October 10, 2025 • 33 mins
Ross Gerber, president and CEO of Gerber Kawasaki, joins the podcast to talk about his life as one of Tesla's biggest and most famous investors. Plus, thoughts on Tesla's decision to drop prices and whether it should pursue self-driving as a business model.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News. I'm Hannah Elliott and
I'm Matt Miller.
Speaker 2 (00:11):
This is Hot Pursuit coming up. On today's show, we
are all in on Tesla Plus. We dabble a little
bit in Rivian and Lucid, Portia and Ferrari.
Speaker 3 (00:27):
That's right, I mean all the good stuff. Back to Tesla.
It did announce this week some new less expensive models
that were rather stripped down, and the response has been underwhelming.
Speaker 2 (00:40):
Yes, aside from the newly redesigned Chevy Bolt. It was
probably the biggest car news this week, and we get
a deep dive with one of the most famous, one
of the earliest and most outspoken investors in Tesla. We're
joined by Ross Gerber, president and CEO of Gerber Kawasaki.
For the listeners of our podcasts who don't know, how
(01:03):
did you get started?
Speaker 4 (01:04):
How did you.
Speaker 2 (01:05):
Become essentially the most famous Tesla investor?
Speaker 4 (01:08):
Not by choice, that's for sure.
Speaker 5 (01:11):
You know, it's been an extremely painful, fortunately profitable journey
for me. But it really started. I think it was
twenty thirteen when the model s came out and or
Tesla went public and it was like a four billion
dollar company. They were down the street from us in
Santa Monica, so I knew who they were. And my
(01:33):
parents had dealt with Elon because my dad, my stepfather,
had done some work with NASA and he was part
of the group that was working with SpaceX to move
our space program to SpaceX. This was you know, ten
fifteen years ago, and so they had dinner with Elon
and my mom said, you know this Elon Musk guy,
he's a genius. He's doing amazing things. You should check
(01:55):
him out. And I said, oh, there's this Tesla thing
down the street. They go public, so we start looking
the company, you know, and so at the time, they
had no Model S. So we waited about a year
and then the Model S was like being launched and
we go down to Santa Monica to the showroom and
I looked at the models and I said, Wow, this
is a pretty nice car.
Speaker 4 (02:14):
And then I got in it and we drove it,
and I said.
Speaker 5 (02:16):
You know, if this is this electric car, you know,
like this is like actually better than other cars. So
I was one of the first people in the world
to really realize like these were going to be better
cars than ice cars, you know, like actually electric cars
are better cars, and there's a lot of reasons why
they're better, but they just are. And so we invested
(02:38):
in Tesla right then and there because I was like,
if they can make these cars like this will sell,
like there's.
Speaker 4 (02:45):
No doubt in my mind.
Speaker 5 (02:46):
And so that worked pretty quickly because the Model S
did sell. And even at the time, there were lots
of problems with the Model S with build. You know,
Tesla was known for building some of the worst cars
at that time. They built great technology, but they had
not mastered scaling automotive.
Speaker 2 (03:03):
They did get I remember Consumer Reports loved the first
Model Ass remember.
Speaker 5 (03:07):
And yeah, but they had to fix every car that
came off the line, like literally every Model ASS had
like the roof was misaligned, and so they'd have to
reglue on the roof of every Model ASS at a
shop before they would deliver it to customers. Tesla's been
doing this for years, where they weren't good at manufacturing
till the Model three, really till the Texas factory. The
(03:28):
Texas Factory was their first really good factory because Fremont's
like a bunch of different things put together. So so
basically like Tesla was a great investment off the bat
it rallied for us. We made five times our money
within the first like year, so we took a bunch
of profits because that's what we do, you know, if
we make five times our money, like really quickly, and
(03:54):
you know, crazily enough. I had like about one hundred
thousand dollars worth of Tesla from the IP and if
I wouldn't have sold any of it, God, I don't
even know how much that'd be worth today.
Speaker 4 (04:04):
It's kind of like my bitcoin. I wish I never
sold any of my.
Speaker 5 (04:06):
Bitcoin too, but you know, so I sold some of
it at the time because I made money, and I
was like, this is great. And then Tesla went through
this like five years of rockiness when they launched. They
launched the Model X after the Model S, and that
was kind of a disaster too, because of the doors
didn't work very well and it was super hard to
make these cars, and they weren't making money on the
(04:27):
cars even though they were super cool, and the stock
really hadn't done anything. And then that was like, we're
doing all this to launch the Model three. And so
when the Model three, the scaled Tesla, was supposed to
come out, this is about twenty eighteen. That's when things
got really difficult for Tesla. So they were running out
of money. Basically, they had about a billion dollars in
(04:48):
the bank. They're losing money. They got two expensive models
that people like, but they're having you know, they can
only make one hundred thousand a year of these cars,
so they're making one hundred thousand cars. They're selling them great,
but we're trying to scale this Model three. And what
happened was they Elon had this idea that he was
going to build all these cars with robots, and he
(05:11):
built a factory filled with robots, and when they tried
to scale Model three in twenty eighteen, the robots didn't work,
and so they couldn't get up to five thousand cars
a week, which is what they needed to do to survive,
and so they were stuck at about two thousand cars
a week with the process they had.
Speaker 4 (05:28):
And it was desperate.
Speaker 5 (05:29):
So what happened was I was on the news a
lot because I was a Tesla bull. And then it
got very lonely because the short sellers decided that Tesla
was going to go bankrupt. So every short seller in
the world started shorting Tesla from Chainos to Michael Burry,
from the Big Shore to Einhorn to Andrew Left, like
(05:50):
like it was literally like a cabal of investment firms
against Tesla, and then there was like me, Kathy Wood,
and Ron Barrett. So we were like the only three
investor people that actually stuck with Elon and invested in Tesla.
So in twenty eighteen, they raised money in a convertible
bond offering. They were really desperate. It was such a
(06:11):
good deal and that ended up being extremely profitable, so
we invested more money into Tesla at that point. Because
I went to the factory myself and this was like
early twenty nineteen, and I brought my wife because I
was wanted to make sure that my eyes were not crazy.
And I was like, if they're willing to open up
everything to let me see it, like cool, like awesome.
(06:34):
So like I wanted to meet Elon, but I didn't
get to meet him that time, but I met Jerome Gillion,
who was actually the guy in charge of operations. I
tour the whole factory, went to the tent, so I
learned how to build electric cars that day, like it
was amazing day.
Speaker 4 (06:50):
And at the end of that day.
Speaker 5 (06:52):
I was like, this is the most incredible company I've
ever seen. They're going to make these cars, and Jerome's
gonna make these cars. And they threw the robots out
into the field and they put humans in to finish
the cars. And within two or three months they were
up to five thousand a week and Tesla was safe.
Speaker 4 (07:07):
But yet the market was like still thinking.
Speaker 5 (07:10):
It was going to collapse. But I was like, no,
they've scaled. I went on TV. I was like, they've scaled.
There was an article on Electric because they had it's
a blog and they had gone the day before me,
and they thought the same thing. There's like everything's going great,
Like why is everybody shorting the stock saying it's going
to collapse? And we had this conversation. I don't know,
(07:31):
maybe they just haven't been to the factory. But I'm
going on TV saying I went to the factory like
it's working.
Speaker 4 (07:37):
You know. It wasn't like it was a secret.
Speaker 5 (07:38):
I was telling everybody, and so I became kind of
like so then like Tesla took off, you know, so
then you know, we made a lot of money, and
all the Internet people that followed me made a lot
of money on Tesla.
Speaker 4 (07:55):
So there was this cult that sort of formed.
Speaker 2 (07:58):
You were big on Twitter. You were big on Twitter, right.
Speaker 4 (08:00):
Yeah, I'm still big on Twitter.
Speaker 5 (08:02):
And and it's like, you know, I got huge in
twenty and twenty one when Tesla took off and the
markets took off and everybody went online and everybody's like
stuck in the pandemic trading stocks, and then there's me
and Tesla and the thing goes like, you know, crazy,
and we're and we like, twenty twenty was like one
(08:23):
of my best years ever in the markets. And we
just made a fortune. We made hundreds of millions of
dollars on Tesla, So it was just great.
Speaker 2 (08:30):
You know, dude, how many Tesla's have you had? Have
you had every single you know, the I had every test,
the three.
Speaker 4 (08:35):
Every TESTA yeah, so but I have the cyber truck.
