Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Well, Jlon Muski is now the richest person on the planet.
Speaker 1: More than half the satellites in space are owned and
Speaker 1: controlled by one man.
Speaker 3: Well, he's a legitimate super genius. I mean legitimate.
Speaker 1: He says he's always voted for Democrats, but this year
Speaker 1: it will be different.
Speaker 4: He'll vote Republican.
Speaker 3: There is a reason the US government is so reliant
Speaker 3: on him. Alon Musk is a scam artist and he's
Speaker 3: done nothing.
Speaker 5: Anything he does, he's fascinating people. Welcome to the elan Ink,
Speaker 5: Bloomberg's weekly podcast about Elon Musk. It's July second. I'm
Speaker 5: your host, David Papadopolis. Today is a big day for Tesla.
Speaker 5: The company reported its quarterly sales numbers. Than they are
Speaker 5: not too bad. We'll dig into Tesla's potentially changing fortunes
Speaker 5: after a terrible start of the year. First, though, we'll
Speaker 5: do a lightning round of odds and ends, starting with
Speaker 5: some low Earth orbit news, where SpaceX has scored a
Speaker 5: NASA contract to blast a space station into the ocean,
Speaker 5: just as the company's valuation soared above two hundred billion dollars.
Speaker 5: And in Washington, the Supreme court rendered some opinions that
Speaker 5: could have an impact on X in a very consequential
Speaker 5: election year. And to wrap up, we'll examine somewhat seriously
Speaker 5: Elon's bid to turn X into Pinterest. So for our roundup,
Speaker 5: we have Ace Elon Musk, reporter Dana Hull, Allow Dana Hey,
Speaker 5: and Max Chapkin, BusinessWeek senior writer in Max. Good Day, David, Max, Now,
Speaker 5: I noticed that last week while you're on there were
Speaker 5: an awful lot of F bombs. I want you to
Speaker 5: keep it clean. This week I got some listener mail.
Speaker 3: Did you really No?
Speaker 5: Okay, So Dan, we're going to start with you in
Speaker 5: our news roundup. SpaceX gets to create something called the
Speaker 5: Space Station deorbit Vehicle. What the heck is that?
Speaker 4: Yeah, So the International Space Station, which has been like
Speaker 4: this home away from home for astronauts, is going to
Speaker 4: be retired. It is expected to be retired in twenty
Speaker 4: thirty and NASA needs help getting this station like out
Speaker 4: of space. And so SpaceX won this contract, which is
Speaker 4: worth up to eight hundred and forty three million dollars
Speaker 4: to sort of deorbit the space station.
Speaker 3: And so my.
Speaker 4: Understanding is that SpaceX is going to create some kind
Speaker 4: of vehicle that's going to help guide the space station
Speaker 4: back through the Earth's atmosphere, at which point it will
Speaker 4: blow up and then like fall into the ocean.
Speaker 5: So Max, how cool is this? Not only do you
Speaker 5: get to blow this thing up, you get had to blow.
Speaker 2: Up objectively probably the coolest government contract you could possibly win.
Speaker 3: But I will say this is like a weird It's
Speaker 3: kind of weird.
Speaker 2: Like SpaceX's whole deal is like they are a commercial provider.
Speaker 2: They just sell these launches, and this is obviously a
Speaker 2: custom project. You know, this is kind of like an
Speaker 2: old school What it feels like is like an old
Speaker 2: school defense contract, the kind of thing that SpaceX would
Speaker 2: have criticized maybe in the past. On the other hand,
Speaker 2: objectively cool contract, I don't see how you turn it
Speaker 2: down create stuff.
Speaker 5: I mean, then press release from NASA. I got a
Speaker 5: kick out of NASAU selects International Space Station US de
Speaker 5: orbit vehicle. Now here's the thing, though, Dan, about this
Speaker 5: deorbit vehicle. My sense is that SpaceX Elon and the
Speaker 5: crew they get to create it, and they have a
Speaker 5: large budget now to do so, but they do they
Speaker 5: actually get to do the blowing up themselves, So they
Speaker 5: have to turn this baby over to the end up
Speaker 5: NASAU crew to handle that part of it.
Speaker 4: I understanding is that SpaceX develops the de orbit spacecraft
Speaker 4: and then turns.
Speaker 3: That over to NASA.
Speaker 5: That's kind of a down and.
Speaker 4: SpaceX are like long term partners. I mean, NASA was
Speaker 4: key to like SpaceX even becoming company. And so I mean,
Speaker 4: I don't know the contract could be modified going forward.
Speaker 1: Maybe it will how much in the it's a robot.
