WEBVTT - Tesla Stems the Bleeding, SpaceX Set to Destroy 0:00:03.120 --> 0:00:11.080 Bloomberg Audio Studios, podcasts, radio news. 0:00:14.240 --> 0:00:17.120 Well, Jlon Muski is now the richest person on the planet. 0:00:17.480 --> 0:00:20.319 More than half the satellites in space are owned and 0:00:20.440 --> 0:00:22.160 controlled by one man. 0:00:22.760 --> 0:00:25.720 Well, he's a legitimate super genius. I mean legitimate. 0:00:25.960 --> 0:00:28.600 He says he's always voted for Democrats, but this year 0:00:28.640 --> 0:00:29.400 it will be different. 0:00:29.440 --> 0:00:30.400 He'll vote Republican. 0:00:30.680 --> 0:00:33.159 There is a reason the US government is so reliant 0:00:33.200 --> 0:00:35.720 on him. Alon Musk is a scam artist and he's 0:00:35.760 --> 0:00:36.400 done nothing. 0:00:38.000 --> 0:00:51.599 Anything he does, he's fascinating people. Welcome to the elan Ink, 0:00:51.680 --> 0:00:56.360 Bloomberg's weekly podcast about Elon Musk. It's July second. I'm 0:00:56.400 --> 0:01:00.600 your host, David Papadopolis. Today is a big day for Tesla. 0:01:01.080 --> 0:01:04.280 The company reported its quarterly sales numbers. Than they are 0:01:05.080 --> 0:01:09.480 not too bad. We'll dig into Tesla's potentially changing fortunes 0:01:09.520 --> 0:01:12.479 after a terrible start of the year. First, though, we'll 0:01:12.560 --> 0:01:15.400 do a lightning round of odds and ends, starting with 0:01:15.480 --> 0:01:19.640 some low Earth orbit news, where SpaceX has scored a 0:01:19.760 --> 0:01:23.600 NASA contract to blast a space station into the ocean, 0:01:24.200 --> 0:01:27.800 just as the company's valuation soared above two hundred billion dollars. 0:01:28.360 --> 0:01:31.880 And in Washington, the Supreme court rendered some opinions that 0:01:31.920 --> 0:01:35.360 could have an impact on X in a very consequential 0:01:35.480 --> 0:01:40.680 election year. And to wrap up, we'll examine somewhat seriously 0:01:40.840 --> 0:01:46.160 Elon's bid to turn X into Pinterest. So for our roundup, 0:01:46.360 --> 0:01:51.120 we have Ace Elon Musk, reporter Dana Hull, Allow Dana Hey, 0:01:51.680 --> 0:01:58.640 and Max Chapkin, BusinessWeek senior writer in Max. Good Day, David, Max, Now, 0:01:58.760 --> 0:02:01.680 I noticed that last week while you're on there were 0:02:01.720 --> 0:02:03.480 an awful lot of F bombs. I want you to 0:02:03.560 --> 0:02:06.559 keep it clean. This week I got some listener mail. 0:02:06.760 --> 0:02:07.800 Did you really No? 0:02:08.919 --> 0:02:11.320 Okay, So Dan, we're going to start with you in 0:02:11.360 --> 0:02:16.560 our news roundup. SpaceX gets to create something called the 0:02:16.680 --> 0:02:21.320 Space Station deorbit Vehicle. What the heck is that? 0:02:22.040 --> 0:02:24.640 Yeah, So the International Space Station, which has been like 0:02:24.720 --> 0:02:27.680 this home away from home for astronauts, is going to 0:02:27.680 --> 0:02:30.760 be retired. It is expected to be retired in twenty 0:02:30.840 --> 0:02:35.040 thirty and NASA needs help getting this station like out 0:02:35.080 --> 0:02:38.480 of space. And so SpaceX won this contract, which is 0:02:38.520 --> 0:02:41.720 worth up to eight hundred and forty three million dollars 0:02:41.760 --> 0:02:44.280 to sort of deorbit the space station. 0:02:44.480 --> 0:02:44.960 And so my. 0:02:45.040 --> 0:02:47.360 Understanding is that SpaceX is going to create some kind 0:02:47.360 --> 0:02:49.720 of vehicle that's going to help guide the space station 0:02:50.360 --> 0:02:52.720 back through the Earth's atmosphere, at which point it will 0:02:52.720 --> 0:02:55.440 blow up and then like fall into the ocean. 0:02:55.680 --> 0:02:58.160 So Max, how cool is this? Not only do you 0:02:58.160 --> 0:03:01.000 get to blow this thing up, you get had to blow. 0:03:00.840 --> 0:03:05.440 Up objectively probably the coolest government contract you could possibly win. 0:03:05.800 --> 0:03:08.200 But I will say this is like a weird It's 0:03:08.280 --> 0:03:08.840 kind of weird. 