,920 --> 00:28:12,760
Speaker 4: any kind of statement. There's no clear number two or COO.

534
00:28:13,400 --> 00:28:16,879
Speaker 4: The bench is like not deep, like who runs the

535
00:28:16,880 --> 00:28:19,840
Speaker 4: company day to day. It's like there's not like a

536
00:28:19,880 --> 00:28:23,400
Speaker 4: Gwen shot well at Tesla. So yeah, no, I think

537
00:28:23,400 --> 00:28:25,040
Speaker 4: it's I think it's been concerning. I'm going to be

538
00:28:25,080 --> 00:28:27,680
Speaker 4: super curious to see what the proxy says this time

539
00:28:27,720 --> 00:28:29,080
Speaker 4: around in terms of risk factor.

540
00:28:29,400 --> 00:28:32,160
Speaker 1: Tell us more about that proxy. Remind us what exactly.

541
00:28:32,200 --> 00:28:35,359
Speaker 4: That is, well, every year, like publicly traded companies file

542
00:28:35,400 --> 00:28:40,600
Speaker 4: proxies about it basically lists out like what shareholder resolutions

543
00:28:40,640 --> 00:28:43,240
Speaker 4: are going to be discussed at the shareholder meeting. It's

544
00:28:43,240 --> 00:28:46,000
Speaker 4: a good way to look at how many pledge shares

545
00:28:46,200 --> 00:28:49,560
Speaker 4: Elon Musk has and sometimes they lay out new risk factors.

546
00:28:49,760 --> 00:28:52,560
Speaker 4: And you know a lot of times companies like they

547
00:28:52,800 --> 00:28:55,160
Speaker 4: they hide stuff in the proxy. The proxy drops on

548
00:28:55,240 --> 00:28:57,560
Speaker 4: like good Friday day that the market has closed. It's

549
00:28:57,600 --> 00:29:00,680
Speaker 4: always really deep reading. I will be reading it. I'm

550
00:29:00,720 --> 00:29:02,400
Speaker 4: just sort of curious to you to see about like

551
00:29:02,480 --> 00:29:06,520
Speaker 4: Tesla's board. Remember Joe Gebbia, the Airbnb co founder who

552
00:29:06,560 --> 00:29:09,440
Speaker 4: was on Tesla's board, is also working with Doge. So

553
00:29:09,480 --> 00:29:12,920
Speaker 4: it's not just Elon who's Doge focused, it's like another

554
00:29:12,960 --> 00:29:14,080
Speaker 4: board member as well.

555
00:29:14,560 --> 00:29:19,160
Speaker 1: Yeah. So Esha the Danna says she's seen this show,

556
00:29:19,240 --> 00:29:22,760
Speaker 1: this movie many times, having covered must over the years.

557
00:29:23,200 --> 00:29:24,760
Speaker 1: You've been covering Tessel for how long now?

558
00:29:25,480 --> 00:29:27,440
Speaker 2: Since twenty sixteen, twenty sixteen.

559
00:29:27,200 --> 00:29:30,640
Speaker 1: For a while, yeah, decade basically two decades in Tesla

560
00:29:30,800 --> 00:29:33,680
Speaker 1: right now, in dog years and doze years, forty fifty

561
00:29:33,760 --> 00:29:37,360
Speaker 1: years easy. So I guess I just wonder if you

562
00:29:37,520 --> 00:29:40,680
Speaker 1: also think, now this is just like a sell off

563
00:29:40,720 --> 00:29:44,440
Speaker 1: we've seen before, stock's going to start ripping and bounce

564
00:29:44,520 --> 00:29:49,480
Speaker 1: back soon. Or did the election and the boom and

565
00:29:49,560 --> 00:29:52,840
Speaker 1: initially created and now the bust did it just fundamentally

566
00:29:52,960 --> 00:29:54,640
Speaker 1: change the company and change the stock.

567
00:29:56,400 --> 00:29:57,400
Speaker 2: That's an interesting question.

