September 15, 2025 • 18 mins
On Monday, news broke that Tesla CEO Elon Musk recently bought about $1 billion worth of Tesla stock causing the company’s share price to jump. It was the latest headline to stoke investor optimism, following the news earlier this month that the Tesla board awarded Musk a $1 trillion pay package, to secure his focus on the car company for the next several years.
On today’s Big Take podcast, global autos editor Craig Trudell joins host David Gura to discuss why Tesla investors are, once again, all in on Musk — and why even Musk’s renewed focus may not be enough to turn the company’s fortunes around this time.
Read more: Musk’s $1 Billion Tesla Stock Buy Sends Shares Up for 2025
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Speaker 1 (00:00):
Bloomberg Audio, Studios, podcasts, radio news.
Speaker 2 (00:09):
This morning news broke that Tesla CEO Elon Musk, the
world's richest man, recently bought about one billion dollars worth
of Tesla stock, and the company's share price jumped. Tesla's
shares are getting a boost from their ceo. The stock
rose more than three and a half percent in regular trading.
The world learned about that purchase in a regulatory filing
(00:30):
on Monday, but Musk actually bought those shares on Friday,
September twelfth, indirectly through a revocable trust that was the
same day. Robin Denholm, the chair of Tesla's board, told
Bloomberg TV how optimistic she is about Tesla's future with
Musk in the driver's seat.
Speaker 3 (00:48):
He's a generational leader. There aren't any other people out
there like Elon who can actually lead the company over
this next decade or so.
Speaker 2 (00:58):
That interview came on the heels of a big announcement
earlier this month that Tesla's board wants to offer Musk
an unprecedented compensation package valued at one trillion dollars.
Speaker 4 (01:10):
Well, he's already one of the world's richest people, but
Elon Musk could become the first ever trillionaire. It's all
possible under Tesla's new pay package.
Speaker 2 (01:19):
But behind these headlines, these eye popping numbers are some
serious challenges Tesla's facing.
Speaker 1 (01:24):
Elon Musk warning that the cuts to evs and other
clean energy credits would be incredibly destructive to the country.
Speaker 4 (01:31):
When Tesla's lose power, crashes can turn into deadly races
against time. Reporting by Bloomberg News has found that regulators
have been slow to act, and complaints about Tesla's doors
have piled up.
Speaker 1 (01:43):
I think this is a matter of being able to
sort of in your head, think this guy has done
it before, maybe he can do it again.
Speaker 2 (01:51):
Craig Trudell oversees Bloomberg's coverage of the auto industry. These
covered Elon Musk and Tesla for years. Craig says, what's
really reassuring them and Tesla's board is having Musk out
of government with a new financial incentive to focus more
on the company.
Speaker 1 (02:07):
There's a sort of concerted effort to message on the
part of this company that you know, Musk is coming back.
He's putting his head back down, he's putting politics aside.
He's left the White House, he's gonna hunker back down
and get down to business, and people are even using
really sort of over the top language like a wartime CEO.
Speaker 2 (02:28):
But what's unclear is if Musk himself has gotten that
message and if that one trillion dollar pay package, provided
it's approved by shareholders, will work. I'm David Gura, and
this is the big take from Bloomberg News today. On
the show, what could have been a bad year for
Tesla isn't looking so bad to Tesla's investors and board,
(02:51):
who are convinced that with more of Elon Musk's attention,
the company will be back on track. Twenty twenty five
has been tumultuous for Tesla. After years of remarkable growth.
It shares plunged because of lackluster sales and increased competition,
(03:12):
along with concern over Elon Musk's politics. But in the
month since, Tesla's stock has been trending higher, and this
month it's all but erased those losses. Bloomberg's Craig Trudell
says it's been vibes as much as fundamentals driving the
company's share price.
