Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: 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 3: Well, he's a legitimate super genius. I mean legitimate. He
Speaker 3: says he's always voted for Democrats, but this year it
Speaker 3: will be different.
Speaker 1: He'll vote Republican.
Speaker 3: There is a reason the US government is so reliant
Speaker 3: on him. Elon Musk is a scam artist and he's
Speaker 3: done nothing.
Speaker 2: Anything he does, he's fascinating the people. Welcome to Elon Ink,
Speaker 2: Bloomberg's weekly podcast about Elon Musk. It's Tuesday, February fourth.
Speaker 2: I'm your host, Max Chafkin in for David Papadopoulos. A
Speaker 2: few months ago, many people, although not let's be clear,
Speaker 2: the people on this podcast, were seeing Elon Musk as
Speaker 2: at best sort of a figurehead within the Trump administration,
Speaker 2: somebody who'd be on a blue ribbon panel and would
Speaker 2: mostly spend his time running his six very large, very
Speaker 2: important companies. But the events of the past few days
Speaker 2: have been shocking even to those of us who thought
Speaker 2: that Elon would take a big role. Starting late last week,
Speaker 2: Musk and his Doge team members went out across numerous
Speaker 2: federal departments and armed with Trump's executive orders, began sowing chaos.
Speaker 2: We're going to get into what happened and what might
Speaker 2: come next, and then take a look at how Musk's
Speaker 2: actual businesses are doing with a trade roar at home
Speaker 2: and all of this Musk created chaos and political divisiveness
Speaker 2: here at home. It's a lot to discuss all this.
Speaker 2: We have Bloomberg's elon Musk reporter Dana Hull Hey Dana
Speaker 2: Hey Nax and Bloomberg Politics reporter Ted Man joining us
Speaker 2: from DC Hey, Tedy. And here in New York, Anthony Cormier,
Speaker 2: a investigative reporter who co authored a great story yesterday
Speaker 2: from inside the offices of Musk's attempted takeover of USAID.
Speaker 3: Welcome Anthony, Thanks for having me.
Speaker 2: All right, So, Anthony, you co wrote this story with
Speaker 2: our colleague Jason Leopold.
Speaker 3: It is basically an inside.
Speaker 2: Account on what's kind of like a battle almost that
Speaker 2: played out inside of this us AID, which is a
Speaker 2: big foreign aid office inside the federal government.
Speaker 3: Just tell us what happened as far as you understand.
Speaker 4: It well, And there was a really unusual confrontation in fact,
Speaker 4: on Saturday between a group of what people are calling
Speaker 4: the Doge kids. These are young technologists who seem to
Speaker 4: have an ideological bent that is similar to Elon's. And
Speaker 4: they've been tapped by Musk and this new Doge team
Speaker 4: to go in and look for spending cuts and they
Speaker 4: took aim last week at USID, and so they show
Speaker 4: up on Saturday as the building is empty, and they
Speaker 4: demand access to the entire suite of offices, root around,
Speaker 4: and after some back and forth, one of the members
Speaker 4: of the Dose team calls Elon himself, and Elon gets
Speaker 4: on the phone with the security office of USAID and says, look,
Speaker 4: if you don't let us in, I'm going to call
Speaker 4: the Marshall Service. Which is kind of an extraordinary circumstance,
Speaker 4: kind of an unheard of conversation between these two sides.
Speaker 3: They get in.
Speaker 4: It's our understanding that they do in fact go through offices.
Speaker 4: They're looking, in fact in desk drawers, and ultimately they
Speaker 4: want to get into a security office, a secure facility
Speaker 4: that you need a certain security clearance to get into.
Speaker 4: Security says, no way, you can't do it. One of
Speaker 4: our piece of our reporting suggests that they actually tried
Speaker 4: to open a locked door to this secure facility. There's
Speaker 4: a big blowout, the security officials are put on leave.
Speaker 4: It's unclear at this point where than in fact they
Speaker 4: did get into this office and what they were seeking.
Speaker 2: Okay, so I want to get more into this confrontation
Speaker 2: over the weekend before we do that, Ted, There's been
Speaker 2: a lot happening with DOGE in Washington. We've seen Musk
Speaker 2: sort of go after a handful of targets, the Office
Speaker 2: of Personnel Management, which is like HR for the government
Speaker 2: General Services Administration, which controls I think the buildings the
Speaker 2: Treasury Department's payment system. We talked about that on the
Speaker 2: Emergency podcast over the weekend. Can you just sort of
Speaker 2: put this latest thing into context for us, sure?
