March 11, 2025 • 34 mins
He may be the world’s richest person and a personal pal of Donald Trump, but even Elon Musk can have a bad week. Not only has Tesla stock continued to crater as consumers worldwide turn their back on the South Africa-born multibillionaire (some violently) but his right-wing social network X was hit by sporadic outages he blamed on hackers. Even one of his SpaceX rockets blew up, raining debris down on the Earth and endangering passenger airliners.
A big part of Musk’s waning popularity is of course tied to his starring role in gutting the US government on behalf of Trump—and even there he’s not as loved as he once was. On this episode to discuss all of this are Bloomberg Businessweek senior writer Max Chafkin and Elon Musk reporter Dana Hull. Later, Bloomberg stocks reporter Esha Day talks about how the markets have been treating Musk of late.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:07):
Let me tell you we have a new star.
Speaker 3 (00:10):
A star is born Elon mars Juson Kennemy.
Speaker 4 (00:14):
He is the Thomas Edison plus plus plus of our age.
Speaker 1 (00:18):
Probably his whole life is from a position of insecurity.
I feel for the guy.
Speaker 5 (00:22):
I would say ninety eight percent really appreciate what he does.
But those two percent that are nasty, they are I'll
pay in four fos.
Speaker 1 (00:30):
We were meant for great things in the United States
of America, and Elon reminds us of that we don't
have a fourth branch of governments called Elon Musk. Welcome
to elan Ing, Bloomberg's weekly podcast about Elon Musk. It's Tuesday,
(00:51):
March eleventh. I'm your host, David Popadopolis. So this is
what a bad week looks like. I mean a very
very bad week for Elon. Not only has Tesla stock
continued a crater it dropped fifteen percent on Monday alone,
but he seems to be losing on all fronts right now.
(01:11):
X was hit by sporadic outages Monday that Elon blamed
on hackers. A SpaceX rocket blow up, rain debris and
grounded flights at airports in Florida. Doge is running into
more and more roadblocks from both the courts and from
within the Trump administration itself. Mosk, through it all, is
putting on a brave face, setting his sights on bigger
(01:31):
and boulder things for Doge to cut from the budget.
But has he backed himself into a corner. Here to
discuss all this, we have our trusty muscologists, Max Chaffkin
and Dana Hall. Hello to you both, Hey, David, Dana,
how are you good?
Speaker 4 (01:46):
Good? Good to be here?
Speaker 1 (01:47):
Okay? And then later on in the episode, Bloomberg Stocks
reporter Esha Day will join us to talk all about
Tesla's free fall. Okay, Dana, So let's start by going
a little bit to the tail end of last week
for those who may have missed it. There was a
cabinet meeting in Washington that Musk attended and it got
(02:09):
a little sporty. Tell us what happened.
Speaker 4 (02:11):
Yeah, So what was interesting is that this cabinet meeting
was not on the president's daily schedule. But Sean Duffy,
the Transportation Secretary, posted on x that he was like
headed into a cabinet meeting, And so we were like, wait, what,
there's a cabinet meeting, And then The New York Times
reported that the things got pretty spicy. Apparently there was
like a testy exchange between Musk and Marco Ribio about
(02:35):
cuts at the Department of State, and then you know,
Musk was basically saying that these guys weren't cutting fast
enough or deep enough, and then there was sort of
pushback from the cabinets. Duffy was saying, you know, you
want me to fire all these air traffic controllers and
I've got planes falling out of the sky. And The
New York Times reported that that Trump was kind of
like watching these exchanges, ping pong back and forth, like
(02:56):
almost like he was watching a tennis match, and then
the kind of upshe is that Trump then basically said
that Doge is like an advisor, but that the deep
cuts are, you know, in the province of the Cabinet secretary.
Speaker 3 (03:09):
So there's like a.
Speaker 4 (03:09):
Little bit of a power struggle going on.
Speaker 3 (03:11):
You know.
Speaker 4 (03:11):
Obviously I wasn't at the meeting, would love a readout
if you were, but it's just like the sort of
the first sign that there is tension between Musk and
the Cabinet secretaries about how these agencies are basically being
overtaken by Doge.
Speaker 3 (03:24):
Yeah, and just add one think, Trump after this meeting
did a truth which is, you know, the truth social
version of a tweet Nique a Nicks. And he essentially said,
we're not going to use a hatchet. We're going to
use a scalpel, which feels like a implicit rebuke or
correction or something to Elon Musk. Of course, in the
(03:45):
next paragraph he talked all about how great a job
Elon Musk is doing, and Musk when he posted this,
he only posted a portion of the truth. He posted
the second paragraph, not the one about the scalpel.
Speaker 4 (03:58):
It's fascinating that we've gone from Musk wielding a chainsaw
at SAPAC to Trump saying we're not going to use
a hatchet, We're going to use a scalpel. So like
what's next, like tweezers, like we're going down We're going
downstream in terms of like the size and scope of
the of the implement.
Speaker 1 (04:16):
Here, clearly here max hard to interpret this any other way.
Even though the reporting from inside the room that we
saw in The Times and in other places, mostly the Times,
did make it clear that Musk certainly counterpunched and was
effective to a degree, but it's really hard to interpret
it any other way than it was a defeat and
(04:37):
a setback for his endeavor.
Speaker 3 (04:40):
I think Musk has struggled to some extent to transition
from the kind of realities of campaigning, and even in
the transition, when there weren't these Senate confirmed appointees taking
responsibility for these agencies. So like, what's changed now is
you have Marco Rubio in charge of the Department State,
(05:00):
Shawn Duffy in charge of the Department of Transportation. If
a plane crashes tomorrow, God forbid, Shaw Duffy is the
one who's gonna have to answer questions, not Elon Musk,
no matter what Elon Musk does, no matter how you know,
what his influence is. And that is creating pressure on
these cabinet appointees, which is now a counterweight to Elon Musk.
And I think so, and I think that's what we're seeing.
(05:21):
This was inevitable, this was going to happen, and here
we are it is happening because of course, none of
these Cabinet secretary, as much as they agree maybe in
principle with the idea of cutting government spending. None of
them want their departments to be cut too much, and
they're going to be concerned, especially given musks, you know,
pension for willy nilly, you know, cut now, ask questions later.
Speaker 1 (05:44):
So, Dana, it strikes me that what we're seeing a
little bit here is the classic musk of putting my
head down. I'm just efing going for it. Balls to
the wall, to hell with everyone. We're just going to
go full speed ahead and just see what that what
the hell comes out of it. All that may work
to a certain degree at Tesla, at X and at
(06:06):
other places, but right as Max is getting out here,
the political reality of trying to do that in Washington,
it's just a it's just a different dynamic.
Speaker 5 (06:15):
Yeah.
Speaker 4 (06:16):
But he's also it's also making him dig in even
more because he's saying things like, well, it's like the
ideas that the quote unquote deeed State is squealing and
like you know, all of the Democrats who are in
on this or of course they're responding, and that he's
fabricated this whole thing in his mind where you know,
the media and the NGOs and government employees and federal
(06:38):
workers and contractors and George Soros are like all in
on this, like massive grift that he alone is like
untangling for the world. But it is fundamentally like a
misunderstanding of how bureaucracy works and how you know many
of these people are lifelong civil servants.
Speaker 1 (06:56):
Yeah, so we actually have him, Dana in his own
words here he is speaking on Fox Business with Larry Kudlow.
Let's listen to that.
Speaker 5 (07:05):
You're giving up your other stuff? I mean, how are
you running your other businesses.
Speaker 2 (07:11):
With great difficulty? Yeah, I mean that.
Speaker 5 (07:15):
There's no turning back.
Speaker 2 (07:16):
You're saying, I'm just here trying to make government more efficient.
Speaker 1 (07:22):
Okay, So Max, I know I said at the top
that Musk is putting a brave face on it all.
But man, those were some deep size.
Speaker 3 (07:31):
You know, he does this and like that part.
Speaker 1 (07:33):
Do you think it's just for you think it's it's No.