Speaker 1 (03:29):
This is a company that you know all of it's
here and now fundamentals are sort of flashing red, and
yet you have Musk talking up this future of humanoid robots,
and this is of course, you know, sort of running
contrary to these years of efforts on the part of
other very valuable companies with really smart engineers who have
tried to sort of make humanoid robots a thing and
(03:51):
really struggle doing so. The other sort of half of
the reason for optimism, I would say, would be robotaxis,
and you know, there's maybe more tangible signs of real
progress on that front for Tesla to a degree in
that they have launched this very limited service in Austin, Texas,
where they're headquartered. But it's really important to sort of
keep in mind that there are still humans in the
(04:14):
front row of those vehicles that are sort of keeping
an eye on things. And this was you know, far
from a sort of auspicious start for these vehicles, where
from day one when they launched this service, you had
cars driving in the wrong lane and in sort of
the wrong direction, and the National Highway Traffic Safety Administration
coming right out and telling us at Bloomberg, yeah, we're watching,
(04:36):
we're noticing these things, and we're in touch with the
company so you know, have they figured out robotaxis and
gotten their cars to a point where they can safely
navigate the streets without anyone behind the wheel or in
the passenger seat. Even Tesla, I think, by its actions,
can be judged to be saying no.
Speaker 2 (04:54):
For so long the narrative was that Elon Musk was
distracted by the role that he was playing Trump administration
at the helm of Doge. He wasn't paying attention to this,
to this company and others that he runs. It did
seem like Tesla's board wanted to limit Elon Musk's political activity,
and then it seemed to walk that back. This is
what Robin Denholm said on Bloomberg TV.
Speaker 3 (05:16):
What he does from a personal perspective in terms of
his political motivations, etc. Is up to him. I mean
clearly from our perspective as a board, we're measuring him
on results and measuring him on what he does as
a CEO of TESLAT.
Speaker 2 (05:32):
What is the board's position on Elon Musk and politics.
Speaker 1 (05:35):
Yeah, our colleagues Ed Ludlow and Caroline Hyde really sort
of pressed and holme on this on Friday to really
sort of get a hard and fast sense of what
do we mean by winding down as political activities, because
there was some language within the proxy to that end
that Musk had made some assurances, and we really did
not get firm answers from Denholm. I think, you know,
(05:58):
just reading between the lines, as though we've already gotten
to the point where they're happy. Where he's you know,
left Dough, he's left the White House, he's no longer
a special government employee, and yet there doesn't seem to
be any limits placed on you know, he's thrown out
this idea of maybe starting a political party in the US.
There's also been real substantial weighing in on UK politics,
(06:20):
on German politics, and there doesn't seem to be any
sort of line being drawn by the board, at least
publicly in terms of what's okay and not okay for
him going forward.
Speaker 2 (06:31):
And as you look at your remit the car companies
that you cover, how different is this board, the Tesla board,
from say the board at Forward or the board at GM.
Speaker 1 (06:41):
They have a really difficult job, I will give them that, right.
You know, you don't have another CEO who's pulling the
kind of stunts that he is on a day to
day and you have heard Robin Denholmes sort of speak
to this idea that she wishes that he wasn't quite
the way he is on Twitter. This is a board
that really has its hands full. And yet also on
(07:01):
the other side of that coin is they it is
true that this is a generational leader from the perspective
of we haven't seen somebody, you know, turn a car
company into a trillion dollar enterprise. We haven't seen a
car company even come close to that. And you know,
we can sort of debate until the cows come home
whether or not Tesla is worthy of that valuation, But
(07:22):
the sort of hard and fast truth is that, you know,
he is convinced enough people that it is worth that.
And even if this is more than just a car
company by any metric, you know, in terms of where
they're valued on a sort of fundamental basis, a price
earnings ratio going forward, this is a really rich stock.
And if Musk were to be sort of out of
the picture or in any way perceived as as sort
(07:45):
of stepping back from Tesla, we've seen over the last
few years that that can be hugely destructive to this
company's valuation.
Speaker 2 (07:54):
Elon Musk's plans for Tesla go beyond cars. They include
robots and AI. But musk stream of turning Tesla into
the most valuable company in the world won't be easy.
The challenges facing Musk and Tesla after the break. When
(08:18):
Tesla posted its quarterly earnings back in July, a big
headline was a twelve percent drop in revenue compared to
a year earlier. On a call with investors, Tesla leadership
didn't comment much on that decline, but CEO Elon Musk
did acknowledge the next few months are likely to be rough.