Speaker 2 (08:39):
Now, is it your favorite the ball?
Speaker 4 (08:41):
What is it your.
Speaker 5 (08:42):
Favorite one of It's not my favorite of all because
if Elon would let me sit down with him for
thirty minutes and tell him the things that need to
be fixed on this truck, it could be incredible.
Speaker 4 (08:51):
But there's things on the truck that make it annoying,
and they can fix them, like what they just aren't what.
Speaker 2 (08:56):
Tell us and maybe he'll listen to this podcast.
Speaker 5 (08:58):
Well, I'll give you an example. The car is too big.
It's just too big. It doesn't fit anywhere very easily.
And if it was a little smaller, it would be
just as good a truck, but it would actually fit
in people's garages and parking space.
Speaker 1 (09:11):
I mean the dimensions over.
Speaker 4 (09:14):
It's a tank.
Speaker 5 (09:15):
It's a massive tank, and it drives incredibly well for
its size and weight. So like if you made it
a little smaller, it would be the super dope truck, right,
you know. And then there's things like you can't see
out the back of the truck, you know, like you
can't see out the back. So they put this mirror
like a rearview mirror, but it actually doesn't show anything.
(09:36):
Now that when you're a human, that fucks you up,
you know, because you keep looking at a blank rearview mirror.
I was like, why they put the mirror there, Well,
they have to by law, but there's nothing happens in
the mirror. But yet right below the mirror they have
the video of what's happening behind you. And I said, well,
and they just put it in the mirror, you know,
So you end up like going like this half the
time of your head because your eyes just you can't
(09:58):
retrain yourself not to look at a rearview mirror.
Speaker 2 (10:00):
You know.
Speaker 3 (10:00):
I have to say, I'm very surprised you haven't had
time with Elon considering recently.
Speaker 4 (10:06):
On.
Speaker 5 (10:07):
Elon has a very simple philosophy. If you tell him
things he does not want to hear, he hates you.
Speaker 1 (10:14):
Okay, so maybe.
Speaker 5 (10:17):
I'm not the guy to make him feel good. My
lot in life is to be a pain in the butt.
And I invest now four billion dollars for people. I
invest in companies, and these people pay me to represent
them against companies that are very self interested. Executives make
tons of money, tons and tons of money at every company,
(10:39):
and they.
Speaker 4 (10:40):
Need to be accountable with shareholders.
Speaker 5 (10:42):
I represent public shareholders, people like you, people like me.
I represent the public. I don't represent super rich people.
We have fourteen thousand clients from twenty five dollars of
investment to one hundred million dollar client.
Speaker 4 (10:58):
You see what I'm saying.
Speaker 5 (11:00):
My whole firms guk it like functions around helping people
build a financial future, no matter where you're starting okay.
And so the way I look at it is I'm
the guy that represents the public shareholders in the stock
market against an industry that makes billions of dollars off
of us and should take treat us well because we
(11:22):
fund them. Okay, so we fund the businesses. We're funding
AI right now. You want to start an AI company?
And who do you think they call? They call investors.
They come by my office every day, these private guys.
They want money all the time. I go, I only
do public stuff.
Speaker 2 (11:37):
You know, And so wait, what's the real talk? Ross
when you're when you see the new lower priced versions
of the Model Y and what's uh, what's actually going
on there?
Speaker 1 (11:49):
This is based off the listeners? Yeah, it sucks to
use this.
Speaker 3 (11:55):
Tesla has introduced new versions of its top selling models
for less than forty grand, right.
Speaker 4 (12:01):
But it's like they suck.
Speaker 5 (12:02):
It's like we're introducing a crappy version of our car
to get to make up for losing the tax credit.
And so see, you know, when you build a product,
you want to build the best product ever. You want
to build it for a price that people can afford it,
but you want people coming home with the best product ever.
Speaker 4 (12:20):
Let's use Apple as an example.
Speaker 5 (12:22):
That was one of my first grade investments as a
young person, and Steve Jobs was one of my main
Like I loved Steve Jobs back and when I was younger,
and we made a ton of money on Apple still
top holding and Apple. I just bought my kid a
new Apple MacBook Air and he ran around the yard twice.
He was so excited for this thing. And I open
(12:42):
up this product and it's phenomenal, you know, like Apple
products like you know, innovation, this and that. No, they're
phenomenal products. We all use them across the world. They
seem to never disappoint. We all want more and more.
But actually they make phenomenal products, right, And so if
you want an iPhone that is cheaper, you just get
(13:02):
an older model, Okay, but they work really well. You know,
I was using a thirteen for a long time. I
finally upgraded, you know. So Tesla was always built in
my mind in the same model it was Apple. It
was a hardware product with great software. It literally was Apple.
And I was like, Elon could be in the next
Steve Jobs. And that's what I'm saying. If we can
(13:24):
make cars that drive themselves and they're electric, we could
sell ten to twenty million a year. That was the
original business plant of Tesla.
Speaker 4 (13:32):
Okay.
Speaker 5 (13:32):
So when you see a company rip out, what makes
that company so great? Out of the product just to
make it cheaper. That is never a good sign for
a company. It's never a good sign.
Speaker 4 (13:46):
I think.
Speaker 5 (13:46):
When you think about Tesla as a brand, what made
the brand cool was that it had fart sounds that
you could do in your car. What made the brand
cool was that you had a screen in the back
seat that your kids could watch YouTube when you're driving
three hours. It's kind of nice. What made the brand
cool was that the sound system was so good. One
of the things I love about electric cars is that
you don't have noise from the engine. The cars are
(14:08):
like silent, and then they have this great sound system
in there, and I could play my jazz music, you know,
if it's recorded on a good you know, more modern music.
Speaker 4 (14:17):
It's like they're sitting right there. It was so good.
So if you spent forty dollars on a model Y
like last month and you got the new model, why
it's a great car. Okay, So you take this great car, you.
Speaker 5 (14:34):
Help elect a guy that hates electric vehicles, who then
takes away all the benefits to society for fighting climate
and then you respond by making a crappier version of
your car because.
Speaker 3 (14:48):
I should say the new models have less battery range.
They have are stripped of features like the screens that
you mentioned, and people covered them.
Speaker 4 (14:59):
The best things. Sit back and see ye stars. I
mean it really did people buy Teslas.
Speaker 5 (15:05):
They would buy a Tesla. They would get in this
car and they came from a Toyota, a BMW or
Mercedes or whatever, and they'd be like, this thing is fast,
it's quiet, I don't have to go to gas stations.
The software is amazing, plays great music. I can make
my kids laugh. It's got screened in the back like
it was a great deal. It was just a great car.
Speaker 2 (15:25):
Do you think Ross, Do you think the the startups
like Lucid or Rivian have anything to match that or
are doing a better job.
Speaker 5 (15:35):
Well, what those companies did was from the beginning they
didn't need or rely on the on the incentives because
the cars were too expensive, so they they sell to
a different market.
Speaker 4 (15:45):
You know, what, do you like them?
Speaker 5 (15:48):
I like my Rivian a lot, you know, I have
the RS one or it's my wife's and like, so
I drive both, and I really like the Rivian.
Speaker 4 (15:57):
I think they did a great job.
Speaker 5 (15:59):
I think Rivian had other issues which are more operational,
like when you're trying to get stuff fixed. But it's
just like you're buying a new company, you know, it
is what it is.
Speaker 2 (16:08):
Even to stick with the four hundred vold architecture though,
I mean to me, that feels like almost decontenting a model. Why,
you know, when they had when they had the choice
to go to an eight hundred volt architecture and faster charging,
they decided to stick with the old thing.
Speaker 5 (16:21):
Well, there's lots of different challenges with faster charging versus
slower charging, depending on battery degradation and quality and all
these other factors. So the thing about fast charging is
the faster you charge, the more issues you have with
battery life, you know. So there's this trade off of
like how fast we want the car to charge, but
(16:41):
also we don't want the battery to like die after
six years, and so that's one of the challenges. But
they just did these five hundred volt megabal new chargers,
and I saw them charging it over twelve hundred miles
per hour added to the car, which is faster than
I've ever seen. And I'm like, dude, you can charge
your car completely in fifteen minutes now a regular Tesla.
(17:04):
So so I think, you know, a lot of companies
are trying different ways to address charging and battery technology,
whether in Tesla's doing this too with forty six to eighty,
and I think Tesla is the best at this, you know,
by far, Like they get charging in batteries better than
anybody in.