568
00:29:57,480 --> 00:30:00,480
Speaker 5: Tesla has always been a really volatile stock. It had

569
00:30:00,600 --> 00:30:04,560
Speaker 5: always it's kind of in market parlance, it's almost always

570
00:30:04,600 --> 00:30:07,600
Speaker 5: called the og memes stock in many ways, like it

571
00:30:07,720 --> 00:30:10,880
Speaker 5: was a meme stock of cult stock even before that phenomenon.

572
00:30:11,000 --> 00:30:14,520
Speaker 1: Really, on that point, do you hear estimates from analysts

573
00:30:14,680 --> 00:30:18,960
Speaker 1: on what percent of the valuation is just means stock

574
00:30:19,080 --> 00:30:23,480
Speaker 1: valuation which is hard to separate from the Musk phenomenon,

575
00:30:23,720 --> 00:30:27,800
Speaker 1: and then what part is just hey, valuing this business

576
00:30:28,360 --> 00:30:31,000
Speaker 1: right now and going forward. Do people have estimates?

577
00:30:31,080 --> 00:30:33,080
Speaker 2: See, it's more of an art than science.

578
00:30:33,160 --> 00:30:35,840
Speaker 5: Of course, when you try to understand, you know, what

579
00:30:36,000 --> 00:30:38,760
Speaker 5: part of it is the keymand risk or tied to

580
00:30:39,320 --> 00:30:42,880
Speaker 5: Musk and musks antiques and stuff like that. However, there

581
00:30:42,960 --> 00:30:46,280
Speaker 5: are estimates that there are zeros analysts on Wall Street

582
00:30:46,280 --> 00:30:49,120
Speaker 5: who kind of try to understand if not how much

583
00:30:49,200 --> 00:30:52,120
Speaker 5: is tied to musk, which is a really abstract concept,

584
00:30:52,360 --> 00:30:54,720
Speaker 5: but at least try to understand how much of the

585
00:30:54,800 --> 00:30:57,920
Speaker 5: valuation is really focused on the future or future growth

586
00:30:58,000 --> 00:30:59,719
Speaker 5: or future growth potential.

587
00:31:00,200 --> 00:31:02,960
Speaker 2: So right now the stock has moved so much.

588
00:31:03,000 --> 00:31:05,880
Speaker 5: I haven't seen any very recent numbers, but around the

589
00:31:05,920 --> 00:31:08,120
Speaker 5: time and it was like a trillion dollar valuation.

590
00:31:08,640 --> 00:31:10,040
Speaker 2: I have seen people say.

591
00:31:09,880 --> 00:31:13,960
Speaker 5: That anywhere between two hundred to four hundred billion dollars

592
00:31:14,120 --> 00:31:18,720
Speaker 5: was for the auto business and the auto business future

593
00:31:18,760 --> 00:31:23,680
Speaker 5: growth as well, and everything else was robotaxi and AI

594
00:31:23,800 --> 00:31:27,080
Speaker 5: and like essentially the musk dream premium as we would

595
00:31:27,080 --> 00:31:27,360
Speaker 5: call it.

596
00:31:27,440 --> 00:31:30,320
Speaker 3: Yeah, I mean, if you look at Tesla's valuation compared

597
00:31:30,320 --> 00:31:34,080
Speaker 3: to car companies that have like that sell a similar volume,

598
00:31:34,120 --> 00:31:37,280
Speaker 3: it's like many times greater. It is like if Tesla

599
00:31:37,320 --> 00:31:40,960
Speaker 3: were just a car company, like it would be worth way,

600
00:31:41,040 --> 00:31:44,480
Speaker 3: way less. Even having fallen, you know, fifty percent over

601
00:31:44,520 --> 00:31:48,000
Speaker 3: the last couple of months, it's always been like a

602
00:31:48,000 --> 00:31:50,000
Speaker 3: bit of a leap of faith. And maybe I'm being

603
00:31:50,040 --> 00:31:54,080
Speaker 3: a little bit generous here to say to value Tesla's

604
00:31:54,160 --> 00:31:57,760
Speaker 3: robotaxi business or its optimist business in any way because

605
00:31:57,800 --> 00:32:00,880
Speaker 3: there is no business there. It doesn't act actually exists,

606
00:32:00,960 --> 00:32:03,160
Speaker 3: you know, Wall Street, like bid up the stock after

607
00:32:03,200 --> 00:32:05,600
Speaker 3: the election. We sort of touched on this at times,

608
00:32:05,640 --> 00:32:08,400
Speaker 3: but like there was no clear reason why. There is

609
00:32:08,440 --> 00:32:10,880
Speaker 3: nothing Trump can do. He cannot wave a magic wand

610
00:32:11,240 --> 00:32:14,000
Speaker 3: and give Tesla a robotex The funny.