Speaker 3 (08:35):
I mean, does that mean like we could have a
few rough quarters. Yeah, we probably could have a few
rough quarters.
Speaker 2 (08:41):
I asked Bloomberg's Craig Trudell what that admission tells us
about Musk's vision for the company and what's to come.
Speaker 1 (08:48):
Yeah. I think it's going to be the case that
this quarter is going to be boosted by the fact
that in the US you have a phasing out of
electric vehicle tax credits. There's going to be a pull
ahead of people who are maybe considering buying an EV
that are going to accelerate that decision to take advantage
of the fact that they could be eligible for a
(09:09):
seventy five hundred dollars tax credit. The real concern is
that after those tax credits go away, that Tesla and
everyone else selling EV's is really going to have a
hard time for months to come. On top of that,
you also have a deregulation agenda on the part of
the Trump administration to take away penalties for fuel economy
(09:29):
standards and for emission standards that Tesla for years has
really benefited from more than twelve billion dollars worth of
regulatory credits. You have byd going from strength to strength
in terms of continuing to outsell everybody.
Speaker 3 (09:45):
There.
Speaker 1 (09:46):
You have Jaumi, China's version of Apple making a real
concerted effort to go into the EV space. And then
here in Europe a sort of falling apart of Tesla's
position in really major markets including Germany, France, and so
cross the globe, we're seeing real weakness in Tesla's core
car business. And I should also mention too, just to
(10:06):
go along with that, this is a company with an
energy business that sells storage batteries for utilities, that too
is going to be hit by the fact that the
Republicans have got it a lot of what was in IRA.
Speaker 2 (10:18):
During the throws of the early days of Trump's second term,
we saw Tesla sales decline. How much of that decline
is attributable to politics, and how does he change that
part of Tesla story that sales have been dropping and
they really haven't recovered.
Speaker 1 (10:32):
It's a really good question, and it's something we've struggled with.
Right there are very clear signs that Musk is at
least a major contributing factor to the challenges that this
company has had all year long, really, and some of
those signs are that early in the year the company
was kind of using this excuse that seemed to have
some merit that they were changing over their most important product,
(10:53):
the Model WHY, to a new design. They were making
it better in a lot of respects, upgrading the design,
and in order to sort of change over to that
new vehicle, they needed to temporarily shut down production at
factories around the world. But what we've seen is that
since the new Model Y has arrived in showrooms that
we've not seen a recovery in this company's sales. I
(11:15):
would say, particularly here in Europe, things have just continued
to be really weak, But in the US as well,
I think the sales numbers that we see in California
sort of liberal bastion in a place where Tesla has
dominated for so long. They have fallen from a position
of extreme strength to it's now a much more competitive
space with a lot more alternatives, Craig.
Speaker 2 (11:38):
Another set of challenges have to do with the vehicles
themselves and how they're designed. And your team has done
some incredible investigations of the doors on Tesla models. For instance,
I think anybody who's bought one, or rented one or
ridden one has to figure out how to open a
car door on a test that's even more complicated on
a cyber truck. This has actually proven to be hugely
problematic when there are car accidents, and these stores are
(12:00):
incredibly difficult to open if the car no longer has power.
What did Bloomberg learn over the course of that investigation,
and how have federal regulators responded to that problem?
Speaker 1 (12:10):
Yeah, this all started actually internally with one of our
colleagues having read about and heard about a crash involving
four college students who were in a cyber truck around
the time of Thanksgiving last year. And these students were
in a crash where only one was pulled out of
the vehicle, and the three others did not survive the
(12:30):
fire that followed this crash. All three of the young
people who died in this incident survived the initial crash,
but died of thermal injuries and smoke inhalation because they
were unable to get out of the vehicle. And this
really sort of big questions for us of a simple
question of why couldn't they get out? And this is
(12:51):
an issue that has been raised for years, going back
to the Model S, the first vehicle that Tessa built
itself from the ground up, where they designed their doors
externally to have flush door handles. I think, you know,
it was for understandable reasons of improve aerodynamics, reduce wind noise,
and also just a sort of cool factor. And yet
(13:13):
from the beginning there were real issues with how these
door handles worked, both from the outside and from the inside.