Speaker 1: I mean what Anthesy is describing as an especially dramatic
Speaker 1: and colorful version of what has happened at a bunch
Speaker 1: of these other offices you just mentioned, where these landing
Speaker 1: teams of DOGE employees are just showing up and requesting
Speaker 1: access to the basic plumbing systems of the federal government,
Speaker 1: how money moves around, how people get hired, the information
Speaker 1: that is stored about every program and every person who
Speaker 1: works in the federal government. So it really is exactly
Speaker 1: what the executve orders that created this non agency agency promised,
Speaker 1: which is that they've they've given him the keys to
Speaker 1: all the systems, or they're trying to at any rate.
Speaker 1: In some cases, obviously they're having to try to take
Speaker 1: them because they lack the legal authority. But it does
Speaker 1: seem like this is this attempt to kind of get
Speaker 1: over top of the whole machine and figure out how
Speaker 1: it works.
Speaker 3: And Dana, is you on doing anything else of the moment?
Speaker 2: Is he basically just is this like a doze like
Speaker 2: one hundred percent full time right now.
Speaker 5: He did take an hour out of his busy schedule
Speaker 5: last week to like be on Tesla's earning call, but
Speaker 5: he is hunkered down in Washington, d C. His plane
Speaker 5: has been at Dulles for two weeks. And Anthony, what
Speaker 5: kind of really struck me about your story over the
Speaker 5: weekend is kind of the gleeful abandon with which Musk
Speaker 5: and the Doze crew, where kids as some as some
Speaker 5: have called them, are going about this. I listened to
Speaker 5: Elon Musk do his X spaces on Sunday night, and
Speaker 5: he was like very euphoric about about what they had done.
Speaker 6: To be clear, shutting down which we're in the past
Speaker 6: is doing shutting down USAID. The reason for that, as
Speaker 6: opposed to simply, you know, trying to do some minor
Speaker 6: house cleaning, is is that as we dug into USAID,
Speaker 6: it became apparent that what we have here is not
Speaker 6: an apple with a worm in it, but we have
Speaker 6: actually just a bowl of worms.
Speaker 2: He also said, we spent the weekend feeding USAID into
Speaker 2: a wood chipper. Could have gone to some great parties,
Speaker 2: did that instead?
Speaker 5: Yeah, Anthony, I think this is a really important point.
Speaker 5: Like Musk is not a nine to five person. He
Speaker 5: operates a lot on the weekends and a lot late
Speaker 5: at night, and the fact that this kind of confrontation
Speaker 5: happened on a Saturday is just super striking to me.
Speaker 5: I think that's by design. And could you just talk
Speaker 5: a little bit more about like who the doged landing
Speaker 5: team at USA I did is? I mean you and
Speaker 5: Jason and your story actually had like the names of
Speaker 5: these people and many of them are like twenty five
Speaker 5: and under, recent college graduates, young engineers who have worked
Speaker 5: for Elon's other companies. Can you give us a little
Speaker 5: bit more census to who exactly they are. Do they
Speaker 5: have security clearances? Are they special government employees?
Speaker 3: They are all great questions, we think.
Speaker 4: So far, they've been assigned to other government offices, the
Speaker 4: Office of Personnel Management, the GSA, the Small Businesses Administration.
Speaker 4: I believe one of them has been and they all
Speaker 4: seem to have, like I said earlier, an ideological bent
Speaker 4: as far as we can tell. For instance, there's a
Speaker 4: fellow called Gavin Kleeber. He's a twenty something who has
Speaker 4: a blog, and on his blog he expounds on these
Speaker 4: kind of conspiracies about how the CIA was responsible for
Speaker 4: everything that happened to Congressman Matt Getz. There's another individual
Speaker 4: on that that sort of beachhead team that was at usaid.
Speaker 4: This is a person who is a teeal fellow. Right,
Speaker 4: So we're seeing people who come from that sort of strainingly.
Speaker 2: Online right wing conspiratorial ecosystem.
Speaker 3: Right, your words are perfect, right.
Speaker 4: These are the people who sort of believe in that mission,
Speaker 4: whatever you think of it, and they've been hired and
Speaker 4: tasked with many of the similar things. I mean, there's
Speaker 4: a brilliant story in the New York Times about how
Speaker 4: this mirrors what happened at X right that they go
Speaker 4: in and wipe out half the staff and figure it
Speaker 4: out later. And folks at USAID are saying to us, like,
Speaker 4: you can't break malaria coverage, like it's irresponsible to stop
Speaker 4: some of the funding of these measures, and they've to
Speaker 4: use his words, put it in a wood chipper.