Speaker 5: I just say, I'm just saying this. You know, one
Speaker 5: of the in addition, in addition to being a great industrialist,
Speaker 5: Elon apparently is quite the gamer. You could see him
Speaker 5: just like gaming out on this thing, controlling it as
Speaker 5: it's gonna blow this thing up.
Speaker 2: I mean reading stories about this, you know they're going
Speaker 2: to drop it in some part, some part of the
Speaker 2: ocean that's like Asteros, not a lot of I guess
Speaker 2: marine life or whatever, but this is like the area
Speaker 2: of the ocean where they.
Speaker 3: Dump old spaceships.
Speaker 2: So it'll it's the whole thing is fascinating, and you know,
Speaker 2: hopefully by the time they do this, we'll have you know,
Speaker 2: a station on the Moon or something.
Speaker 5: One would hope. Okay, Max, in other SpaceX news its
Speaker 5: valuation is up, up and up.
Speaker 3: Yeah.
Speaker 2: So SpaceX, as we've said on this podcast many times,
Speaker 2: is a privately held company. It's a little bit unusual
Speaker 2: because it's been around for a long time, and you
Speaker 2: have employees and investors who've been who've held stock in
Speaker 2: the company for many years, if not more than a decade,
Speaker 2: and private companies essentially like this will make tender offers. Well,
Speaker 2: they'll essentially offer to buy shares of longtime shareholders using
Speaker 2: external capital. The reporting suggests that the valuation is two
Speaker 2: hundred and ten billion dollars, substantially up from before. I
Speaker 2: will just say, you know, these tender offers, these valuations
Speaker 2: are not public markets valuations. Anytime we're talking about private
Speaker 2: market valuations. It's not like the definitive value of this thing.
Speaker 2: It's just sort of like what the company is telling
Speaker 2: investors that it thinks it is worth.
Speaker 5: Well. But if it is the latest transaction that's happening,
Speaker 5: so at sub level, that does set a price. I mean,
Speaker 5: I guess the fact that SpaceX is willing to pay
Speaker 5: that price for the shares indicates that it thinks it's
Speaker 5: worth that much. I mean, but yeah, as you were
Speaker 5: saying it's climbed quite a bit. I think towards the
Speaker 5: end of last year was at one hundred and eighty billion,
Speaker 5: and then two hundred billion, and now two hundred and ten.
Speaker 5: It is a very very, very very large private company. Remember,
Speaker 5: the vast bulk of Elon's companies are privately held companies, ie,
Speaker 5: not companies that trade in public stock markets, Tesla being
Speaker 5: the loan exception. But it is SpaceX that is by
Speaker 5: far the most valuable, and at this point I would
Speaker 5: say on the cuspmax of being the most valuable private
Speaker 5: company in the world right now, the only larger one
Speaker 5: is Byte after bite after Byte Dance, right, owner of TikTok.
Speaker 5: But if SpaceX's valuations up up and up, Byte Dances
Speaker 5: valuation is going in the exact opposite direction, right But Dan,
Speaker 5: I got to say on that does SpaceX and Star
Speaker 5: do they stay private or go public? Given how worked
Speaker 5: up Elon is getting about the Delaware court as it
Speaker 5: relates to Tesla and all the hassles of having to
Speaker 5: be a publicly traded company, man, I got to think
Speaker 5: that these companies stay private.
Speaker 4: Yeah, I don't think Elon likes being a public company.
Speaker 4: CEO I mean it opens you up to just far
Speaker 4: more scrutiny. You've got to deal with earnings every quarter.
Speaker 4: I mean I think he you know, he tried to
Speaker 4: take Tesla private back in twenty eighteen and then had
Speaker 4: to back out of that when when it was clear
Speaker 4: that that was going to be way harder to do.
Speaker 3: That he realized.
Speaker 4: And the whole thing with the funding secured at four
Speaker 4: twenty and the saudis so. But yeah, I mean, why
Speaker 4: go The only the reason to go public, it's it's
Speaker 4: really a fundraising event. Like you go public because you
Speaker 4: need to raise money. If SpaceX can continue to raise
Speaker 4: money from private investors and venture capitalists and private equity
Speaker 4: and get these lucrative government contracts, like, I don't think
Speaker 4: he would want to go. But yeah, I mean Gwen
Speaker 4: shotwell All, the president of SpaceX, you know, at an
Speaker 4: investor conference a couple of years ago, said that she
Speaker 4: could see spinning Starlink out at some point when Starlink
Speaker 4: had positive revenue. I don't think they're there yet. But
Speaker 4: if you're elon, like, what upside is there to going public?
Speaker 2: There's a serial case for going public is that you know,
Speaker 2: his his like ability to raise capital from the public
Speaker 2: markets is much greater.
Speaker 5: Because you get to tap into all that.