Where some of the pushback that we've gotten for this
piece is, well, you know they have mechanical releases to
get out of these vehicles, they're also very difficult to find.
There's also differences from model to model as to whether
or not there's mechanical releases in the back seat, which
(13:35):
is obviously hugely problematic if you happen to be in
the back seat in an instance where your Tesla has
lost power, and particularly if your Tesla has lost power
and it is on fire. And also I just should
point out from the outside of Tesla's you know, they
advise within their sort of rescue tip sheets for first responders,
(13:56):
the doors just don't work from the outside. If the
vehicle doesn't have any power, you're going to have to
bash the window and or cut the doors open to
get to people.
Speaker 2 (14:04):
Musk and other Tesla executives didn't respond to Bloomberg's inquiries
about the doors or to Bloomberg's requests for comment.
Speaker 1 (14:11):
And we found incidents of people complaining to the National
Highway Traffic Safety Administration about their doors not working for
them that NISA says it's aware of not only those complaints,
but also the incidents that we wrote about last week,
and they're considering whether or not a full investigation of
this issue is warranted.
Speaker 2 (14:30):
It highlights this tension between Elon Musk's Tesla and regulators,
and you can hear this on quarterly calls. He often
says that the engineering is up to snuff, or they've
developed something or it's ready to go, they're just waiting
for regulatory approval. I think about this in the context
of another investigation that Bloomberg did about the self driving
(14:51):
system on his cars, which operate differently than other car
companies self driving apparatuses. Help me understand how that is
kind of framing elon Musk's timeline for the advancements he
says are coming. So I think of, for instance, the
robotaxis he's talked about, as you mentioned, have been in
Austin where Tesla's based, a few other cities as well.
He's very eager to expand it. How realistic is that
(15:13):
in light of that tension I just mentioned between what
regulators are thinking and allowing versus what Tesla says it's
able to do.
Speaker 1 (15:18):
Yeah, it's interesting. NITSA has clearly demonstrated that they're paying
attention in terms of just how much they've really stood
in the way of this company. I guess there's not
necessarily huge issues in terms of the ways in which
they could be sort of perceived as holding Tesla back.
Musk has referred to them as the fun police, I
should note, And yet this is also an agency that
(15:40):
is not particularly well resourced, not particularly well staffed, and
that was before DOGE came in and did what it
did across the US government. And we've also just taken
an approach in the US of allowing and being more
permissive of this technology on the grounds that it has
this potential to bring down the roughly forty and traffic
(16:00):
fatalities that we see on US roads every year. There's
been this concern going back to the Obama administration of
we shouldn't be too prescriptive or too tough on this
technology or set hard and fast rules. We should allow
this to sort of proceed and sort of set guidelines
and come in afterward. And to the extent that issues
(16:20):
come up, we'll do defect investigations, will subject to these
companies to scrutiny, but we're not really going to stand
in the way. Whereas in Europe it's a very different story.
You have not seen Tesla be allowed to put what
it refers to as FSD on the roads, and even
in China there was a sort of limited ability to
sort of start to pilot that earlier this year. That
(16:41):
didn't last particularly long, and there's been real concerns about
Tesla and its competitors, just how sort of ready that
that technology is and the extent to which companies perhaps
have maybe oversold the capability of this technology.
Speaker 2 (16:56):
Just lastly, here to recap, Tesla has issues with sales
being down, the sunsetting of these electric vehicle incentives by
the US government, problems with safety that have come to
light in the media. Given all of that, how is
it that Tesla investors retain the level of optimism we've
seen them have.
Speaker 1 (17:16):
I think Musk has this uncanny ability to sort of
set agendas and command narratives, and his ability to sort
of talk about the future in this really exciting way
and put out these indications that everything's going to change.
He's going to deliver something that we've never seen before,
(17:37):
and we've seen him sort of make good on a
lot of those things. Right, This is a guy who
shoots rockets off into space and lands them back on
bard ships.
Speaker 4 (17:45):
Right.
Speaker 1 (17:46):
His ability to leverage that as don't worry about the
here and now, forget about the challenges that I'm having.
I've done it before, and I can do it again.
And it has proven to be really sort of sticky
and effective, even in spite of the damage that he
himself has been doing to his own company.