Speaker 3 (07:36):
I think it's both a performance, but I think it
is also genuine, right, Like, I mean, obviously he is
struggling to run his companies and do the job that
he's doing, as his comments indicate. I do think that
there are ways in which the kind of the sort
of practical ins and outs of what he's trying to
(07:58):
do in government, and also the kind of impression, the
branding of what he's trying to do conflicts with who
he is. Like his thing in the past has been
putting himself almost deliberately into these crises and sleeping on
the floor, which you know, dramatically right. But now like suddenly,
this this performance is coming off a little bit differently,
partly because what he's doing is just like fundamentally not
(08:22):
gonna be as popular as building an awesome, super fast,
super cool electric car, you know, or whatever, and or
taking the planet in mars, like like being really good
at like cutting parts of the federal budget, even if
you're awesome at it, even if there's none of the
sort of negative press, even if you don't accidentally fire
(08:42):
you know, a bunch of nuclear engineers or air traffic controllers,
Like I still think it's just inherently not gonna be
as cool. And then when he admits like, yeah, it's tough,
Like if I'm an investor in one of these other companies,
like ooh, this is gonna give me a feeling that
is not great. It's gonna confirm some of maybe my
worst fears about what where this thing is leading where
(09:04):
Musk is at once distracted so that he's not spending
as much time with the companies as he once did obviously,
but also eroding his brand. And I'm just sort of
watching my investments lose value day by day.
Speaker 1 (09:16):
Yeah, So, Dana, those size bring me to a question
that I meant to and failed to ask last week.
So I will ask you it now. Elon Musk, knowing
what he knows now, had he known this on oh,
I don't know, say June the first of last year,
or October the first of last year, or November fifth,
(09:40):
would he say yes to doing it all over again?
Speaker 2 (09:44):
Yes?
Speaker 4 (09:44):
I mean this is why he donated to Trump's campaign
and he pitched this idea. Like Elon Musk has has
always been driven by two goals, getting to Mars and
getting rid of regulation. Those are that is what is
driving him. Maybe he didn't expected to be so bumpy.
Maybe he expected more people to like applaud his efforts
(10:05):
and not to get the kind of pushback that he's getting.
I mean, you're seeing all these protests at the Tesla showrooms.
But no, I mean I think that you know this
is like he proposed this idea that there is a
reason why he donated to the campaign.
Speaker 1 (10:18):
And but so so you don't think you don't think
he feels like in hindsight, it was just a bridge
too far.
Speaker 4 (10:24):
No, because he loves to create. This is sort of
who he is. Like, and I've been through so many
cycles of this with Elon before, and it's like every
time we get to like a new quote unquote crisis,
everyone's like, oh my god, this is it. But like
we've been through this countless times. In twenty eighteen, when
he tried to like fake the buyout of going private
and when he bought Twitter, like everyone was like, oh
(10:47):
my god, Like this is the end. He's going to
be so distracted.
Speaker 1 (10:49):
And then you're telling me, you're telling me he actually
loves this. He's this is his this is his Okay.
Speaker 4 (10:54):
Yes, he creates chaos on purpose, right, Okay, that's how
he throws That's how he.
Speaker 1 (11:00):
Okay, we need to move on from Washington and go
to x, which was down for users at different parts
of the day yesterday. Max tell us what transpired.
Speaker 3 (11:10):
You know X Twitter has long had issues with uptime.
This is a site that gets at times like huge
amounts of traffic and you know, over the years, like
has gone down numerous times. There have also been numerous
incidents like this where there's some sort of denial of
service attack or cyber attack. The site went down yesterday,
(11:31):
I should say, there were sort of intermittent outages over
a period of time across you know, a number of countries.
I was not able to use it, you know, you
know me, I'm a big X user. I was not
able to get on weeks from no weeks is I
was not able to get on for hours yesterday. So
from my own personal experience.
Speaker 1 (11:50):
Is that why you're in such a crappy mood today?
Speaker 3 (11:52):
Yeah, I didn't get my fixed. It seemed like a
particularly bad, you know, sort of crash or whatever.
Speaker 1 (12:00):
Any work of the Ukrainian he blamed.
Speaker 3 (12:02):
Yeah, well he said he didn't exactly say that. He
said there were IP addresses in Ukraine. Of course, he's
What he's trying to do is suggest that somehow Zelenski,
in addition to like not saying thank you or something,
set the hackers on Twitter. Certainly possible, although there is
a group, a hacking group that has taken responsibility. They're
(12:23):
a sort of pro Palestinian aligned hacker collective. So again,
we don't I don't think we know yet who did it,
But of course it's not good for business and it
and when you when you layer in all of the
other things that we're going to be talking about, it
doesn't necessarily communicate command or having having their stuff together.
Speaker 1 (12:46):
No, Dana. Meanwhile, a SpaceX rocket launch late last week
was quite a show, but I suppose for for the
wrong reasons.
Speaker 4 (12:56):
Yeah, I mean, it launched okay, but then it blew
apart and then debris kind of like closed air travel
in Florida for a little while. I mean, I think,
you know, in SpaceX's defense, they would argue that every
time they have a mistake, they learn from it, they
get better, they iterate, they improve on things like you
don't make advances in sciences and technology without a lot
(13:17):
of experimentation. But you know, Musk has always been someone
who is spinning a lot of plates. And as Max
and I wrote earlier this year, you know, he is
running six companies and now he's got a seventh, which
is running the government. And it's only a matter of
time before like one of those plates comes crashing down.
So how long he can keep them all spinning as
anyone's guest, but he's we've sort of been in these
(13:39):
crisis moments before.
Speaker 1 (13:40):
So Max Dana points out that SpaceX and Musk love
to learn and iterate from these blow ups, and they
kind of, to a certain extent almost even enjoy them
in the sense that they then get to autopsy the
whole thing and go on. That's fine, learning and iterating
is one thing. But raining so much to debris down
that airports are shut down for a while, Is that okay?
(14:03):
Is that normal?
Speaker 5 (14:04):
No?
Speaker 3 (14:05):
And it's not. And so obviously yes, it's true that
like they're not going to get to Mars or even
get this uh spacecraft working on one launch. By design,
these things are are not going to work out. They're
not launching any real cargo yet. For this very reason,
I believe there were some rocket was by the way,
(14:25):
this was a starship rocket. This is the This is
the spacecraft that Elon Musk sees as the Mars vehicle
for now, though SpaceX has a contract to land this
is a lunar landing craft for for the Moon mission, right,
but musks that that's the contract that they have.
Speaker 1 (14:43):
Moon is for losers.
Speaker 3 (14:45):
That's what Elon Musk says, but now, but the challenge
here is that, well, first of all, one challenge is
there are a lot of people who who don't think
the Moon is for losers, and and those people include
many of the other companies who have contracts UH to
send people and parts and so on to the Moon.
There is going to be political opposition. There already is
(15:07):
political opposition to any effort to sort of like as
Musk has sort of hinted, like, cancel the Artemist program,
which is the Moon program and replace it with a
Mars program. The other day, Trump actually brought up Mars
and said it, well, it's it's not that big a priority,
which I would say is in start contrast to how
Elon Musk s is it. These launches are have scientific
(15:30):
and engineering value, but they also are political. And we
learned that during the campaign trail when Trump over and
over and over again talked about how beautiful it was,
how amazing the arms they lived. You know, we all
heard this over and over again. Dan and I heard
it in person in Madison Square Garden. Trump loves like
cradling a baby like Trump loves to talk about it
(15:53):
because and of course he loves it because it is
like a perfect illustration of Elon Musk's competence and at
and so when we see the opposite, it doesn't convey that,
and it makes it all the harder for Elon Musk
to argue that the United States should bet on this
technology which is a new technology, which is not totally
(16:13):
figured out, which could fail. Right, Like, so, yes, the
failures are by design, but they're not good.
Speaker 1 (16:20):
As we wrap this segment here, Max, I'll just say
that Musk, like I knows that stocks go to the moon,
starships go to Mars. Come on, I don't.
