Speaker 1: Well, Elon Musk is now the richest person on the planet.
Speaker 2: More than half the satellites in space are owned and
Speaker 2: controlled by one man.
Speaker 1: Well, he's a legitimate super genius. I mean legitimate. He says.
Speaker 2: He's always voted for Democrats, but this year it will
Speaker 2: be different.
Speaker 3: He'll vote Republican.
Speaker 1: There is a reason the US government is so reliant
Speaker 1: on ed Elon.
Speaker 4: Musk is a scam artist and he's done nothing.
Speaker 1: Anything he does, he's fascinating people.
Speaker 2: Welcome to Elon Inc, Bloomberg's weekly podcast about Elon Musk.
Speaker 2: It's Tuesday, April sixteenth, twenty twenty four. I'm your host,
Speaker 2: David Papadopolis. Today we have Tesla on our minds first
Speaker 2: and foremost. There's been a flurry of news in the
Speaker 2: wake of the company's dismal first quarter sales, a management shakeup,
Speaker 2: a midnight announcement of layoffs, and yet another plunge in
Speaker 2: the stock. On a happier note, for he's heading off
Speaker 2: to India soon to meet with Prime Minister Narandra Modi.
Speaker 2: It's an important trip for him and for sales of
Speaker 2: Tesla's and Starlink satellites, and a controversial one for X Plus,
Speaker 2: now this is important. We have an update on Elon's
Speaker 2: feud with Coachella. Honestly, I have no idea what the
Speaker 2: hell happened here, but apparently it sounded something like this,
Speaker 2: for the love of God, but Max Chafkin. Max will
Speaker 2: explain to us later what that's all about. But we're
Speaker 2: gonna talk Tesla first, and so Max our Bloomberg Business
Speaker 2: Week Reporter extraordinaries here.
Speaker 1: With us a lot resisting the urge too yet.
Speaker 2: Yet but wait, and we also have Dana Hall, Elon
Speaker 2: Reporter extraordinaire and by the way, a scoop machine. Hello Dana, Hello, Hello. Okay,
Speaker 2: so Dana, starting with Tesla. The news came out late
Speaker 2: Sunday night. They're laying off a large number of workers.
Speaker 2: What exactly is going on?
Speaker 3: Yeah, so just to step back for a minute, Tesla
Speaker 3: has over one hundred and forty thousand employees globally. Periodically,
Speaker 3: Elon musk freaks out about the economy, about sales, about
Speaker 3: their growth, about capex, about their need to cut costs,
Speaker 3: and wax wax a large percentage over the weekend. All
Speaker 3: these employees were like bracing for layoffs. There was all
Speaker 3: these text messages my phone was blowing up. We hear
Speaker 3: they're coming, We hear they're coming. And then like after
Speaker 3: and then on Sunday evening, at eight forty five pm Pacific,
Speaker 3: people started getting emails that they were being let go.
Speaker 3: And then Musk sent out an email to the company.
Speaker 3: I think it was after midnight. I was asleep. I
Speaker 3: woke up and it was already out, basically saying that
Speaker 3: they were restructuring the company and they were laying off
Speaker 3: more than ten percent of their workforce. And just put
Speaker 3: this in perspective, this is the largest reduction in force
Speaker 3: in Tesla's history. They've never done ten percent before. And
Speaker 3: the chatter within the company is that it's more than
Speaker 3: ten percent. It's actually we've heard that it's more like
Speaker 3: twenty percent. And people are still waiting for other shoes
Speaker 3: to drop. So this is by no means over. And
Speaker 3: I think what's interesting is that Wall Street typically likes
Speaker 3: it when companies do layoffs. It's this sort of awful
Speaker 3: secret that layoffs are good for shareholders.
Speaker 2: Wall Street likes Blood Landing.
Speaker 3: Yeah, yeah, this had the opposite effect, Like the stock
Speaker 3: was down yesterday. Granted, everyone's also worried about World War three,
Speaker 3: but like, this is not improving the stock at all.
Speaker 3: And the people that were laid off, I have just
Speaker 3: had the most harrowing conversations with employees. Some people got
Speaker 3: the email at three thirty in the morning, and the
Speaker 3: email else saying that you were laid off went to
Speaker 3: your personal email. So if you like woke up and
Speaker 3: commuted to work and didn't check your personal email, you
Speaker 3: like got to the office and like your badge didn't work,
Speaker 3: or like the security ran out and we're like, sorry,
Speaker 3: you can't come into the building. So layoffs are always brutal,
Speaker 3: but there's a lot of pain and angers right now.
Speaker 2: Very haphazardly, it would appear max to that point on
Speaker 2: the stock it's a almost forty percent this year. Why
Speaker 2: is the market interpreting it this way?
Speaker 1: Well, so two things. One is Wall Street likes layoffs
Speaker 1: because you know, it's perceived as keeping expenses under control,
Speaker 1: friendly to shareholders and so on. Wall Street does not
Speaker 1: like erratic behavior, does not like surprises. And I think
Speaker 1: that this is both surprising and a little bit confusing. Right.
Speaker 1: It's like Elon Musk during the last earnings call was
Speaker 1: talking all about ramping up production of this new model
Speaker 1: that's going to save Tesla's sort of growth issues. This
Speaker 1: is supposed to be a growth stock, right and of
Speaker 1: course there are ways in which some cost cutting, right
Speaker 1: size and whatever you want to whatever euphemism you want
Speaker 1: to use, can be compatible with that. But it just
Speaker 1: feels like there was a sudden shift in strategy that
Speaker 1: is not being explained super well. The second thing is context.