0:03:08.880 --> 0:03:12.720 Like SpaceX's whole deal is like they are a commercial provider. 0:03:12.840 --> 0:03:16.120 They just sell these launches, and this is obviously a 0:03:16.160 --> 0:03:18.920 custom project. You know, this is kind of like an 0:03:18.960 --> 0:03:21.120 old school What it feels like is like an old 0:03:21.120 --> 0:03:24.200 school defense contract, the kind of thing that SpaceX would 0:03:24.200 --> 0:03:26.800 have criticized maybe in the past. On the other hand, 0:03:26.960 --> 0:03:29.520 objectively cool contract, I don't see how you turn it 0:03:29.560 --> 0:03:30.680 down create stuff. 0:03:30.760 --> 0:03:33.560 I mean, then press release from NASA. I got a 0:03:33.639 --> 0:03:37.960 kick out of NASAU selects International Space Station US de 0:03:38.200 --> 0:03:41.000 orbit vehicle. Now here's the thing, though, Dan, about this 0:03:41.000 --> 0:03:46.640 deorbit vehicle. My sense is that SpaceX Elon and the 0:03:46.720 --> 0:03:49.240 crew they get to create it, and they have a 0:03:49.320 --> 0:03:51.960 large budget now to do so, but they do they 0:03:52.000 --> 0:03:54.200 actually get to do the blowing up themselves, So they 0:03:54.280 --> 0:03:57.400 have to turn this baby over to the end up 0:03:57.520 --> 0:03:59.360 NASAU crew to handle that part of it. 0:04:00.000 --> 0:04:03.960 I understanding is that SpaceX develops the de orbit spacecraft 0:04:03.960 --> 0:04:05.160 and then turns. 0:04:04.800 --> 0:04:06.040 That over to NASA. 0:04:06.800 --> 0:04:08.120 That's kind of a down and. 0:04:08.560 --> 0:04:11.720 SpaceX are like long term partners. I mean, NASA was 0:04:12.440 --> 0:04:16.320 key to like SpaceX even becoming company. And so I mean, 0:04:16.440 --> 0:04:19.160 I don't know the contract could be modified going forward. 0:04:19.240 --> 0:04:25.239 Maybe it will how much in the it's a robot. 0:04:25.320 --> 0:04:28.120 I just say, I'm just saying this. You know, one 0:04:28.120 --> 0:04:31.279 of the in addition, in addition to being a great industrialist, 0:04:31.360 --> 0:04:34.320 Elon apparently is quite the gamer. You could see him 0:04:34.360 --> 0:04:37.120 just like gaming out on this thing, controlling it as 0:04:37.160 --> 0:04:38.880 it's gonna blow this thing up. 0:04:38.960 --> 0:04:41.480 I mean reading stories about this, you know they're going 0:04:41.520 --> 0:04:43.919 to drop it in some part, some part of the 0:04:43.920 --> 0:04:47.000 ocean that's like Asteros, not a lot of I guess 0:04:47.040 --> 0:04:49.520 marine life or whatever, but this is like the area 0:04:49.600 --> 0:04:51.200 of the ocean where they. 0:04:51.120 --> 0:04:52.640 Dump old spaceships. 0:04:52.640 --> 0:04:55.839 So it'll it's the whole thing is fascinating, and you know, 0:04:55.839 --> 0:04:58.080 hopefully by the time they do this, we'll have you know, 0:04:58.279 --> 0:05:00.120 a station on the Moon or something. 0:05:00.160 --> 0:05:03.800 One would hope. Okay, Max, in other SpaceX news its 0:05:03.920 --> 0:05:06.200 valuation is up, up and up. 0:05:06.640 --> 0:05:07.080 Yeah. 0:05:07.160 --> 0:05:10.800 So SpaceX, as we've said on this podcast many times, 0:05:10.880 --> 0:05:14.239 is a privately held company. It's a little bit unusual 0:05:14.240 --> 0:05:17.120 because it's been around for a long time, and you 0:05:17.240 --> 0:05:21.359 have employees and investors who've been who've held stock in 0:05:21.400 --> 0:05:24.520 the company for many years, if not more than a decade, 0:05:24.839 --> 0:05:28.640 and private companies essentially like this will make tender offers. Well, 0:05:28.640 --> 0:05:32.960 they'll essentially offer to buy shares of longtime shareholders using 0:05:33.080 --> 0:05:37.520 external capital. The reporting suggests that the valuation is two 0:05:37.560 --> 0:05:42.359 hundred and ten billion dollars, substantially up from before. I 0:05:42.400 --> 0:05:47.280 will just say, you know, these tender offers, these valuations 0:05:47.360 --> 0:05:50.680 are not public markets valuations. Anytime we're talking about private 0:05:50.720 --> 0:05:54.240 market valuations. It's not like the definitive value of this thing. 