Speaker 3 (16:32):
I don't totally know what that means.
Speaker 1 (16:33):
But okay, all right, okay, So we're now joined by
stocks reporter Esha Day. Hello, Esha, welcome back.
Speaker 2 (16:46):
Hello.
Speaker 1 (16:46):
So I told you to come back on when you
had something interesting to talk about, and man, do you
so the Tesla, the stock has been in free fall,
notwithstanding a little bit of a bump back up today.
Hit us to start with with some superlatives that capture
the move in recent days.
Speaker 5 (17:07):
Sure, let me absolutely spoil you here. So Tesla says
a down forty five percent last I checked for the year.
Speaker 2 (17:14):
It's really volatile today.
Speaker 5 (17:16):
But let's go with forty five percent, and then it's
down fifty three percent from the all time high that
it touched on December seventeenth. So in the process, the
stock has now lost more than eight hundred to be specific,
eight hundred and sixteen billion dollars from its market evaluation.
Speaker 1 (17:32):
So at and its peak, its market value was.
Speaker 2 (17:36):
One point five trillion.
Speaker 5 (17:37):
Yes, and currently it's worth around seven hundred billion and change.
Speaker 1 (17:42):
Yes, and I believe it is the biggest decliner in
the S and P five hundred index.
Speaker 5 (17:48):
Since that's right, yesation, right, yes, you you completely snatched
the words out of it is the worst decliner on
the SMB five hundred right now by a decent margin,
I would say.
Speaker 1 (17:59):
So, I get the sense that even the bulls out there,
the Tesla perma bulls, are starting to get to get
starting to get a bit nervous. What are you hearing?
Speaker 5 (18:09):
Yes, that's a great way to put it. The perma bulls,
some of them extremely vocal and art in Tesla fans,
I would say, who absolutely believe in this kind of
long term vision of Tesla becoming this pioneer in the
fully self driving vehicle, the robot taxi and a much
more sophisticated real life AI applications such as humanoid robot
(18:34):
and all that. Even those people, when I talk to
them for in a very long time, and I have
been covering this stock for a while now, this is
the first time that I'm hearing them being a little antsy.
Speaker 2 (18:45):
They're not sure. They're still on the sideline.
Speaker 5 (18:47):
So despite a fifty what seems like a fifty three
percent discount, So clearly these people think, and they say
this in as many words, that they think there's more
to go in this decline. And why is that? The
reason is simple, Like you know, the the boom that
we saw after the election, it was really not driven
by anything fundamental. So now that all that speculative frenzy
(19:11):
has been taken out of the stock, people are starting
to look at the fundamental. So where do fundamental stand
compared to say November.
Speaker 2 (19:18):
Of last year. They look weaker. So there's no reason terrible.
Speaker 1 (19:22):
Right, I mean, in Europe, in parts of the US,
sales are way down. The brand has been damaged with
the significant swath of consumers out there. But Dana Trump
came out last night in truth it was I believe
it was last night, and he said He's going to
go out himself and buy a Tesla to show support
(19:43):
for his man mosque. Is this is going to turn
this is going to turn the stock around?
Speaker 4 (19:48):
Well, I mean, it's it's remarkable that the President of
the United States is saying this, and his exact quote
on truth is I'm going to buy a brand new
Tesla tomorrow morning, meeting today today as we speak, as
a show, as a show of confidence and support for
Elon Musk, a truly great American. So, first of all,
I don't see how this works in practice, Like, are
(20:10):
we supposed to believe that the President is going to
like waltz into some showroom in Washington, DC and like
roll out with the cyber truck or something like. I
just don't really I scrutinize this very concept.
Speaker 1 (20:21):
I could see him rocking a cyber truck.
Speaker 4 (20:23):
But secondly, if the whole issue is brand erosion and
Tesla's longtime consumer is being very upset that Musk has
thrown in his lot with Trump, the idea that Trump
is now going to buy a Tesla is just going
to further cement Tesla as a brand into like a Magamobile,
which you know, Max and I wrote about like two
(20:44):
years ago. So I don't see how it helps Elon
at all. I just think it's not good.
Speaker 1 (20:49):
This is a key thing. And I guess my first
reaction was when Trump said he was gonna go buy one.
I was like, one, you're gonna buy one Tesla? How
about three hundred thousand, buddy? And I guess my question
for you, Max is and it gets back to something
it's been nagging for a while for me, which is,
for every five or ten or twenty buyers Musk loses
(21:13):
in Blue America, is there some offset in Red America,
some of any kind? And is Trump perhaps nudging those
red buyers to get up off the couch and go
buy Yes.
Speaker 3 (21:25):
I want to remind people. This would be Trump's second
cyber truck. He actually got one from a podcaster in
twenty twenty four. I believe we talked about this. It
was like it had like I remember stickers on it
or something. Anyway, Yeah, it was like a campaign stunt.
I don't again, I don't know if he still has it.
But it could be a second one could be a
Trump fleet. You could have Eric and On Junior both
driving cyber trucks. I suppose I do think like there
(21:49):
is a universe of of sort of hardcore Trump supporter
who has already embraced Elon Musk. We've talked about this
a lot, like it's not like there's no sort of
like maga buyer coalition, But like Danna saying, this doesn't
really help because Musk is already completely Trump coded, I.
Speaker 1 (22:08):
Guess the pushback on that would be that, yes, that
maga crowd that loves the that loves Musk or likes
must buys the stock right has been buying the stock,
and that was part of ESHA right, the big pop
we saw last year in the stock. Can you get
them through something like a truth like this to go
doing that from buying right, from buying the stock to
(22:29):
then no, no, we need you to do more, we
need you to buy the vehicle itself.
Speaker 4 (22:33):
I just think that, Listen, the economy is really uncertain
right now. People are losing their jobs, people are seeing
their retirement savings go to hell. They don't know if
they're going to have Social Security and Medicare, Like, this
is not the time when people make a big purchase
like buying a car. There is a reason why Q
one sales are going to be crappy, and it's like
(22:53):
just buying a car is a huge purchase. It's often
the largest purchase that someone makes outside of housing or
like a college education. So I just don't think you're
seeing people like rushing to the showroom to buy a vehicle.
And also, like Tesla's lineup, it's super old, Like Tesla
made a big thing of how they're now, you know,
selling the refreshed Model Why. So some people are waiting
(23:16):
for the Model Y, but there's like the new Model Why.
But there's like a ton of inventory on the Tesla
website right now. And yeah, I don't think that like Trump,
I don't think you're gonna see like a ton of
people moving to buy a car right now with so
much uncertainty in the wider economy.
Speaker 1 (23:35):
So I actually have esha a theory that came to
me the other day on the Model Why refresh. It
was an epiphany I had as I was walking down
Park Avenue and I saw a cyber truck on one
road and I saw an old Model Why in the
other and I thought, Man, the problem with this refresh
is possible buyers of the new model Why because it
(23:56):
looks distinct and unique and new and different than the
old ones. They lose plausible deniability. You cannot sit you
cannot own it and slap the bumper sticker on it
and say I bought this before I knew Elan was crazy.
It's just no. Everyone's like, oh man, that's a brand
new car. So the theory is that rather than helping
them turn sales around, it could deepen their slump. What say,
(24:20):
you hit me with it.
Speaker 2 (24:21):
It's a possibility, right, jeez, that's it.
Speaker 1 (24:24):
That's all I get.
Speaker 2 (24:25):
Here's what I'll say.
Speaker 5 (24:26):
So it definitely seems like you know, when I talk
to like bullish just tesla investors or analysts, a lot
of them will push back on this idea of the
of damage to the brand.
Speaker 1 (24:37):
But why what do they say when they push back
and they say, you're overstating it.
Speaker 5 (24:42):
King, Yes, they think it's just being overstated by the media,
it's just being hyped.
Speaker 1 (24:46):
But when they see sales down seventy percent in some places,
they think that's a blip that will go away.
Speaker 5 (24:51):
They say that it's not entirely clear what exactly is
going on. Also, Europe and like smaller Europe chemakets like
you know, let's first see what's happening in US, because
that's kind of the litmus test, right, like what's happening
in the US market, which we do not know yet.