Speaker 1: Tesla stock is way down because there are more They
Speaker 1: are making more cars than they can sell, and that
Speaker 1: is a big problem. That be a problem for any company,
Speaker 1: but it's particularly problem given that Elon Musk has said
Speaker 1: for years and years and years that the big problem
Speaker 1: is they weren't the demand was unlimited. The big problem
Speaker 1: was manufacturing. So basically the markets for many people, I
Speaker 1: think their understanding of this company is sort of broken.
Speaker 3: It's also a really big problem for Tesla because they
Speaker 3: don't have a dealer network. They sell directly to consumers.
Speaker 3: So when they have forty six thousand cars in inventory,
Speaker 3: they are holding that inventory on their books.
Speaker 1: That is a drag on.
Speaker 3: Their profit and they report earnings on Tuesday.
Speaker 2: Explain that a little more. Dana. So typically an enormal
Speaker 2: model with Ford and GM and others. This isn't a
Speaker 2: Ford and GM problem. This is a problem that the dealer.
Speaker 2: The dealers are choking on that.
Speaker 3: Supply, right, So, like typically dealers have the inventory and
Speaker 3: they do all the tricks in the book to try
Speaker 3: to move cars off of their lots. But Tesla doesn't
Speaker 3: have dealers. Tesla sells directly to consumers, so when there's
Speaker 3: excess inventory, it is on the corporate balance sheet, not
Speaker 3: the balance sheet of a dealer. It's like all Tesla.
Speaker 3: So it's just like another drag And it's not a
Speaker 3: surprise that like Tesla decided to do this before earning
Speaker 3: the earnings call next week that said, we've been bracing
Speaker 3: for I've been bracing for layoffs for weeks now because
Speaker 3: in February we broke the news that like Tesla managers
Speaker 3: were asked this question of like is this employee's role critical?
Speaker 3: And so we sort of knew that something was up,
Speaker 3: it was just a matter of like when and how severe.
Speaker 3: But yeah, this is severe, and uh it also just
Speaker 3: is they've hired like crazy in certain departments, Like they're
Speaker 3: hiring all these AI and optimists and JOJO people, so
Speaker 3: but now they're cutting like across the board pretty severely.
Speaker 2: That's the part that I guess. I wonder if it's
Speaker 2: just to a certain degree reflection of musk speed. You
Speaker 2: ramp up, it's the speed of light, and then when
Speaker 2: things go against you, yeah, you just and so maybe
Speaker 2: there's an element of that in this case. Here you
Speaker 2: both have factory workers who are losing their jobs and
Speaker 2: white collar workers who are losing their jobs. In the past,
Speaker 2: hasn't attended to mostly just be the white collar folks.
Speaker 3: Oh no, No, when they cut, they cut across the board.
Speaker 3: It's everything. It's engineers, it's hr it's recruiting, it's white collar,
Speaker 3: it's support, it's policy, it's legal, it's manufacturing. They're cutting
Speaker 3: across the board.
Speaker 1: So two other things in terms of just the sort
Speaker 1: of weirdness. One is Elon Musk has been saying for
Speaker 1: a long time that Tesla's FSD, which is like where
Speaker 1: he's supposedly going email full self driving, which has now
Speaker 1: been called full self driving parentheses supervised, as pointed out
Speaker 1: last week, kind of a weird name for a product.
Speaker 1: But in any case, he's been saying, based, yeah, it
Speaker 1: costs twelve thousand dollars one hundred and ninety or one
Speaker 1: hundred ninety nine dollars a month. But it's going to
Speaker 1: get more expensive over time because it's so valuable. If
Speaker 1: you have a robotaxi, then you could send your car
Speaker 1: out while you sleep. As we've discussed, David, this is
Speaker 1: your retirement plan. You could pay hard, you might not
Speaker 1: pay for more. You might pay more, right, but no,
Speaker 1: but suddenly there was a sudden price cut of full
Speaker 1: self driving, So you suddenly have this weird reset of
Speaker 1: a bunch of the basic underpinnings of this company. The
Speaker 1: last thing just to build on with Dana is saying
Speaker 1: it's not just that they have a huge and a
Speaker 1: huge bunch of cars that are sitting on their books.
Speaker 1: They've been cutting prices super super aggressively for a very
Speaker 1: long time, for like a year now. It's like you've
Speaker 1: cut prices like crazy. There's a limit to which they
Speaker 1: can discount.
Speaker 2: I think at this point, you cut prices super aggressively
Speaker 2: with the idea that was going to help you move
Speaker 2: greater quantities of volume, and it's just not happening at all.
Speaker 2: I mean, you've cut prices and your volumes are stagnant. Dana,
Speaker 2: part of these layoffs there are two very big names
Speaker 2: of people who are leaving. Two top executives tell us
Speaker 2: about them and what we know about their departure from
Speaker 2: the company.
Speaker 3: So Tesla only has four named executive officers. One of
Speaker 3: them is Drew Biglino. He's the senior vice president of
Speaker 3: Engineering and the Energy Division. He was basically the de
Speaker 3: facto CTO. He really kind of rose to prominence after J. B.
Speaker 3: Strabo left the company. He stood with Elon at the
Speaker 3: battery day that they did a couple of years ago.
Speaker 3: Like Drew was an engineers went to Stanford like very
Speaker 3: well known, like diehard Tesla employee. He resigned on Sunday,
Speaker 3: and Tesla.