Speaker 2 (18:10):
This is the Big Take from Bloomberg News. I'm David Gura.
To get more from The Big Take and unlimited access
to all of Bloomberg dot com, subscribe today at Bloomberg
dot com slash podcast offer. If you'd like this episode,
make sure to follow and review The Big Take wherever
you listen to podcasts. It helps people find the show.
Thanks for listening. We'll be back tomorrow.
Bloomberg Audio, Studios, podcasts, radio news.
Speaker 2 (00:09):
This morning news broke that Tesla CEO Elon Musk, the
world's richest man, recently bought about one billion dollars worth
of Tesla stock, and the company's share price jumped. Tesla's
shares are getting a boost from their ceo. The stock
rose more than three and a half percent in regular trading.
The world learned about that purchase in a regulatory filing
(00:30):
on Monday, but Musk actually bought those shares on Friday,
September twelfth, indirectly through a revocable trust that was the
same day. Robin Denholm, the chair of Tesla's board, told
Bloomberg TV how optimistic she is about Tesla's future with
Musk in the driver's seat.
Speaker 3 (00:48):
He's a generational leader. There aren't any other people out
there like Elon who can actually lead the company over
this next decade or so.
Speaker 2 (00:58):
That interview came on the heels of a big announcement
earlier this month that Tesla's board wants to offer Musk
an unprecedented compensation package valued at one trillion dollars.
Speaker 4 (01:10):
Well, he's already one of the world's richest people, but
Elon Musk could become the first ever trillionaire. It's all
possible under Tesla's new pay package.
Speaker 2 (01:19):
But behind these headlines, these eye popping numbers are some
serious challenges Tesla's facing.
Speaker 1 (01:24):
Elon Musk warning that the cuts to evs and other
clean energy credits would be incredibly destructive to the country.
Speaker 4 (01:31):
When Tesla's lose power, crashes can turn into deadly races
against time. Reporting by Bloomberg News has found that regulators
have been slow to act, and complaints about Tesla's doors
have piled up.
Speaker 1 (01:43):
I think this is a matter of being able to
sort of in your head, think this guy has done
it before, maybe he can do it again.
Speaker 2 (01:51):
Craig Trudell oversees Bloomberg's coverage of the auto industry. These
covered Elon Musk and Tesla for years. Craig says, what's
really reassuring them and Tesla's board is having Musk out
of government with a new financial incentive to focus more
on the company.
Speaker 1 (02:07):
There's a sort of concerted effort to message on the
part of this company that you know, Musk is coming back.
He's putting his head back down, he's putting politics aside.
He's left the White House, he's gonna hunker back down
and get down to business, and people are even using
really sort of over the top language like a wartime CEO.
Speaker 2 (02:28):
But what's unclear is if Musk himself has gotten that
message and if that one trillion dollar pay package, provided
it's approved by shareholders, will work. I'm David Gura, and
this is the big take from Bloomberg News today. On
the show, what could have been a bad year for
Tesla isn't looking so bad to Tesla's investors and board,
(02:51):
who are convinced that with more of Elon Musk's attention,
the company will be back on track. Twenty twenty five
has been tumultuous for Tesla. After years of remarkable growth.
It shares plunged because of lackluster sales and increased competition,
(03:12):
along with concern over Elon Musk's politics. But in the
month since, Tesla's stock has been trending higher, and this
month it's all but erased those losses. Bloomberg's Craig Trudell
says it's been vibes as much as fundamentals driving the
company's share price.
Speaker 1 (03:29):
This is a company that you know all of it's
here and now fundamentals are sort of flashing red, and
yet you have Musk talking up this future of humanoid robots,
and this is of course, you know, sort of running
contrary to these years of efforts on the part of
other very valuable companies with really smart engineers who have
tried to sort of make humanoid robots a thing and
(03:51):
really struggle doing so. The other sort of half of
the reason for optimism, I would say, would be robotaxis,
and you know, there's maybe more tangible signs of real
progress on that front for Tesla to a degree in
that they have launched this very limited service in Austin, Texas,
where they're headquartered. But it's really important to sort of
keep in mind that there are still humans in the
(04:14):
front row of those vehicles that are sort of keeping
an eye on things. And this was you know, far
from a sort of auspicious start for these vehicles, where
from day one when they launched this service, you had
cars driving in the wrong lane and in sort of
the wrong direction, and the National Highway Traffic Safety Administration
coming right out and telling us at Bloomberg, yeah, we're watching,
(04:36):
we're noticing these things, and we're in touch with the
company so you know, have they figured out robotaxis and
gotten their cars to a point where they can safely
navigate the streets without anyone behind the wheel or in
the passenger seat. Even Tesla, I think, by its actions,
can be judged to be saying no.