But my point is the risk of brand damage has
to be real enough that it pushed Trump to tweet
(25:12):
last night, right, Like it's kind of an acknowledgment of
this brand damage that they clearly are seeing happening.
Speaker 3 (25:19):
Even maga people, even the tard cor Donald Trump people
do not like people who throw Nazi salutes or salutes
that look Nazi adjacent. Right, Musk's antics have seemed, I
think even fairly extreme for some conservatives, and like the
idea that there's no brand damage just seems like almost
(25:44):
disconnected from reality. I mean, like we're seeing in those
European sales numbers that Asha just mentioned, serious brand damage,
and we're seeing in the China sales numbers. We're seeing it,
in fact in some of the US sales numbers, and
even leaving that aside, like these protests in front of
Tesla dealerships are real. And it's so interesting because Musk
(26:06):
has responded to this and we should say by essentially
saying it's a it's all a big conspiracy, right, this
is like Act Blue, some Democratic activists, and.
Speaker 1 (26:15):
This is what Trump was saying lesson right, And I.
Speaker 3 (26:19):
Think this is a case where actually, like, and he's
of course blaming the media, but I think this is
really a case where the media has been behind the
ball on this, where like the media has not fully
realized and I think a lot of Wall Street has
not fully realized how significant the opinion shift is, and
how like this has become the way that people who
(26:42):
are mad at Trump expressed that anger at Trump. You
cannot there's nowhere to protest Trump right now. Like I
guess you could go to the White House or something,
but there are opportunities, you know, every day, a cyber truck,
right or whatever to express your displeasure. And like, Musk
has made this choice. You know, we talked about it
(27:04):
on this podcast, and Bears have been worried about this
for years, that he was going to polarize the brand.
And I think it would have been less of an
issue if Trump had lost the election. But Trump did
not lose the election. It also would have been less
of an issue if Musk had not taken a job
within the Trump administration, It would have been less of
an issue if he had taken a less controversial job
(27:25):
in the administration. But he has run headlong into this
controversy and the electorate is reacting as you'd expect.
Speaker 1 (27:32):
Dana, one of those bulls that Esha had mentioned earlier.
Dan Ives at Webbush called this a moment of truth
for Musk and Tesla, and in that Fox Business interview yesterday,
when asked about how he was running Tesla and his
other companies, his response was with great difficulty. Well, I
(27:52):
guess I wonder is he even running them at all?
And given what it's going through, that can't cause or
given there's a whole lot of confidence as they watch
the stock crater.
Speaker 4 (28:03):
Right and the board has been completely silent on Musk
since the election. I mean they have not put out
any kind of statement. There's no clear number two or COO.
The bench is like not deep, like who runs the
company day to day. It's like there's not like a
Gwen shot well at Tesla. So yeah, no, I think
(28:23):
it's I think it's been concerning. I'm going to be
super curious to see what the proxy says this time
around in terms of risk factor.
Speaker 1 (28:29):
Tell us more about that proxy. Remind us what exactly.
Speaker 4 (28:32):
That is, well, every year, like publicly traded companies file
proxies about it basically lists out like what shareholder resolutions
are going to be discussed at the shareholder meeting. It's
a good way to look at how many pledge shares
Elon Musk has and sometimes they lay out new risk factors.
And you know a lot of times companies like they
(28:52):
they hide stuff in the proxy. The proxy drops on
like good Friday day that the market has closed. It's
always really deep reading. I will be reading it. I'm
just sort of curious to you to see about like
Tesla's board. Remember Joe Gebbia, the Airbnb co founder who
was on Tesla's board, is also working with Doge. So
it's not just Elon who's Doge focused, it's like another
(29:12):
board member as well.
Speaker 1 (29:14):
Yeah. So Esha the Danna says she's seen this show,
this movie many times, having covered must over the years.
You've been covering Tessel for how long now?
Speaker 2 (29:25):
Since twenty sixteen, twenty sixteen.
Speaker 1 (29:27):
For a while, yeah, decade basically two decades in Tesla
right now, in dog years and doze years, forty fifty
years easy. So I guess I just wonder if you
also think, now this is just like a sell off
we've seen before, stock's going to start ripping and bounce
back soon. Or did the election and the boom and
(29:49):
initially created and now the bust did it just fundamentally
change the company and change the stock.
Speaker 2 (29:56):
That's an interesting question.
Speaker 5 (29:57):
Tesla has always been a really volatile stock. It had
always it's kind of in market parlance, it's almost always
called the og memes stock in many ways, like it
was a meme stock of cult stock even before that phenomenon.
Speaker 1 (30:11):
Really, on that point, do you hear estimates from analysts
on what percent of the valuation is just means stock
valuation which is hard to separate from the Musk phenomenon,
and then what part is just hey, valuing this business
right now and going forward. Do people have estimates?
Speaker 2 (30:31):
See, it's more of an art than science.
Speaker 5 (30:33):
Of course, when you try to understand, you know, what
part of it is the keymand risk or tied to
Musk and musks antiques and stuff like that. However, there
are estimates that there are zeros analysts on Wall Street
who kind of try to understand if not how much
is tied to musk, which is a really abstract concept,
but at least try to understand how much of the
(30:54):
valuation is really focused on the future or future growth
or future growth potential.
Speaker 2 (31:00):
So right now the stock has moved so much.
Speaker 5 (31:03):
I haven't seen any very recent numbers, but around the
time and it was like a trillion dollar valuation.
Speaker 2 (31:08):
I have seen people say.
Speaker 5 (31:09):
That anywhere between two hundred to four hundred billion dollars
was for the auto business and the auto business future
growth as well, and everything else was robotaxi and AI
and like essentially the musk dream premium as we would
call it.
Speaker 3 (31:27):
Yeah, I mean, if you look at Tesla's valuation compared
to car companies that have like that sell a similar volume,
it's like many times greater. It is like if Tesla
were just a car company, like it would be worth way,
way less. Even having fallen, you know, fifty percent over
the last couple of months, it's always been like a
(31:48):
bit of a leap of faith. And maybe I'm being
a little bit generous here to say to value Tesla's
robotaxi business or its optimist business in any way because
there is no business there. It doesn't act actually exists,
you know, Wall Street, like bid up the stock after
the election. We sort of touched on this at times,
but like there was no clear reason why. There is
(32:08):
nothing Trump can do. He cannot wave a magic wand
and give Tesla a robotex The funny.
Speaker 1 (32:14):
The funny thing is is that Esha had shared a
couple of reports this morning from Bulls and both of
them as they expressed jitters and concern, one of the
things they both drew comfort from was the Robotaxi dream
and Morgan Stanley they're waiting for the big Austin Robotaxi
unveil in the summer. Maybe team say you've lost Dan Ives.
Speaker 3 (32:36):
I mean Dan Ives is like the QAnon shaman to
like Tesla fandom, Mike, I mean he is like as
maybe I'm overstating it, but he is a megabull. Might
be if he is a mildly concerned, that is a
huge like that is like a wow.
Speaker 1 (32:53):
Well yeah, yeah, he called it right. I think that
was in top of his report this morning. This is
a moment of truth for Elon and us.
Speaker 2 (33:00):
Yeah, I mean, Max is right.
Speaker 3 (33:05):
Don't have a very colorful out, Esha day.
Speaker 1 (33:13):
Thank you for joining us, Thank you, Max, Dana.
Speaker 5 (33:16):
Glad to be here.
Speaker 2 (33:16):
Thank you.
Speaker 1 (33:24):
This episode was produced by Stacey Wong. Anna Massa Rakus
is our editor, and Rayhan Harmanci our senior editor. Blake
Maples handles engineering, and Dave Precell fact checks. Our supervising
producer is Magnus Henrickson. The theme is written and performed
by Takea Yasuzawa and Alex Sugi Eira. Brendan Francis Newnham
is our executive producer, and Sage Bauman is the head
(33:45):
of Bloomberg Podcasts. A big thanks to our supporters Joel
Weber and Brad Stone. I'm David Papadopoulos. If you have
a minute, rate and review our show, it'll help other
listeners find us. See you next week.