Speaker 5: It also really mirrors what happened at TESLA, right, So
Speaker 5: like last spring, Elon Musk fired nearly twenty percent of
Speaker 5: the staff at Tesla and people literally like were going
Speaker 5: to work in the morning and they only knew that
Speaker 5: they had been dismissed because their badges no longer worked
Speaker 5: and they were immediately cut off from all systems. That's
Speaker 5: what's happening at USAID right. Like people that are like
Speaker 5: in missions around the world are like all of a
Speaker 5: sudden like told like that they're fired, but they can't
Speaker 5: even access any kind of system to like get reimbursed
Speaker 5: for they're plane ticket home or like to close out
Speaker 5: what they'd been working on with their partners. I mean,
Speaker 5: people are really like around the globe or left hanging.
Speaker 1: There's medicine on the loading dock in some cases, like
Speaker 1: there's just we've just walked away from real obligations that
Speaker 1: affect real lives.
Speaker 2: TED build on that a little bit, because I don't
Speaker 2: think we've totally established what said stake here, Like, first
Speaker 2: of all, I don't think it's clear that Elon Musk
Speaker 2: has in fact destroyed like he I'm not sure that
Speaker 2: you know, sorry to use the metaphor, but put it
Speaker 2: in the wood chipper. And also like if he were
Speaker 2: to destroy USID, like, what does this organization actually do well?
Speaker 1: I mean, to your first point, there are a lot
Speaker 1: of people who point out he legally lacks the authority
Speaker 1: to destroy USAID was created by a statute. It was,
Speaker 1: you know, a law made this thing. He can't undo
Speaker 1: it by waiving a magic wand at it. The question
Speaker 1: is whether anyone in Washington who opposes this is going
Speaker 1: to stand up to it or going to find a
Speaker 1: way that's effective. And we don't really know the answer
Speaker 1: to that. USADA is broad, and it's like a lot
Speaker 1: of federal agencies where it's it's they all have something
Speaker 1: that we've talked about this before. It's easy to pull
Speaker 1: out and make fun of. You know, there's always some
Speaker 1: budget line for research that sounds stupid if you want
Speaker 1: to make it look like they're just out there wasting money.
Speaker 1: But it's also it's an agency directing soft power by
Speaker 1: funding humanitarian efforts around the world. It's intended from its
Speaker 1: outset to project American benevolence and force in opposition to
Speaker 1: other superpowers, namely Russia and China. So, yeah, that's the
Speaker 1: thing that they have just switched off with no warning.
Speaker 1: It does sound like it's very analogous to what you're
Speaker 1: describing Dana Tesla and what happened at X, but you know,
Speaker 1: it's a little bit different when we're talking about baby formula.
Speaker 2: Yeah, this has come up in a few stories and
Speaker 2: Anthony and maybe it's you've even come across it.
Speaker 3: I'm curious.
Speaker 2: But like the idea that they're using quote unquote AI,
Speaker 2: these these dose kids are using AI to essentially figure
Speaker 2: out what's cut And I feel like, to Ted's point,
Speaker 2: like a lot of these things you do a search
Speaker 2: for them and it sounds pretty bad or it sounds like, oh,
Speaker 2: this is some frivolous thing. But a lot of what
Speaker 2: USAID does is sort of project American influence in the world,
Speaker 2: Like this is this is like a big part of
Speaker 2: our like Foreign Policy and.
Speaker 4: Foreign Policy Magazine once describe usa AIDA's work as trying
Speaker 4: to do good things in bad places. And it's everything
Speaker 4: from again, like HIV treatment in Sub Saharan Africa, it's
Speaker 4: rebuilding Ukraine. They've got there' spent loads of money there,
Speaker 4: appropriate loads of money there. And I think to its critics,
Speaker 4: like their USAID is seen as sort of a front
Speaker 4: for the CIA. I mean, there's not real evidence to support,
Speaker 4: at least in recent years anyway, but you can see
Speaker 4: why it might be a target of folks like Elon
Speaker 4: Musk or Donald Trumptil who have an ideological bent against
Speaker 4: expound our power. And also, like Trump, ran on an
Speaker 4: America first platform, and their argument is going to be
Speaker 4: I think that these programs still serve Americans first. Right,
Speaker 4: No one on this call is going to be the
Speaker 4: beneficiary of a USAID program. But I think you could
Speaker 4: make an argument that like solving famine and poverty in
Speaker 4: developing countries does keep the United States safe. I mean,
Speaker 4: that's like what JFK started this whole thing about, right.
