Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: Let me tell you we have a new star.
Speaker 3: A star is born Elon mars Juson Kennemy.
Speaker 4: He is the Thomas Edison plus plus plus of our age.
Speaker 1: Probably his whole life is from a position of insecurity.
Speaker 1: I feel for the guy.
Speaker 5: I would say ninety eight percent really appreciate what he does.
Speaker 5: But those two percent that are nasty, they are I'll
Speaker 5: pay in four fos.
Speaker 1: We were meant for great things in the United States
Speaker 1: of America, and Elon reminds us of that we don't
Speaker 1: have a fourth branch of governments called Elon Musk. Welcome
Speaker 1: to elan Ing, Bloomberg's weekly podcast about Elon Musk. It's Tuesday,
Speaker 1: March eleventh. I'm your host, David Popadopolis. So this is
Speaker 1: what a bad week looks like. I mean a very
Speaker 1: very bad week for Elon. Not only has Tesla stock
Speaker 1: continued a crater it dropped fifteen percent on Monday alone,
Speaker 1: but he seems to be losing on all fronts right now.
Speaker 1: X was hit by sporadic outages Monday that Elon blamed
Speaker 1: on hackers. A SpaceX rocket blow up, rain debris and
Speaker 1: grounded flights at airports in Florida. Doge is running into
Speaker 1: more and more roadblocks from both the courts and from
Speaker 1: within the Trump administration itself. Mosk, through it all, is
Speaker 1: putting on a brave face, setting his sights on bigger
Speaker 1: and boulder things for Doge to cut from the budget.
Speaker 1: But has he backed himself into a corner. Here to
Speaker 1: discuss all this, we have our trusty muscologists, Max Chaffkin
Speaker 1: and Dana Hall. Hello to you both, Hey, David, Dana,
Speaker 1: how are you good?
Speaker 4: Good? Good to be here?
Speaker 1: Okay? And then later on in the episode, Bloomberg Stocks
Speaker 1: reporter Esha Day will join us to talk all about
Speaker 1: Tesla's free fall. Okay, Dana, So let's start by going
Speaker 1: a little bit to the tail end of last week
Speaker 1: for those who may have missed it. There was a
Speaker 1: cabinet meeting in Washington that Musk attended and it got
Speaker 1: a little sporty. Tell us what happened.
Speaker 4: Yeah, So what was interesting is that this cabinet meeting
Speaker 4: was not on the president's daily schedule. But Sean Duffy,
Speaker 4: the Transportation Secretary, posted on x that he was like
Speaker 4: headed into a cabinet meeting, And so we were like, wait, what,
Speaker 4: there's a cabinet meeting, And then The New York Times
Speaker 4: reported that the things got pretty spicy. Apparently there was
Speaker 4: like a testy exchange between Musk and Marco Ribio about
Speaker 4: cuts at the Department of State, and then you know,
Speaker 4: Musk was basically saying that these guys weren't cutting fast
Speaker 4: enough or deep enough, and then there was sort of
Speaker 4: pushback from the cabinets. Duffy was saying, you know, you
Speaker 4: want me to fire all these air traffic controllers and
Speaker 4: I've got planes falling out of the sky. And The
Speaker 4: New York Times reported that that Trump was kind of
Speaker 4: like watching these exchanges, ping pong back and forth, like
Speaker 4: almost like he was watching a tennis match, and then
Speaker 4: the kind of upshe is that Trump then basically said
Speaker 4: that Doge is like an advisor, but that the deep
Speaker 4: cuts are, you know, in the province of the Cabinet secretary.
Speaker 3: So there's like a.
Speaker 4: Little bit of a power struggle going on.
Speaker 3: You know.
Speaker 4: Obviously I wasn't at the meeting, would love a readout
Speaker 4: if you were, but it's just like the sort of
Speaker 4: the first sign that there is tension between Musk and
Speaker 4: the Cabinet secretaries about how these agencies are basically being
Speaker 4: overtaken by Doge.
Speaker 3: Yeah, and just add one think, Trump after this meeting
Speaker 3: did a truth which is, you know, the truth social
Speaker 3: version of a tweet Nique a Nicks. And he essentially said,
Speaker 3: we're not going to use a hatchet. We're going to
Speaker 3: use a scalpel, which feels like a implicit rebuke or
Speaker 3: correction or something to Elon Musk. Of course, in the
Speaker 3: next paragraph he talked all about how great a job
Speaker 3: Elon Musk is doing, and Musk when he posted this,
Speaker 3: he only posted a portion of the truth. He posted
Speaker 3: the second paragraph, not the one about the scalpel.
Speaker 4: It's fascinating that we've gone from Musk wielding a chainsaw
Speaker 4: at SAPAC to Trump saying we're not going to use
Speaker 4: a hatchet, We're going to use a scalpel. So like
Speaker 4: what's next, like tweezers, like we're going down We're going
Speaker 4: downstream in terms of like the size and scope of
Speaker 4: the of the implement.