0:05:54.279 --> 0:05:57.400 It's just sort of like what the company is telling 0:05:57.480 --> 0:05:59.839 investors that it thinks it is worth. 0:06:00.200 --> 0:06:03.720 Well. But if it is the latest transaction that's happening, 0:06:03.720 --> 0:06:06.200 so at sub level, that does set a price. I mean, 0:06:06.520 --> 0:06:08.520 I guess the fact that SpaceX is willing to pay 0:06:08.560 --> 0:06:11.600 that price for the shares indicates that it thinks it's 0:06:11.640 --> 0:06:13.680 worth that much. I mean, but yeah, as you were 0:06:13.680 --> 0:06:16.000 saying it's climbed quite a bit. I think towards the 0:06:16.080 --> 0:06:18.039 end of last year was at one hundred and eighty billion, 0:06:18.279 --> 0:06:21.200 and then two hundred billion, and now two hundred and ten. 0:06:22.080 --> 0:06:26.240 It is a very very, very very large private company. Remember, 0:06:26.600 --> 0:06:29.960 the vast bulk of Elon's companies are privately held companies, ie, 0:06:30.320 --> 0:06:34.040 not companies that trade in public stock markets, Tesla being 0:06:34.040 --> 0:06:36.599 the loan exception. But it is SpaceX that is by 0:06:36.680 --> 0:06:39.440 far the most valuable, and at this point I would 0:06:39.480 --> 0:06:42.000 say on the cuspmax of being the most valuable private 0:06:42.040 --> 0:06:44.839 company in the world right now, the only larger one 0:06:44.920 --> 0:06:48.160 is Byte after bite after Byte Dance, right, owner of TikTok. 0:06:48.680 --> 0:06:52.160 But if SpaceX's valuations up up and up, Byte Dances 0:06:52.240 --> 0:06:55.960 valuation is going in the exact opposite direction, right But Dan, 0:06:56.080 --> 0:06:59.840 I got to say on that does SpaceX and Star 0:07:00.279 --> 0:07:05.560 do they stay private or go public? Given how worked 0:07:05.600 --> 0:07:10.160 up Elon is getting about the Delaware court as it 0:07:10.200 --> 0:07:13.920 relates to Tesla and all the hassles of having to 0:07:13.920 --> 0:07:16.800 be a publicly traded company, man, I got to think 0:07:16.800 --> 0:07:18.360 that these companies stay private. 0:07:19.000 --> 0:07:21.440 Yeah, I don't think Elon likes being a public company. 0:07:21.520 --> 0:07:24.240 CEO I mean it opens you up to just far 0:07:24.360 --> 0:07:27.040 more scrutiny. You've got to deal with earnings every quarter. 0:07:27.200 --> 0:07:29.200 I mean I think he you know, he tried to 0:07:29.240 --> 0:07:32.640 take Tesla private back in twenty eighteen and then had 0:07:32.640 --> 0:07:34.440 to back out of that when when it was clear 0:07:34.480 --> 0:07:35.920 that that was going to be way harder to do. 0:07:35.920 --> 0:07:36.720 That he realized. 0:07:36.760 --> 0:07:39.160 And the whole thing with the funding secured at four 0:07:39.200 --> 0:07:42.080 twenty and the saudis so. But yeah, I mean, why 0:07:42.200 --> 0:07:44.360 go The only the reason to go public, it's it's 0:07:44.360 --> 0:07:46.680 really a fundraising event. Like you go public because you 0:07:46.720 --> 0:07:49.400 need to raise money. If SpaceX can continue to raise 0:07:49.400 --> 0:07:53.360 money from private investors and venture capitalists and private equity 0:07:53.520 --> 0:07:57.480 and get these lucrative government contracts, like, I don't think 0:07:57.520 --> 0:07:59.520 he would want to go. But yeah, I mean Gwen 0:07:59.560 --> 0:08:02.560 shotwell All, the president of SpaceX, you know, at an 0:08:02.600 --> 0:08:04.480 investor conference a couple of years ago, said that she 0:08:04.480 --> 0:08:07.720 could see spinning Starlink out at some point when Starlink 0:08:07.760 --> 0:08:10.600 had positive revenue. I don't think they're there yet. But 0:08:11.480 --> 0:08:14.400 if you're elon, like, what upside is there to going public? 