Speaker 4: JFK in nineteen sixty one, to combat some Soviet Union
Speaker 4: essentially said that American security American national security is best
Speaker 4: served by stability across the world. So he starts a
Speaker 4: program that will reduce famine, war, and poverty across the
Speaker 4: world in the hopes that it will keep us safe
Speaker 4: here at home. And I think that's what soft power
Speaker 4: looks like.
Speaker 2: So we've seen a couple of congress people, Senator Roger
Speaker 2: rit Wicker of Mississippi kind of pushback gently. He said
Speaker 2: he'd seen usaid kind of to your point, Anthony as
Speaker 2: quote our way of combating the Belton Road initiative, that's
Speaker 2: like the Chinese equivalent of soft power. We've also seen
Speaker 2: Democrats push back, probably even more strongly. Let's play a
Speaker 2: clip from Senator Bryan Shatz.
Speaker 7: You cannot wave away an agency that you don't like
Speaker 7: or that you disagree with by executive order or by
Speaker 7: literally storming into the building and taking over the servers.
Speaker 2: Yeah, that's kind of where the Democrats are, Dana, do
Speaker 2: we have a sense of where President Trump is here?
Speaker 2: I mean this has been kind of a running theme,
Speaker 2: like how like plugged in, is President Trump here? How
Speaker 2: was he like, Yeah, Elon, go go destroy usaid, go
Speaker 2: put in the woodshipper, or did Elon kind of do
Speaker 2: this on his own.
Speaker 5: I think that Elon did it with Trump's blessing. I
Speaker 5: think that there was a comment from Trump at one
Speaker 5: of the briefings that Elon can't do everything that he wants,
Speaker 5: but he checks in and like this was okay. Marco
Speaker 5: Rubio yesterday said that now parts of USAID are going
Speaker 5: to be sort of absorbed into the State Department. So
Speaker 5: this is not Elon going rogue. Elon Musks thinks that
Speaker 5: he has a mandate to do this, and until the
Speaker 5: Trump administration stops him, he is not going to stop.
Speaker 5: I think what has surprised people is like the speed
Speaker 5: with which he is doing it. It's almost like watching
Speaker 5: like a foreign nation get sacked, where like they take
Speaker 5: like city over city over city, and they're going agency
Speaker 5: by agency by agency. And I think that they've had
Speaker 5: this plan in the works for months. And I'm also
Speaker 5: super interested in how Doge is working with either in
Speaker 5: tandem or in parallel with the folks at omb and
Speaker 5: Ross Voyd and Project twenty twenty five, Like these are
Speaker 5: very similar objectives.
Speaker 3: Yeah.
Speaker 2: Absolutely, And I think we're gonna we're gonna have to
Speaker 2: talk about Russ Vaught at some point on this podcast.
Speaker 2: I wanted to play one more clip from that very
Speaker 2: surreal Twitter spaces. You know, first of all, the who
Speaker 2: is out at Dose just like showed up as a
Speaker 2: co host, which was sort of weird and amusing, and
Speaker 2: there was this like slightly awkward vibe I thought between
Speaker 2: the two men. And then there was also this moment
Speaker 2: where Musk actually spoke to his kind of relationship with
Speaker 2: President Trump. Let's just listen to that real quick.
Speaker 6: And this could be done without the full support of
Speaker 6: the President and with regard to the USA, I do stuff.
Speaker 3: I went went over with him, you know, in.
Speaker 6: Detail, and he agreed with the that we should we
Speaker 6: should shut it down. I mean, that's want to be clear,
Speaker 6: that's and I actually checked with him a few times.
Speaker 3: Are you sure, like yes, so we're shutting it down?
Speaker 2: Ted, Did you take that as Musk having Trump's full
Speaker 2: and complete endorsement or whatever? Like there was something a
Speaker 2: little bit like like protest too much to me about
Speaker 2: Like I asked him once and he said yes. Then
Speaker 2: I asked him again and he said, like it just
Speaker 2: I don't know, there was something about that. And I
Speaker 2: also just sort of wondering, you know, we're seeing Congress
Speaker 2: people senators and House members make statements, do you sense
Speaker 2: any kind of political blowback or even the beginnings of
Speaker 2: political blowback, either from Republicans or Democrats.