Speaker 2: Even put out he resigned, Dana or he was resigned.
Speaker 3: He resigned. I'm pretty sure never say absolute, but I
Speaker 3: am pretty positive that he resigned. In the eight that
Speaker 3: went out today, Tesla said that he resigned. So that's
Speaker 3: just like a big loss in terms of institutional knowledge.
Speaker 3: Drew oversee a lot of the battery development for the
Speaker 3: forty six eighty cells that Tesla is trying to make
Speaker 3: in house. And then the other key person who resigned,
Speaker 3: which was almost more shocking to me, was Rohan Patel
Speaker 3: who is the vice president of Business Development and Policy,
Speaker 3: basically like the lead DC guy for Elon Musk. Anytime
Speaker 3: Elon Musk goes to Capitol Hill, what if he's like
Speaker 3: meeting with Schumer and talking about AI like Rohan was
Speaker 3: right by his side. Rohan used to work in the
Speaker 3: Obama White House, was like the architect of this whole
Speaker 3: India strategy. And you know, Rohan was also the executive
Speaker 3: that would push back against media stories on X and
Speaker 3: was very vocal and had just like a big social
Speaker 3: media presence in terms of trying to set the record
Speaker 3: straight in terms of reporting on the company. So those
Speaker 3: two people leaving, it's a sign to me that this
Speaker 3: is just not like a normal layoff. This is the
Speaker 3: company is shifting strategy. And some executives are at a
Speaker 3: point where in their careers where they're like, you know what,
Speaker 3: I'm out, I'm not gonna do this, I am it
Speaker 3: is a good time for me to pass the torch,
Speaker 3: like I'm gonna spend time with my kids, like you
Speaker 3: go do your ROBOTAXI thing.
Speaker 1: So with rohuntel as Dana points out, former Obama White
Speaker 1: House figure also very much a ev sustainability somebody who's
Speaker 1: kind of interest in this. If you look at his background, right,
Speaker 1: he's done a lot of work on climate stuff. Of course,
Speaker 1: big part of Tesla's DC strategy is selling a company,
Speaker 1: has been selling the company as a climate solution. His
Speaker 1: departure on top of this other one. It's like it's
Speaker 1: basically two guys who are really bought into EV's maybe
Speaker 1: the probably the two most important people at the company
Speaker 1: besides Elon Musk having to do with EV's, and they're
Speaker 1: both out.
Speaker 2: With the collapse in the price yesterday and the collapse
Speaker 2: in the price we saw at the opening of the
Speaker 2: session today, this company is now worth less than a
Speaker 2: half a trillion dollars, still an awful lot of money,
Speaker 2: But at its peak, Tesla was worth one point three
Speaker 2: trillion dollars. It is now declined in value eight hundred
Speaker 2: billion dollars, which is a lot of money. Dana and Max,
Speaker 2: I will hit you guys with an anecdote I heard
Speaker 2: over the weekend from my mother. My mom's a source
Speaker 2: of lots of information in good Tibbets. A neighbor of
Speaker 2: hers she noticed the other day suddenly was not driving
Speaker 2: his Tesla, and she said, what happened? To your tesla.
Speaker 2: He said, no, I decided I cannot abide mister Musk.
Speaker 2: I'm getting rid of it. He got rid of it.
Speaker 2: He essentially was too embarrassed to own it, and he
Speaker 2: replaced it with an all ev BMW. I'll just say this,
Speaker 2: it's come up in the past, mister Musk, for all
Speaker 2: he's done for this company, for making it that company
Speaker 2: at some point was worth one point three trillion dollars,
Speaker 2: and for all the brain power and so on and
Speaker 2: so forth, he probably is about the worst brand ambassador
Speaker 2: in the history of the world right now in terms
Speaker 2: of alienating his core customer base.
Speaker 1: Max, I'm hesitant to go that far, just because he
Speaker 1: is a branding genius and this trillion dollar plus valuation,
Speaker 1: which was totally bonkers by any normal you talk to
Speaker 1: any autoanalysts, right, it's it's so crazy, it's confusing, right,
Speaker 1: And it's like entirely about Elon Musk's force of personality.
Speaker 2: But are you conflating that is the value of the stock,
Speaker 2: and that is the fanboys who pile into the stock. Yeah,
Speaker 2: that's different, I feel like to a certain degree than
Speaker 2: in Connecticut.
Speaker 1: Well, I think it's so First of all, I think
Speaker 1: it's all connected. I think that the Tesla brand is complicated,
Speaker 1: and it incorporates obviously like climate change and like doing something,
Speaker 1: and but also it also incorporates the kind of success
Speaker 1: narrative around Elon Musk. I agree with you, David, that
Speaker 1: it's been like an incredibly self destructive period. I've been
Speaker 1: thinking a lot about King Lear. I mean, it feels
Speaker 1: like Musk is in this kind of weird destructive late stag,
Speaker 1: Like he's just like looking at the world around him
Speaker 1: and looking at all these assets and like one by
Speaker 1: one undermining them in various ways. And you know, this
Speaker 1: pivot to software, which of course makes financial sense, it
Speaker 1: really runs counter to a big part of the Elon
Speaker 1: Musk brand and the Elon Musk mythology. The whole big
Speaker 1: thing that people would talk about with Elon Musk, the
Speaker 1: thing that got people so excited about Elon Musk is like,
Speaker 1: this is a guy that builds stuff. Right the rest
Speaker 1: of Silicon Valley they're just making apps, and here's Elon Musk, industrialist.