Speaker 1: Here, clearly here max hard to interpret this any other way.
Speaker 1: Even though the reporting from inside the room that we
Speaker 1: saw in The Times and in other places, mostly the Times,
Speaker 1: did make it clear that Musk certainly counterpunched and was
Speaker 1: effective to a degree, but it's really hard to interpret
Speaker 1: it any other way than it was a defeat and
Speaker 1: a setback for his endeavor.
Speaker 3: I think Musk has struggled to some extent to transition
Speaker 3: from the kind of realities of campaigning, and even in
Speaker 3: the transition, when there weren't these Senate confirmed appointees taking
Speaker 3: responsibility for these agencies. So like, what's changed now is
Speaker 3: you have Marco Rubio in charge of the Department State,
Speaker 3: Shawn Duffy in charge of the Department of Transportation. If
Speaker 3: a plane crashes tomorrow, God forbid, Shaw Duffy is the
Speaker 3: one who's gonna have to answer questions, not Elon Musk,
Speaker 3: no matter what Elon Musk does, no matter how you know,
Speaker 3: what his influence is. And that is creating pressure on
Speaker 3: these cabinet appointees, which is now a counterweight to Elon Musk.
Speaker 3: And I think so, and I think that's what we're seeing.
Speaker 3: This was inevitable, this was going to happen, and here
Speaker 3: we are it is happening because of course, none of
Speaker 3: these Cabinet secretary, as much as they agree maybe in
Speaker 3: principle with the idea of cutting government spending. None of
Speaker 3: them want their departments to be cut too much, and
Speaker 3: they're going to be concerned, especially given musks, you know,
Speaker 3: pension for willy nilly, you know, cut now, ask questions later.
Speaker 1: So, Dana, it strikes me that what we're seeing a
Speaker 1: little bit here is the classic musk of putting my
Speaker 1: head down. I'm just efing going for it. Balls to
Speaker 1: the wall, to hell with everyone. We're just going to
Speaker 1: go full speed ahead and just see what that what
Speaker 1: the hell comes out of it. All that may work
Speaker 1: to a certain degree at Tesla, at X and at
Speaker 1: other places, but right as Max is getting out here,
Speaker 1: the political reality of trying to do that in Washington,
Speaker 1: it's just a it's just a different dynamic.
Speaker 5: Yeah.
Speaker 4: But he's also it's also making him dig in even
Speaker 4: more because he's saying things like, well, it's like the
Speaker 4: ideas that the quote unquote deeed State is squealing and
Speaker 4: like you know, all of the Democrats who are in
Speaker 4: on this or of course they're responding, and that he's
Speaker 4: fabricated this whole thing in his mind where you know,
Speaker 4: the media and the NGOs and government employees and federal
Speaker 4: workers and contractors and George Soros are like all in
Speaker 4: on this, like massive grift that he alone is like
Speaker 4: untangling for the world. But it is fundamentally like a
Speaker 4: misunderstanding of how bureaucracy works and how you know many
Speaker 4: of these people are lifelong civil servants.
Speaker 1: Yeah, so we actually have him, Dana in his own
Speaker 1: words here he is speaking on Fox Business with Larry Kudlow.
Speaker 1: Let's listen to that.
Speaker 5: You're giving up your other stuff? I mean, how are
Speaker 5: you running your other businesses.
Speaker 2: With great difficulty? Yeah, I mean that.
Speaker 5: There's no turning back.
Speaker 2: You're saying, I'm just here trying to make government more efficient.
Speaker 1: Okay, So Max, I know I said at the top
Speaker 1: that Musk is putting a brave face on it all.
Speaker 1: But man, those were some deep size.
Speaker 3: You know, he does this and like that part.
Speaker 1: Do you think it's just for you think it's it's No.