0:08:14.640 --> 0:08:16.920 There's a serial case for going public is that you know, 0:08:17.040 --> 0:08:20.120 his his like ability to raise capital from the public 0:08:20.160 --> 0:08:21.600 markets is much greater. 0:08:21.360 --> 0:08:22.600 Because you get to tap into all that. 0:08:22.720 --> 0:08:25.400 I mean, we just saw like the retail investors of 0:08:25.840 --> 0:08:28.560 Tesla gave him just just you know, wrote him a 0:08:28.600 --> 0:08:31.520 fifty billion dollar check after declining. Like you know, you 0:08:31.560 --> 0:08:34.640 can like Elon Musk as as persuasive as he is 0:08:35.120 --> 0:08:37.920 with you know, major private. 0:08:37.520 --> 0:08:39.000 Market investor retail crowd. 0:08:39.160 --> 0:08:41.920 It's the retail crowd that really, you know, will will 0:08:41.960 --> 0:08:42.319 go for this. 0:08:42.440 --> 0:08:48.360 That's fair. Here's my prediction. He neither IPO's SpaceX or starlink, 0:08:48.640 --> 0:08:53.040 but does an IPO spin off of his de orbit 0:08:53.240 --> 0:08:57.199 vehicle unit. Okay, well, we'll see how this first one does, 0:08:57.800 --> 0:08:59.640 uh in a few years when they try to blow 0:08:59.679 --> 0:09:03.000 this thing up up. Okay. In other news, down in Washington, Max, 0:09:03.040 --> 0:09:06.000 the Supreme Court had a couple of big rulings on 0:09:06.040 --> 0:09:10.280 social media that could affect Elon Musk's X. Tell us 0:09:10.280 --> 0:09:10.880 all about. 0:09:10.679 --> 0:09:13.240 Them, all right, So the top line here is that 0:09:13.280 --> 0:09:16.920 the status quo for social media stays the same. But 0:09:17.200 --> 0:09:19.080 just going a little bit deeper on that, you had 0:09:19.120 --> 0:09:22.000 a case about a week ago where a couple of 0:09:22.040 --> 0:09:28.160 states had sued the Biden administration over essentially accusations that 0:09:28.200 --> 0:09:30.840 came up during the Twitter Files. This was the idea 0:09:30.840 --> 0:09:36.640 that the government was, you know, improperly influencing social media companies. 0:09:36.800 --> 0:09:38.760 Supreme Court said, now, this is a bit of a 0:09:38.840 --> 0:09:41.400 rebuke to the for people who really thought the Twitter 0:09:41.440 --> 0:09:45.560 files were a big game changer. Essentially said that there 0:09:45.720 --> 0:09:49.040 was no reason to think that this had actually happened 0:09:49.080 --> 0:09:52.000 in any kind of sustained way. There was a second 0:09:52.480 --> 0:09:55.600 sort of set two cases that the Supreme Court kicked 0:09:55.640 --> 0:09:58.000 back to lower courts earlier this week, and these were 0:09:58.080 --> 0:10:02.560 over laws in Texas and Florida that we would essentially 0:10:02.600 --> 0:10:06.040 prevent social media companies from doing the kind of moderation 0:10:06.200 --> 0:10:08.880 that they do previous that they do currently. So it 0:10:08.920 --> 0:10:12.040 was saying, like, you know, you're not allowed to like 0:10:12.440 --> 0:10:16.160 throw somebody off a platform. You have to give people 0:10:16.200 --> 0:10:19.440 like an absolute right to free speech on social media. 0:10:19.679 --> 0:10:21.080 That's kind of Elon Musk's position. 0:10:21.880 --> 0:10:25.200 The Court effectively is saying that for now, social media 0:10:25.280 --> 0:10:27.640 companies have free speech rights as well, which means that 0:10:27.679 --> 0:10:29.880 they can sort of do whatever they want with their platforms. 0:10:30.120 --> 0:10:33.000 So that's the stat This is a status quo stays 0:10:33.040 --> 0:10:35.960 the same. Now, does this affect Elon Muskin anyway? 0:10:35.960 --> 0:10:37.640 Probably not. I mean, like. 0:10:39.160 --> 0:10:41.840 His his sort of maximalist view of the First Amendment 0:10:42.160 --> 0:10:45.080 could be seen as being rebuffed. But for now, you know, 0:10:45.320 --> 0:10:48.640 X will just continue operating as as it's operated. 