Speaker 2: I mean, we just saw like the retail investors of
Speaker 2: Tesla gave him just just you know, wrote him a
Speaker 2: fifty billion dollar check after declining. Like you know, you
Speaker 2: can like Elon Musk as as persuasive as he is
Speaker 2: with you know, major private.
Speaker 5: Market investor retail crowd.
Speaker 3: It's the retail crowd that really, you know, will will
Speaker 3: go for this.
Speaker 5: That's fair. Here's my prediction. He neither IPO's SpaceX or starlink,
Speaker 5: but does an IPO spin off of his de orbit
Speaker 5: vehicle unit. Okay, well, we'll see how this first one does,
Speaker 5: uh in a few years when they try to blow
Speaker 5: this thing up up. Okay. In other news, down in Washington, Max,
Speaker 5: the Supreme Court had a couple of big rulings on
Speaker 5: social media that could affect Elon Musk's X. Tell us
Speaker 5: all about.
Speaker 2: Them, all right, So the top line here is that
Speaker 2: the status quo for social media stays the same. But
Speaker 2: just going a little bit deeper on that, you had
Speaker 2: a case about a week ago where a couple of
Speaker 2: states had sued the Biden administration over essentially accusations that
Speaker 2: came up during the Twitter Files. This was the idea
Speaker 2: that the government was, you know, improperly influencing social media companies.
Speaker 2: Supreme Court said, now, this is a bit of a
Speaker 2: rebuke to the for people who really thought the Twitter
Speaker 2: files were a big game changer. Essentially said that there
Speaker 2: was no reason to think that this had actually happened
Speaker 2: in any kind of sustained way. There was a second
Speaker 2: sort of set two cases that the Supreme Court kicked
Speaker 2: back to lower courts earlier this week, and these were
Speaker 2: over laws in Texas and Florida that we would essentially
Speaker 2: prevent social media companies from doing the kind of moderation
Speaker 2: that they do previous that they do currently. So it
Speaker 2: was saying, like, you know, you're not allowed to like
Speaker 2: throw somebody off a platform. You have to give people
Speaker 2: like an absolute right to free speech on social media.
Speaker 3: That's kind of Elon Musk's position.
Speaker 2: The Court effectively is saying that for now, social media
Speaker 2: companies have free speech rights as well, which means that
Speaker 2: they can sort of do whatever they want with their platforms.
Speaker 2: So that's the stat This is a status quo stays
Speaker 2: the same. Now, does this affect Elon Muskin anyway?
Speaker 3: Probably not. I mean, like.
Speaker 2: His his sort of maximalist view of the First Amendment
Speaker 2: could be seen as being rebuffed. But for now, you know,
Speaker 2: X will just continue operating as as it's operated.
Speaker 5: Actually, And as a result, the effect on the twenty
Speaker 5: twenty four campaign and use of social media in the
Speaker 5: twenty twenty four campaign and disinformation campaigns, any impact there?
Speaker 3: No? Well, like I said, status Quo is going to
Speaker 3: say the same.
Speaker 2: I mean, I think that there are that probably like
Speaker 2: public pressure on social media companies matters, because these companies
Speaker 2: have constituencies that include like investors and users and so on,
Speaker 2: and if and if a social media in the same
Speaker 2: way that you can kind of like work the refs
Speaker 2: like in a game and sort of push them towards
Speaker 2: making decisions that are close to.
Speaker 5: What you like. I gotcha. So we are now joined
Speaker 5: by Bloomberg's Global autos Are Craig Trudel to talk about
Speaker 5: tesla second quarter sales. Craig, welcome, Thanks for having me. Okay, so, Dana,
Speaker 5: we will start with you though here tell us what
Speaker 5: exactly were the numbers and how should we interpret them?
Speaker 4: Yeah, so, Tesla delivered four hundred and forty three thousand
Speaker 4: nine hundred and fifty six vehicles in the second quarter.
Speaker 4: Those are global figures. It was still a five percent
Speaker 4: year of year decline, but the numbers that were released
Speaker 4: this morning were better than what analysts were expecting, and
Speaker 4: you're seeing the shares move higher as a result.
Speaker 6: This is a matter of a few thousand vehicles more
Speaker 6: than analysts we're expecting. I think, you know, the consensus
Speaker 6: that we had was about a five point eight percent decline,
Speaker 6: So all of one percentage point has meant you know,
Speaker 6: a roughly ten percent move just this morning, which is
Speaker 6: really remarkable but also kind of par for the course
Speaker 6: with this this stock. You guys have had Esha Day
Speaker 6: on here before to kind of talk about Tesla as
Speaker 6: a stock and how much that's a big aspect of
Speaker 6: the story for this company. When this name gets momentum,
Speaker 6: it really moves in dramatic ways, and we've seen that,
Speaker 6: you know, just in the last few weeks. You know,
Speaker 6: even as everybody was anticipating these numbers weren't going to
Speaker 6: be that great, there's been so much emphasis and focus
Speaker 6: on the future, in no small part thanks to Elon
Speaker 6: and his comments at the annual meeting recently.