Speaker 3: I think it's both a performance, but I think it
Speaker 3: is also genuine, right, Like, I mean, obviously he is
Speaker 3: struggling to run his companies and do the job that
Speaker 3: he's doing, as his comments indicate. I do think that
Speaker 3: there are ways in which the kind of the sort
Speaker 3: of practical ins and outs of what he's trying to
Speaker 3: do in government, and also the kind of impression, the
Speaker 3: branding of what he's trying to do conflicts with who
Speaker 3: he is. Like his thing in the past has been
Speaker 3: putting himself almost deliberately into these crises and sleeping on
Speaker 3: the floor, which you know, dramatically right. But now like suddenly,
Speaker 3: this this performance is coming off a little bit differently,
Speaker 3: partly because what he's doing is just like fundamentally not
Speaker 3: gonna be as popular as building an awesome, super fast,
Speaker 3: super cool electric car, you know, or whatever, and or
Speaker 3: taking the planet in mars, like like being really good
Speaker 3: at like cutting parts of the federal budget, even if
Speaker 3: you're awesome at it, even if there's none of the
Speaker 3: sort of negative press, even if you don't accidentally fire
Speaker 3: you know, a bunch of nuclear engineers or air traffic controllers,
Speaker 3: Like I still think it's just inherently not gonna be
Speaker 3: as cool. And then when he admits like, yeah, it's tough,
Speaker 3: Like if I'm an investor in one of these other companies,
Speaker 3: like ooh, this is gonna give me a feeling that
Speaker 3: is not great. It's gonna confirm some of maybe my
Speaker 3: worst fears about what where this thing is leading where
Speaker 3: Musk is at once distracted so that he's not spending
Speaker 3: as much time with the companies as he once did obviously,
Speaker 3: but also eroding his brand. And I'm just sort of
Speaker 3: watching my investments lose value day by day.
Speaker 1: Yeah, So, Dana, those size bring me to a question
Speaker 1: that I meant to and failed to ask last week.
Speaker 1: So I will ask you it now. Elon Musk, knowing
Speaker 1: what he knows now, had he known this on oh,
Speaker 1: I don't know, say June the first of last year,
Speaker 1: or October the first of last year, or November fifth,
Speaker 1: would he say yes to doing it all over again?
Speaker 2: Yes?
Speaker 4: I mean this is why he donated to Trump's campaign
Speaker 4: and he pitched this idea. Like Elon Musk has has
Speaker 4: always been driven by two goals, getting to Mars and
Speaker 4: getting rid of regulation. Those are that is what is
Speaker 4: driving him. Maybe he didn't expected to be so bumpy.
Speaker 4: Maybe he expected more people to like applaud his efforts
Speaker 4: and not to get the kind of pushback that he's getting.
Speaker 4: I mean, you're seeing all these protests at the Tesla showrooms.
Speaker 4: But no, I mean I think that you know this
Speaker 4: is like he proposed this idea that there is a
Speaker 4: reason why he donated to the campaign.
Speaker 1: And but so so you don't think you don't think
Speaker 1: he feels like in hindsight, it was just a bridge
Speaker 1: too far.
Speaker 4: No, because he loves to create. This is sort of
Speaker 4: who he is. Like, and I've been through so many
Speaker 4: cycles of this with Elon before, and it's like every
Speaker 4: time we get to like a new quote unquote crisis,
Speaker 4: everyone's like, oh my god, this is it. But like
Speaker 4: we've been through this countless times. In twenty eighteen, when
Speaker 4: he tried to like fake the buyout of going private
Speaker 4: and when he bought Twitter, like everyone was like, oh
Speaker 4: my god, Like this is the end. He's going to
Speaker 4: be so distracted.
Speaker 1: And then you're telling me, you're telling me he actually
Speaker 1: loves this. He's this is his this is his Okay.
Speaker 4: Yes, he creates chaos on purpose, right, Okay, that's how
Speaker 4: he throws That's how he.
Speaker 1: Okay, we need to move on from Washington and go
Speaker 1: to x, which was down for users at different parts
Speaker 1: of the day yesterday. Max tell us what transpired.
Speaker 3: You know X Twitter has long had issues with uptime.
Speaker 3: This is a site that gets at times like huge
Speaker 3: amounts of traffic and you know, over the years, like
Speaker 3: has gone down numerous times. There have also been numerous
Speaker 3: incidents like this where there's some sort of denial of
Speaker 3: service attack or cyber attack. The site went down yesterday,
Speaker 3: I should say, there were sort of intermittent outages over
Speaker 3: a period of time across you know, a number of countries.
Speaker 3: I was not able to use it, you know, you
Speaker 3: know me, I'm a big X user. I was not
Speaker 3: able to get on weeks from no weeks is I
Speaker 3: was not able to get on for hours yesterday. So
Speaker 3: from my own personal experience.
Speaker 1: Is that why you're in such a crappy mood today?
Speaker 3: Yeah, I didn't get my fixed. It seemed like a
Speaker 3: particularly bad, you know, sort of crash or whatever.
Speaker 1: Any work of the Ukrainian he blamed.
Speaker 3: Yeah, well he said he didn't exactly say that. He
Speaker 3: said there were IP addresses in Ukraine. Of course, he's
Speaker 3: What he's trying to do is suggest that somehow Zelenski,
Speaker 3: in addition to like not saying thank you or something,
Speaker 3: set the hackers on Twitter. Certainly possible, although there is
Speaker 3: a group, a hacking group that has taken responsibility. They're
Speaker 3: a sort of pro Palestinian aligned hacker collective. So again,
Speaker 3: we don't I don't think we know yet who did it,
Speaker 3: But of course it's not good for business and it
Speaker 3: and when you when you layer in all of the
Speaker 3: other things that we're going to be talking about, it
Speaker 3: doesn't necessarily communicate command or having having their stuff together.