Speaker 2 (04:54):
For so long the narrative was that Elon Musk was
distracted by the role that he was playing Trump administration
at the helm of Doge. He wasn't paying attention to this,
to this company and others that he runs. It did
seem like Tesla's board wanted to limit Elon Musk's political activity,
and then it seemed to walk that back. This is
what Robin Denholm said on Bloomberg TV.
Speaker 3 (05:16):
What he does from a personal perspective in terms of
his political motivations, etc. Is up to him. I mean
clearly from our perspective as a board, we're measuring him
on results and measuring him on what he does as
a CEO of TESLAT.
Speaker 2 (05:32):
What is the board's position on Elon Musk and politics.
Speaker 1 (05:35):
Yeah, our colleagues Ed Ludlow and Caroline Hyde really sort
of pressed and holme on this on Friday to really
sort of get a hard and fast sense of what
do we mean by winding down as political activities, because
there was some language within the proxy to that end
that Musk had made some assurances, and we really did
not get firm answers from Denholm. I think, you know,
(05:58):
just reading between the lines, as though we've already gotten
to the point where they're happy. Where he's you know,
left Dough, he's left the White House, he's no longer
a special government employee, and yet there doesn't seem to
be any limits placed on you know, he's thrown out
this idea of maybe starting a political party in the US.
There's also been real substantial weighing in on UK politics,
(06:20):
on German politics, and there doesn't seem to be any
sort of line being drawn by the board, at least
publicly in terms of what's okay and not okay for
him going forward.
Speaker 2 (06:31):
And as you look at your remit the car companies
that you cover, how different is this board, the Tesla board,
from say the board at Forward or the board at GM.
Speaker 1 (06:41):
They have a really difficult job, I will give them that, right.
You know, you don't have another CEO who's pulling the
kind of stunts that he is on a day to
day and you have heard Robin Denholmes sort of speak
to this idea that she wishes that he wasn't quite
the way he is on Twitter. This is a board
that really has its hands full. And yet also on
(07:01):
the other side of that coin is they it is
true that this is a generational leader from the perspective
of we haven't seen somebody, you know, turn a car
company into a trillion dollar enterprise. We haven't seen a
car company even come close to that. And you know,
we can sort of debate until the cows come home
whether or not Tesla is worthy of that valuation, But
(07:22):
the sort of hard and fast truth is that, you know,
he is convinced enough people that it is worth that.
And even if this is more than just a car
company by any metric, you know, in terms of where
they're valued on a sort of fundamental basis, a price
earnings ratio going forward, this is a really rich stock.
And if Musk were to be sort of out of
the picture or in any way perceived as as sort
(07:45):
of stepping back from Tesla, we've seen over the last
few years that that can be hugely destructive to this
company's valuation.
Speaker 2 (07:54):
Elon Musk's plans for Tesla go beyond cars. They include
robots and AI. But musk stream of turning Tesla into
the most valuable company in the world won't be easy.
The challenges facing Musk and Tesla after the break. When
(08:18):
Tesla posted its quarterly earnings back in July, a big
headline was a twelve percent drop in revenue compared to
a year earlier. On a call with investors, Tesla leadership
didn't comment much on that decline, but CEO Elon Musk
did acknowledge the next few months are likely to be rough.
Speaker 3 (08:35):
I mean, does that mean like we could have a
few rough quarters. Yeah, we probably could have a few
rough quarters.
Speaker 2 (08:41):
I asked Bloomberg's Craig Trudell what that admission tells us
about Musk's vision for the company and what's to come.