Speaker 5: Yeah, so on the stock. We spent a fair amount
Speaker 5: of time in the first half of the year talking
Speaker 5: about its cratering it had at its nadir back in April,
Speaker 5: it was down almost fifty percent. It was quite the plunge.
Speaker 5: It has roared back since, as you guys are alluding to,
Speaker 5: It's gained more than fifty percent since then, and really
Speaker 5: isn't down much year to date at all. Now, So, Craig,
Speaker 5: how do I square that rebound with these sales numbers
Speaker 5: that just came out again? I get that the sales
Speaker 5: numbers weren't quite as bad as expected, but they were
Speaker 5: still down.
Speaker 6: I suppose. I mean, I guess this has always been,
Speaker 6: you know, a story stocked to some degree, right, I mean,
Speaker 6: it's always been the case that, you know, if you
Speaker 6: talk with a sort of more traditional automotive analyst, that
Speaker 6: they've generally, you know, and very consistently said that this valuation,
Speaker 6: you know, doesn't make a sense in their universe. But
Speaker 6: as long as you're looking at this as a tech
Speaker 6: company and putting that serious amounts of value on businesses
Speaker 6: that don't exist in in the case of robotaxis or
Speaker 6: optimist robots, you can sort of put whatever number you
Speaker 6: like on this and Elon you may call you something
Speaker 6: other than boneheaded.
Speaker 4: The other thing I was just going to point out
Speaker 4: about the release today is that they flagged their energy
Speaker 4: storage numbers. You know, so Tesla has two divisions, automotive
Speaker 4: and energy storage. Energy storage is when they sell these
Speaker 4: big batteries known as megapas to utilities like pgene and
Speaker 4: the power wall to consumers, and like, the energy division
Speaker 4: has always played this big back seat to automotive in
Speaker 4: terms of revenue, but now with the automotive sales obviously
Speaker 4: no longer showing robust growth, they're like really flagging energy
Speaker 4: is like this big growth thing. So it was just
Speaker 4: funny to see in a quarterly release that's all about
Speaker 4: vehicle deliveries that they flag how awesome the energy sales
Speaker 4: are going. And I think you're going to see Elon
Speaker 4: talk a lot more about energy on the earnings call
Speaker 4: later this month.
Speaker 5: Yeah, it's a little bit of the active diversion and confuscation.
Speaker 5: That is the second time recent week, Stana, that you
Speaker 5: brought interview storage up. I feel an entire segment or
Speaker 5: episode coming up on that topic soon. Max, though, how
Speaker 5: did you take the number?
Speaker 2: I just like Craig is saying, We've been talking for
Speaker 2: months about what I think, in retrospect was a really
Speaker 2: kind of audacious move by Elon Musk. We have a
Speaker 2: car company that is priced like a growth stock that
Speaker 2: has stopped growing, and we've been talking for a long
Speaker 2: time about how that's a pretty big problem.
Speaker 3: We're a growth stock and you're not growing. That's problem.
Speaker 2: And what we've seen is Elon Musk, over the course
Speaker 2: of several months, essentially reframe the story. And now it's
Speaker 2: been reframed. It's no longer a car company. He's said
Speaker 2: that a million times, despite the fact that as we
Speaker 2: see from these delivery numbers, they sure saw a lot
Speaker 2: of cars, seems to be the bulk of their revenue.
Speaker 2: But nonetheless, you know, what the investors are clearly focused on,
Speaker 2: and we've seen this now in the stock reaction today,
Speaker 2: in the payvote, you know, over the last several months,
Speaker 2: is is this autonomy story. And what's interesting here is
Speaker 2: getting lost. So they sold almost all of these sales
Speaker 2: are Model three, Model Y that's the kind of lower
Speaker 2: end car. Tesla also sells, of course models Model X
Speaker 2: and a Sign.
Speaker 5: They basically sell almost none.
Speaker 2: Of those and remember we talked about at this at
Speaker 2: the end of last year, like wow, you know the
Speaker 2: cyber truck, this, this could really, you know, change the
Speaker 2: game for Tesla. You know, pickup trucks are are the
Speaker 2: best selling category.
Speaker 4: You don't even break it out separately, it's under it.