Speaker 2: And industrialist of our times.
Speaker 3: I'm going to push back a little bit on this, guys,
Speaker 3: because if you read Masterplan Part duh from twenty sixteen.
Speaker 2: Because you chied in me last week, Dan, I read it.
Speaker 2: I spent all weekend reading it.
Speaker 1: Do you read it like one hundred times?
Speaker 2: Sure?
Speaker 3: Okay, autonomy has always been part of the plan, and
Speaker 3: so it's not real it's to call it a pivot
Speaker 3: to autonomy. Yes, it seems like it's clearly a pivot
Speaker 3: that the robotaxi is taking priority over the twenty five
Speaker 3: thousand dollars consumer facing car. But like Elon has been
Speaker 3: upset yes with autonomous cars for like a decade now.
Speaker 3: I mean, he's been promising this forever, and I think
Speaker 3: what has changed just that he's very confident about FSD
Speaker 3: version twelve, so confident that they dropped beta from the name.
Speaker 3: They have all this data, they think it's going to work.
Speaker 3: He's all in, and he's just basically, we've got to
Speaker 3: spend all this money now on compute. We've got to
Speaker 3: really reorient the next phase of the growth is going
Speaker 3: to be the robotaxi. I don't think investors are fully
Speaker 3: buying it. But it's also like the message, the messaging
Speaker 3: has been so murky that it's not a problem as
Speaker 3: to why.
Speaker 2: So, first of all, my answer to your question is no.
Speaker 2: I read it, and I read it ninety nine, I
Speaker 2: read one hundred times. But that is the issue. If
Speaker 2: you are going to save the Earth from climate change
Speaker 2: and we are going to stave off the worst effects
Speaker 2: of climate change, is the cheap Tesla not significantly more
Speaker 2: important than the robotaxis.
Speaker 3: Well, you won't need to sell as many cars to
Speaker 3: consumers if the robotaxi can just operate twenty four seven
Speaker 3: and drive you around when you need to get where
Speaker 3: you need to go. And the robotaxi is still going
Speaker 3: to be electric. So there's like climate arguments to be
Speaker 3: made about optimizing the vehicles on the road, and like
Speaker 3: why do we have so much traffic because people are
Speaker 3: driving so much like we could have. There's like a
Speaker 3: lot of arguments around the climate imperatives around a robotaxi.
Speaker 3: But yeah, it still seems like a big shift, like
Speaker 3: the company is at this big inflection point and not
Speaker 3: everyone is on board with it, including some executives.
Speaker 1: Apparently electric cars have downsides, right, and when making a
Speaker 1: car is an expense, you know, is carbon intensive, but
Speaker 1: come on, like one of these things is real. It's
Speaker 1: a car, they work. You can buy them their electric motors,
Speaker 1: and one of them is imaginary. There is no Tesla
Speaker 1: full self driving car. There is no robotaxi. There is
Speaker 1: no clear pathway to getting a robotaxi. What we have right.
Speaker 2: Now is there really why is there no clear path?
Speaker 1: It's going to require a regulatory overhaul that would be BACTLL,
Speaker 1: a redesign of our infrastructure, it would be it's a
Speaker 1: massive undertaking that has not even begun. And again, as
Speaker 1: I said, like last week, you have companies that are
Speaker 1: much further along on this kind of regulatory thing and
Speaker 1: they are struggling. Cruise GM big company invested a ton
Speaker 1: of money in getting its cars on the road, getting
Speaker 1: its robotaxis on the road, had to pull them off.
Speaker 1: And so it's just there is no clear path here.
Speaker 2: So autonomous is not just hard, it's really really hard.
Speaker 2: I get it. Okay, very good. All right, We're gonna
Speaker 2: move on to mister Musk's big upcoming trip to India.
Speaker 2: So we're now joined by Dan Flatley, a national security
Speaker 2: reporter here at Bloomberg, and Dan, along with Dana and Max,
Speaker 2: is going to tell us all about Elon's big trip
Speaker 2: coming up to India. Dan, when does it start and
Speaker 2: what exactly is on mister Musk's agenda here.
Speaker 5: So the visit itself is sort of timed at the
Speaker 5: beginning of elections in India, so the elections will take
Speaker 5: you almost a month to sort of roll through the
Speaker 5: whole country. But essentially there's something to be gained by
Speaker 5: both parties in this, and that Musk he's trying to
Speaker 5: get beyond the US, beyond China, trying to reach new markets,
Speaker 5: and Mody is sort of trying to promote this pro
Speaker 5: business agenda, and so both parties have something to gain
Speaker 5: from this. Of course, Tesla's under a bit of strain
Speaker 5: at the moment because some not great results in terms
Speaker 5: of the valuation and some layoffs and things like that.
Speaker 5: So you know, it comes at kind of an important
Speaker 5: time both politically and for business reasons for both of
Speaker 5: these individuals.
Speaker 2: Now Dan, knowing what we know about Elon and knowing
Speaker 2: a bit what we know about mister Mody, are these
Speaker 2: two are simpatico in their views of the world.
Speaker 5: Yeah, I mean I think that Musk is sort of
Speaker 5: has kind of cultivated this image not only as a
Speaker 5: thought leader but also somebody who's become more and more
Speaker 5: interested in politics. And in that regard, he has cultivated
Speaker 5: relationships with folks like Modi, folks like Javier Milay in Argentina,
Speaker 5: other sort of free market enthusiasts, let's call them. You
Speaker 5: could call them authoritarian. You could say potentially that some
Speaker 5: of the leaders in these governments where he's visiting have
Speaker 5: authoritarian tendencies or certainly trying to stay in power. So
Speaker 5: this is sort of part and parcel of his idea
Speaker 5: of having not just influence over the world of technology.