Speaker 4 (17:23):
The world by far.
Speaker 5 (17:25):
What is so Loosid vehicles I also like but don't
love because the battery is too big. And the Lucid
and you know, it's kind of like this hulking luxury
vehicles and it's turned out to sell pretty well because
people are buying those now instead of modelesses. So so
I like the Lucid and I like the Rivian. I
(17:46):
think they're good brands. I just think that they serve
the wealthy market and not the masses in any way,
and so there's a limited you know, potential for those
companies until they have cheaper products. And if they make
cheaper products, it hurts being a luxury brand. And I
don't think it's bad to be a luxury brand in
ev because it seems like all the luxury brands don't
want to make EV's.
Speaker 4 (18:05):
Now that Elon, you know, kind of got everybody out
of making evs.
Speaker 3 (18:10):
Now you're listening to Hot Pursuit from Bloomberg Radio. We
have more with Gerbert Kawasaki, President and CEO Ross Gerber
after this.
Speaker 2 (18:28):
Now back to our deep dive on Tesla with Ross
Gerber of Gerber Kawasaki.
Speaker 3 (18:34):
So can Tesla straddle that balance between you just said
it's not great that they're selling these cheap products that
have been stripped, but they're more affordable.
Speaker 1 (18:46):
You know that is not.
Speaker 5 (18:48):
I mean, you know, women are very brand conscious, Okay,
So when you think about how men think about brands
versus women, it's very different. And men are buying process
is much shorter, you know, like.
Speaker 1 (19:02):
We know about that I may make, I may beg
to differ.
Speaker 3 (19:06):
I think, well, I know a lot of men are
pretty if you talk about wristwatches.
Speaker 1 (19:10):
Men are very about.
Speaker 4 (19:12):
Like how we perceive a brand.
Speaker 5 (19:14):
Now, when a woman buys a brand, Let's say we
go into a Prada or a Chanel and we're buying
a very high end brand. Okay, if there's anything in
that store that's cheap. It hurts that store, you see
what I'm saying. So there's nothing in the store that's cheap.
The brand that's done the best at this is Tiffany's. Tiffany's,
you can buy really expensive stuff, but you can find
(19:36):
some things that you can afford there.
Speaker 3 (19:38):
You know, it's important to have a lipstick, and maybe
the lipstick costs eighty dollars because it's omez, but I
have bought an eighty dollars a Mez lipstick just because
it felt special another mess store, and that is a
relatively affordable thing.
Speaker 1 (19:55):
You know what I mean.
Speaker 5 (19:55):
I guess, but you're saying that. But most people are
like gasping right now that you spend eighty dollars.
Speaker 1 (20:00):
I know it's completely irrational, but I did.
Speaker 5 (20:02):
It right exactly because of the brand though, And I
do this too, And you brought up watches, which is
exactly what men spend money on based off the brand.
One hundred percent, okay, And so there. We don't care
about a lot of jewelry, but watches is one of them.
And especially if you're so sophisticated whatever, you know, you
got to have one of these. You got to have
an AP or something like that, you know.
Speaker 4 (20:24):
And so.
Speaker 2 (20:26):
Speaking of brand, so brand really yeah, you know, like brands.
Speaker 5 (20:30):
Like Louis Vauton is a stock we owned once, and
I spent in Ferrari, and I spent some time studying
the brand philosophy of Ferrari, and it's genius. Like Ferrari
is a genius brand. They literally make one hundred thousand
dollars minimum profit on every car they sell. These people,
they sell the cars to the same people over and
over again. They don't even need new customers. They make
(20:53):
eight thousand a year. They can charge four hundred, five hundred,
eight hundred thousand car people pay it right, Margin's always
forty percent.
Speaker 1 (21:03):
Everything he wants to be free.
Speaker 4 (21:05):
You're in the club.
Speaker 5 (21:06):
You can't just go buy a Ferrari, okay, so allands.
Speaker 4 (21:13):
Once I had enough money, I started figuring this out.
Speaker 5 (21:15):
You go into an AP store and you're like, oh,
I want to look at your watches, and they go,
we don't have any. You have to come in for
an interview, you know, and we'll decide what watch we
think was great for you. And I go, dude, I
got fifty grand to spend, right, fucking now I want
to watch, you know, like and the guys like, I
can't sell you watch this way, you know.
Speaker 4 (21:34):
And that's when I learned the lesson. I go, what
is this? This like a fucking game? It's a game.
I got it.
Speaker 5 (21:40):
I'm a capitalist. You have to go to I was
ready to buy a watch that day. I made a
good trade. I made fifty g's. I was going to
spend it, and now I'm gonna save it. You know,
I gotta pay for private school now, sorry. And so
so I paid for private school. What a watch or
my kid? You're in private school. It's done. Now my
kid's in public school. And I was like, I'm going
(22:01):
to buy a Ferrari. So you go to the Ferrari
dealership because actually private school costs the same as a
Ferrari or an ap It's fifty dollars a year. So
I was like, oh, I'll buy a Ferrari now that
my kid's back in public school. Right, So you go
down a Ferrari like I want to FRAI. They go,
I gotta even to sell you.
Speaker 4 (22:15):
You. You got to go to Italy. You got to
convince them to sell you a car.
Speaker 1 (22:19):
You need to be the Catholic that bluxury is.
Speaker 4 (22:23):
Like, how exclusive can we make?
Speaker 2 (22:25):
Dud On that note, I have to ask because this
week Ferrari had its biggest share drop since the IO. Okay,
the the the outlook was a little bit conservative, but
one of the other things that they told us is
they're going to scale back on their EV ambitions. So
would you buy a fully ev Ferrari or when you
(22:48):
buy a Ferrari, is the whole point of it to
have the internal combustion engine.
Speaker 5 (22:54):
I'm not the traditional market for Ferrari, so my opinion
doesn't matter.
Speaker 2 (22:59):
But that's why we have you here who want.
Speaker 4 (23:01):
To write yeah for me.
Speaker 5 (23:03):
For me, I'm waiting for somebody to understand they can
build the best supercar ever that's electric because they drive
better and faster and handle better than gas cars period.
Speaker 4 (23:19):
What Remacnavara, Yeah, that's a fast car.
Speaker 5 (23:23):
But I'm just saying, like the Plaid was the fastest
car on the road when I was driving it, like
one point nine zero the sixty. I mean, it's hard
to beat that, and if you are beating it, you're
at the risk you might just take off, you know,
Like it's it's fast, right.
Speaker 4 (23:36):
But like the the Elon thing.
Speaker 5 (23:40):
This is what bothers me the most is that these
companies are now dialing back electric vehicle ambitions because the
pressure isn't going to be on them like it was
to make these cars, or they're not going to compete now.
The problem with the Ferrari electricity is it's a half
a million dollars for the car, so it's really hard
to get people to buy into a new concept to
Ferrari without the big engine, which is kind of what
(24:04):
Ferrari's about a little bit Like I had this Maserati
once and when I bought it, they were like, it's
a Ferrari, you know.
Speaker 4 (24:10):
It's the same engines as ferraris. And you get in
the car and you turn it on.
Speaker 5 (24:14):
Its cora and it makes you feel like a man.
I'm more of a man, you know, Like I got
a Ferrari.
Speaker 4 (24:22):
You know. It's like having a good horse. You know.
It's like in the old days. If you had a good.
Speaker 5 (24:26):
Horse in the old days, you're a better cowboy. That
you get in the car and you push a button
and it doesn't make any sound.
Speaker 4 (24:37):
It seems to be very hard for older Ferrari owners,
you know, And.
Speaker 5 (24:41):
I'm like how about the idea that it's just a
dope car and it drives super good and you don't
need the engine.
Speaker 4 (24:47):
You know.
Speaker 2 (24:47):
What do you think about the Porsche Taekon, by the way.
Speaker 5 (24:50):
I think it's a beautiful car, Like the Porsche did
a great job with luxury, and the pricing is expensive,
like it's almost two hundred K, but it's a great
looking vehicle. The problem is Porsche sucks at software and
the cars have software issues.
Speaker 4 (25:07):
And I don't know if they've solved it this year
or not, but if you buy one.