Speaker 1: I don't know how much Musk was sensing blowback in
Speaker 1: that moment when he said that, it's certainly I hear
Speaker 1: it the same way that if the blowback is coming,
Speaker 1: he's reminding everybody that the leader of their group, of
Speaker 1: their movement approves of what he's doing, or at least
Speaker 1: has given him the whip hand. But there is blowback coming.
Speaker 1: Like Bill Cassidy is a center from Louisiana, he's also
Speaker 1: a doctor, and I think it was earlier today, if
Speaker 1: not yesterday, he was criticizing the fact that this is
Speaker 1: shut down PEPFAR, which is probably the most successful public
Speaker 1: health initiative certainly of the last half century, which is
Speaker 1: also a Republican program. It's a Bush program. People are
Speaker 1: starting to grapple with the consequences, and it's not just
Speaker 1: Democrats complaining. I think Musk probably is aware that he's
Speaker 1: going to have to sort of defend some of this
Speaker 1: stuff if he wants it to stick. I would just
Speaker 1: point out, though I think you used the word glee earlier.
Speaker 1: There is like on the subject of russ Vote, like
Speaker 1: in the way that the DOGE people are talking to
Speaker 1: the civil servants who are going after the weird shot
Speaker 1: at all of them in the offer of the retirement package,
Speaker 1: where they said, we'd like to move you from low
Speaker 1: productivity public sector work into the private sector. Like this
Speaker 1: disdain for anyone who works for the government is a
Speaker 1: connective tissue to the rest of MAGA. That's the way
Speaker 1: russ Vote has spoken about wanting every civil servant to
Speaker 1: feel like a villain and to not want to go
Speaker 1: to work in the morning. And there is this shared
Speaker 1: antipathy for the government worker has a type, and I
Speaker 1: think that that is the way at least right now
Speaker 1: where they're working in harmony.
Speaker 2: Yeah, Anthony, I was curious if that came up in
Speaker 2: your reporting, just the extent to which part of the
Speaker 2: goal here seems to be the performance as much as
Speaker 2: it is the actual like actually cutting these programs, but
Speaker 2: to make civil servants feel bad or something like that.
Speaker 4: No, not as much as not explicitly. The thing that
Speaker 4: did come up is a real lack of transparency. It's
Speaker 4: very difficult for us to understand who in fact works
Speaker 4: for doughe like, what are they do? Like, how are
Speaker 4: they communicating with one another? Like my colleague, you guys
Speaker 4: probably know Chas Leopold is the most aggressive user of
Speaker 4: the Freedom of Information Act. And I am sure we
Speaker 4: will be litigating some of these issues, but I am
Speaker 4: struck by the lack of complete transparency. I mean, it's
Speaker 4: happening on a social media platform that the great world's
Speaker 4: richest man owns, Like he's setting and explaining public policy
Speaker 4: on an all on a business that he owns. That
Speaker 4: does not strike me as being businesses as usual.
Speaker 2: Yeah, to the point about lack of transparency, We've seen
Speaker 2: reports saying that these doge kids are will.
Speaker 3: Like refusing to give their last name.
Speaker 2: So like many of the people at these agencies don't
Speaker 2: even know who they're dealing with. And just to be clear, like,
Speaker 2: legally Elon cannot shut down usaid ted you kind of
Speaker 2: you said it, but I just want to establish that, right.
Speaker 1: Yeah, that's certainly the argument you hear from every Democrat
Speaker 1: in Congress I've heard talk about this to say, Look,
Speaker 1: he's got an executive order saying that he can recommend
Speaker 1: changes to the government, but that doesn't mean that he
Speaker 1: can go in and remove something that is in the
Speaker 1: Statutes of the United States that was created by law.
Speaker 1: But that's going to be something where I think every
Speaker 1: indication is they're going to dare the other side to
Speaker 1: fight them and to take it to court.
Speaker 2: And anthony this kind of these tactics, this kind of playbook.
Speaker 2: Do we have any sense of whether it has been
Speaker 2: replicated at any other federal agencies or whether we expect
Speaker 2: to see the same kind of approach anywhere else within
Speaker 2: the government.
Speaker 3: Yeah, I think so.
Speaker 4: We don't know yet where they've gone, but we do
Speaker 4: know we understand that one of the main DOGE kids,
Speaker 4: for lack of a better word, is a guy called
Speaker 4: Gavin Kleeger, and his name has not been copied on
Speaker 4: a number of other emails to other agencies. So the
Speaker 4: thought is from people who work at these agencies, if
Speaker 4: we're not now we're next right, that they are priming
Speaker 4: the pump, so to speak, to come knock on our
Speaker 4: door in the future. So it doesn't seem to end
Speaker 4: with USAID or GSA or oh PM. It looks like
Speaker 4: this is going to be a step by step process.