Speaker 2 (34:00):
Stand Standing
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:07):
Let me tell you we have a new star.
Speaker 3 (00:10):
A star is born Elon mars Juson Kennemy.
Speaker 4 (00:14):
He is the Thomas Edison plus plus plus of our age.
Speaker 1 (00:18):
Probably his whole life is from a position of insecurity.
I feel for the guy.
Speaker 5 (00:22):
I would say ninety eight percent really appreciate what he does.
But those two percent that are nasty, they are I'll
pay in four fos.
Speaker 1 (00:30):
We were meant for great things in the United States
of America, and Elon reminds us of that we don't
have a fourth branch of governments called Elon Musk. Welcome
to elan Ing, Bloomberg's weekly podcast about Elon Musk. It's Tuesday,
(00:51):
March eleventh. I'm your host, David Popadopolis. So this is
what a bad week looks like. I mean a very
very bad week for Elon. Not only has Tesla stock
continued a crater it dropped fifteen percent on Monday alone,
but he seems to be losing on all fronts right now.
(01:11):
X was hit by sporadic outages Monday that Elon blamed
on hackers. A SpaceX rocket blow up, rain debris and
grounded flights at airports in Florida. Doge is running into
more and more roadblocks from both the courts and from
within the Trump administration itself. Mosk, through it all, is
putting on a brave face, setting his sights on bigger
(01:31):
and boulder things for Doge to cut from the budget.
But has he backed himself into a corner. Here to
discuss all this, we have our trusty muscologists, Max Chaffkin
and Dana Hall. Hello to you both, Hey, David, Dana,
how are you good?
Speaker 4 (01:46):
Good? Good to be here?
Speaker 1 (01:47):
Okay? And then later on in the episode, Bloomberg Stocks
reporter Esha Day will join us to talk all about
Tesla's free fall. Okay, Dana, So let's start by going
a little bit to the tail end of last week
for those who may have missed it. There was a
cabinet meeting in Washington that Musk attended and it got
(02:09):
a little sporty. Tell us what happened.
Speaker 4 (02:11):
Yeah, So what was interesting is that this cabinet meeting
was not on the president's daily schedule. But Sean Duffy,
the Transportation Secretary, posted on x that he was like
headed into a cabinet meeting, And so we were like, wait, what,
there's a cabinet meeting, And then The New York Times
reported that the things got pretty spicy. Apparently there was
like a testy exchange between Musk and Marco Ribio about
(02:35):
cuts at the Department of State, and then you know,
Musk was basically saying that these guys weren't cutting fast
enough or deep enough, and then there was sort of
pushback from the cabinets. Duffy was saying, you know, you
want me to fire all these air traffic controllers and
I've got planes falling out of the sky. And The
New York Times reported that that Trump was kind of
like watching these exchanges, ping pong back and forth, like
(02:56):
almost like he was watching a tennis match, and then
the kind of upshe is that Trump then basically said
that Doge is like an advisor, but that the deep
cuts are, you know, in the province of the Cabinet secretary.
Speaker 3 (03:09):
So there's like a.
Speaker 4 (03:09):
Little bit of a power struggle going on.
Speaker 3 (03:11):
You know.
Speaker 4 (03:11):
Obviously I wasn't at the meeting, would love a readout
if you were, but it's just like the sort of
the first sign that there is tension between Musk and
the Cabinet secretaries about how these agencies are basically being
overtaken by Doge.
Speaker 3 (03:24):
Yeah, and just add one think, Trump after this meeting
did a truth which is, you know, the truth social
version of a tweet Nique a Nicks. And he essentially said,
we're not going to use a hatchet. We're going to
use a scalpel, which feels like a implicit rebuke or
correction or something to Elon Musk. Of course, in the
(03:45):
next paragraph he talked all about how great a job
Elon Musk is doing, and Musk when he posted this,
he only posted a portion of the truth. He posted
the second paragraph, not the one about the scalpel.
Speaker 4 (03:58):
It's fascinating that we've gone from Musk wielding a chainsaw
at SAPAC to Trump saying we're not going to use
a hatchet, We're going to use a scalpel. So like
what's next, like tweezers, like we're going down We're going
downstream in terms of like the size and scope of
the of the implement.
Speaker 1 (04:16):
Here, clearly here max hard to interpret this any other way.
Even though the reporting from inside the room that we
saw in The Times and in other places, mostly the Times,
did make it clear that Musk certainly counterpunched and was
effective to a degree, but it's really hard to interpret
it any other way than it was a defeat and
(04:37):
a setback for his endeavor.
Speaker 3 (04:40):
I think Musk has struggled to some extent to transition
from the kind of realities of campaigning, and even in
the transition, when there weren't these Senate confirmed appointees taking
responsibility for these agencies. So like, what's changed now is
you have Marco Rubio in charge of the Department State,
(05:00):
Shawn Duffy in charge of the Department of Transportation. If
a plane crashes tomorrow, God forbid, Shaw Duffy is the
one who's gonna have to answer questions, not Elon Musk,
no matter what Elon Musk does, no matter how you know,
what his influence is. And that is creating pressure on
these cabinet appointees, which is now a counterweight to Elon Musk.
And I think so, and I think that's what we're seeing.
(05:21):
This was inevitable, this was going to happen, and here
we are it is happening because of course, none of
these Cabinet secretary, as much as they agree maybe in
principle with the idea of cutting government spending. None of
them want their departments to be cut too much, and
they're going to be concerned, especially given musks, you know,
pension for willy nilly, you know, cut now, ask questions later.
Speaker 1 (05:44):
So, Dana, it strikes me that what we're seeing a
little bit here is the classic musk of putting my
head down. I'm just efing going for it. Balls to
the wall, to hell with everyone. We're just going to
go full speed ahead and just see what that what
the hell comes out of it. All that may work
to a certain degree at Tesla, at X and at
(06:06):
other places, but right as Max is getting out here,
the political reality of trying to do that in Washington,
it's just a it's just a different dynamic.
Speaker 5 (06:15):
Yeah.
Speaker 4 (06:16):
But he's also it's also making him dig in even
more because he's saying things like, well, it's like the
ideas that the quote unquote deeed State is squealing and
like you know, all of the Democrats who are in
on this or of course they're responding, and that he's
fabricated this whole thing in his mind where you know,
the media and the NGOs and government employees and federal
(06:38):
workers and contractors and George Soros are like all in
on this, like massive grift that he alone is like
untangling for the world. But it is fundamentally like a
misunderstanding of how bureaucracy works and how you know many
of these people are lifelong civil servants.
Speaker 1 (06:56):
Yeah, so we actually have him, Dana in his own
words here he is speaking on Fox Business with Larry Kudlow.
Let's listen to that.
Speaker 5 (07:05):
You're giving up your other stuff? I mean, how are
you running your other businesses.
Speaker 2 (07:11):
With great difficulty? Yeah, I mean that.
Speaker 5 (07:15):
There's no turning back.
Speaker 2 (07:16):
You're saying, I'm just here trying to make government more efficient.
Speaker 1 (07:22):
Okay, So Max, I know I said at the top
that Musk is putting a brave face on it all.
But man, those were some deep size.
Speaker 3 (07:31):
You know, he does this and like that part.
Speaker 1 (07:33):
Do you think it's just for you think it's it's No.