Speaker 1: No, Dana. Meanwhile, a SpaceX rocket launch late last week
Speaker 1: was quite a show, but I suppose for for the
Speaker 1: wrong reasons.
Speaker 4: Yeah, I mean, it launched okay, but then it blew
Speaker 4: apart and then debris kind of like closed air travel
Speaker 4: in Florida for a little while. I mean, I think,
Speaker 4: you know, in SpaceX's defense, they would argue that every
Speaker 4: time they have a mistake, they learn from it, they
Speaker 4: get better, they iterate, they improve on things like you
Speaker 4: don't make advances in sciences and technology without a lot
Speaker 4: of experimentation. But you know, Musk has always been someone
Speaker 4: who is spinning a lot of plates. And as Max
Speaker 4: and I wrote earlier this year, you know, he is
Speaker 4: running six companies and now he's got a seventh, which
Speaker 4: is running the government. And it's only a matter of
Speaker 4: time before like one of those plates comes crashing down.
Speaker 4: So how long he can keep them all spinning as
Speaker 4: anyone's guest, but he's we've sort of been in these
Speaker 4: crisis moments before.
Speaker 1: So Max Dana points out that SpaceX and Musk love
Speaker 1: to learn and iterate from these blow ups, and they
Speaker 1: kind of, to a certain extent almost even enjoy them
Speaker 1: in the sense that they then get to autopsy the
Speaker 1: whole thing and go on. That's fine, learning and iterating
Speaker 1: is one thing. But raining so much to debris down
Speaker 1: that airports are shut down for a while, Is that okay?
Speaker 1: Is that normal?
Speaker 5: No?
Speaker 3: And it's not. And so obviously yes, it's true that
Speaker 3: like they're not going to get to Mars or even
Speaker 3: get this uh spacecraft working on one launch. By design,
Speaker 3: these things are are not going to work out. They're
Speaker 3: not launching any real cargo yet. For this very reason,
Speaker 3: I believe there were some rocket was by the way,
Speaker 3: this was a starship rocket. This is the This is
Speaker 3: the spacecraft that Elon Musk sees as the Mars vehicle
Speaker 3: for now, though SpaceX has a contract to land this
Speaker 3: is a lunar landing craft for for the Moon mission, right,
Speaker 3: but musks that that's the contract that they have.
Speaker 1: Moon is for losers.
Speaker 3: That's what Elon Musk says, but now, but the challenge
Speaker 3: here is that, well, first of all, one challenge is
Speaker 3: there are a lot of people who who don't think
Speaker 3: the Moon is for losers, and and those people include
Speaker 3: many of the other companies who have contracts UH to
Speaker 3: send people and parts and so on to the Moon.
Speaker 3: There is going to be political opposition. There already is
Speaker 3: political opposition to any effort to sort of like as
Speaker 3: Musk has sort of hinted, like, cancel the Artemist program,
Speaker 3: which is the Moon program and replace it with a
Speaker 3: Mars program. The other day, Trump actually brought up Mars
Speaker 3: and said it, well, it's it's not that big a priority,
Speaker 3: which I would say is in start contrast to how
Speaker 3: Elon Musk s is it. These launches are have scientific
Speaker 3: and engineering value, but they also are political. And we
Speaker 3: learned that during the campaign trail when Trump over and
Speaker 3: over and over again talked about how beautiful it was,
Speaker 3: how amazing the arms they lived. You know, we all
Speaker 3: heard this over and over again. Dan and I heard
Speaker 3: it in person in Madison Square Garden. Trump loves like
Speaker 3: cradling a baby like Trump loves to talk about it
Speaker 3: because and of course he loves it because it is
Speaker 3: like a perfect illustration of Elon Musk's competence and at
Speaker 3: and so when we see the opposite, it doesn't convey that,
Speaker 3: and it makes it all the harder for Elon Musk
Speaker 3: to argue that the United States should bet on this
Speaker 3: technology which is a new technology, which is not totally
Speaker 3: figured out, which could fail. Right, Like, so, yes, the
Speaker 3: failures are by design, but they're not good.
Speaker 1: As we wrap this segment here, Max, I'll just say
Speaker 1: that Musk, like I knows that stocks go to the moon,
Speaker 1: starships go to Mars. Come on, I don't.
Speaker 3: I don't totally know what that means.
Speaker 1: But okay, all right, okay, So we're now joined by
Speaker 1: stocks reporter Esha Day. Hello, Esha, welcome back.
Speaker 2: Hello.
Speaker 1: So I told you to come back on when you
Speaker 1: had something interesting to talk about, and man, do you
Speaker 1: so the Tesla, the stock has been in free fall,
Speaker 1: notwithstanding a little bit of a bump back up today.