Speaker 2: It looks like a very very small number twenty thousand
Speaker 2: total other models. So I mean you're talking about, you know,
Speaker 2: number of cyber trucks that you know, would be insignificant
Speaker 2: to like a Toyota, Ford or whatever. So it's just
Speaker 2: pretty staggering first of all that that the company has
Speaker 2: gone in this direction, and then also that investors are
Speaker 2: are up for it, they like it.
Speaker 5: Yeah, so, Craig, I actually I've been thinking about this
Speaker 5: for a while now. At this point on the model
Speaker 5: S IS and X IS, and you know, these are
Speaker 5: older models that are selling at this point negligible amounts.
Speaker 5: As Max is saying, it's all about the why, It's
Speaker 5: all about the three. The cyber truck is just ramping up.
Speaker 5: If it even goes anywhere, why not put a bullet
Speaker 5: in the s in the ax. Aren't they just a distraction? No?
Speaker 6: I think they do still sell for for fairly significant
Speaker 6: amounts of money, and so perhaps you can kind of
Speaker 6: make the argument that you know, continuing to amortize, you know,
Speaker 6: the investment in those vehicles makes some sense. But as
Speaker 6: as we do look ahead to you know, where this
Speaker 6: company is going, and you know, sort of pay close
Speaker 6: attention to the fact that you know, Musk is very
Speaker 6: much you know, focused on autonomy and on robotaxis to
Speaker 6: the extent that he is able to actually stand up
Speaker 6: that business and does want to sort of, you know,
Speaker 6: put more emphasis on that going forward. Would it make
Speaker 6: sense to potentially, you know, switch up the existing factory
Speaker 6: capacity that you have to make those vehicles over you know,
Speaker 6: ones that now are quite long in the tooth that
Speaker 6: Musk has said, we probably shouldn't keep making them anymore
Speaker 6: and are really just sort of doing so for posterity reasons.
Speaker 5: On the fleet point in general, and this has come
Speaker 5: up a fair amount in the past, but I suppose
Speaker 5: it's going to keep coming up, not just the S
Speaker 5: and the X, but the totality of the fleet, with
Speaker 5: the exception of the cyber truck, Dana. As I drive
Speaker 5: around the streets of the Tri State area, Man, these
Speaker 5: teslas they do it? Should they just look old and tired.
Speaker 5: I mean you drive around, you bump into you know,
Speaker 5: you see Rivians in the wild and some of the
Speaker 5: new Fords, and the key is in the VW's It
Speaker 5: just seems like these are just yesterday's cars.
Speaker 4: I think the calculation that Elon Musk made is that
Speaker 4: look like they were the first company to really bring
Speaker 4: electric cars into the mainstream full stop. But now electric
Speaker 4: cars are quite common and here in California, same thing.
Speaker 4: I mean, I see Rivians, I see a lot of Hyundaies,
Speaker 4: and like being an electric car maker is no longer
Speaker 4: enough to set you apart from the pack. What sets
Speaker 4: you apart from the pack is that you are electric
Speaker 4: and fully autonomous, and that is what Elon is going for.
Speaker 4: And Craig and I have had long debates back and
Speaker 4: forth about whether this is like real or vaporware, and like,
Speaker 4: at what point does Tesla actually get you know, level
Speaker 4: five regulatory approval. I mean, that's all very still very
Speaker 4: high in the sky. But Musk believes in his heart
Speaker 4: that they are on the cusp of full autonomy and
Speaker 4: he just wants to be like he wants to be
Speaker 4: valued as a tech company. He sees Nvidia and all
Speaker 4: these other players getting these crazy valuations, and he wants
Speaker 4: Tesla to be thought of in that vein, and so
Speaker 4: he is all about like Tesla doesn't really just make cars,
Speaker 4: they are making autonomous.
Speaker 5: So then your point is he's not up for playing
Speaker 5: this game that the traditional car makers play, which is, hey,
Speaker 5: we're going to refresh our fleet every shing.
Speaker 4: I think that Elon is just bored of making cars.
Speaker 4: It's like very capital intensive and like he's always been about.
Speaker 5: And he's board making cars, but he wants them to
Speaker 5: pay him some odd billion dollars when car making is
Speaker 5: your main job.
Speaker 4: Right, But he's been at this for a very long time.
Speaker 4: It is capital intensive, it is grueling, you're fighting for
Speaker 4: market share. He's got byd coming out like after him,
Speaker 4: Like he's just like he like just constantly refreshing models
Speaker 4: and constantly coming out with new models is just it's
Speaker 4: boring for him.
Speaker 5: I mean you could see it Nickel Dimes stuff.
Speaker 4: It wants to be, you know, he wants to be
Speaker 4: like cutting edge, mister future, and that's.
Speaker 5: Our time as you as you've often said, I do think,
Speaker 5: you know.