Speaker 3 (07:36):
I think it's both a performance, but I think it
is also genuine, right, Like, I mean, obviously he is
struggling to run his companies and do the job that
he's doing, as his comments indicate. I do think that
there are ways in which the kind of the sort
of practical ins and outs of what he's trying to
(07:58):
do in government, and also the kind of impression, the
branding of what he's trying to do conflicts with who
he is. Like his thing in the past has been
putting himself almost deliberately into these crises and sleeping on
the floor, which you know, dramatically right. But now like suddenly,
this this performance is coming off a little bit differently,
partly because what he's doing is just like fundamentally not
(08:22):
gonna be as popular as building an awesome, super fast,
super cool electric car, you know, or whatever, and or
taking the planet in mars, like like being really good
at like cutting parts of the federal budget, even if
you're awesome at it, even if there's none of the
sort of negative press, even if you don't accidentally fire
(08:42):
you know, a bunch of nuclear engineers or air traffic controllers,
Like I still think it's just inherently not gonna be
as cool. And then when he admits like, yeah, it's tough,
Like if I'm an investor in one of these other companies,
like ooh, this is gonna give me a feeling that
is not great. It's gonna confirm some of maybe my
worst fears about what where this thing is leading where
(09:04):
Musk is at once distracted so that he's not spending
as much time with the companies as he once did obviously,
but also eroding his brand. And I'm just sort of
watching my investments lose value day by day.
Speaker 1 (09:16):
Yeah, So, Dana, those size bring me to a question
that I meant to and failed to ask last week.
So I will ask you it now. Elon Musk, knowing
what he knows now, had he known this on oh,
I don't know, say June the first of last year,
or October the first of last year, or November fifth,
(09:40):
would he say yes to doing it all over again?
Speaker 2 (09:44):
Yes?
Speaker 4 (09:44):
I mean this is why he donated to Trump's campaign
and he pitched this idea. Like Elon Musk has has
always been driven by two goals, getting to Mars and
getting rid of regulation. Those are that is what is
driving him. Maybe he didn't expected to be so bumpy.
Maybe he expected more people to like applaud his efforts
(10:05):
and not to get the kind of pushback that he's getting.
I mean, you're seeing all these protests at the Tesla showrooms.
But no, I mean I think that you know this
is like he proposed this idea that there is a
reason why he donated to the campaign.
Speaker 1 (10:18):
And but so so you don't think you don't think
he feels like in hindsight, it was just a bridge
too far.
Speaker 4 (10:24):
No, because he loves to create. This is sort of
who he is. Like, and I've been through so many
cycles of this with Elon before, and it's like every
time we get to like a new quote unquote crisis,
everyone's like, oh my god, this is it. But like
we've been through this countless times. In twenty eighteen, when
he tried to like fake the buyout of going private
and when he bought Twitter, like everyone was like, oh
(10:47):
my god, Like this is the end. He's going to
be so distracted.
Speaker 1 (10:49):
And then you're telling me, you're telling me he actually
loves this. He's this is his this is his Okay.
Speaker 4 (10:54):
Yes, he creates chaos on purpose, right, Okay, that's how
he throws That's how he.
Speaker 1 (11:00):
Okay, we need to move on from Washington and go
to x, which was down for users at different parts
of the day yesterday. Max tell us what transpired.
Speaker 3 (11:10):
You know X Twitter has long had issues with uptime.
This is a site that gets at times like huge
amounts of traffic and you know, over the years, like
has gone down numerous times. There have also been numerous
incidents like this where there's some sort of denial of
service attack or cyber attack. The site went down yesterday,
(11:31):
I should say, there were sort of intermittent outages over
a period of time across you know, a number of countries.
I was not able to use it, you know, you
know me, I'm a big X user. I was not
able to get on weeks from no weeks is I
was not able to get on for hours yesterday. So
from my own personal experience.
Speaker 1 (11:50):
Is that why you're in such a crappy mood today?
Speaker 3 (11:52):
Yeah, I didn't get my fixed. It seemed like a
particularly bad, you know, sort of crash or whatever.
Speaker 1 (12:00):
Any work of the Ukrainian he blamed.
Speaker 3 (12:02):
Yeah, well he said he didn't exactly say that. He
said there were IP addresses in Ukraine. Of course, he's
What he's trying to do is suggest that somehow Zelenski,
in addition to like not saying thank you or something,
set the hackers on Twitter. Certainly possible, although there is
a group, a hacking group that has taken responsibility. They're
(12:23):
a sort of pro Palestinian aligned hacker collective. So again,
we don't I don't think we know yet who did it,
But of course it's not good for business and it
and when you when you layer in all of the
other things that we're going to be talking about, it
doesn't necessarily communicate command or having having their stuff together.
Speaker 1 (12:46):
No, Dana. Meanwhile, a SpaceX rocket launch late last week
was quite a show, but I suppose for for the
wrong reasons.
Speaker 4 (12:56):
Yeah, I mean, it launched okay, but then it blew
apart and then debris kind of like closed air travel
in Florida for a little while. I mean, I think,
you know, in SpaceX's defense, they would argue that every
time they have a mistake, they learn from it, they
get better, they iterate, they improve on things like you
don't make advances in sciences and technology without a lot
(13:17):
of experimentation. But you know, Musk has always been someone
who is spinning a lot of plates. And as Max
and I wrote earlier this year, you know, he is
running six companies and now he's got a seventh, which
is running the government. And it's only a matter of
time before like one of those plates comes crashing down.
So how long he can keep them all spinning as
anyone's guest, but he's we've sort of been in these
(13:39):
crisis moments before.
Speaker 1 (13:40):
So Max Dana points out that SpaceX and Musk love
to learn and iterate from these blow ups, and they
kind of, to a certain extent almost even enjoy them
in the sense that they then get to autopsy the
whole thing and go on. That's fine, learning and iterating
is one thing. But raining so much to debris down
that airports are shut down for a while, Is that okay?
(14:03):
Is that normal?
Speaker 5 (14:04):
No?
Speaker 3 (14:05):
And it's not. And so obviously yes, it's true that
like they're not going to get to Mars or even
get this uh spacecraft working on one launch. By design,
these things are are not going to work out. They're
not launching any real cargo yet. For this very reason,
I believe there were some rocket was by the way,
(14:25):
this was a starship rocket. This is the This is
the spacecraft that Elon Musk sees as the Mars vehicle
for now, though SpaceX has a contract to land this
is a lunar landing craft for for the Moon mission, right,
but musks that that's the contract that they have.
Speaker 1 (14:43):
Moon is for losers.
Speaker 3 (14:45):
That's what Elon Musk says, but now, but the challenge
here is that, well, first of all, one challenge is
there are a lot of people who who don't think
the Moon is for losers, and and those people include
many of the other companies who have contracts UH to
send people and parts and so on to the Moon.
There is going to be political opposition. There already is
(15:07):
political opposition to any effort to sort of like as
Musk has sort of hinted, like, cancel the Artemist program,
which is the Moon program and replace it with a
Mars program. The other day, Trump actually brought up Mars
and said it, well, it's it's not that big a priority,
which I would say is in start contrast to how
Elon Musk s is it. These launches are have scientific
(15:30):
and engineering value, but they also are political. And we
learned that during the campaign trail when Trump over and
over and over again talked about how beautiful it was,
how amazing the arms they lived. You know, we all
heard this over and over again. Dan and I heard
it in person in Madison Square Garden. Trump loves like
cradling a baby like Trump loves to talk about it
(15:53):
because and of course he loves it because it is
like a perfect illustration of Elon Musk's competence and at
and so when we see the opposite, it doesn't convey that,
and it makes it all the harder for Elon Musk
to argue that the United States should bet on this
technology which is a new technology, which is not totally
(16:13):
figured out, which could fail. Right, Like, so, yes, the
failures are by design, but they're not good.
Speaker 1 (16:20):
As we wrap this segment here, Max, I'll just say
that Musk, like I knows that stocks go to the moon,
starships go to Mars. Come on, I don't.
Speaker 3 (16:32):
I don't totally know what that means.
Speaker 1 (16:33):
But okay, all right, okay, So we're now joined by
stocks reporter Esha Day. Hello, Esha, welcome back.
Speaker 2 (16:46):
Hello.
Speaker 1 (16:46):
So I told you to come back on when you
had something interesting to talk about, and man, do you
so the Tesla, the stock has been in free fall,
notwithstanding a little bit of a bump back up today.
Hit us to start with with some superlatives that capture
the move in recent days.
Speaker 5 (17:07):
Sure, let me absolutely spoil you here. So Tesla says
a down forty five percent last I checked for the year.