0:10:49.080 --> 0:10:51.640 Actually, And as a result, the effect on the twenty 0:10:51.679 --> 0:10:54.719 twenty four campaign and use of social media in the 0:10:54.760 --> 0:10:59.480 twenty twenty four campaign and disinformation campaigns, any impact there? 0:10:59.720 --> 0:11:01.880 No? Well, like I said, status Quo is going to 0:11:01.920 --> 0:11:02.400 say the same. 0:11:02.440 --> 0:11:06.440 I mean, I think that there are that probably like 0:11:06.760 --> 0:11:11.640 public pressure on social media companies matters, because these companies 0:11:11.720 --> 0:11:15.520 have constituencies that include like investors and users and so on, 0:11:15.720 --> 0:11:17.480 and if and if a social media in the same 0:11:17.480 --> 0:11:19.480 way that you can kind of like work the refs 0:11:19.559 --> 0:11:22.440 like in a game and sort of push them towards 0:11:22.440 --> 0:11:23.760 making decisions that are close to. 0:11:23.640 --> 0:11:31.440 What you like. I gotcha. So we are now joined 0:11:31.440 --> 0:11:35.840 by Bloomberg's Global autos Are Craig Trudel to talk about 0:11:36.000 --> 0:11:41.920 tesla second quarter sales. Craig, welcome, Thanks for having me. Okay, so, Dana, 0:11:41.960 --> 0:11:45.280 we will start with you though here tell us what 0:11:45.640 --> 0:11:49.680 exactly were the numbers and how should we interpret them? 0:11:50.000 --> 0:11:53.520 Yeah, so, Tesla delivered four hundred and forty three thousand 0:11:53.800 --> 0:11:56.120 nine hundred and fifty six vehicles in the second quarter. 0:11:56.240 --> 0:11:59.640 Those are global figures. It was still a five percent 0:11:59.720 --> 0:12:02.600 year of year decline, but the numbers that were released 0:12:02.600 --> 0:12:05.200 this morning were better than what analysts were expecting, and 0:12:05.240 --> 0:12:07.920 you're seeing the shares move higher as a result. 0:12:08.240 --> 0:12:11.120 This is a matter of a few thousand vehicles more 0:12:11.160 --> 0:12:14.360 than analysts we're expecting. I think, you know, the consensus 0:12:14.400 --> 0:12:17.280 that we had was about a five point eight percent decline, 0:12:17.320 --> 0:12:20.800 So all of one percentage point has meant you know, 0:12:20.880 --> 0:12:24.160 a roughly ten percent move just this morning, which is 0:12:24.240 --> 0:12:26.800 really remarkable but also kind of par for the course 0:12:26.840 --> 0:12:29.160 with this this stock. You guys have had Esha Day 0:12:29.200 --> 0:12:32.280 on here before to kind of talk about Tesla as 0:12:32.320 --> 0:12:34.559 a stock and how much that's a big aspect of 0:12:34.880 --> 0:12:38.280 the story for this company. When this name gets momentum, 0:12:38.679 --> 0:12:41.439 it really moves in dramatic ways, and we've seen that, 0:12:41.720 --> 0:12:43.480 you know, just in the last few weeks. You know, 0:12:43.600 --> 0:12:46.959 even as everybody was anticipating these numbers weren't going to 0:12:47.000 --> 0:12:50.080 be that great, there's been so much emphasis and focus 0:12:49.840 --> 0:12:53.640 on the future, in no small part thanks to Elon 0:12:53.720 --> 0:12:55.640 and his comments at the annual meeting recently. 0:12:56.160 --> 0:12:58.920 Yeah, so on the stock. We spent a fair amount 0:12:58.920 --> 0:13:00.400 of time in the first half of the year talking 0:13:00.440 --> 0:13:05.240 about its cratering it had at its nadir back in April, 0:13:05.240 --> 0:13:09.440 it was down almost fifty percent. It was quite the plunge. 