Speaker 2: As you guys are saying, they're going to be more
Speaker 2: of these standoffs.
Speaker 3: We're going to be following it. Anthony, hope to.
Speaker 2: Have you back to talk about as you as you
Speaker 2: and your colleagues follow these stories.
Speaker 3: Thanks again for being with us, Thanks for having me.
Speaker 2: All right, let's talk about the impact that these very
Speaker 2: well publicized antics and potentially consequential handtics are having on
Speaker 2: Musk's businesses.
Speaker 3: You know, we have talked over and.
Speaker 2: Over again on this podcast, Dana will know ted you
Speaker 2: may have even picked up a hint of it because
Speaker 2: it comes up so often about the prospect that Musk's
Speaker 2: politicking will somehow hurt Tesla. David Popadopolis is like obsessed
Speaker 2: with this question. He's always trying to force Dana to
Speaker 2: admit that that maybe there's an impact.
Speaker 3: And Dan, I think we've got it now, right.
Speaker 2: Tesla's sales declined in California pretty significantly, the Model three,
Speaker 2: especially down by like a third. Are we ready to
Speaker 2: start saying, hey, like Tesla's sales may be suffering because
Speaker 2: of Elon Musk's politics.
Speaker 5: Yes, I would just caution that Tesla gets like like
Speaker 5: forty percent of Tesla's sales are in China, and it
Speaker 5: is a global auto market, and for every person that says,
Speaker 5: I hate Elon Musket as politics. I'm never going to
Speaker 5: buy a Tesla, Like people don't buy cars in the
Speaker 5: same way that they buy like bud Light or shop
Speaker 5: Target versus Costco. But yes, you are seeing people trade
Speaker 5: in their Tesla's four rivians. You saw sales dip in
Speaker 5: the in particularly in California, which is like the most
Speaker 5: mature ev market in the country. You're seeing people's spray
Speaker 5: paint stuff on the side of cyber trucks and vandalized stores,
Speaker 5: and like you are seeing those sort of goofy bumper stickers.
Speaker 5: I bought my Tesla before Elon went crazy, Like more
Speaker 5: are more common now.
Speaker 2: The cyber truck in particular is almost like a rolling
Speaker 2: bodiment of the dynamic that we discussed earlier. Right, it's
Speaker 2: like two big, it's sort of like bullying the road.
Speaker 2: Like it almost feels like that car in particular sort
Speaker 2: of increasing this sense of Elon as a political figure
Speaker 2: in a way that if they had, you know, had
Speaker 2: a nice much smaller car, like a little smart car
Speaker 2: type thing, maybe maybe it would it would counter it.
Speaker 1: I think the cyber truck is the magahead of the
Speaker 1: musk movement. It's a provocation, like you are asking for
Speaker 1: the eyeball to even drive it down the street.
Speaker 3: Yeah. Absolutely.
Speaker 2: And also what's crazy about these sales numbers in the
Speaker 2: US anyway, is that they Tesla had a new model,
Speaker 2: essentially like a cyber truck is relatively new, and so
Speaker 2: so the fact that the sales are falling despite the
Speaker 2: cyber truck, or maybe because of it, seems doubly concerning
Speaker 2: ted Let's let's let's stay with you and and move
Speaker 2: on to tariffs, because we've seen this kind of Trump
Speaker 2: sort of threatened tariffs against Canada Mexico and then quickly
Speaker 2: reverse course. We have the prospect of tariffs on China.
Speaker 2: And you wrote a story for Bloomberg over the EV
Speaker 2: graphite and the prospect of much much greater tariffs on graphite,
Speaker 2: which is necessary, I believe to make batteries. Where does
Speaker 2: that stand and how big a deal is it for Tesla.
Speaker 1: It's a potentially big guilt for all the EV makers,
Speaker 1: especially Tesla, as well as just the battery companies too.
Speaker 1: This is an interesting example that we chose partly because
Speaker 1: it starts in the first Trump term, when Trump imposed
Speaker 1: duties on imports from China. One of the things that
Speaker 1: got hit in that first wave was graphite, which is
Speaker 1: needed in huge quantities and a great purity to make battery.