Speaker 2: For Elon Musk and for the people who sort of
Speaker 2: buy this it's the the comparison is a tech company,
Speaker 2: not not a car company, you know. And I think
Speaker 2: all along the reason they are not refreshing the Model
Speaker 2: three or whatever, and the reason this is happening is
Speaker 2: because Musk has long seen like the model as Apple, Right,
Speaker 2: the iPhone form factor is has been essentially unchanged for
Speaker 2: almost the entire time that the iPhone has you know, existed.
Speaker 2: Every other company's you know, iPhone like device looks exactly
Speaker 2: like it.
Speaker 5: Right.
Speaker 3: The differentiator is the software and that's what Musk sees.
Speaker 5: Right, and those he would argue, those are where the
Speaker 5: refreshes come.
Speaker 3: Yeah, but I.
Speaker 2: Think there are real questions about whether that is how
Speaker 2: consumers feel. And even when we're talking about atimomy, Dana
Speaker 2: is saying, like, you know, talking about oh, well, you know,
Speaker 2: maybe they'll get the level five approval or whatever. I
Speaker 2: you know, obviously, like, there are so many questions there,
Speaker 2: and I think it's going to take way longer.
Speaker 3: Than Elon Musk assumes.
Speaker 2: But then the on the other side, there's a question
Speaker 2: of do consumers care like is like it is the
Speaker 2: assumption that this is a game changer going to be
Speaker 2: true for a regular person who drives a regular car.
Speaker 2: And we don't know answer that question yet, but we
Speaker 2: have seen some signs and like one of which is
Speaker 2: it doesn't seem like there have been that successful in
Speaker 2: selling full self driving or whatever you want to call it,
Speaker 2: this aid ass system to customers. Customers, they've drive the
Speaker 2: price like, it doesn't look like how much does it cost?
Speaker 3: Well, it was what two.
Speaker 2: Hundred dollars a month. Now they're down to one hundred
Speaker 2: dollars a month. They're sort of getting it away.
Speaker 4: It is not thought to be very high.
Speaker 2: Right, And I think that and when you talk to
Speaker 2: like normal people, you know, and every time I'm sure
Speaker 2: Dan and Craig do this as well, but like you know,
Speaker 2: you're in an uber you ask them about full self driving,
Speaker 2: you know, it's pretty rare. When I ask the question
Speaker 2: that someone is like, yeah, it's the best. Most people
Speaker 2: are like I don't use it, or yeah it's okay.
Speaker 2: And I just don't think they've managed to convince regular
Speaker 2: normal drivers that this thing is worth paying for yet.
Speaker 5: Craig on the Robotaxi, you guys have referred to it.
Speaker 5: It's coming soon, right, the big reveal. They're gonna they're
Speaker 5: gonna put bring it out on stage. They're gonna bring
Speaker 5: something out on stage, you know, covered in a blanket
Speaker 5: or you know, and then they're gonna Elon's gonna, you know,
Speaker 5: with great pomp and circumstance, you know, pull the blanket away.
Speaker 5: We're gonna see something when it exactly is that coming?
Speaker 6: Yeah, I'd like a BINGO card for that event. You know,
Speaker 6: is he wearing the Texas hat.
Speaker 4: Working on the beginning?
Speaker 3: Oh, Craig, we are doing it.
Speaker 5: Yeah.
Speaker 6: So that's August eighth. And to Max's point, I do
Speaker 6: think the fact that this company has been taking people's
Speaker 6: money for years now and deferring revenue that it that
Speaker 6: it collects related to full self driving. And actually, when
Speaker 6: you when you sort of look closely at their quarterly
Speaker 6: filings and compare the deferred revenue that they're actually recognizing
Speaker 6: versus what they thought they would recognize, you know, the
Speaker 6: prior year, those numbers have have never matched up. They've
Speaker 6: always overestimated how much revenue they're going to generate from
Speaker 6: or or recognize from that sort of you know, piggybank
Speaker 6: that they've you know, kind of set aside in acknowledgment
Speaker 6: of the fact that Full self driving is not actually
Speaker 6: self driving. So you know, this is a company that,
Speaker 6: for years, if you're sort of a close partser of
Speaker 6: regulatory filings, has acknowledged the fact that they've over sold
Speaker 6: this stuff. And not only do we not know to
Speaker 6: what extent consumers are ready to take this on, I
Speaker 6: think we have some real questions about just how ready
Speaker 6: regulators are because if you look at what the National
Speaker 6: Highway Traffic Safety Administration has to say about Tesla's lower
Speaker 6: level systems autopilot I'm referring to here, they have real
Speaker 6: concerns about the safety gap between you know, how the
Speaker 6: company is marketing this and how they're deploying it versus
Speaker 6: what it's actually capable of.