0:13:09.920 --> 0:13:12.480 It has roared back since, as you guys are alluding to, 0:13:13.080 --> 0:13:16.120 It's gained more than fifty percent since then, and really 0:13:16.200 --> 0:13:20.080 isn't down much year to date at all. Now, So, Craig, 0:13:20.520 --> 0:13:24.840 how do I square that rebound with these sales numbers 0:13:24.840 --> 0:13:28.200 that just came out again? I get that the sales 0:13:28.280 --> 0:13:31.800 numbers weren't quite as bad as expected, but they were 0:13:31.840 --> 0:13:33.080 still down. 0:13:33.600 --> 0:13:36.200 I suppose. I mean, I guess this has always been, 0:13:36.440 --> 0:13:38.840 you know, a story stocked to some degree, right, I mean, 0:13:39.080 --> 0:13:41.560 it's always been the case that, you know, if you 0:13:41.640 --> 0:13:45.200 talk with a sort of more traditional automotive analyst, that 0:13:45.240 --> 0:13:49.840 they've generally, you know, and very consistently said that this valuation, 0:13:50.160 --> 0:13:52.280 you know, doesn't make a sense in their universe. But 0:13:53.040 --> 0:13:55.080 as long as you're looking at this as a tech 0:13:55.120 --> 0:13:58.880 company and putting that serious amounts of value on businesses 0:13:58.920 --> 0:14:02.720 that don't exist in in the case of robotaxis or 0:14:02.840 --> 0:14:06.080 optimist robots, you can sort of put whatever number you 0:14:06.200 --> 0:14:09.080 like on this and Elon you may call you something 0:14:09.080 --> 0:14:10.080 other than boneheaded. 0:14:10.559 --> 0:14:11.960 The other thing I was just going to point out 0:14:11.960 --> 0:14:14.320 about the release today is that they flagged their energy 0:14:14.360 --> 0:14:18.040 storage numbers. You know, so Tesla has two divisions, automotive 0:14:18.120 --> 0:14:21.000 and energy storage. Energy storage is when they sell these 0:14:21.040 --> 0:14:25.760 big batteries known as megapas to utilities like pgene and 0:14:25.840 --> 0:14:29.560 the power wall to consumers, and like, the energy division 0:14:29.600 --> 0:14:32.840 has always played this big back seat to automotive in 0:14:32.920 --> 0:14:36.920 terms of revenue, but now with the automotive sales obviously 0:14:37.120 --> 0:14:40.480 no longer showing robust growth, they're like really flagging energy 0:14:40.600 --> 0:14:42.720 is like this big growth thing. So it was just 0:14:42.760 --> 0:14:46.280 funny to see in a quarterly release that's all about 0:14:46.400 --> 0:14:50.480 vehicle deliveries that they flag how awesome the energy sales 0:14:50.520 --> 0:14:52.480 are going. And I think you're going to see Elon 0:14:52.560 --> 0:14:54.920 talk a lot more about energy on the earnings call 0:14:55.040 --> 0:14:55.640 later this month. 0:14:55.720 --> 0:14:58.360 Yeah, it's a little bit of the active diversion and confuscation. 0:14:58.480 --> 0:15:01.200 That is the second time recent week, Stana, that you 0:15:01.240 --> 0:15:04.840 brought interview storage up. I feel an entire segment or 0:15:04.920 --> 0:15:08.560 episode coming up on that topic soon. Max, though, how 0:15:08.600 --> 0:15:09.440 did you take the number? 0:15:09.680 --> 0:15:13.000 I just like Craig is saying, We've been talking for 0:15:13.120 --> 0:15:16.240 months about what I think, in retrospect was a really 0:15:16.480 --> 0:15:19.680 kind of audacious move by Elon Musk. We have a 0:15:19.840 --> 0:15:22.560 car company that is priced like a growth stock that 0:15:22.640 --> 0:15:25.840 has stopped growing, and we've been talking for a long 0:15:25.880 --> 0:15:28.160 time about how that's a pretty big problem. 0:15:28.560 --> 0:15:30.720 We're a growth stock and you're not growing. That's problem. 0:15:30.840 --> 0:15:33.680 And what we've seen is Elon Musk, over the course 0:15:33.920 --> 0:15:40.200 of several months, essentially reframe the story. And now it's 0:15:40.680 --> 0:15:43.360 been reframed. It's no longer a car company. He's said 0:15:43.360 --> 0:15:45.800 that a million times, despite the fact that as we 0:15:45.800 --> 0:15:48.400 see from these delivery numbers, they sure saw a lot 0:15:48.440 --> 0:15:50.880 of cars, seems to be the bulk of their revenue. 