Speaker 5 (25:11):
Of these cars, expect and they don't do over the
air updates. So when you have a software problem, you
got to take it to Porsche. Now, this is like
the like I would call the anti technology technology, where
you make technology that's better that makes your car worse,
you know, And so that's my issue with that. They've
they've got to get better software and they've got to
figure out that they that car companies in the future
(25:33):
are software companies more than their hardware companies, and they
don't know that yet and they're still trying to be
hardware companies. But really they're building iPhones not that drive,
not cars, and that's what Tesla innovated that still most
companies haven't really fully grasped.
Speaker 1 (25:51):
Ross.
Speaker 3 (25:51):
I just want to put a pin and a bow
on our Tesla conversation just to wrap things up. Where
do you see us going from here? After this announced
meant about the lower priced cars?
Speaker 1 (26:03):
You know, how are you? What's your outlook now?
Speaker 5 (26:07):
So the next six So in the next six months,
all this stuff comes to roost, right, Like, there's no
credits anymore. So how many Tesla's are we going to
sell in the next six months?
Speaker 4 (26:21):
And I don't know. I just don't know. I know
from my.
Speaker 5 (26:25):
Experience as an economics person in some of you studies
business that we should see a pretty dramatic drop off
in sales this quarter as we pulled demand forward with
the end of the credits and a great new car
and and people use that. And they had a great
quarter because people, you know, went out and bought Tesla's.
Speaker 4 (26:45):
Hold their nose. They don't like Elon, who cares? It's
a great car.
Speaker 1 (26:48):
I've seen the store.
Speaker 5 (26:49):
Yeah, I mean it's funny, the stickers. I feel bad
for the people that feel like they need to justify it.
How about you just care about the environment, like it's okay,
like you know that of so many companies suck, so
like you know, if you want to get into that,
Elon's just another one of the bad guys who runs
another company, you know. But I want to do what's
(27:09):
best for me and the environment, and Tesla still is
a great vehicle for that. So I think that it's
going to be a hard time for Tesla because they
still don't advertise. Elon doesn't think he's doing anything wrong,
insulting people constantly, and people hate him in Europe.
Speaker 4 (27:25):
They won't even buy the car. You know.
Speaker 5 (27:27):
China is now getting ahead of us, and they're making
extremely good electric vehicles and they're extremely competitive and the
government's all in. So what I also fear out of
this Trump administration philosophy of going away from electric vehicles,
then now we're going to lose the race to build
the best electric vehicles. So China knew that when they
(27:47):
let the Tesla factory in, and that was why they
did it.
Speaker 4 (27:50):
And then who would think.
Speaker 5 (27:52):
It would be so far to it is that we
would actually stop making great electric vehicles and now they
can take the entire market from everybody. That's exactly what's
going to happen is in the next five years, Chinese
evs will be like the top vehicles in the electric
vehicle market.
Speaker 1 (28:07):
I have no doubt you think they'll be here in
the US.
Speaker 5 (28:10):
Well, we're going to try to stop them, right, because
isn't that capitalism stop the competitors, not free market capitalism?
Speaker 4 (28:17):
You know. So I don't know they're in Europe. I
see them in Mexico, so you know.
Speaker 1 (28:22):
Got Chinese buses here.
Speaker 4 (28:24):
I believe Chinese BYD buses.
Speaker 5 (28:27):
So if you're a free market guy like me, you're
kind of like, yeah, why shouldn't I be able to
buy a BYD? Did?
Speaker 2 (28:31):
I feel you on every level? I feel like we're
soul brothers.
Speaker 4 (28:35):
You guys.
Speaker 3 (28:35):
I was going to say, are you long last brothers?
Because Matt is just sitting.
Speaker 4 (28:39):
Back podcast together.
Speaker 5 (28:41):
You know, this is why I don't have my own podcasts,
because I try to find great podcasters to be on
their shows.
Speaker 1 (28:45):
You need to come on more often.
Speaker 2 (28:47):
I'm so glad we got you.
Speaker 4 (28:48):
You love to? Yeah, I love to. Well, that's what
I'm saying.
Speaker 5 (28:50):
I see you know, I look at Bloomberg a lot,
and because there's nothing else to look at any more,
that I believe in and and sadly, Reuters in Bloomberg
is all I've got now.
Speaker 4 (28:59):
And so, you know, no offense to all the other
channels I'm on. You know, I love you all too,
But the quality is you guys are getting worked.
Speaker 2 (29:07):
You know, I will get you everywhere.
Speaker 4 (29:11):
Yeah, I'm like, you.
Speaker 5 (29:12):
Know, I love your podcast, and I love cars, and
you know, I love technology, and I think that this
is one of the most exciting times in technology. You know,
you didn't ask me about what I think about putting
Groc on the car. You know, he put the AI
thing on the Tesla too, and it totally screwed up
the infotainment system because Groc is an integrated.
Speaker 4 (29:32):
I didn't even know when you push the.
Speaker 5 (29:34):
MIC to like make a phone call now and you're
like call my mom. Groc's like, well, I can't do that.
And I was like, then, why are you on my car?
And It's like, well, elon, put me on your car.
And I was like, but if you can't run anything
on the car, like, why are you on my car?
And how do I get back to the thing that
used to do stuff? And it's like, you can't. And
I was like and I was like I'm going to
record this and post this because groc will tell you, like,
(29:56):
it doesn't make any sense why I'm on the car
right now, because I can't.
Speaker 4 (29:58):
Do anything that's great. Wow.
Speaker 5 (30:01):
But it's the beginning of a big innovation that's about
to happen in cars, where in our lives, where AI
will actually.
Speaker 4 (30:09):
Do stuff for us. Right now it's telling us stuff
and it's great for research, but next it's going to
do stuff for us. Buy me those tickets, yes, order
me that plan, that plan that trip for me, use
my bloom tickets. Yeah.
Speaker 2 (30:25):
Yeah, Actually, I just I was just driving the new
Aston Martin Vanquish and they are the.
Speaker 4 (30:33):
First that's a great car.
Speaker 2 (30:34):
It's insanely good. I'm so blown away, dude, the way I.
Speaker 4 (30:38):
Hadn't asked Martin once that I loved it to.
Speaker 2 (30:40):
Be handling on this, I don't know how the engineers
did it. Like it's not it doesn't jar you, but
it's also so sporty. But the one thing that on
the outside, on the tech side, they are the first
company or the first car maker to use Apple car
Play Ultra, so it's car Play, but it also controls
everything in your cars mode and climate, controls and you know,
(31:03):
so you don't have to switch back and forth.
Speaker 4 (31:05):
It's really so did it work well?
Speaker 2 (31:06):
It worked really well.
Speaker 5 (31:08):
It really well because Apple failed in this whole car
thing pretty bad, and the original car play was like
kind of a joke and manufacturers were just putting it on.
But it was basically like a cheap integration. But a
full auto integration makes a lot of sense because car
makers can't make software, as I was just saying, and
so let Apple just take exact car. It makes sense,
(31:30):
be your iOS, you know, of your car. It's it's
sort of like the next big battles who controls your car?
Speaker 4 (31:38):
You know? Apple, And that was.
Speaker 5 (31:40):
Sort of like, oh, we're going to license the Tesla
software and all this kind of stuff too, which which
could have happened if that's what they were focused on,
because you know, even when you get in like a
good new car, most of that software to me is
pretty like ridiculously bad. Yeah, it doesn't compare to anything
like a video game or anything.
Speaker 4 (32:00):
You know.
Speaker 2 (32:00):
It's like, yeah, dude, I agree, We're gonna have to
have you back on again because this has been great.
Speaker 4 (32:08):
Love.
Speaker 1 (32:10):
I think this is the beginning of a long relationship.
Speaker 2 (32:14):
Uh my final, My final tipics.
Speaker 4 (32:17):
We're going to talk about cars like I.
Speaker 1 (32:19):
Love or music. I got my Springsteen t shirt on
Talk About.
Speaker 2 (32:28):
Special. Thanks to my new best friend Ross Gerber for
joining us today. He is the president and CEO of
Gerber Kawasaki.
Speaker 3 (32:35):
That does it for this week's show. Remember to follow
us and subscribe to Bloomberg Hot Pursuit on Apple, Spotify,
and anywhere else you listen. You can also send us
your comments. Please email us your comments at Hot Pursuit
at Bloomberg.
Speaker 2 (32:51):
Dot net, and check out Hannah's columns and stories on
Bloomberg dot com and the Bloomberg Business app. Go there
for car reviews, events and stories that you won't find
anywhere else. Find it all at Bloomberg dot com, slash Pursuits,
slash Autos. I'm Matt Miller and I'm Hannah Elliott.