Speaker 2 (17:14):
It's really volatile today.
Speaker 5 (17:16):
But let's go with forty five percent, and then it's
down fifty three percent from the all time high that
it touched on December seventeenth. So in the process, the
stock has now lost more than eight hundred to be specific,
eight hundred and sixteen billion dollars from its market evaluation.
Speaker 1 (17:32):
So at and its peak, its market value was.
Speaker 2 (17:36):
One point five trillion.
Speaker 5 (17:37):
Yes, and currently it's worth around seven hundred billion and change.
Speaker 1 (17:42):
Yes, and I believe it is the biggest decliner in
the S and P five hundred index.
Speaker 5 (17:48):
Since that's right, yesation, right, yes, you you completely snatched
the words out of it is the worst decliner on
the SMB five hundred right now by a decent margin,
I would say.
Speaker 1 (17:59):
So, I get the sense that even the bulls out there,
the Tesla perma bulls, are starting to get to get
starting to get a bit nervous. What are you hearing?
Speaker 5 (18:09):
Yes, that's a great way to put it. The perma bulls,
some of them extremely vocal and art in Tesla fans,
I would say, who absolutely believe in this kind of
long term vision of Tesla becoming this pioneer in the
fully self driving vehicle, the robot taxi and a much
more sophisticated real life AI applications such as humanoid robot
(18:34):
and all that. Even those people, when I talk to
them for in a very long time, and I have
been covering this stock for a while now, this is
the first time that I'm hearing them being a little antsy.
Speaker 2 (18:45):
They're not sure. They're still on the sideline.
Speaker 5 (18:47):
So despite a fifty what seems like a fifty three
percent discount, So clearly these people think, and they say
this in as many words, that they think there's more
to go in this decline. And why is that? The
reason is simple, Like you know, the the boom that
we saw after the election, it was really not driven
by anything fundamental. So now that all that speculative frenzy
(19:11):
has been taken out of the stock, people are starting
to look at the fundamental. So where do fundamental stand
compared to say November.
Speaker 2 (19:18):
Of last year. They look weaker. So there's no reason terrible.
Speaker 1 (19:22):
Right, I mean, in Europe, in parts of the US,
sales are way down. The brand has been damaged with
the significant swath of consumers out there. But Dana Trump
came out last night in truth it was I believe
it was last night, and he said He's going to
go out himself and buy a Tesla to show support
(19:43):
for his man mosque. Is this is going to turn
this is going to turn the stock around?
Speaker 4 (19:48):
Well, I mean, it's it's remarkable that the President of
the United States is saying this, and his exact quote
on truth is I'm going to buy a brand new
Tesla tomorrow morning, meeting today today as we speak, as
a show, as a show of confidence and support for
Elon Musk, a truly great American. So, first of all,
I don't see how this works in practice, Like, are
(20:10):
we supposed to believe that the President is going to
like waltz into some showroom in Washington, DC and like
roll out with the cyber truck or something like. I
just don't really I scrutinize this very concept.
Speaker 1 (20:21):
I could see him rocking a cyber truck.
Speaker 4 (20:23):
But secondly, if the whole issue is brand erosion and
Tesla's longtime consumer is being very upset that Musk has
thrown in his lot with Trump, the idea that Trump
is now going to buy a Tesla is just going
to further cement Tesla as a brand into like a Magamobile,
which you know, Max and I wrote about like two
(20:44):
years ago. So I don't see how it helps Elon
at all. I just think it's not good.
Speaker 1 (20:49):
This is a key thing. And I guess my first
reaction was when Trump said he was gonna go buy one.
I was like, one, you're gonna buy one Tesla? How
about three hundred thousand, buddy? And I guess my question
for you, Max is and it gets back to something
it's been nagging for a while for me, which is,
for every five or ten or twenty buyers Musk loses
(21:13):
in Blue America, is there some offset in Red America,
some of any kind? And is Trump perhaps nudging those
red buyers to get up off the couch and go
buy Yes.
Speaker 3 (21:25):
I want to remind people. This would be Trump's second
cyber truck. He actually got one from a podcaster in
twenty twenty four. I believe we talked about this. It
was like it had like I remember stickers on it
or something. Anyway, Yeah, it was like a campaign stunt.
I don't again, I don't know if he still has it.
But it could be a second one could be a
Trump fleet. You could have Eric and On Junior both
driving cyber trucks. I suppose I do think like there
(21:49):
is a universe of of sort of hardcore Trump supporter
who has already embraced Elon Musk. We've talked about this
a lot, like it's not like there's no sort of
like maga buyer coalition, But like Danna saying, this doesn't
really help because Musk is already completely Trump coded, I.
Speaker 1 (22:08):
Guess the pushback on that would be that, yes, that
maga crowd that loves the that loves Musk or likes
must buys the stock right has been buying the stock,
and that was part of ESHA right, the big pop
we saw last year in the stock. Can you get
them through something like a truth like this to go
doing that from buying right, from buying the stock to
(22:29):
then no, no, we need you to do more, we
need you to buy the vehicle itself.
Speaker 4 (22:33):
I just think that, Listen, the economy is really uncertain
right now. People are losing their jobs, people are seeing
their retirement savings go to hell. They don't know if
they're going to have Social Security and Medicare, Like, this
is not the time when people make a big purchase
like buying a car. There is a reason why Q
one sales are going to be crappy, and it's like
(22:53):
just buying a car is a huge purchase. It's often
the largest purchase that someone makes outside of housing or
like a college education. So I just don't think you're
seeing people like rushing to the showroom to buy a vehicle.
And also, like Tesla's lineup, it's super old, Like Tesla
made a big thing of how they're now, you know,
selling the refreshed Model Why. So some people are waiting
(23:16):
for the Model Y, but there's like the new Model Why.
But there's like a ton of inventory on the Tesla
website right now. And yeah, I don't think that like Trump,
I don't think you're gonna see like a ton of
people moving to buy a car right now with so
much uncertainty in the wider economy.
Speaker 1 (23:35):
So I actually have esha a theory that came to
me the other day on the Model Why refresh. It
was an epiphany I had as I was walking down
Park Avenue and I saw a cyber truck on one
road and I saw an old Model Why in the
other and I thought, Man, the problem with this refresh
is possible buyers of the new model Why because it
(23:56):
looks distinct and unique and new and different than the
old ones. They lose plausible deniability. You cannot sit you
cannot own it and slap the bumper sticker on it
and say I bought this before I knew Elan was crazy.
It's just no. Everyone's like, oh man, that's a brand
new car. So the theory is that rather than helping
them turn sales around, it could deepen their slump. What say,
(24:20):
you hit me with it.
Speaker 2 (24:21):
It's a possibility, right, jeez, that's it.
Speaker 1 (24:24):
That's all I get.
Speaker 2 (24:25):
Here's what I'll say.
Speaker 5 (24:26):
So it definitely seems like you know, when I talk
to like bullish just tesla investors or analysts, a lot
of them will push back on this idea of the
of damage to the brand.
Speaker 1 (24:37):
But why what do they say when they push back
and they say, you're overstating it.
Speaker 5 (24:42):
King, Yes, they think it's just being overstated by the media,
it's just being hyped.
Speaker 1 (24:46):
But when they see sales down seventy percent in some places,
they think that's a blip that will go away.
Speaker 5 (24:51):
They say that it's not entirely clear what exactly is
going on. Also, Europe and like smaller Europe chemakets like
you know, let's first see what's happening in US, because
that's kind of the litmus test, right, like what's happening
in the US market, which we do not know yet.
But my point is the risk of brand damage has
to be real enough that it pushed Trump to tweet
(25:12):
last night, right, Like it's kind of an acknowledgment of
this brand damage that they clearly are seeing happening.