Speaker 1: Hit us to start with with some superlatives that capture
Speaker 1: the move in recent days.
Speaker 5: Sure, let me absolutely spoil you here. So Tesla says
Speaker 5: a down forty five percent last I checked for the year.
Speaker 2: It's really volatile today.
Speaker 5: But let's go with forty five percent, and then it's
Speaker 5: down fifty three percent from the all time high that
Speaker 5: it touched on December seventeenth. So in the process, the
Speaker 5: stock has now lost more than eight hundred to be specific,
Speaker 5: eight hundred and sixteen billion dollars from its market evaluation.
Speaker 1: So at and its peak, its market value was.
Speaker 2: One point five trillion.
Speaker 5: Yes, and currently it's worth around seven hundred billion and change.
Speaker 1: Yes, and I believe it is the biggest decliner in
Speaker 1: the S and P five hundred index.
Speaker 5: Since that's right, yesation, right, yes, you you completely snatched
Speaker 5: the words out of it is the worst decliner on
Speaker 5: the SMB five hundred right now by a decent margin,
Speaker 5: I would say.
Speaker 1: So, I get the sense that even the bulls out there,
Speaker 1: the Tesla perma bulls, are starting to get to get
Speaker 1: starting to get a bit nervous. What are you hearing?
Speaker 5: Yes, that's a great way to put it. The perma bulls,
Speaker 5: some of them extremely vocal and art in Tesla fans,
Speaker 5: I would say, who absolutely believe in this kind of
Speaker 5: long term vision of Tesla becoming this pioneer in the
Speaker 5: fully self driving vehicle, the robot taxi and a much
Speaker 5: more sophisticated real life AI applications such as humanoid robot
Speaker 5: and all that. Even those people, when I talk to
Speaker 5: them for in a very long time, and I have
Speaker 5: been covering this stock for a while now, this is
Speaker 5: the first time that I'm hearing them being a little antsy.
Speaker 2: They're not sure. They're still on the sideline.
Speaker 5: So despite a fifty what seems like a fifty three
Speaker 5: percent discount, So clearly these people think, and they say
Speaker 5: this in as many words, that they think there's more
Speaker 5: to go in this decline. And why is that? The
Speaker 5: reason is simple, Like you know, the the boom that
Speaker 5: we saw after the election, it was really not driven
Speaker 5: by anything fundamental. So now that all that speculative frenzy
Speaker 5: has been taken out of the stock, people are starting
Speaker 5: to look at the fundamental. So where do fundamental stand
Speaker 5: compared to say November.
Speaker 2: Of last year. They look weaker. So there's no reason terrible.
Speaker 1: Right, I mean, in Europe, in parts of the US,
Speaker 1: sales are way down. The brand has been damaged with
Speaker 1: the significant swath of consumers out there. But Dana Trump
Speaker 1: came out last night in truth it was I believe
Speaker 1: it was last night, and he said He's going to
Speaker 1: go out himself and buy a Tesla to show support
Speaker 1: for his man mosque. Is this is going to turn
Speaker 1: this is going to turn the stock around?
Speaker 4: Well, I mean, it's it's remarkable that the President of
Speaker 4: the United States is saying this, and his exact quote
Speaker 4: on truth is I'm going to buy a brand new
Speaker 4: Tesla tomorrow morning, meeting today today as we speak, as
Speaker 4: a show, as a show of confidence and support for
Speaker 4: Elon Musk, a truly great American. So, first of all,
Speaker 4: I don't see how this works in practice, Like, are
Speaker 4: we supposed to believe that the President is going to
Speaker 4: like waltz into some showroom in Washington, DC and like
Speaker 4: roll out with the cyber truck or something like. I
Speaker 4: just don't really I scrutinize this very concept.
Speaker 1: I could see him rocking a cyber truck.
Speaker 4: But secondly, if the whole issue is brand erosion and
Speaker 4: Tesla's longtime consumer is being very upset that Musk has
Speaker 4: thrown in his lot with Trump, the idea that Trump
Speaker 4: is now going to buy a Tesla is just going
Speaker 4: to further cement Tesla as a brand into like a Magamobile,
Speaker 4: which you know, Max and I wrote about like two
Speaker 4: years ago. So I don't see how it helps Elon
Speaker 4: at all. I just think it's not good.
Speaker 1: This is a key thing. And I guess my first
Speaker 1: reaction was when Trump said he was gonna go buy one.
Speaker 1: I was like, one, you're gonna buy one Tesla? How
Speaker 1: about three hundred thousand, buddy? And I guess my question
Speaker 1: for you, Max is and it gets back to something
Speaker 1: it's been nagging for a while for me, which is,
Speaker 1: for every five or ten or twenty buyers Musk loses
Speaker 1: in Blue America, is there some offset in Red America,
Speaker 1: some of any kind? And is Trump perhaps nudging those
Speaker 1: red buyers to get up off the couch and go
Speaker 1: buy Yes.