Speaker 1 (08:48):
Yeah. I think it's going to be the case that
this quarter is going to be boosted by the fact
that in the US you have a phasing out of
electric vehicle tax credits. There's going to be a pull
ahead of people who are maybe considering buying an EV
that are going to accelerate that decision to take advantage
of the fact that they could be eligible for a
(09:09):
seventy five hundred dollars tax credit. The real concern is
that after those tax credits go away, that Tesla and
everyone else selling EV's is really going to have a
hard time for months to come. On top of that,
you also have a deregulation agenda on the part of
the Trump administration to take away penalties for fuel economy
(09:29):
standards and for emission standards that Tesla for years has
really benefited from more than twelve billion dollars worth of
regulatory credits. You have byd going from strength to strength
in terms of continuing to outsell everybody.
Speaker 3 (09:45):
There.
Speaker 1 (09:46):
You have Jaumi, China's version of Apple making a real
concerted effort to go into the EV space. And then
here in Europe a sort of falling apart of Tesla's
position in really major markets including Germany, France, and so
cross the globe, we're seeing real weakness in Tesla's core
car business. And I should also mention too, just to
(10:06):
go along with that, this is a company with an
energy business that sells storage batteries for utilities, that too
is going to be hit by the fact that the
Republicans have got it a lot of what was in IRA.
Speaker 2 (10:18):
During the throws of the early days of Trump's second term,
we saw Tesla sales decline. How much of that decline
is attributable to politics, and how does he change that
part of Tesla story that sales have been dropping and
they really haven't recovered.
Speaker 1 (10:32):
It's a really good question, and it's something we've struggled with.
Right there are very clear signs that Musk is at
least a major contributing factor to the challenges that this
company has had all year long, really, and some of
those signs are that early in the year the company
was kind of using this excuse that seemed to have
some merit that they were changing over their most important product,
(10:53):
the Model WHY, to a new design. They were making
it better in a lot of respects, upgrading the design,
and in order to sort of change over to that
new vehicle, they needed to temporarily shut down production at
factories around the world. But what we've seen is that
since the new Model Y has arrived in showrooms that
we've not seen a recovery in this company's sales. I
(11:15):
would say, particularly here in Europe, things have just continued
to be really weak, But in the US as well,
I think the sales numbers that we see in California
sort of liberal bastion in a place where Tesla has
dominated for so long. They have fallen from a position
of extreme strength to it's now a much more competitive
space with a lot more alternatives, Craig.
Speaker 2 (11:38):
Another set of challenges have to do with the vehicles
themselves and how they're designed. And your team has done
some incredible investigations of the doors on Tesla models. For instance,
I think anybody who's bought one, or rented one or
ridden one has to figure out how to open a
car door on a test that's even more complicated on
a cyber truck. This has actually proven to be hugely
problematic when there are car accidents, and these stores are
(12:00):
incredibly difficult to open if the car no longer has power.
What did Bloomberg learn over the course of that investigation,
and how have federal regulators responded to that problem?
Speaker 1 (12:10):
Yeah, this all started actually internally with one of our
colleagues having read about and heard about a crash involving
four college students who were in a cyber truck around
the time of Thanksgiving last year. And these students were
in a crash where only one was pulled out of
the vehicle, and the three others did not survive the
(12:30):
fire that followed this crash. All three of the young
people who died in this incident survived the initial crash,
but died of thermal injuries and smoke inhalation because they
were unable to get out of the vehicle. And this
really sort of big questions for us of a simple
question of why couldn't they get out? And this is
(12:51):
an issue that has been raised for years, going back
to the Model S, the first vehicle that Tessa built
itself from the ground up, where they designed their doors
externally to have flush door handles. I think, you know,
it was for understandable reasons of improve aerodynamics, reduce wind noise,
and also just a sort of cool factor. And yet
(13:13):
from the beginning there were real issues with how these
door handles worked, both from the outside and from the inside.
Where some of the pushback that we've gotten for this
piece is, well, you know they have mechanical releases to
get out of these vehicles, they're also very difficult to find.