Speaker 3 (33:08):
Will be back in your podcast speed again next week
Bloomberg Audio Studios, Podcasts, radio News. I'm Hannah Elliott and
I'm Matt Miller.
Speaker 2 (00:11):
This is Hot Pursuit coming up. On today's show, we
are all in on Tesla Plus. We dabble a little
bit in Rivian and Lucid, Portia and Ferrari.
Speaker 3 (00:27):
That's right, I mean all the good stuff. Back to Tesla.
It did announce this week some new less expensive models
that were rather stripped down, and the response has been underwhelming.
Speaker 2 (00:40):
Yes, aside from the newly redesigned Chevy Bolt. It was
probably the biggest car news this week, and we get
a deep dive with one of the most famous, one
of the earliest and most outspoken investors in Tesla. We're
joined by Ross Gerber, president and CEO of Gerber Kawasaki.
For the listeners of our podcasts who don't know, how
(01:03):
did you get started?
Speaker 4 (01:04):
How did you.
Speaker 2 (01:05):
Become essentially the most famous Tesla investor?
Speaker 4 (01:08):
Not by choice, that's for sure.
Speaker 5 (01:11):
You know, it's been an extremely painful, fortunately profitable journey
for me. But it really started. I think it was
twenty thirteen when the model s came out and or
Tesla went public and it was like a four billion
dollar company. They were down the street from us in
Santa Monica, so I knew who they were. And my
(01:33):
parents had dealt with Elon because my dad, my stepfather,
had done some work with NASA and he was part
of the group that was working with SpaceX to move
our space program to SpaceX. This was you know, ten
fifteen years ago, and so they had dinner with Elon
and my mom said, you know this Elon Musk guy,
he's a genius. He's doing amazing things. You should check
(01:55):
him out. And I said, oh, there's this Tesla thing
down the street. They go public, so we start looking
the company, you know, and so at the time, they
had no Model S. So we waited about a year
and then the Model S was like being launched and
we go down to Santa Monica to the showroom and
I looked at the models and I said, Wow, this
is a pretty nice car.
Speaker 4 (02:14):
And then I got in it and we drove it,
and I said.
Speaker 5 (02:16):
You know, if this is this electric car, you know,
like this is like actually better than other cars. So
I was one of the first people in the world
to really realize like these were going to be better
cars than ice cars, you know, like actually electric cars
are better cars, and there's a lot of reasons why
they're better, but they just are. And so we invested
(02:38):
in Tesla right then and there because I was like,
if they can make these cars like this will sell,
like there's.
Speaker 4 (02:45):
No doubt in my mind.
Speaker 5 (02:46):
And so that worked pretty quickly because the Model S
did sell. And even at the time, there were lots
of problems with the Model S with build. You know,
Tesla was known for building some of the worst cars
at that time. They built great technology, but they had
not mastered scaling automotive.
Speaker 2 (03:03):
They did get I remember Consumer Reports loved the first
Model Ass remember.
Speaker 5 (03:07):
And yeah, but they had to fix every car that
came off the line, like literally every Model ASS had
like the roof was misaligned, and so they'd have to
reglue on the roof of every Model ASS at a
shop before they would deliver it to customers. Tesla's been
doing this for years, where they weren't good at manufacturing
till the Model three, really till the Texas factory. The
(03:28):
Texas Factory was their first really good factory because Fremont's
like a bunch of different things put together. So so
basically like Tesla was a great investment off the bat
it rallied for us. We made five times our money
within the first like year, so we took a bunch
of profits because that's what we do, you know, if
we make five times our money, like really quickly, and
(03:54):
you know, crazily enough. I had like about one hundred
thousand dollars worth of Tesla from the IP and if
I wouldn't have sold any of it, God, I don't
even know how much that'd be worth today.
Speaker 4 (04:04):
It's kind of like my bitcoin. I wish I never
sold any of my.
Speaker 5 (04:06):
Bitcoin too, but you know, so I sold some of
it at the time because I made money, and I
was like, this is great. And then Tesla went through
this like five years of rockiness when they launched. They
launched the Model X after the Model S, and that
was kind of a disaster too, because of the doors
didn't work very well and it was super hard to
make these cars, and they weren't making money on the
(04:27):
cars even though they were super cool, and the stock
really hadn't done anything. And then that was like, we're
doing all this to launch the Model three. And so
when the Model three, the scaled Tesla, was supposed to
come out, this is about twenty eighteen. That's when things
got really difficult for Tesla. So they were running out
of money. Basically, they had about a billion dollars in
(04:48):
the bank. They're losing money. They got two expensive models
that people like, but they're having you know, they can
only make one hundred thousand a year of these cars,
so they're making one hundred thousand cars. They're selling them great,
but we're trying to scale this Model three. And what
happened was they Elon had this idea that he was
going to build all these cars with robots, and he
(05:11):
built a factory filled with robots, and when they tried
to scale Model three in twenty eighteen, the robots didn't work,
and so they couldn't get up to five thousand cars
a week, which is what they needed to do to survive,
and so they were stuck at about two thousand cars
a week with the process they had.
Speaker 4 (05:28):
And it was desperate.
Speaker 5 (05:29):
So what happened was I was on the news a
lot because I was a Tesla bull. And then it
got very lonely because the short sellers decided that Tesla
was going to go bankrupt. So every short seller in
the world started shorting Tesla from Chainos to Michael Burry,
from the Big Shore to Einhorn to Andrew Left, like
(05:50):
like it was literally like a cabal of investment firms
against Tesla, and then there was like me, Kathy Wood,
and Ron Barrett. So we were like the only three
investor people that actually stuck with Elon and invested in Tesla.
So in twenty eighteen, they raised money in a convertible
bond offering. They were really desperate. It was such a
(06:11):
good deal and that ended up being extremely profitable, so
we invested more money into Tesla at that point. Because
I went to the factory myself and this was like
early twenty nineteen, and I brought my wife because I
was wanted to make sure that my eyes were not crazy.
And I was like, if they're willing to open up
everything to let me see it, like cool, like awesome.
(06:34):
So like I wanted to meet Elon, but I didn't
get to meet him that time, but I met Jerome Gillion,
who was actually the guy in charge of operations. I
tour the whole factory, went to the tent, so I
learned how to build electric cars that day, like it
was amazing day.
Speaker 4 (06:50):
And at the end of that day.
Speaker 5 (06:52):
I was like, this is the most incredible company I've
ever seen. They're going to make these cars, and Jerome's
gonna make these cars. And they threw the robots out
into the field and they put humans in to finish
the cars. And within two or three months they were
up to five thousand a week and Tesla was safe.
Speaker 4 (07:07):
But yet the market was like still thinking.
Speaker 5 (07:10):
It was going to collapse. But I was like, no,
they've scaled. I went on TV. I was like, they've scaled.
There was an article on Electric because they had it's
a blog and they had gone the day before me,
and they thought the same thing. There's like everything's going great,
Like why is everybody shorting the stock saying it's going
to collapse? And we had this conversation. I don't know,
(07:31):
maybe they just haven't been to the factory. But I'm
going on TV saying I went to the factory like
it's working.
Speaker 4 (07:37):
You know. It wasn't like it was a secret.
Speaker 5 (07:38):
I was telling everybody, and so I became kind of
like so then like Tesla took off, you know, so
then you know, we made a lot of money, and
all the Internet people that followed me made a lot
of money on Tesla.
Speaker 4 (07:55):
So there was this cult that sort of formed.
Speaker 2 (07:58):
You were big on Twitter. You were big on Twitter, right.
Speaker 4 (08:00):
Yeah, I'm still big on Twitter.
Speaker 5 (08:02):
And and it's like, you know, I got huge in
twenty and twenty one when Tesla took off and the
markets took off and everybody went online and everybody's like
stuck in the pandemic trading stocks, and then there's me
and Tesla and the thing goes like, you know, crazy,
and we're and we like, twenty twenty was like one
(08:23):
of my best years ever in the markets. And we
just made a fortune. We made hundreds of millions of
dollars on Tesla, So it was just great.
Speaker 2 (08:30):
You know, dude, how many Tesla's have you had? Have
you had every single you know, the I had every test,
the three.
Speaker 4 (08:35):
Every TESTA yeah, so but I have the cyber truck.
Speaker 2 (08:39):
Now, is it your favorite the ball?
Speaker 4 (08:41):
What is it your.