611
00:32:14,120 --> 00:32:16,680
Speaker 1: The funny thing is is that Esha had shared a

612
00:32:16,680 --> 00:32:19,520
Speaker 1: couple of reports this morning from Bulls and both of

613
00:32:19,560 --> 00:32:22,880
Speaker 1: them as they expressed jitters and concern, one of the

614
00:32:22,880 --> 00:32:27,320
Speaker 1: things they both drew comfort from was the Robotaxi dream

615
00:32:27,520 --> 00:32:30,880
Speaker 1: and Morgan Stanley they're waiting for the big Austin Robotaxi

616
00:32:31,080 --> 00:32:36,480
Speaker 1: unveil in the summer. Maybe team say you've lost Dan Ives.

617
00:32:36,560 --> 00:32:40,800
Speaker 3: I mean Dan Ives is like the QAnon shaman to

618
00:32:40,960 --> 00:32:43,960
Speaker 3: like Tesla fandom, Mike, I mean he is like as

619
00:32:44,280 --> 00:32:47,320
Speaker 3: maybe I'm overstating it, but he is a megabull. Might

620
00:32:47,360 --> 00:32:50,920
Speaker 3: be if he is a mildly concerned, that is a

621
00:32:51,160 --> 00:32:53,520
Speaker 3: huge like that is like a wow.

622
00:32:53,560 --> 00:32:56,280
Speaker 1: Well yeah, yeah, he called it right. I think that

623
00:32:56,400 --> 00:32:58,040
Speaker 1: was in top of his report this morning. This is

624
00:32:58,080 --> 00:33:00,160
Speaker 1: a moment of truth for Elon and us.

625
00:33:00,320 --> 00:33:03,240
Speaker 2: Yeah, I mean, Max is right.

626
00:33:05,840 --> 00:33:13,440
Speaker 3: Don't have a very colorful out, Esha day.

627
00:33:13,440 --> 00:33:16,120
Speaker 1: Thank you for joining us, Thank you, Max, Dana.

628
00:33:16,000 --> 00:33:16,800
Speaker 5: Glad to be here.

629
00:33:16,920 --> 00:33:17,280
Speaker 2: Thank you.

630
00:33:24,240 --> 00:33:27,440
Speaker 1: This episode was produced by Stacey Wong. Anna Massa Rakus

631
00:33:27,480 --> 00:33:30,520
Speaker 1: is our editor, and Rayhan Harmanci our senior editor. Blake

632
00:33:30,520 --> 00:33:34,560
Speaker 1: Maples handles engineering, and Dave Precell fact checks. Our supervising

633
00:33:34,600 --> 00:33:39,160
Speaker 1: producer is Magnus Henrickson. The theme is written and performed

634
00:33:39,160 --> 00:33:43,200
Speaker 1: by Takea Yasuzawa and Alex Sugi Eira. Brendan Francis Newnham

635
00:33:43,280 --> 00:33:45,560
Speaker 1: is our executive producer, and Sage Bauman is the head

636
00:33:45,560 --> 00:33:49,320
Speaker 1: of Bloomberg Podcasts. A big thanks to our supporters Joel

637
00:33:49,320 --> 00:33:53,200
Speaker 1: Weber and Brad Stone. I'm David Papadopoulos. If you have

638
00:33:53,280 --> 00:33:55,720
Speaker 1: a minute, rate and review our show, it'll help other

639
00:33:55,760 --> 00:33:57,880
Speaker 1: listeners find us. See you next week.

640
00:34:00,400 --> 00:34:02,080
Speaker 2: Stand Standing