Speaker 3: I want to remind people. This would be Trump's second
Speaker 3: cyber truck. He actually got one from a podcaster in
Speaker 3: twenty twenty four. I believe we talked about this. It
Speaker 3: was like it had like I remember stickers on it
Speaker 3: or something. Anyway, Yeah, it was like a campaign stunt.
Speaker 3: I don't again, I don't know if he still has it.
Speaker 3: But it could be a second one could be a
Speaker 3: Trump fleet. You could have Eric and On Junior both
Speaker 3: driving cyber trucks. I suppose I do think like there
Speaker 3: is a universe of of sort of hardcore Trump supporter
Speaker 3: who has already embraced Elon Musk. We've talked about this
Speaker 3: a lot, like it's not like there's no sort of
Speaker 3: like maga buyer coalition, But like Danna saying, this doesn't
Speaker 3: really help because Musk is already completely Trump coded, I.
Speaker 1: Guess the pushback on that would be that, yes, that
Speaker 1: maga crowd that loves the that loves Musk or likes
Speaker 1: must buys the stock right has been buying the stock,
Speaker 1: and that was part of ESHA right, the big pop
Speaker 1: we saw last year in the stock. Can you get
Speaker 1: them through something like a truth like this to go
Speaker 1: doing that from buying right, from buying the stock to
Speaker 1: then no, no, we need you to do more, we
Speaker 1: need you to buy the vehicle itself.
Speaker 4: I just think that, Listen, the economy is really uncertain
Speaker 4: right now. People are losing their jobs, people are seeing
Speaker 4: their retirement savings go to hell. They don't know if
Speaker 4: they're going to have Social Security and Medicare, Like, this
Speaker 4: is not the time when people make a big purchase
Speaker 4: like buying a car. There is a reason why Q
Speaker 4: one sales are going to be crappy, and it's like
Speaker 4: just buying a car is a huge purchase. It's often
Speaker 4: the largest purchase that someone makes outside of housing or
Speaker 4: like a college education. So I just don't think you're
Speaker 4: seeing people like rushing to the showroom to buy a vehicle.
Speaker 4: And also, like Tesla's lineup, it's super old, Like Tesla
Speaker 4: made a big thing of how they're now, you know,
Speaker 4: selling the refreshed Model Why. So some people are waiting
Speaker 4: for the Model Y, but there's like the new Model Why.
Speaker 4: But there's like a ton of inventory on the Tesla
Speaker 4: website right now. And yeah, I don't think that like Trump,
Speaker 4: I don't think you're gonna see like a ton of
Speaker 4: people moving to buy a car right now with so
Speaker 4: much uncertainty in the wider economy.
Speaker 1: So I actually have esha a theory that came to
Speaker 1: me the other day on the Model Why refresh. It
Speaker 1: was an epiphany I had as I was walking down
Speaker 1: Park Avenue and I saw a cyber truck on one
Speaker 1: road and I saw an old Model Why in the
Speaker 1: other and I thought, Man, the problem with this refresh
Speaker 1: is possible buyers of the new model Why because it
Speaker 1: looks distinct and unique and new and different than the
Speaker 1: old ones. They lose plausible deniability. You cannot sit you
Speaker 1: cannot own it and slap the bumper sticker on it
Speaker 1: and say I bought this before I knew Elan was crazy.
Speaker 1: It's just no. Everyone's like, oh man, that's a brand
Speaker 1: new car. So the theory is that rather than helping
Speaker 1: them turn sales around, it could deepen their slump. What say,
Speaker 1: you hit me with it.
Speaker 2: It's a possibility, right, jeez, that's it.
Speaker 1: That's all I get.
Speaker 2: Here's what I'll say.
Speaker 5: So it definitely seems like you know, when I talk
Speaker 5: to like bullish just tesla investors or analysts, a lot
Speaker 5: of them will push back on this idea of the
Speaker 5: of damage to the brand.
Speaker 1: But why what do they say when they push back
Speaker 1: and they say, you're overstating it.
Speaker 5: King, Yes, they think it's just being overstated by the media,
Speaker 5: it's just being hyped.
Speaker 1: But when they see sales down seventy percent in some places,
Speaker 1: they think that's a blip that will go away.
Speaker 5: They say that it's not entirely clear what exactly is
Speaker 5: going on. Also, Europe and like smaller Europe chemakets like
Speaker 5: you know, let's first see what's happening in US, because
Speaker 5: that's kind of the litmus test, right, like what's happening
Speaker 5: in the US market, which we do not know yet.
Speaker 5: But my point is the risk of brand damage has
Speaker 5: to be real enough that it pushed Trump to tweet
Speaker 5: last night, right, Like it's kind of an acknowledgment of
Speaker 5: this brand damage that they clearly are seeing happening.