Speaker 5 (08:42):
Favorite one of It's not my favorite of all because
if Elon would let me sit down with him for
thirty minutes and tell him the things that need to
be fixed on this truck, it could be incredible.
Speaker 4 (08:51):
But there's things on the truck that make it annoying,
and they can fix them, like what they just aren't what.
Speaker 2 (08:56):
Tell us and maybe he'll listen to this podcast.
Speaker 5 (08:58):
Well, I'll give you an example. The car is too big.
It's just too big. It doesn't fit anywhere very easily.
And if it was a little smaller, it would be
just as good a truck, but it would actually fit
in people's garages and parking space.
Speaker 1 (09:11):
I mean the dimensions over.
Speaker 4 (09:14):
It's a tank.
Speaker 5 (09:15):
It's a massive tank, and it drives incredibly well for
its size and weight. So like if you made it
a little smaller, it would be the super dope truck, right,
you know. And then there's things like you can't see
out the back of the truck, you know, like you
can't see out the back. So they put this mirror
like a rearview mirror, but it actually doesn't show anything.
(09:36):
Now that when you're a human, that fucks you up,
you know, because you keep looking at a blank rearview mirror.
I was like, why they put the mirror there, Well,
they have to by law, but there's nothing happens in
the mirror. But yet right below the mirror they have
the video of what's happening behind you. And I said, well,
and they just put it in the mirror, you know,
So you end up like going like this half the
time of your head because your eyes just you can't
(09:58):
retrain yourself not to look at a rearview mirror.
Speaker 2 (10:00):
You know.
Speaker 3 (10:00):
I have to say, I'm very surprised you haven't had
time with Elon considering recently.
Speaker 4 (10:06):
On.
Speaker 5 (10:07):
Elon has a very simple philosophy. If you tell him
things he does not want to hear, he hates you.
Speaker 1 (10:14):
Okay, so maybe.
Speaker 5 (10:17):
I'm not the guy to make him feel good. My
lot in life is to be a pain in the butt.
And I invest now four billion dollars for people. I
invest in companies, and these people pay me to represent
them against companies that are very self interested. Executives make
tons of money, tons and tons of money at every company,
(10:39):
and they.
Speaker 4 (10:40):
Need to be accountable with shareholders.
Speaker 5 (10:42):
I represent public shareholders, people like you, people like me.
I represent the public. I don't represent super rich people.
We have fourteen thousand clients from twenty five dollars of
investment to one hundred million dollar client.
Speaker 4 (10:58):
You see what I'm saying.
Speaker 5 (11:00):
My whole firms guk it like functions around helping people
build a financial future, no matter where you're starting okay.
And so the way I look at it is I'm
the guy that represents the public shareholders in the stock
market against an industry that makes billions of dollars off
of us and should take treat us well because we
(11:22):
fund them. Okay, so we fund the businesses. We're funding
AI right now. You want to start an AI company?
And who do you think they call? They call investors.
They come by my office every day, these private guys.
They want money all the time. I go, I only
do public stuff.
Speaker 2 (11:37):
You know, And so wait, what's the real talk? Ross
when you're when you see the new lower priced versions
of the Model Y and what's uh, what's actually going
on there?
Speaker 1 (11:49):
This is based off the listeners? Yeah, it sucks to
use this.
Speaker 3 (11:55):
Tesla has introduced new versions of its top selling models
for less than forty grand, right.
Speaker 4 (12:01):
But it's like they suck.
Speaker 5 (12:02):
It's like we're introducing a crappy version of our car
to get to make up for losing the tax credit.
And so see, you know, when you build a product,
you want to build the best product ever. You want
to build it for a price that people can afford it,
but you want people coming home with the best product ever.
Speaker 4 (12:20):
Let's use Apple as an example.
Speaker 5 (12:22):
That was one of my first grade investments as a
young person, and Steve Jobs was one of my main
Like I loved Steve Jobs back and when I was younger,
and we made a ton of money on Apple still
top holding and Apple. I just bought my kid a
new Apple MacBook Air and he ran around the yard twice.
He was so excited for this thing. And I open
(12:42):
up this product and it's phenomenal, you know, like Apple
products like you know, innovation, this and that. No, they're
phenomenal products. We all use them across the world. They
seem to never disappoint. We all want more and more.
But actually they make phenomenal products, right, And so if
you want an iPhone that is cheaper, you just get
(13:02):
an older model, Okay, but they work really well. You know,
I was using a thirteen for a long time. I
finally upgraded, you know. So Tesla was always built in
my mind in the same model it was Apple. It
was a hardware product with great software. It literally was Apple.
And I was like, Elon could be in the next
Steve Jobs. And that's what I'm saying. If we can
(13:24):
make cars that drive themselves and they're electric, we could
sell ten to twenty million a year. That was the
original business plant of Tesla.
Speaker 4 (13:32):
Okay.
Speaker 5 (13:32):
So when you see a company rip out, what makes
that company so great? Out of the product just to
make it cheaper. That is never a good sign for
a company. It's never a good sign.
Speaker 4 (13:46):
I think.
Speaker 5 (13:46):
When you think about Tesla as a brand, what made
the brand cool was that it had fart sounds that
you could do in your car. What made the brand
cool was that you had a screen in the back
seat that your kids could watch YouTube when you're driving
three hours. It's kind of nice. What made the brand
cool was that the sound system was so good. One
of the things I love about electric cars is that
you don't have noise from the engine. The cars are
(14:08):
like silent, and then they have this great sound system
in there, and I could play my jazz music, you know,
if it's recorded on a good you know, more modern music.
Speaker 4 (14:17):
It's like they're sitting right there. It was so good.
So if you spent forty dollars on a model Y
like last month and you got the new model, why
it's a great car. Okay, So you take this great car, you.
Speaker 5 (14:34):
Help elect a guy that hates electric vehicles, who then
takes away all the benefits to society for fighting climate
and then you respond by making a crappier version of
your car because.
Speaker 3 (14:48):
I should say the new models have less battery range.
They have are stripped of features like the screens that
you mentioned, and people covered them.
Speaker 4 (14:59):
The best things. Sit back and see ye stars. I
mean it really did people buy Teslas.
Speaker 5 (15:05):
They would buy a Tesla. They would get in this
car and they came from a Toyota, a BMW or
Mercedes or whatever, and they'd be like, this thing is fast,
it's quiet, I don't have to go to gas stations.
The software is amazing, plays great music. I can make
my kids laugh. It's got screened in the back like
it was a great deal. It was just a great car.
Speaker 2 (15:25):
Do you think Ross, Do you think the the startups
like Lucid or Rivian have anything to match that or
are doing a better job.
Speaker 5 (15:35):
Well, what those companies did was from the beginning they
didn't need or rely on the on the incentives because
the cars were too expensive, so they they sell to
a different market.
Speaker 4 (15:45):
You know, what, do you like them?
Speaker 5 (15:48):
I like my Rivian a lot, you know, I have
the RS one or it's my wife's and like, so
I drive both, and I really like the Rivian.
Speaker 4 (15:57):
I think they did a great job.
Speaker 5 (15:59):
I think Rivian had other issues which are more operational,
like when you're trying to get stuff fixed. But it's
just like you're buying a new company, you know, it
is what it is.
Speaker 2 (16:08):
Even to stick with the four hundred vold architecture though,
I mean to me, that feels like almost decontenting a model. Why,
you know, when they had when they had the choice
to go to an eight hundred volt architecture and faster charging,
they decided to stick with the old thing.
Speaker 5 (16:21):
Well, there's lots of different challenges with faster charging versus
slower charging, depending on battery degradation and quality and all
these other factors. So the thing about fast charging is
the faster you charge, the more issues you have with
battery life, you know. So there's this trade off of
like how fast we want the car to charge, but
(16:41):
also we don't want the battery to like die after
six years, and so that's one of the challenges. But
they just did these five hundred volt megabal new chargers,
and I saw them charging it over twelve hundred miles
per hour added to the car, which is faster than
I've ever seen. And I'm like, dude, you can charge
your car completely in fifteen minutes now a regular Tesla.
(17:04):
So so I think, you know, a lot of companies
are trying different ways to address charging and battery technology,
whether in Tesla's doing this too with forty six to eighty,
and I think Tesla is the best at this, you know,
by far, Like they get charging in batteries better than
anybody in.
Speaker 4 (17:23):
The world by far.