0:15:50.960 --> 0:15:55.000 But nonetheless, you know, what the investors are clearly focused on, 0:15:55.040 --> 0:15:57.600 and we've seen this now in the stock reaction today, 0:15:57.880 --> 0:16:01.200 in the payvote, you know, over the last several months, 0:16:00.840 --> 0:16:05.560 is is this autonomy story. And what's interesting here is 0:16:05.560 --> 0:16:08.760 getting lost. So they sold almost all of these sales 0:16:08.920 --> 0:16:12.280 are Model three, Model Y that's the kind of lower 0:16:12.400 --> 0:16:16.400 end car. Tesla also sells, of course models Model X 0:16:16.440 --> 0:16:16.920 and a Sign. 0:16:17.000 --> 0:16:19.840 They basically sell almost none. 0:16:19.320 --> 0:16:21.520 Of those and remember we talked about at this at 0:16:21.520 --> 0:16:23.400 the end of last year, like wow, you know the 0:16:23.440 --> 0:16:26.560 cyber truck, this, this could really, you know, change the 0:16:26.640 --> 0:16:29.320 game for Tesla. You know, pickup trucks are are the 0:16:29.320 --> 0:16:30.520 best selling category. 0:16:30.680 --> 0:16:33.960 You don't even break it out separately, it's under it. 0:16:33.960 --> 0:16:37.400 It looks like a very very small number twenty thousand 0:16:37.520 --> 0:16:41.320 total other models. So I mean you're talking about, you know, 0:16:41.400 --> 0:16:44.120 number of cyber trucks that you know, would be insignificant 0:16:44.240 --> 0:16:46.960 to like a Toyota, Ford or whatever. So it's just 0:16:47.120 --> 0:16:51.240 pretty staggering first of all that that the company has 0:16:51.520 --> 0:16:54.760 gone in this direction, and then also that investors are 0:16:54.840 --> 0:16:56.400 are up for it, they like it. 0:16:56.920 --> 0:16:59.600 Yeah, so, Craig, I actually I've been thinking about this 0:16:59.640 --> 0:17:01.320 for a while now. At this point on the model 0:17:01.440 --> 0:17:04.640 S IS and X IS, and you know, these are 0:17:04.680 --> 0:17:09.120 older models that are selling at this point negligible amounts. 0:17:09.119 --> 0:17:11.080 As Max is saying, it's all about the why, It's 0:17:11.119 --> 0:17:13.679 all about the three. The cyber truck is just ramping up. 0:17:13.680 --> 0:17:16.199 If it even goes anywhere, why not put a bullet 0:17:16.200 --> 0:17:19.520 in the s in the ax. Aren't they just a distraction? No? 0:17:19.760 --> 0:17:23.879 I think they do still sell for for fairly significant 0:17:23.880 --> 0:17:25.919 amounts of money, and so perhaps you can kind of 0:17:25.920 --> 0:17:29.320 make the argument that you know, continuing to amortize, you know, 0:17:29.400 --> 0:17:33.040 the investment in those vehicles makes some sense. But as 0:17:33.119 --> 0:17:35.800 as we do look ahead to you know, where this 0:17:35.880 --> 0:17:40.200 company is going, and you know, sort of pay close 0:17:40.200 --> 0:17:43.080 attention to the fact that you know, Musk is very 0:17:43.119 --> 0:17:47.000 much you know, focused on autonomy and on robotaxis to 0:17:47.080 --> 0:17:49.840 the extent that he is able to actually stand up 0:17:49.840 --> 0:17:52.520 that business and does want to sort of, you know, 0:17:52.640 --> 0:17:55.480 put more emphasis on that going forward. Would it make 0:17:55.560 --> 0:17:59.200 sense to potentially, you know, switch up the existing factory 0:17:59.240 --> 0:18:03.200 capacity that you have to make those vehicles over you know, 0:18:03.320 --> 0:18:05.399 ones that now are quite long in the tooth that 0:18:05.520 --> 0:18:09.000 Musk has said, we probably shouldn't keep making them anymore 0:18:09.040 --> 0:18:13.280 and are really just sort of doing so for posterity reasons. 0:18:13.640 --> 0:18:16.680 On the fleet point in general, and this has come 0:18:16.720 --> 0:18:18.719 up a fair amount in the past, but I suppose 0:18:18.720 --> 0:18:21.000 it's going to keep coming up, not just the S 0:18:21.040 --> 0:18:23.000 and the X, but the totality of the fleet, with 0:18:23.080 --> 0:18:26.000 the exception of the cyber truck, Dana. As I drive 0:18:26.080 --> 0:18:28.880 around the streets of the Tri State area, Man, these 0:18:28.920 --> 0:18:31.800 teslas they do it? Should they just look old and tired. 