Speaker 3: Even maga people, even the tard cor Donald Trump people
Speaker 3: do not like people who throw Nazi salutes or salutes
Speaker 3: that look Nazi adjacent. Right, Musk's antics have seemed, I
Speaker 3: think even fairly extreme for some conservatives, and like the
Speaker 3: idea that there's no brand damage just seems like almost
Speaker 3: disconnected from reality. I mean, like we're seeing in those
Speaker 3: European sales numbers that Asha just mentioned, serious brand damage,
Speaker 3: and we're seeing in the China sales numbers. We're seeing it,
Speaker 3: in fact in some of the US sales numbers, and
Speaker 3: even leaving that aside, like these protests in front of
Speaker 3: Tesla dealerships are real. And it's so interesting because Musk
Speaker 3: has responded to this and we should say by essentially
Speaker 3: saying it's a it's all a big conspiracy, right, this
Speaker 3: is like Act Blue, some Democratic activists, and.
Speaker 1: This is what Trump was saying lesson right, And I.
Speaker 3: Think this is a case where actually, like, and he's
Speaker 3: of course blaming the media, but I think this is
Speaker 3: really a case where the media has been behind the
Speaker 3: ball on this, where like the media has not fully
Speaker 3: realized and I think a lot of Wall Street has
Speaker 3: not fully realized how significant the opinion shift is, and
Speaker 3: how like this has become the way that people who
Speaker 3: are mad at Trump expressed that anger at Trump. You
Speaker 3: cannot there's nowhere to protest Trump right now. Like I
Speaker 3: guess you could go to the White House or something,
Speaker 3: but there are opportunities, you know, every day, a cyber truck,
Speaker 3: right or whatever to express your displeasure. And like, Musk
Speaker 3: has made this choice. You know, we talked about it
Speaker 3: on this podcast, and Bears have been worried about this
Speaker 3: for years, that he was going to polarize the brand.
Speaker 3: And I think it would have been less of an
Speaker 3: issue if Trump had lost the election. But Trump did
Speaker 3: not lose the election. It also would have been less
Speaker 3: of an issue if Musk had not taken a job
Speaker 3: within the Trump administration, It would have been less of
Speaker 3: an issue if he had taken a less controversial job
Speaker 3: in the administration. But he has run headlong into this
Speaker 3: controversy and the electorate is reacting as you'd expect.
Speaker 1: Dana, one of those bulls that Esha had mentioned earlier.
Speaker 1: Dan Ives at Webbush called this a moment of truth
Speaker 1: for Musk and Tesla, and in that Fox Business interview yesterday,
Speaker 1: when asked about how he was running Tesla and his
Speaker 1: other companies, his response was with great difficulty. Well, I
Speaker 1: guess I wonder is he even running them at all?
Speaker 1: And given what it's going through, that can't cause or
Speaker 1: given there's a whole lot of confidence as they watch
Speaker 1: the stock crater.
Speaker 4: Right and the board has been completely silent on Musk
Speaker 4: since the election. I mean they have not put out
Speaker 4: any kind of statement. There's no clear number two or COO.
Speaker 4: The bench is like not deep, like who runs the
Speaker 4: company day to day. It's like there's not like a
Speaker 4: Gwen shot well at Tesla. So yeah, no, I think
Speaker 4: it's I think it's been concerning. I'm going to be
Speaker 4: super curious to see what the proxy says this time
Speaker 4: around in terms of risk factor.
Speaker 1: Tell us more about that proxy. Remind us what exactly.
Speaker 4: That is, well, every year, like publicly traded companies file
Speaker 4: proxies about it basically lists out like what shareholder resolutions
Speaker 4: are going to be discussed at the shareholder meeting. It's
Speaker 4: a good way to look at how many pledge shares
Speaker 4: Elon Musk has and sometimes they lay out new risk factors.
Speaker 4: And you know a lot of times companies like they
Speaker 4: they hide stuff in the proxy. The proxy drops on
Speaker 4: like good Friday day that the market has closed. It's
Speaker 4: always really deep reading. I will be reading it. I'm
Speaker 4: just sort of curious to you to see about like
Speaker 4: Tesla's board. Remember Joe Gebbia, the Airbnb co founder who
Speaker 4: was on Tesla's board, is also working with Doge. So
Speaker 4: it's not just Elon who's Doge focused, it's like another
Speaker 4: board member as well.
Speaker 1: Yeah. So Esha the Danna says she's seen this show,
Speaker 1: this movie many times, having covered must over the years.
Speaker 1: You've been covering Tessel for how long now?
Speaker 2: Since twenty sixteen, twenty sixteen.