Speaker 5 (17:25):
What is so Loosid vehicles I also like but don't
love because the battery is too big. And the Lucid
and you know, it's kind of like this hulking luxury
vehicles and it's turned out to sell pretty well because
people are buying those now instead of modelesses. So so
I like the Lucid and I like the Rivian. I
(17:46):
think they're good brands. I just think that they serve
the wealthy market and not the masses in any way,
and so there's a limited you know, potential for those
companies until they have cheaper products. And if they make
cheaper products, it hurts being a luxury brand. And I
don't think it's bad to be a luxury brand in
ev because it seems like all the luxury brands don't
want to make EV's.
Speaker 4 (18:05):
Now that Elon, you know, kind of got everybody out
of making evs.
Speaker 3 (18:10):
Now you're listening to Hot Pursuit from Bloomberg Radio. We
have more with Gerbert Kawasaki, President and CEO Ross Gerber
after this.
Speaker 2 (18:28):
Now back to our deep dive on Tesla with Ross
Gerber of Gerber Kawasaki.
Speaker 3 (18:34):
So can Tesla straddle that balance between you just said
it's not great that they're selling these cheap products that
have been stripped, but they're more affordable.
Speaker 1 (18:46):
You know that is not.
Speaker 5 (18:48):
I mean, you know, women are very brand conscious, Okay,
So when you think about how men think about brands
versus women, it's very different. And men are buying process
is much shorter, you know, like.
Speaker 1 (19:02):
We know about that I may make, I may beg
to differ.
Speaker 3 (19:06):
I think, well, I know a lot of men are
pretty if you talk about wristwatches.
Speaker 1 (19:10):
Men are very about.
Speaker 4 (19:12):
Like how we perceive a brand.
Speaker 5 (19:14):
Now, when a woman buys a brand, Let's say we
go into a Prada or a Chanel and we're buying
a very high end brand. Okay, if there's anything in
that store that's cheap. It hurts that store, you see
what I'm saying. So there's nothing in the store that's cheap.
The brand that's done the best at this is Tiffany's. Tiffany's,
you can buy really expensive stuff, but you can find
(19:36):
some things that you can afford there.
Speaker 3 (19:38):
You know, it's important to have a lipstick, and maybe
the lipstick costs eighty dollars because it's omez, but I
have bought an eighty dollars a Mez lipstick just because
it felt special another mess store, and that is a
relatively affordable thing.
Speaker 1 (19:55):
You know what I mean.
Speaker 5 (19:55):
I guess, but you're saying that. But most people are
like gasping right now that you spend eighty dollars.
Speaker 1 (20:00):
I know it's completely irrational, but I did.
Speaker 5 (20:02):
It right exactly because of the brand though, And I
do this too, And you brought up watches, which is
exactly what men spend money on based off the brand.
One hundred percent, okay, And so there. We don't care
about a lot of jewelry, but watches is one of them.
And especially if you're so sophisticated whatever, you know, you
got to have one of these. You got to have
an AP or something like that, you know.
Speaker 4 (20:24):
And so.
Speaker 2 (20:26):
Speaking of brand, so brand really yeah, you know, like brands.
Speaker 5 (20:30):
Like Louis Vauton is a stock we owned once, and
I spent in Ferrari, and I spent some time studying
the brand philosophy of Ferrari, and it's genius. Like Ferrari
is a genius brand. They literally make one hundred thousand
dollars minimum profit on every car they sell. These people,
they sell the cars to the same people over and
over again. They don't even need new customers. They make
(20:53):
eight thousand a year. They can charge four hundred, five hundred,
eight hundred thousand car people pay it right, Margin's always
forty percent.
Speaker 1 (21:03):
Everything he wants to be free.
Speaker 4 (21:05):
You're in the club.
Speaker 5 (21:06):
You can't just go buy a Ferrari, okay, so allands.
Speaker 4 (21:13):
Once I had enough money, I started figuring this out.
Speaker 5 (21:15):
You go into an AP store and you're like, oh,
I want to look at your watches, and they go,
we don't have any. You have to come in for
an interview, you know, and we'll decide what watch we
think was great for you. And I go, dude, I
got fifty grand to spend, right, fucking now I want
to watch, you know, like and the guys like, I
can't sell you watch this way, you know.
Speaker 4 (21:34):
And that's when I learned the lesson. I go, what
is this? This like a fucking game? It's a game.
I got it.
Speaker 5 (21:40):
I'm a capitalist. You have to go to I was
ready to buy a watch that day. I made a
good trade. I made fifty g's. I was going to
spend it, and now I'm gonna save it. You know,
I gotta pay for private school now, sorry. And so
so I paid for private school. What a watch or
my kid? You're in private school. It's done. Now my
kid's in public school. And I was like, I'm going
(22:01):
to buy a Ferrari. So you go to the Ferrari
dealership because actually private school costs the same as a
Ferrari or an ap It's fifty dollars a year. So
I was like, oh, I'll buy a Ferrari now that
my kid's back in public school. Right, So you go
down a Ferrari like I want to FRAI. They go,
I gotta even to sell you.
Speaker 4 (22:15):
You. You got to go to Italy. You got to
convince them to sell you a car.
Speaker 1 (22:19):
You need to be the Catholic that bluxury is.
Speaker 4 (22:23):
Like, how exclusive can we make?
Speaker 2 (22:25):
Dud On that note, I have to ask because this
week Ferrari had its biggest share drop since the IO. Okay,
the the the outlook was a little bit conservative, but
one of the other things that they told us is
they're going to scale back on their EV ambitions. So
would you buy a fully ev Ferrari or when you
(22:48):
buy a Ferrari, is the whole point of it to
have the internal combustion engine.
Speaker 5 (22:54):
I'm not the traditional market for Ferrari, so my opinion
doesn't matter.
Speaker 2 (22:59):
But that's why we have you here who want.
Speaker 4 (23:01):
To write yeah for me.
Speaker 5 (23:03):
For me, I'm waiting for somebody to understand they can
build the best supercar ever that's electric because they drive
better and faster and handle better than gas cars period.
Speaker 4 (23:19):
What Remacnavara, Yeah, that's a fast car.
Speaker 5 (23:23):
But I'm just saying, like the Plaid was the fastest
car on the road when I was driving it, like
one point nine zero the sixty. I mean, it's hard
to beat that, and if you are beating it, you're
at the risk you might just take off, you know,
Like it's it's fast, right.
Speaker 4 (23:36):
But like the the Elon thing.
Speaker 5 (23:40):
This is what bothers me the most is that these
companies are now dialing back electric vehicle ambitions because the
pressure isn't going to be on them like it was
to make these cars, or they're not going to compete now.
The problem with the Ferrari electricity is it's a half
a million dollars for the car, so it's really hard
to get people to buy into a new concept to
Ferrari without the big engine, which is kind of what
(24:04):
Ferrari's about a little bit Like I had this Maserati
once and when I bought it, they were like, it's
a Ferrari, you know.
Speaker 4 (24:10):
It's the same engines as ferraris. And you get in
the car and you turn it on.
Speaker 5 (24:14):
Its cora and it makes you feel like a man.
I'm more of a man, you know, Like I got
a Ferrari.
Speaker 4 (24:22):
You know. It's like having a good horse. You know.
It's like in the old days. If you had a good.
Speaker 5 (24:26):
Horse in the old days, you're a better cowboy. That
you get in the car and you push a button
and it doesn't make any sound.
Speaker 4 (24:37):
It seems to be very hard for older Ferrari owners,
you know, And.
Speaker 5 (24:41):
I'm like how about the idea that it's just a
dope car and it drives super good and you don't
need the engine.
Speaker 4 (24:47):
You know.
Speaker 2 (24:47):
What do you think about the Porsche Taekon, by the way.
Speaker 5 (24:50):
I think it's a beautiful car, Like the Porsche did
a great job with luxury, and the pricing is expensive,
like it's almost two hundred K, but it's a great
looking vehicle. The problem is Porsche sucks at software and
the cars have software issues.
Speaker 4 (25:07):
And I don't know if they've solved it this year
or not, but if you buy one.
Speaker 5 (25:11):
Of these cars, expect and they don't do over the
air updates. So when you have a software problem, you
got to take it to Porsche. Now, this is like
the like I would call the anti technology technology, where
you make technology that's better that makes your car worse,
you know, And so that's my issue with that. They've
they've got to get better software and they've got to
figure out that they that car companies in the future
(25:33):
are software companies more than their hardware companies, and they
don't know that yet and they're still trying to be
hardware companies. But really they're building iPhones not that drive,
not cars, and that's what Tesla innovated that still most
companies haven't really fully grasped.