0:18:32.160 --> 0:18:33.959 I mean you drive around, you bump into you know, 0:18:34.000 --> 0:18:36.080 you see Rivians in the wild and some of the 0:18:36.119 --> 0:18:39.080 new Fords, and the key is in the VW's It 0:18:39.280 --> 0:18:44.720 just seems like these are just yesterday's cars. 0:18:44.920 --> 0:18:47.360 I think the calculation that Elon Musk made is that 0:18:47.400 --> 0:18:49.760 look like they were the first company to really bring 0:18:49.800 --> 0:18:53.280 electric cars into the mainstream full stop. But now electric 0:18:53.320 --> 0:18:56.360 cars are quite common and here in California, same thing. 0:18:56.400 --> 0:18:58.440 I mean, I see Rivians, I see a lot of Hyundaies, 0:18:59.160 --> 0:19:02.800 and like being an electric car maker is no longer 0:19:02.920 --> 0:19:05.000 enough to set you apart from the pack. What sets 0:19:05.040 --> 0:19:08.240 you apart from the pack is that you are electric 0:19:08.359 --> 0:19:11.000 and fully autonomous, and that is what Elon is going for. 0:19:11.119 --> 0:19:13.760 And Craig and I have had long debates back and 0:19:13.840 --> 0:19:16.479 forth about whether this is like real or vaporware, and like, 0:19:16.680 --> 0:19:19.200 at what point does Tesla actually get you know, level 0:19:19.240 --> 0:19:22.520 five regulatory approval. I mean, that's all very still very 0:19:22.640 --> 0:19:25.040 high in the sky. But Musk believes in his heart 0:19:25.119 --> 0:19:28.280 that they are on the cusp of full autonomy and 0:19:28.880 --> 0:19:30.760 he just wants to be like he wants to be 0:19:30.840 --> 0:19:33.280 valued as a tech company. He sees Nvidia and all 0:19:33.400 --> 0:19:36.480 these other players getting these crazy valuations, and he wants 0:19:36.520 --> 0:19:39.479 Tesla to be thought of in that vein, and so 0:19:39.680 --> 0:19:43.720 he is all about like Tesla doesn't really just make cars, 0:19:43.760 --> 0:19:45.840 they are making autonomous. 0:19:45.280 --> 0:19:47.320 So then your point is he's not up for playing 0:19:47.359 --> 0:19:51.399 this game that the traditional car makers play, which is, hey, 0:19:51.480 --> 0:19:53.480 we're going to refresh our fleet every shing. 0:19:53.720 --> 0:19:55.879 I think that Elon is just bored of making cars. 0:19:55.920 --> 0:20:00.240 It's like very capital intensive and like he's always been about. 0:20:00.080 --> 0:20:02.960 And he's board making cars, but he wants them to 0:20:03.000 --> 0:20:06.080 pay him some odd billion dollars when car making is 0:20:06.119 --> 0:20:07.720 your main job. 0:20:08.480 --> 0:20:10.680 Right, But he's been at this for a very long time. 0:20:10.760 --> 0:20:13.720 It is capital intensive, it is grueling, you're fighting for 0:20:13.840 --> 0:20:17.280 market share. He's got byd coming out like after him, 0:20:17.440 --> 0:20:21.560 Like he's just like he like just constantly refreshing models 0:20:21.560 --> 0:20:24.040 and constantly coming out with new models is just it's 0:20:24.080 --> 0:20:24.679 boring for him. 0:20:24.720 --> 0:20:27.000 I mean you could see it Nickel Dimes stuff. 0:20:28.040 --> 0:20:30.520 It wants to be, you know, he wants to be 0:20:30.680 --> 0:20:35.240 like cutting edge, mister future, and that's. 0:20:34.359 --> 0:20:36.920 Our time as you as you've often said, I do think, 0:20:37.520 --> 0:20:37.880 you know. 0:20:38.000 --> 0:20:40.520 For Elon Musk and for the people who sort of 0:20:40.760 --> 0:20:45.080 buy this it's the the comparison is a tech company, 0:20:45.119 --> 0:20:46.880 not not a car company, you know. And I think 0:20:46.960 --> 0:20:51.040 all along the reason they are not refreshing the Model 0:20:51.040 --> 0:20:52.960 three or whatever, and the reason this is happening is 0:20:52.960 --> 0:20:57.399 because Musk has long seen like the model as Apple, Right, 0:20:57.480 --> 0:21:02.159