Speaker 5: And so yes, there's sympatico in that sense, and certainly
Speaker 5: it's a reach beyond sort of the kind of the
Speaker 5: normal places where folks like this would go to that
Speaker 5: kind of influence.
Speaker 2: Now, Max speaking of strong regimes, authoritarian esque regimes, as
Speaker 2: he travels to India, what does our sense of how
Speaker 2: this is being received over in China, which is also
Speaker 2: a very important market for Misty.
Speaker 1: Yeah, so we've seen this with consumer electronics as Apple
Speaker 1: has attempted to diversify its supply chain. China has kind
Speaker 1: of tended to view India's efforts to encourage, you know,
Speaker 1: people to set up manufacturing operations there as in competition
Speaker 1: with them with China. When China banned the iPhone in
Speaker 1: some government offices last year. It was viewed by some
Speaker 1: as a response to Apple's efforts. And what we saw
Speaker 1: ahead of this visit is the Global Times, which is
Speaker 1: essentially a government controlled newspaper running an editorial saying, oh boy,
Speaker 1: you know, Tesla's making a big mistake. This is going
Speaker 1: to be a lot harder than Elon Musk thinks, you know,
Speaker 1: essentially at least dumping cold water on this, if not
Speaker 1: maybe a subtle warning to Elon Musk over what China
Speaker 1: might see as an effort to diversify to get to
Speaker 1: invest less in China and more in India. So I
Speaker 1: think that is going to be a real challenge for
Speaker 1: Elon Musk. The other thing is like the Indian electric
Speaker 1: car market is small.
Speaker 2: Yeah, let me ask you that perhaps the eb market
Speaker 2: is smaller in India now, but is there potentially a
Speaker 2: gold mine down the road for the company.
Speaker 1: Yeah.
Speaker 5: I mean interestingly, this is one of the areas in
Speaker 5: which Elon Musk and the Biden administration are kind of aligned.
Speaker 5: The Biden administration, for a lot of different reasons, but
Speaker 5: some national security reasons, has put a lot of focus
Speaker 5: on India as a counter to China. And so there
Speaker 5: is potentially some not just business benefits that could come
Speaker 5: from this alliance between Elon Musk and the Rendra Modi,
Speaker 5: but also some national security dividends that could come in
Speaker 5: the sense that if Musk is able to get in there,
Speaker 5: if Tesla's able to get in there and develop the
Speaker 5: electric vehicle industry in India or develop the technological capabilities
Speaker 5: of that country in ways that haven't previously been seen,
Speaker 5: it could provide a counterweight to China. And ultimately that
Speaker 5: is something that not just the Biden administration, but national
Speaker 5: security folks here in Washington across Republican and Democratic administrations
Speaker 5: want to see.
Speaker 3: There's another opportunity for Tessel here, which is that they
Speaker 3: are really trying to diversify away from just selling cars.
Speaker 3: You know, they're all in on the robotaxi, this promise
Speaker 3: of autonomy. But they have an energy division, and the
Speaker 3: big driver of their energy division is the megapac, which
Speaker 3: is these massive batteries that are sold to utility companies.
Speaker 3: And India has a real infrastructure problem when it comes
Speaker 3: to electricity, and you cannot develop an electric car market
Speaker 3: unless you have a pretty stable, reliable source of electric
Speaker 3: power and megapack is a big solution for that, right
Speaker 3: because it allows you to store solar and wind, and
Speaker 3: it's been hugely popular here in the US and in
Speaker 3: markets like Australia and the UK. And so while everyone
Speaker 3: is waiting to see if there's this big announcement that
Speaker 3: Tesla's going to open up an electric vehicle plant in
Speaker 3: India at some point down the road, I think we
Speaker 3: should also watch to see what they say on the
Speaker 3: energy side of that equation.
Speaker 2: Right, And then as you talk about that, it also
Speaker 2: reminds me of just going back to their first segment
Speaker 2: of our show here in which we talked about how
Speaker 2: bad sales have been for Tesla and how much demand
Speaker 2: is drying up. And I guess I just wonder, in
Speaker 2: the abstract, Jesus, does Tesla really need another factory in
Speaker 2: the world.
Speaker 3: Not right now? So they had their they so basically
Speaker 3: their over capacity right now? Are they are not selling
Speaker 3: the cars They ended the quarter with forty six thousand
Speaker 3: cars in inventory. They already announced plans to build a
Speaker 3: plant in Mexico, which has not really broken ground yet,
Speaker 3: so they don't need a third plant now, No, not
Speaker 3: at all, which is why like any announcement. I think
Speaker 3: I would be surprised if there's like a firm deadline
Speaker 3: as to when that investment would take place.
Speaker 1: Especially we're getting all these signs that they're either scaling
Speaker 1: back or pausing or killing the This more inexpensive car max.
Speaker 2: Isn't the argument that and this is what the inter
Speaker 2: tubes tell me that in order to penetrate the Indian market,
Speaker 2: which will be the authority is down the road, an
Speaker 2: enormous ev market, you need to make cars in India.
Speaker 2: They will only allow you to import so many from.
Speaker 1: They're gonna Elon Musk Is gonna need to make some
Speaker 1: kind of concession to Mody to allow him to at
Speaker 1: least import cars.
Speaker 3: And Tesla got what they wanted because India lowered the tariffs.