Speaker 1: Sells the anode of a battery, so a ton of
Speaker 1: it gets imported, including by Tesla, also by Panasonic and
Speaker 1: other battery makers. They were hit with this duty the
Speaker 1: first time around when Trump imposed tariffs on China. They
Speaker 1: successfully Tesla succesfully lobbied for an exclusion. In other words,
Speaker 1: they got to not pay the tariff, which was raising
Speaker 1: their input costs for this this material that they desperately needed.
Speaker 1: Under the Biden administration, where Biden kept some of those
Speaker 1: tariffs in place, you could petition to have your exclusion
Speaker 1: continued and renewed, and they lost theirs. They failed to
Speaker 1: get the renewal, so now they're paying a twenty five
Speaker 1: percent duty on the graphight that they import. The issue here, though,
Speaker 1: is the domestic graphight producers in the United States are
Speaker 1: seeking a much much larger tariff on that material coming in.
Speaker 1: They say there's no chance that a big industry that
Speaker 1: we will really need for EVS but also for the
Speaker 1: energy transition, because you'll need a lot of energy storage
Speaker 1: systems will never be able to produce that raw material
Speaker 1: if China is flooding the market with super low cost,
Speaker 1: improperly low cost graphite, So they're asking for more than
Speaker 1: nine hundred percent tariffs on graphite imports, and Tesla is
Speaker 1: lobbying against that, which we just found. It's pretty interesting, right,
Speaker 1: this is Donald Trump's favorite rich guy and Donald Trump's
Speaker 1: almost only economic theory, which is just imposing tariffs on
Speaker 1: everybody else and then you'll get a revival of American manufacturing.
Speaker 1: And the two are directly at loggerheads.
Speaker 2: Tesla is in certain ways almost like a Chinese car company,
Speaker 2: or it's like an American company and a Chinese car
Speaker 2: company married together or something. And as Ted is kind
Speaker 2: of hinting at, you know, it's not just the tariffs
Speaker 2: are a big issue for Trump, but China is a
Speaker 2: big issue. I mean where do you have any sense
Speaker 2: of like where and how Tesla could be hurt by
Speaker 2: Trump's approach to China, whether he's he takes a harder
Speaker 2: line than Biden or maybe a sort of lighter touch.
Speaker 5: Well, Tesla is in better shape that other car companies
Speaker 5: in terms of tariffs, just because they most of you know,
Speaker 5: the cars that they sell in the United States, they
Speaker 5: make in the United States, and they have a very
Speaker 5: high percentage of American content. They are not making cars
Speaker 5: in Mexico. They're not importing a lot from Canada. Like,
Speaker 5: they have a very domestic supply chain, which is why
Speaker 5: they benefit so much.
Speaker 3: They make all their parts or most of them.
Speaker 5: Yeah, and it's why they actually benefit quite so much
Speaker 5: from Biden's inflation Production Act is because they have so
Speaker 5: much domestic content and domestic manufacturing. But with China, like
Speaker 5: the plant in Shanghai exports those vehicles to Europe and
Speaker 5: to Canada and is the most productive factory that they
Speaker 5: have on the globe. And so as the trade war
Speaker 5: evolves and like other nations get involved, like if Europe
Speaker 5: gets dragged in, you could just see it having like
Speaker 5: longer repercussions. But I think that like Musk is kind
Speaker 5: of okay with tariffs because it hurts his competitors more
Speaker 5: than it hurts him. I don't think Elon really cares though.
Speaker 2: I do think though, that Musk cares about his companies,
Speaker 2: and I think that as much as he's political, and
Speaker 2: I will point out like he's had some real wins,
Speaker 2: wins for his companies. So the new head of NASA
Speaker 2: is a big fan at Elon Musk. The guy who's
Speaker 2: gonna run the Air Force is a guy that Musk wanted,
Speaker 2: and like these these are potential buyers of SpaceX's services.
Speaker 2: I mean ted to me like one of the ways
Speaker 2: that we're going to evaluate Elon's sort of performance in government,
Speaker 2: there will be the doge metrics how much money did
Speaker 2: he does he say cut? And then also like how
Speaker 2: does it help his companies? I mean, where do you
Speaker 2: think he stands right now? Like in terms of if
Speaker 2: you were just looking this as a transactional thing, like
Speaker 2: what is he getting for all of this?
Speaker 3: Do you think he's gotten anything? A lot, a little.