Speaker 5: Robotaxi. Of course, the level of angst among regulators and
Speaker 5: scrutiny's going to be that much greater. I will just say, though, Max,
Speaker 5: that between you got to say here that between robotaxi
Speaker 5: talk and all by doing whatever he was that he
Speaker 5: had to do, stabilizing sales to some extent, slashing payrolls
Speaker 5: by the way, during in recent months he's cut payrolls
Speaker 5: almost twenty percent. Okay, you take all those things together,
Speaker 5: and he's done it again. He has turned the tied
Speaker 5: on a stock that seemed to be in free fall.
Speaker 3: Yeah, I totally agree.
Speaker 2: Listen, there there are some real questions about whether this
Speaker 2: strategy is real. And I mean you're talking about like
Speaker 2: our robotos tax is going to happen. I think some
Speaker 2: elon probably thinks that's a problem for the Trump administration
Speaker 2: to solve. I think it's going to be a problem
Speaker 2: for like the Eric Trump administration or the Donald Junior
Speaker 2: Trump ad like this is a this is a decades
Speaker 2: long regulation problem, not not something that's going.
Speaker 3: To happen soon, but and and so.
Speaker 5: But in the near term.
Speaker 3: Yeah, he's done it. He really has.
Speaker 2: I mean, he he completely managed to change the narrative
Speaker 2: to turn what should be a real problem for a
Speaker 2: company that makes cars, which is that it's not selling
Speaker 2: them as much as it wants to, into like almost
Speaker 2: an asset.
Speaker 3: It's you know, sorry, we're not a car company anymore.
Speaker 3: We're software.
Speaker 5: Don't worry about that. But he has Craig push sales
Speaker 5: volume at any price, cutting prices repeatedly that presumably has
Speaker 5: come and will continue to calm at the cost of margin.
Speaker 5: I mean, is that is that something that's we're going
Speaker 5: to see playing out in coming quarters.
Speaker 6: Yeah, Dana mentioned the energy storage deployments, and it is
Speaker 6: a very dramatic increase, but I think we've also watched
Speaker 6: very closely how that has actually translated in terms of revenue,
Speaker 6: and we've not really seen evidence that that is really
Speaker 6: moving the needle. I think the fundamentals of this company's
Speaker 6: business are sort of continuing to deteriorate and sort of
Speaker 6: you know, matching, you know, maybe what the stock was
Speaker 6: doing months ago. And it's been fascinating to see the
Speaker 6: shares you know, really sort of come roaring back just
Speaker 6: these last few weeks.
Speaker 4: I just looked at the Bloomberg terminal and shares are
Speaker 4: only down like seven point six percent for the year now.
Speaker 4: I mean, that is a big difference from where we.
Speaker 5: Were basically flat. I mean, it's true, Dana that the
Speaker 5: market overall is up like fifteen percent or so, So
Speaker 5: seven percent down is still seven percent down at a
Speaker 5: time when everything else is up. But you're absolutely right.
Speaker 5: I mean, to have gone from almost fifty percent down
Speaker 5: to down just seven percent year to date is quite
Speaker 5: a thing.
Speaker 4: I just want to make one more point, which we've
Speaker 4: pounded on quite a bit on this show and elsewhere,
Speaker 4: which is that, like you know, Elon is fundamentally just
Speaker 4: this like master Marketer, master of the narrative. It's like
Speaker 4: the Man behind the Curtain, Wizard of Oz kind of
Speaker 4: stuff where he really does like drop these clues. It's
Speaker 4: almost like a QAnon drop and the fans go bananas.
Speaker 4: So the other thing that happened this week was he
Speaker 4: started following Travis Kalanik, which everyone saw as this clue
Speaker 4: that like the Robotaxi is gonna partner with Uber or
Speaker 4: like that, you know, and he's called it the cyber Cab.
Speaker 4: And so like just when he does stuff like that,
Speaker 4: like the fans go go ballistic and they are all
Speaker 4: in on like this future vision. And it is like
Speaker 4: a cult in a lot of ways in terms of
Speaker 4: the way that the stock moves and the way that
Speaker 4: you know, everyone rallies around the leader. And there have
Speaker 4: been these real pivot points where you're like, oh my god,
Speaker 4: is he going to be able to pull this out?
Speaker 4: Is he going to be able to pull the rabbit
Speaker 4: out of the hat, And like he does it over
Speaker 4: and over again to the point where like we're all
Speaker 4: very cynical about it, but obviously investors are not. And
Speaker 4: that's like, that's the disconnect that I think some of
Speaker 4: us feel. It's like, Wow, they're really going for this
Speaker 4: yet again. But we've seen this play over and over again.