Speaker 1 (25:51):
Ross.
Speaker 3 (25:51):
I just want to put a pin and a bow
on our Tesla conversation just to wrap things up. Where
do you see us going from here? After this announced
meant about the lower priced cars?
Speaker 1 (26:03):
You know, how are you? What's your outlook now?
Speaker 5 (26:07):
So the next six So in the next six months,
all this stuff comes to roost, right, Like, there's no
credits anymore. So how many Tesla's are we going to
sell in the next six months?
Speaker 4 (26:21):
And I don't know. I just don't know. I know
from my.
Speaker 5 (26:25):
Experience as an economics person in some of you studies
business that we should see a pretty dramatic drop off
in sales this quarter as we pulled demand forward with
the end of the credits and a great new car
and and people use that. And they had a great
quarter because people, you know, went out and bought Tesla's.
Speaker 4 (26:45):
Hold their nose. They don't like Elon, who cares? It's
a great car.
Speaker 1 (26:48):
I've seen the store.
Speaker 5 (26:49):
Yeah, I mean it's funny, the stickers. I feel bad
for the people that feel like they need to justify it.
How about you just care about the environment, like it's okay,
like you know that of so many companies suck, so
like you know, if you want to get into that,
Elon's just another one of the bad guys who runs
another company, you know. But I want to do what's
(27:09):
best for me and the environment, and Tesla still is
a great vehicle for that. So I think that it's
going to be a hard time for Tesla because they
still don't advertise. Elon doesn't think he's doing anything wrong,
insulting people constantly, and people hate him in Europe.
Speaker 4 (27:25):
They won't even buy the car. You know.
Speaker 5 (27:27):
China is now getting ahead of us, and they're making
extremely good electric vehicles and they're extremely competitive and the
government's all in. So what I also fear out of
this Trump administration philosophy of going away from electric vehicles,
then now we're going to lose the race to build
the best electric vehicles. So China knew that when they
(27:47):
let the Tesla factory in, and that was why they
did it.
Speaker 4 (27:50):
And then who would think.
Speaker 5 (27:52):
It would be so far to it is that we
would actually stop making great electric vehicles and now they
can take the entire market from everybody. That's exactly what's
going to happen is in the next five years, Chinese
evs will be like the top vehicles in the electric
vehicle market.
Speaker 1 (28:07):
I have no doubt you think they'll be here in
the US.
Speaker 5 (28:10):
Well, we're going to try to stop them, right, because
isn't that capitalism stop the competitors, not free market capitalism?
Speaker 4 (28:17):
You know. So I don't know they're in Europe. I
see them in Mexico, so you know.
Speaker 1 (28:22):
Got Chinese buses here.
Speaker 4 (28:24):
I believe Chinese BYD buses.
Speaker 5 (28:27):
So if you're a free market guy like me, you're
kind of like, yeah, why shouldn't I be able to
buy a BYD? Did?
Speaker 2 (28:31):
I feel you on every level? I feel like we're
soul brothers.
Speaker 4 (28:35):
You guys.
Speaker 3 (28:35):
I was going to say, are you long last brothers?
Because Matt is just sitting.
Speaker 4 (28:39):
Back podcast together.
Speaker 5 (28:41):
You know, this is why I don't have my own podcasts,
because I try to find great podcasters to be on
their shows.
Speaker 1 (28:45):
You need to come on more often.
Speaker 2 (28:47):
I'm so glad we got you.
Speaker 4 (28:48):
You love to? Yeah, I love to. Well, that's what
I'm saying.
Speaker 5 (28:50):
I see you know, I look at Bloomberg a lot,
and because there's nothing else to look at any more,
that I believe in and and sadly, Reuters in Bloomberg
is all I've got now.
Speaker 4 (28:59):
And so, you know, no offense to all the other
channels I'm on. You know, I love you all too,
But the quality is you guys are getting worked.
Speaker 2 (29:07):
You know, I will get you everywhere.
Speaker 4 (29:11):
Yeah, I'm like, you.
Speaker 5 (29:12):
Know, I love your podcast, and I love cars, and
you know, I love technology, and I think that this
is one of the most exciting times in technology. You know,
you didn't ask me about what I think about putting
Groc on the car. You know, he put the AI
thing on the Tesla too, and it totally screwed up
the infotainment system because Groc is an integrated.
Speaker 4 (29:32):
I didn't even know when you push the.
Speaker 5 (29:34):
MIC to like make a phone call now and you're
like call my mom. Groc's like, well, I can't do that.
And I was like, then, why are you on my car?
And It's like, well, elon, put me on your car.
And I was like, but if you can't run anything
on the car, like, why are you on my car?
And how do I get back to the thing that
used to do stuff? And it's like, you can't. And
I was like and I was like I'm going to
record this and post this because groc will tell you, like,
(29:56):
it doesn't make any sense why I'm on the car
right now, because I can't.
Speaker 4 (29:58):
Do anything that's great. Wow.
Speaker 5 (30:01):
But it's the beginning of a big innovation that's about
to happen in cars, where in our lives, where AI
will actually.
Speaker 4 (30:09):
Do stuff for us. Right now it's telling us stuff
and it's great for research, but next it's going to
do stuff for us. Buy me those tickets, yes, order
me that plan, that plan that trip for me, use
my bloom tickets. Yeah.
Speaker 2 (30:25):
Yeah, Actually, I just I was just driving the new
Aston Martin Vanquish and they are the.
Speaker 4 (30:33):
First that's a great car.
Speaker 2 (30:34):
It's insanely good. I'm so blown away, dude, the way I.
Speaker 4 (30:38):
Hadn't asked Martin once that I loved it to.
Speaker 2 (30:40):
Be handling on this, I don't know how the engineers
did it. Like it's not it doesn't jar you, but
it's also so sporty. But the one thing that on
the outside, on the tech side, they are the first
company or the first car maker to use Apple car
Play Ultra, so it's car Play, but it also controls
everything in your cars mode and climate, controls and you know,
(31:03):
so you don't have to switch back and forth.
Speaker 4 (31:05):
It's really so did it work well?
Speaker 2 (31:06):
It worked really well.
Speaker 5 (31:08):
It really well because Apple failed in this whole car
thing pretty bad, and the original car play was like
kind of a joke and manufacturers were just putting it on.
But it was basically like a cheap integration. But a
full auto integration makes a lot of sense because car
makers can't make software, as I was just saying, and
so let Apple just take exact car. It makes sense,
(31:30):
be your iOS, you know, of your car. It's it's
sort of like the next big battles who controls your car?
Speaker 4 (31:38):
You know? Apple, And that was.
Speaker 5 (31:40):
Sort of like, oh, we're going to license the Tesla
software and all this kind of stuff too, which which
could have happened if that's what they were focused on,
because you know, even when you get in like a
good new car, most of that software to me is
pretty like ridiculously bad. Yeah, it doesn't compare to anything
like a video game or anything.
Speaker 4 (32:00):
You know.
Speaker 2 (32:00):
It's like, yeah, dude, I agree, We're gonna have to
have you back on again because this has been great.
Speaker 4 (32:08):
Love.
Speaker 1 (32:10):
I think this is the beginning of a long relationship.
Speaker 2 (32:14):
Uh my final, My final tipics.
Speaker 4 (32:17):
We're going to talk about cars like I.
Speaker 1 (32:19):
Love or music. I got my Springsteen t shirt on
Talk About.
Speaker 2 (32:28):
Special. Thanks to my new best friend Ross Gerber for
joining us today. He is the president and CEO of
Gerber Kawasaki.
Speaker 3 (32:35):
That does it for this week's show. Remember to follow
us and subscribe to Bloomberg Hot Pursuit on Apple, Spotify,
and anywhere else you listen. You can also send us
your comments. Please email us your comments at Hot Pursuit
at Bloomberg.
Speaker 2 (32:51):
Dot net, and check out Hannah's columns and stories on
Bloomberg dot com and the Bloomberg Business app. Go there
for car reviews, events and stories that you won't find
anywhere else. Find it all at Bloomberg dot com, slash Pursuits,
slash Autos. I'm Matt Miller and I'm Hannah Elliott.
Speaker 3 (33:08):
Will be back in your podcast speed again next week
Hosts And Creators
Hannah Elliott
Matt Miller
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