Speaker 3: That was the big thing, like in terms of concessions
Speaker 3: like India's rea.
Speaker 2: So they were the tariffs. But because the promise has
Speaker 2: to be though, all right, I'll lower the teriffs for
Speaker 2: you now. Oh and by the way, you got to
Speaker 2: where's your ears have to invest?
Speaker 1: Right? Right? And there's been some I think there have
Speaker 1: been some reports of Teslas sourcing more, more parts and
Speaker 1: so on from India. So there probably are intermediary steps.
Speaker 1: But remember Elon musk Is, as he's told us before,
Speaker 1: between two growth waves, really struggling with the stock price
Speaker 1: showing up in India. As you said, David, huge market
Speaker 1: potentially anyway, right, small market now, but a lot of people.
Speaker 1: It does maybe help him change the story from no
Speaker 1: one will buy their cars to look at all this
Speaker 1: growth on the.
Speaker 2: Hurricket now tapping into the world's hottest market. Look at
Speaker 2: us go Dan. Another key product that mister Mosque would
Speaker 2: be looking to sell in India is Starlink and the
Speaker 2: Starlink satellites. We've seen how they've been used now on
Speaker 2: battlefields across the globe, but moreover just in remote parts
Speaker 2: of the world. India certainly has lots of remote parts.
Speaker 2: Is this a big push here? Is this part of
Speaker 2: his push to get Starlink there? Yeah, certainly.
Speaker 5: I mean I think that that was one of the
Speaker 5: one of the focuses of his talks with Javier Milay
Speaker 5: of Argentina, and I expect that it will be part
Speaker 5: of his discussions with Mody and the Indian government as well, because,
Speaker 5: as you mentioned, David, Starlink and SpaceX these are services
Speaker 5: that land even more squarely in the national security realm.
Speaker 5: This is something that is squarely in the national security sphere,
Speaker 5: and it's something that I'm sure that he'll be talking
Speaker 5: about with Mody. But he's also there's lots of back
Speaker 5: and forth between US officials about how this should be controlled,
Speaker 5: how should be regulated, whether it should be regulated, how
Speaker 5: it's being used, and is it being used counter to
Speaker 5: US interests. So these are very active discussions that are
Speaker 5: happening not just abroad but also here in the United States.
Speaker 5: So it'd be very interesting to see where they land
Speaker 5: on that.
Speaker 2: So he's just on the heels of another meeting last
Speaker 2: week at a Tesla plant with the Argentine President Javier Milay.
Speaker 2: Now he's about to head off to India to see
Speaker 2: mode this Milays visit beyond two libertarian cool dudes taking
Speaker 2: funny pictures together, what was the purpose of it and
Speaker 2: what does it do for mister Musk.
Speaker 5: You know, hard to say exactly what the larger business
Speaker 5: or geopolitical purpose of this meeting would be. Obviously, these
Speaker 5: are two sort of fellow travelers, as you say, as
Speaker 5: the libertarian school of thought, but there is an interesting
Speaker 5: line to be drawn between both Musk's engagement with Argentine
Speaker 5: government and the Indian government in that a lot of
Speaker 5: what Musk has done over the years has been heavily
Speaker 5: dependent on some sort of government policy or intervention in
Speaker 5: some way or other, whether it's with SpaceX and the
Speaker 5: rocket programs, whether it's with ev credits or other sorts
Speaker 5: of things with Tesla in some of the earlier days
Speaker 5: of its history. So there is, despite Musk's libertarian leanings,
Speaker 5: he does have a lot of ties to governments around
Speaker 5: the world, both here in the US, in India, in
Speaker 5: Argentina and other places China certainly. So it's an interesting
Speaker 5: kind of paradox in the sense that he has this
Speaker 5: very free market orientation and yet he does need to
Speaker 5: talk to governments quite frequently in order to make sure
Speaker 5: that his companies are positioned in the best possible posture
Speaker 5: to do business there. And so I'm certain that while
Speaker 5: there may be no deliverables quote unquote, as they say
Speaker 5: here in DC from that meeting with Melee, there certainly
Speaker 5: is a relationship growing there and in other places as well,
Speaker 5: that he wants to maintain.
Speaker 1: Just it really feels like we've talked on this podcast
Speaker 1: about geopolitical Elon this kind of globe trotting figure who's
Speaker 1: going to Italy and going to Auschwitz and meeting with
Speaker 1: NT Yahou and so on, And it really feels he's
Speaker 1: getting a lot of very impressive sort of pr opportunities,
Speaker 1: and this MODI one would be one. I think the
Speaker 1: MELA one maybe ranks a little bit lower in terms
Speaker 1: of I for my impressiveness. But what I'll say is
Speaker 1: Elon has, as Dan saying, historically, been incredibly effective at
Speaker 1: basically extracting concessions from governments, figuring out what he has
Speaker 1: to give and getting what he wants. And with China,
Speaker 1: right when he opened up in China, he got the
Speaker 1: Chinese government to change the rules for foreign auto manufacturer.
Speaker 1: They're the first, the only car company from the US
Speaker 1: that doesn't have a joint venture, that doesn't have a
Speaker 1: domestic partner. And I don't think it's clear the current
Speaker 1: iteration of geopolitical Elon feels kind of scattershot and half
Speaker 1: baked and somewhat you know, maybe like they're sort of
Speaker 1: paying attention to how this might affect Tesla, but also
Speaker 1: he seems to be thinking a lot about how it's
Speaker 1: going to play on X and it's like we're caught
Speaker 1: halfway between genuine diplomacy and mugging for social media.