Speaker 5: Craig, great to have you on. Don't be a stranger.
Speaker 5: Come back soon.
Speaker 6: Thanks for having me.
Speaker 5: Okay, to wrap this up. Now, we're gonna do a
Speaker 5: segment that I'm gonna be honest, I know absolutely nothing
Speaker 5: about Max. Tell us all about it. Something about Elon
Speaker 5: trying to make X a kinder, gentler place.
Speaker 3: Yeah, we've talked about this in past episodes. Elon. You
Speaker 3: may think of him as a trolling, you know.
Speaker 1: Poster who loves to just stir the pot, but he
Speaker 1: has a softer side, and that softer side wants to
Speaker 1: see content that isn't divisive, that doesn't you know, rile
Speaker 1: people up.
Speaker 3: That's just beautiful.
Speaker 2: Such a and and so yesterday there this is i'd
Speaker 2: say one of my favorite all time Elon Musks posts.
Speaker 2: He he posted a tweet by an account called l Lookbook.
Speaker 2: It's basically like a a bunch of pictures essentially beautiful interiors,
Speaker 2: and it looks like something out of Brides magazine it's
Speaker 2: like an all white interior with a bed kind of
Speaker 2: in the in the background, and an arch and some plants.
Speaker 2: It's just a gorgeous It looks like your ideal Airbnb
Speaker 2: in Newport or something. And Elon wrote, would be lovely
Speaker 2: to see more accounts on x simply posting beautiful content. Okay,
Speaker 2: and I say, Elon here here, let's all come back.
Speaker 5: But I'm seeing he wants.
Speaker 4: To become Pinterest or something.
Speaker 5: Well, I feel like I'm seeing a direction of travel
Speaker 5: because just the previous week, right he said, when I
Speaker 5: told everyone to go all the you know, advertisers to
Speaker 5: go f themselves, I didn't mean go f yourself. And
Speaker 5: now like again he's just right just continuing on that line,
Speaker 5: and man, can we just post beautiful.
Speaker 7: And a dyne non You know, it's weird because like
Speaker 7: the jk Rowling one was sort of felt like a
Speaker 7: specific comment about jk Rowling where he was saying, hey,
Speaker 7: what was that?
Speaker 5: Remind me?
Speaker 3: Yeah, he had he.
Speaker 2: Had suggested that, you know, essentially I'm paraphrasing, probably badly,
Speaker 2: but essentially that she had been posting all this controversial stuff.
Speaker 2: Wouldn't it better if she was just posting stuff about
Speaker 2: wizards or Harry Potter or something here.
Speaker 3: Yeah, like Danna says.
Speaker 2: It's like, well, it wouldn't it be great if we
Speaker 2: just had some nice interiors on this on this site
Speaker 2: instead of all this divisive content. And I thought, Okay, maybe,
Speaker 2: you know, maybe this maybe is turning overleaf. But you
Speaker 2: really don't have to go too too far before he's
Speaker 2: you know, down in the timeline, before he's back in
Speaker 2: the mix politically, So just.
Speaker 5: Back in the in the in the in the scrum
Speaker 5: and just and just fighting and scrap it. So, Dana, though,
Speaker 5: you see that post and it says, pinteresting, Well.
Speaker 4: It's a summer bedroom. I mean I see flowers, I
Speaker 4: see white sheets, white walls. The person who posted is
Speaker 4: Eva loves Design and yeah, look it's like a Pinterest
Speaker 4: board like my favorite interior for my summer cottage or
Speaker 4: something like that.
Speaker 5: So now, Max, is that the totality though? The kinder
Speaker 5: gentler X from elanor were there other things that put
Speaker 5: you in that direction? That was it?
Speaker 3: That's the totality.
Speaker 5: That's the totality, Max, Dana, thanks for joining.
Speaker 3: Always a pleasure, great to be here.
Speaker 5: This episode was produced by Stacy Woan Naomi Shaven and
Speaker 5: Rayhan Harmanci are our senior editors. The idea for this
Speaker 5: very show also came from Rayhan. Blake Maples handles engineering,
Speaker 5: and we get special editing assistants from Jeff Grocott, Antonia
Speaker 5: Muffarech and Arafat Jalasho Perry. Our supervising producer is Magnus Hendrickson.
Speaker 5: The elin ing theme is written and performed by Taka
Speaker 5: Yasuzawa and Alex sugi Era. Brendan Francis Newnham is our
Speaker 5: executive producer, and Sage Bauman is the head of Bloomberg Podcasts.
Speaker 5: A big thanks as always to our supporter Joel Weber.
Speaker 5: I'm Dave bit Papadopolis. If you have a minute, rate
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Speaker 5: See you next week.