There's also differences from model to model as to whether
or not there's mechanical releases in the back seat, which
(13:35):
is obviously hugely problematic if you happen to be in
the back seat in an instance where your Tesla has
lost power, and particularly if your Tesla has lost power
and it is on fire. And also I just should
point out from the outside of Tesla's you know, they
advise within their sort of rescue tip sheets for first responders,
(13:56):
the doors just don't work from the outside. If the
vehicle doesn't have any power, you're going to have to
bash the window and or cut the doors open to
get to people.
Speaker 2 (14:04):
Musk and other Tesla executives didn't respond to Bloomberg's inquiries
about the doors or to Bloomberg's requests for comment.
Speaker 1 (14:11):
And we found incidents of people complaining to the National
Highway Traffic Safety Administration about their doors not working for
them that NISA says it's aware of not only those complaints,
but also the incidents that we wrote about last week,
and they're considering whether or not a full investigation of
this issue is warranted.
Speaker 2 (14:30):
It highlights this tension between Elon Musk's Tesla and regulators,
and you can hear this on quarterly calls. He often
says that the engineering is up to snuff, or they've
developed something or it's ready to go, they're just waiting
for regulatory approval. I think about this in the context
of another investigation that Bloomberg did about the self driving
(14:51):
system on his cars, which operate differently than other car
companies self driving apparatuses. Help me understand how that is
kind of framing elon Musk's timeline for the advancements he
says are coming. So I think of, for instance, the
robotaxis he's talked about, as you mentioned, have been in
Austin where Tesla's based, a few other cities as well.
He's very eager to expand it. How realistic is that
(15:13):
in light of that tension I just mentioned between what
regulators are thinking and allowing versus what Tesla says it's
able to do.
Speaker 1 (15:18):
Yeah, it's interesting. NITSA has clearly demonstrated that they're paying
attention in terms of just how much they've really stood
in the way of this company. I guess there's not
necessarily huge issues in terms of the ways in which
they could be sort of perceived as holding Tesla back.
Musk has referred to them as the fun police, I
should note, And yet this is also an agency that
(15:40):
is not particularly well resourced, not particularly well staffed, and
that was before DOGE came in and did what it
did across the US government. And we've also just taken
an approach in the US of allowing and being more
permissive of this technology on the grounds that it has
this potential to bring down the roughly forty and traffic
(16:00):
fatalities that we see on US roads every year. There's
been this concern going back to the Obama administration of
we shouldn't be too prescriptive or too tough on this
technology or set hard and fast rules. We should allow
this to sort of proceed and sort of set guidelines
and come in afterward. And to the extent that issues
(16:20):
come up, we'll do defect investigations, will subject to these
companies to scrutiny, but we're not really going to stand
in the way. Whereas in Europe it's a very different story.
You have not seen Tesla be allowed to put what
it refers to as FSD on the roads, and even
in China there was a sort of limited ability to
sort of start to pilot that earlier this year. That
(16:41):
didn't last particularly long, and there's been real concerns about
Tesla and its competitors, just how sort of ready that
that technology is and the extent to which companies perhaps
have maybe oversold the capability of this technology.
Speaker 2 (16:56):
Just lastly, here to recap, Tesla has issues with sales
being down, the sunsetting of these electric vehicle incentives by
the US government, problems with safety that have come to
light in the media. Given all of that, how is
it that Tesla investors retain the level of optimism we've
seen them have.
Speaker 1 (17:16):
I think Musk has this uncanny ability to sort of
set agendas and command narratives, and his ability to sort
of talk about the future in this really exciting way
and put out these indications that everything's going to change.
He's going to deliver something that we've never seen before,
(17:37):
and we've seen him sort of make good on a
lot of those things. Right, This is a guy who
shoots rockets off into space and lands them back on
bard ships.
Speaker 4 (17:45):
Right.
Speaker 1 (17:46):
His ability to leverage that as don't worry about the
here and now, forget about the challenges that I'm having.
I've done it before, and I can do it again.
And it has proven to be really sort of sticky
and effective, even in spite of the damage that he
himself has been doing to his own company.
Speaker 2 (18:10):
This is the Big Take from Bloomberg News. I'm David Gura.
To get more from The Big Take and unlimited access
to all of Bloomberg dot com, subscribe today at Bloomberg
dot com slash podcast offer. If you'd like this episode,
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Thanks for listening. We'll be back tomorrow.
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