Speaker 3: The other word I just want to mention is lithium.
Speaker 3: So a big part of the whole ev strategy is
Speaker 3: where you're getting your raw minerals from. And we have
Speaker 3: this whole we're all waiting for, like final Treasury guidance
Speaker 3: about thirty D and the foreign entities of concern and
Speaker 3: which like you can't get minerals via China, and there's
Speaker 3: all these loopholes that automakers are lobbying for, and it's
Speaker 3: like a whole big thing in DC, as dan Well knows.
Speaker 3: But Tesla needs to get their raw materials from somewhere,
Speaker 3: and Argentina is a big source of lithium, so there
Speaker 3: could have been like a real supply chain strategy there.
Speaker 3: But it seems also that like Elon's geopolitical Elons World
Speaker 3: Tour is often like touring around with the autocrats of
Speaker 3: the world, like Bolsonaro, and it's like there's this brethren
Speaker 3: of rising autocrats. Oh seem to be the places where
Speaker 3: he is spending his time.
Speaker 2: Yeah, Max, And it seems like at times he's willing
Speaker 2: to give up some of the free speech stuff that
Speaker 2: he feels so strongly about on x in exchange for
Speaker 2: access to these.
Speaker 1: Yeah, and look like Elon Musk in the past, caving
Speaker 1: essentially to demands of Turkey or various other countries that
Speaker 1: are restricting speech in ways that maybe he personally doesn't
Speaker 1: disagree with. That's what every tech company does. This thing
Speaker 1: in Brazil feels like more of an aberration. It's kind
Speaker 1: of part of what I'm trying to say, like, it
Speaker 1: feels more like breaking from what had been what had
Speaker 1: felt like a consistent, coherent strategy to something that is
Speaker 1: more scattershot and that looks like what it looks like,
Speaker 1: that looks like a guy who wants to brow down
Speaker 1: with some cool guy dictators.
Speaker 5: I was looking at some of Musk's tweets or posts
Speaker 5: i should say, recently, and reading some of the stuff
Speaker 5: that he said, some of the reporting on his sort
Speaker 5: of management style, and it sort of strikes me that
Speaker 5: one of the things, one of the things that he
Speaker 5: may have in common with some of these more authoritarian
Speaker 5: type leaders is that he has a vision for the future.
Speaker 5: He seems to have a very definite idea of the
Speaker 5: way that things should be done. And that kind of
Speaker 5: vision is one could say, or one might argue, is
Speaker 5: more easily implemented in a strong authoritarian government where democracy
Speaker 5: is messire change is hard to implement, there's a lot
Speaker 5: of pushback, and so he may feel that he has
Speaker 5: a better chance of implementing this vision.
Speaker 1: I don't think we should sleep on this lithium thing,
Speaker 1: because that is hugely important. That's hugely important for Tesla
Speaker 1: And who knows, like maybe the weird memes and the
Speaker 1: cool photos and stuff with melee are just a distraction
Speaker 1: for like a major commodity deal.
Speaker 2: That that's true, Argentina does have a good amount of lithium. Dan,
Speaker 2: thanks again for joining us.
Speaker 5: Thank you.
Speaker 2: Now to our feud of the week. Let's all listen to.
Speaker 4: This. This is a.
Speaker 3: Difficult thing to explain, but we're having a major technical
Speaker 3: air where all the song timbers are.
Speaker 1: Double speed and I have not practiced the math because
Speaker 1: I'm not fastened math. But I am going to I
Speaker 1: am going to.
Speaker 5: Handy this.
Speaker 4: All right, Let's try this again, y'all.
Speaker 3: Don't trudge me for being bad at calculating things.
Speaker 2: So so Max, I mean I don't know, man, I mean,
Speaker 2: help me out. Here, what is going on.
Speaker 1: I don't know about you, David, but that makes me
Speaker 1: really confident about Robotaxis going forward. That is Grimes. That's
Speaker 1: Elon Musk's former partner, the mother of some of his children,
Speaker 1: performing is the word.
Speaker 2: At She was performing at Coachell.
Speaker 1: She was attempting to do DJ stuff, and she was
Speaker 1: attempting to mix two different tracks. I think I've gotten
Speaker 1: really deep on on DJ reddit and essentially she was
Speaker 1: unable to master her mixing board. And over the course,
Speaker 1: they're actually several or maybe more than several clips just
Speaker 1: like this where she's stopping the set and screaming and
Speaker 1: really and true frustrate real, I cannot get this through
Speaker 1: this phone tree right now. I've been pressing zero a
Speaker 1: million times and they won't. I cannot get a human.
Speaker 1: It was some serious frustration. And of course this has
Speaker 1: absolutely nothing to do with Elon Musk, except again that
Speaker 1: Grimes is his ex or I don't know who knows.
Speaker 2: It has to have something to do with the on
Speaker 2: the show. I will I'm going to bring it back.
Speaker 1: Don't worry. Elon Musk has a long running feud with Coachella,
Speaker 1: so in certain ways Grimes is just you know, getting
Speaker 1: in on an pre existing feud, which, as I understand it,
Speaker 1: began in twenty twenty when Elon Musk tweeted that Coachella
Speaker 1: sucked and that it was better five years earlier when
Speaker 1: you could discover new bands. And I went back to
Speaker 1: twenty fifteen to.
Speaker 2: Try to figure out which new bands.