Speaker 1: I would answer that question by pointing you to the
Speaker 1: story that our Collie Kelsey Griffiths reported last night, which
Speaker 1: is that the Trump folks are bringing in a critic
Speaker 1: of the Biden era broadband rollout, which has been delayed
Speaker 1: and subject of controversy. That's a forty two billion dollars
Speaker 1: pot of money that was not designed to just go
Speaker 1: to starlink and they're not going to give it all
Speaker 1: the month, but they're bringing in someone who didn't like
Speaker 1: the program that he didn't like, who will presumably approach
Speaker 1: it in a different fashion and will give him a
Speaker 1: better opportunit getting some of that federal money. So I
Speaker 1: think that that's the approach that we should expect him
Speaker 1: to continue, taking a Dana, your point is well taken
Speaker 1: that he's willing to have there be short term chaos
Speaker 1: and pain and to do things that are not immediately
Speaker 1: to his you know, you know, benefit on day two.
Speaker 1: But I also do think that there's this sense that,
Speaker 1: as you said, that there will be more contracts.
Speaker 5: Elon gets the trough no matter what Biden is president,
Speaker 5: Like this fire hose of money in the form of
Speaker 5: the Inflation Reduction Act is like aimed squarely at Tesla.
Speaker 5: Trump gets elected, like now we're going to see maybe
Speaker 5: more contracts for Starlink. Like no matter who's in power,
Speaker 5: Elon wins. And it's because, frankly, his companies are the best,
Speaker 5: Like SpaceX is the low cost provider that has conquered
Speaker 5: the launch market, Tesla is the most profitable ev maker
Speaker 5: in the United States, and and Elon has you know,
Speaker 5: he's played both sides like throughout his career very adroitly.
Speaker 2: I just want to end with sort of asking guys
Speaker 2: to look ahead a little bit and sort of say,
Speaker 2: what do each of you think we're going to be
Speaker 2: talking about on the subject of Elon Musk and the
Speaker 2: government next week? Which agency I guess is the next
Speaker 2: target ted I'll start with you.
Speaker 1: Oh, I have to pick an agency. I'm not going
Speaker 1: to pick an agency. I will just say that these
Speaker 1: guys are dedicated to doing what they're doing to the government.
Speaker 1: They also seem a little bit new at it in
Speaker 1: the way they talk about must keep saying we'll just
Speaker 1: get rid of rules and add back one if we
Speaker 1: decide we needed it suggests a total unfamiliarity with the
Speaker 1: process that they're disrupting. And one aspect of that will
Speaker 1: be they're going to gore an ox that they're not
Speaker 1: expecting will be as big of a problem as it is.
Speaker 1: And you're seeing that even among conservative Republican senators talking
Speaker 1: about foreign aid, which they usually have no problem just
Speaker 1: talking about how foreign eight is all the waste, But
Speaker 1: even there you're starting to hear those rumblings of blowback.
Speaker 1: And if continues with this approach, agency by agency across
Speaker 1: the government, you start to hit things that people actually
Speaker 1: do care about and that people who in the abstract
Speaker 1: are for tearing it all down don't actually like when
Speaker 1: you do it. So I think that that will be
Speaker 1: the question is where does he cross that line with
Speaker 1: which part of the Republican majority and what happens then.
Speaker 5: So there are like four hundred government agencies and including
Speaker 5: some small ones that nobody has ever heard about. But
Speaker 5: I personally am going to keep my eye on the
Speaker 5: Department of Education because, as we've reported, like Musk has
Speaker 5: a huge interest in education himself. He has a foundation
Speaker 5: that's very dedicated to education. He has started a preschool
Speaker 5: in Texas. A lot of this is ideological around wokeism,
Speaker 5: and you know, we don't have a confirmed head of
Speaker 5: the Department of d yet, but I just sort of
Speaker 5: worry and predict that, like you will see Doge at
Speaker 5: the Department of Bed relatively soon.
Speaker 2: Yeah, And to Ted's point, I mean that is going
Speaker 2: to be.
Speaker 3: A massive vector for blowback.
Speaker 2: People get mad when their public schools start to get defunded,
Speaker 2: and depending on how subtle this is, there could be
Speaker 2: real consequences. Let's end there. Ted, Dana, thanks for being here.
Speaker 2: Really appreciate it.
Speaker 3: Thank you, Thank you.
Speaker 2: This episode was produced by Stacy Wong. Anna Masarakis is
Speaker 2: our editor, and Rahan Harmanci our senior editor. Blake Maple's
Speaker 2: handles engineering and Dave Purcell fact checks. Our supervising producer
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Speaker 3: And Brad Stone. I'm Max Chafkin.
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