Speaker 1: For a while, yeah, decade basically two decades in Tesla
Speaker 1: right now, in dog years and doze years, forty fifty
Speaker 1: years easy. So I guess I just wonder if you
Speaker 1: also think, now this is just like a sell off
Speaker 1: we've seen before, stock's going to start ripping and bounce
Speaker 1: back soon. Or did the election and the boom and
Speaker 1: initially created and now the bust did it just fundamentally
Speaker 1: change the company and change the stock.
Speaker 2: That's an interesting question.
Speaker 5: Tesla has always been a really volatile stock. It had
Speaker 5: always it's kind of in market parlance, it's almost always
Speaker 5: called the og memes stock in many ways, like it
Speaker 5: was a meme stock of cult stock even before that phenomenon.
Speaker 1: Really, on that point, do you hear estimates from analysts
Speaker 1: on what percent of the valuation is just means stock
Speaker 1: valuation which is hard to separate from the Musk phenomenon,
Speaker 1: and then what part is just hey, valuing this business
Speaker 1: right now and going forward. Do people have estimates?
Speaker 2: See, it's more of an art than science.
Speaker 5: Of course, when you try to understand, you know, what
Speaker 5: part of it is the keymand risk or tied to
Speaker 5: Musk and musks antiques and stuff like that. However, there
Speaker 5: are estimates that there are zeros analysts on Wall Street
Speaker 5: who kind of try to understand if not how much
Speaker 5: is tied to musk, which is a really abstract concept,
Speaker 5: but at least try to understand how much of the
Speaker 5: valuation is really focused on the future or future growth
Speaker 5: or future growth potential.
Speaker 2: So right now the stock has moved so much.
Speaker 5: I haven't seen any very recent numbers, but around the
Speaker 5: time and it was like a trillion dollar valuation.
Speaker 2: I have seen people say.
Speaker 5: That anywhere between two hundred to four hundred billion dollars
Speaker 5: was for the auto business and the auto business future
Speaker 5: growth as well, and everything else was robotaxi and AI
Speaker 5: and like essentially the musk dream premium as we would
Speaker 5: call it.
Speaker 3: Yeah, I mean, if you look at Tesla's valuation compared
Speaker 3: to car companies that have like that sell a similar volume,
Speaker 3: it's like many times greater. It is like if Tesla
Speaker 3: were just a car company, like it would be worth way,
Speaker 3: way less. Even having fallen, you know, fifty percent over
Speaker 3: the last couple of months, it's always been like a
Speaker 3: bit of a leap of faith. And maybe I'm being
Speaker 3: a little bit generous here to say to value Tesla's
Speaker 3: robotaxi business or its optimist business in any way because
Speaker 3: there is no business there. It doesn't act actually exists,
Speaker 3: you know, Wall Street, like bid up the stock after
Speaker 3: the election. We sort of touched on this at times,
Speaker 3: but like there was no clear reason why. There is
Speaker 3: nothing Trump can do. He cannot wave a magic wand
Speaker 3: and give Tesla a robotex The funny.
Speaker 1: The funny thing is is that Esha had shared a
Speaker 1: couple of reports this morning from Bulls and both of
Speaker 1: them as they expressed jitters and concern, one of the
Speaker 1: things they both drew comfort from was the Robotaxi dream
Speaker 1: and Morgan Stanley they're waiting for the big Austin Robotaxi
Speaker 1: unveil in the summer. Maybe team say you've lost Dan Ives.
Speaker 3: I mean Dan Ives is like the QAnon shaman to
Speaker 3: like Tesla fandom, Mike, I mean he is like as
Speaker 3: maybe I'm overstating it, but he is a megabull. Might
Speaker 3: be if he is a mildly concerned, that is a
Speaker 3: huge like that is like a wow.
Speaker 1: Well yeah, yeah, he called it right. I think that
Speaker 1: was in top of his report this morning. This is
Speaker 1: a moment of truth for Elon and us.
Speaker 2: Yeah, I mean, Max is right.
Speaker 3: Don't have a very colorful out, Esha day.
Speaker 1: Thank you for joining us, Thank you, Max, Dana.
Speaker 5: Glad to be here.
Speaker 2: Thank you.
Speaker 1: This episode was produced by Stacey Wong. Anna Massa Rakus
Speaker 1: is our editor, and Rayhan Harmanci our senior editor. Blake
Speaker 1: Maples handles engineering, and Dave Precell fact checks. Our supervising
Speaker 1: producer is Magnus Henrickson. The theme is written and performed
Speaker 1: by Takea Yasuzawa and Alex Sugi Eira. Brendan Francis Newnham
Speaker 1: is our executive producer, and Sage Bauman is the head
Speaker 1: of Bloomberg Podcasts. A big thanks to our supporters Joel
Speaker 1: Weber and Brad Stone. I'm David Papadopoulos. If you have
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Speaker 2: Stand Standing