Speaker 3 (25:19):
Even maga people, even the tard cor Donald Trump people
do not like people who throw Nazi salutes or salutes
that look Nazi adjacent. Right, Musk's antics have seemed, I
think even fairly extreme for some conservatives, and like the
idea that there's no brand damage just seems like almost
(25:44):
disconnected from reality. I mean, like we're seeing in those
European sales numbers that Asha just mentioned, serious brand damage,
and we're seeing in the China sales numbers. We're seeing it,
in fact in some of the US sales numbers, and
even leaving that aside, like these protests in front of
Tesla dealerships are real. And it's so interesting because Musk
(26:06):
has responded to this and we should say by essentially
saying it's a it's all a big conspiracy, right, this
is like Act Blue, some Democratic activists, and.
Speaker 1 (26:15):
This is what Trump was saying lesson right, And I.
Speaker 3 (26:19):
Think this is a case where actually, like, and he's
of course blaming the media, but I think this is
really a case where the media has been behind the
ball on this, where like the media has not fully
realized and I think a lot of Wall Street has
not fully realized how significant the opinion shift is, and
how like this has become the way that people who
(26:42):
are mad at Trump expressed that anger at Trump. You
cannot there's nowhere to protest Trump right now. Like I
guess you could go to the White House or something,
but there are opportunities, you know, every day, a cyber truck,
right or whatever to express your displeasure. And like, Musk
has made this choice. You know, we talked about it
(27:04):
on this podcast, and Bears have been worried about this
for years, that he was going to polarize the brand.
And I think it would have been less of an
issue if Trump had lost the election. But Trump did
not lose the election. It also would have been less
of an issue if Musk had not taken a job
within the Trump administration, It would have been less of
an issue if he had taken a less controversial job
(27:25):
in the administration. But he has run headlong into this
controversy and the electorate is reacting as you'd expect.
Speaker 1 (27:32):
Dana, one of those bulls that Esha had mentioned earlier.
Dan Ives at Webbush called this a moment of truth
for Musk and Tesla, and in that Fox Business interview yesterday,
when asked about how he was running Tesla and his
other companies, his response was with great difficulty. Well, I
(27:52):
guess I wonder is he even running them at all?
And given what it's going through, that can't cause or
given there's a whole lot of confidence as they watch
the stock crater.
Speaker 4 (28:03):
Right and the board has been completely silent on Musk
since the election. I mean they have not put out
any kind of statement. There's no clear number two or COO.
The bench is like not deep, like who runs the
company day to day. It's like there's not like a
Gwen shot well at Tesla. So yeah, no, I think
(28:23):
it's I think it's been concerning. I'm going to be
super curious to see what the proxy says this time
around in terms of risk factor.
Speaker 1 (28:29):
Tell us more about that proxy. Remind us what exactly.
Speaker 4 (28:32):
That is, well, every year, like publicly traded companies file
proxies about it basically lists out like what shareholder resolutions
are going to be discussed at the shareholder meeting. It's
a good way to look at how many pledge shares
Elon Musk has and sometimes they lay out new risk factors.
And you know a lot of times companies like they
(28:52):
they hide stuff in the proxy. The proxy drops on
like good Friday day that the market has closed. It's
always really deep reading. I will be reading it. I'm
just sort of curious to you to see about like
Tesla's board. Remember Joe Gebbia, the Airbnb co founder who
was on Tesla's board, is also working with Doge. So
it's not just Elon who's Doge focused, it's like another
(29:12):
board member as well.
Speaker 1 (29:14):
Yeah. So Esha the Danna says she's seen this show,
this movie many times, having covered must over the years.
You've been covering Tessel for how long now?
Speaker 2 (29:25):
Since twenty sixteen, twenty sixteen.
Speaker 1 (29:27):
For a while, yeah, decade basically two decades in Tesla
right now, in dog years and doze years, forty fifty
years easy. So I guess I just wonder if you
also think, now this is just like a sell off
we've seen before, stock's going to start ripping and bounce
back soon. Or did the election and the boom and
(29:49):
initially created and now the bust did it just fundamentally
change the company and change the stock.
Speaker 2 (29:56):
That's an interesting question.
Speaker 5 (29:57):
Tesla has always been a really volatile stock. It had
always it's kind of in market parlance, it's almost always
called the og memes stock in many ways, like it
was a meme stock of cult stock even before that phenomenon.
Speaker 1 (30:11):
Really, on that point, do you hear estimates from analysts
on what percent of the valuation is just means stock
valuation which is hard to separate from the Musk phenomenon,
and then what part is just hey, valuing this business
right now and going forward. Do people have estimates?
Speaker 2 (30:31):
See, it's more of an art than science.
Speaker 5 (30:33):
Of course, when you try to understand, you know, what
part of it is the keymand risk or tied to
Musk and musks antiques and stuff like that. However, there
are estimates that there are zeros analysts on Wall Street
who kind of try to understand if not how much
is tied to musk, which is a really abstract concept,
but at least try to understand how much of the
(30:54):
valuation is really focused on the future or future growth
or future growth potential.
Speaker 2 (31:00):
So right now the stock has moved so much.
Speaker 5 (31:03):
I haven't seen any very recent numbers, but around the
time and it was like a trillion dollar valuation.
Speaker 2 (31:08):
I have seen people say.
Speaker 5 (31:09):
That anywhere between two hundred to four hundred billion dollars
was for the auto business and the auto business future
growth as well, and everything else was robotaxi and AI
and like essentially the musk dream premium as we would
call it.
Speaker 3 (31:27):
Yeah, I mean, if you look at Tesla's valuation compared
to car companies that have like that sell a similar volume,
it's like many times greater. It is like if Tesla
were just a car company, like it would be worth way,
way less. Even having fallen, you know, fifty percent over
the last couple of months, it's always been like a
(31:48):
bit of a leap of faith. And maybe I'm being
a little bit generous here to say to value Tesla's
robotaxi business or its optimist business in any way because
there is no business there. It doesn't act actually exists,
you know, Wall Street, like bid up the stock after
the election. We sort of touched on this at times,
but like there was no clear reason why. There is
(32:08):
nothing Trump can do. He cannot wave a magic wand
and give Tesla a robotex The funny.
Speaker 1 (32:14):
The funny thing is is that Esha had shared a
couple of reports this morning from Bulls and both of
them as they expressed jitters and concern, one of the
things they both drew comfort from was the Robotaxi dream
and Morgan Stanley they're waiting for the big Austin Robotaxi
unveil in the summer. Maybe team say you've lost Dan Ives.
Speaker 3 (32:36):
I mean Dan Ives is like the QAnon shaman to
like Tesla fandom, Mike, I mean he is like as
maybe I'm overstating it, but he is a megabull. Might
be if he is a mildly concerned, that is a
huge like that is like a wow.
Speaker 1 (32:53):
Well yeah, yeah, he called it right. I think that
was in top of his report this morning. This is
a moment of truth for Elon and us.
Speaker 2 (33:00):
Yeah, I mean, Max is right.
Speaker 3 (33:05):
Don't have a very colorful out, Esha day.
Speaker 1 (33:13):
Thank you for joining us, Thank you, Max, Dana.
Speaker 5 (33:16):
Glad to be here.
Speaker 2 (33:16):
Thank you.
Speaker 1 (33:24):
This episode was produced by Stacey Wong. Anna Massa Rakus
is our editor, and Rayhan Harmanci our senior editor. Blake
Maples handles engineering, and Dave Precell fact checks. Our supervising
producer is Magnus Henrickson. The theme is written and performed
by Takea Yasuzawa and Alex Sugi Eira. Brendan Francis Newnham
is our executive producer, and Sage Bauman is the head
(33:45):
of Bloomberg Podcasts. A big thanks to our supporters Joel
Weber and Brad Stone. I'm David Papadopoulos. If you have
a minute, rate and review our show, it'll help other
listeners find us. See you next week.
Speaker 2 (34:00):
Stand Standing
Host
David Papadopoulos
Popular Podcasts
40s and Free Agents: NFL Draft Season
Daniel Jeremiah of Move the Sticks and Gregg Rosenthal of NFL Daily join forces to break down every team's needs this offseason.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
The Bobby Bones Show
Listen to 'The Bobby Bones Show' by downloading the daily full replay.