Speaker 1: Well, I don't know which band he found, but Drake
Speaker 1: performed there Steely Dan, so a couple possibilities for the
Speaker 1: unknown bands that Elon may have discovered at Coachella in
Speaker 1: twenty fourteen or twenty fifty Dan.
Speaker 2: If nothing else got you listening to that, it's hard
Speaker 2: to listen to. You have to feel bad for grind.
Speaker 3: Oh yeah, it's hugely embarrassing. You're like a DJ and
Speaker 3: you can't mix on the fly, and you're in front
Speaker 3: of this crowd of people, and she's so frustrated that
Speaker 3: she's screaming in agony. That's that was terrible.
Speaker 2: There were moments of last week's podcast that we sounded
Speaker 2: very similar.
Speaker 1: I I kind of liked it as a performance. Honestly,
Speaker 1: would you have first of all, would you have known
Speaker 1: if she hadn't screamed in frustration? Right?
Speaker 2: So, I feel like this is a big moment for her.
Speaker 1: In a way, you're giving people their money's worth bye bye.
Speaker 1: So by engaging with the material rather than just like
Speaker 1: pressing your space bar and your laptop and letting it go.
Speaker 2: This is if you actually think about it. Then so
Speaker 2: Elon both sticks it to Coachella, right, which who he
Speaker 2: really doesn't like at all, and at the same time
Speaker 2: he boosts Grimes his career.
Speaker 1: So I also want to say, what do you want
Speaker 1: to say? Well, two things. One is to tell Grimes
Speaker 1: this was an impressive performance by any normal measure. Grimes
Speaker 1: was delivered to the stage in a gigantic mechanized spider,
Speaker 1: and then she actually apologized for this spider. Uh no, No,
Speaker 1: never apologized for the spider. She apologized for the screw up,
Speaker 1: essentially blaming the help. He was like, the problem here
Speaker 1: is that I didn't do it myself. It was the
Speaker 1: staff screwed up, which is definitely I think how Elon
Speaker 1: we played it as.
Speaker 2: Well, probably so then we shouldn't feel bad for her. No,
Speaker 2: and but actually not only she would not feel bad
Speaker 2: for because you just told us this is gonna this
Speaker 2: is gonna make her career. This is her breakthrough. Moment.
Speaker 2: I'm sure she should thank the staff is what she
Speaker 2: should be doing here.
Speaker 1: I don't know that I said that. I think what
Speaker 1: I said is that this was a more interesting performance
Speaker 1: than Grimes might have otherwise delivered.
Speaker 2: What I can say about this performance, it is the
Speaker 2: first performance by Grimes that I've ever heard in my life.
Speaker 2: That I will say.
Speaker 1: There is so much good content on the internet about this.
Speaker 1: There TikTok's rating. They're like seven different screams and people
Speaker 1: rating the different screams with different energy. DJ read it
Speaker 1: is all over this. You could you can go down
Speaker 1: a deep rabbit.
Speaker 2: But yeah no, And to that point, Max wasn't isn't there.
Speaker 2: One of the theories being bandied about is that this
Speaker 2: was Elon sticking it to Grimes as well.
Speaker 1: So I've seen two different theories. One is that Elon hacked.
Speaker 1: Elon and Grimes are in the middle of a custody battle,
Speaker 1: as we've talked about on the show, that Elon hacked
Speaker 1: her DJ equipment to embarrass her. The other theory is
Speaker 1: that some people have noticed that some of these videos
Speaker 1: from Coachella have been taken down, that Elon is suppressing,
Speaker 1: you know, shadow banning. If you will the people who
Speaker 1: are having fun at Grimes's expense. Of course, these two
Speaker 1: theories are are in complete contradiction. I will say the
Speaker 1: shadow man theory basically, anytime anything happens on Twitter, pre Elon,
Speaker 1: post Elon, people complain about shadow banning. So I don't
Speaker 1: think that Elon has been twiddling the knobs on the algorithm,
Speaker 1: hitting the sink beat button on the algorithm, if you will,
Speaker 1: to try to suppress Grimes is thing. I think the
Speaker 1: Coachella hacking scenario again very far fetched, although maybe slightly
Speaker 1: less far fetched than the ex hacking scenario.
Speaker 2: And for our listeners, you should just know that Max
Speaker 2: is wearing a tin foil hat as Lazy's out for
Speaker 2: us here.
Speaker 1: Kids, if you're an aspiring DJ, you what you want
Speaker 1: to do before you get up on stage and Coachella
Speaker 1: is have a backup mix that's ready to go so
Speaker 1: that you this doesn't happen to you.
Speaker 4: Here we go.
Speaker 1: That's it.
Speaker 4: That is the uh.
Speaker 2: That's frankly, that's the single biggest takeaway the entire show.
Speaker 2: This episode was produced by Magnus Henrickson, who is also
Speaker 2: our supervising producer, Naomi Shaven, and Rayhan HARMANSI are senior editors.
Speaker 2: The idea for this very show also came from Rayhan
Speaker 2: Blake Maple's Handles Engineering, and we get special editing assistants
Speaker 2: from Jeff Grocott. The Elon Inc. Theme is written and
Speaker 2: performed by Takea Yasuzawa and Alex Sugiura. Brendan Francis Newnham
Speaker 2: is our executive producer, and Sage Bauman is the head
Speaker 2: of Bloomberg Podcasts. I'm David Papadopoulos. If you have a minute,
Speaker 2: rate and review our show, it'll help other listenerspot find us.
Speaker 2: See you next week.
Speaker 4: Mhmm.