February 4, 2025 • 32 mins
Elon Musk has been in Washington a few weeks now, and he and his team of Silicon Valley adjutants show no signs of stopping their efforts to (illegally, many legal experts say) dismantle portions of the federal government in the name of Donald Trump. This weekend, we discussed how the Tesla co-founder and far-right billionaire was given access to a central component of government—the mechanism by which the Treasury distributes trillions of dollars authorized by Congress.
Today, Max Chafkin discusses these historic events with Bloomberg reporters Dana Hull, Ted Mann and Anthony Cormier. Cormier co-reported a story on Musk’s effort to collapse the US Agency for International Development, which distributes humanitarian and development aid all over the world. In addition to the ramifications Musk’s unprecedented actions may have for the 249-year-old republic, we also consider what this all means for his finances.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:12):
Well, Elon Musk is now the richest person on the planet.
More than half the satellites in space are owned and
controlled by one man.
Speaker 3 (00:21):
Well, he's a legitimate super genius. I mean legitimate. He
says he's always voted for Democrats, but this year it
will be different.
Speaker 1 (00:27):
He'll vote Republican.
Speaker 3 (00:29):
There is a reason the US government is so reliant
on him. Elon Musk is a scam artist and he's
done nothing.
Speaker 2 (00:34):
Anything he does, he's fascinating the people. Welcome to Elon Ink,
Bloomberg's weekly podcast about Elon Musk. It's Tuesday, February fourth.
I'm your host, Max Chafkin in for David Papadopoulos. A
(00:57):
few months ago, many people, although not let's be clear,
the people on this podcast, were seeing Elon Musk as
at best sort of a figurehead within the Trump administration,
somebody who'd be on a blue ribbon panel and would
mostly spend his time running his six very large, very
important companies. But the events of the past few days
(01:18):
have been shocking even to those of us who thought
that Elon would take a big role. Starting late last week,
Musk and his Doge team members went out across numerous
federal departments and armed with Trump's executive orders, began sowing chaos.
We're going to get into what happened and what might
come next, and then take a look at how Musk's
(01:39):
actual businesses are doing with a trade roar at home
and all of this Musk created chaos and political divisiveness
here at home. It's a lot to discuss all this.
We have Bloomberg's elon Musk reporter Dana Hull Hey Dana
Hey Nax and Bloomberg Politics reporter Ted Man joining us
from DC Hey, Tedy. And here in New York, Anthony Cormier,
(02:03):
a investigative reporter who co authored a great story yesterday
from inside the offices of Musk's attempted takeover of USAID.
Speaker 3 (02:12):
Welcome Anthony, Thanks for having me.
Speaker 2 (02:14):
All right, So, Anthony, you co wrote this story with
our colleague Jason Leopold.
Speaker 3 (02:19):
It is basically an inside.
Speaker 2 (02:22):
Account on what's kind of like a battle almost that
played out inside of this us AID, which is a
big foreign aid office inside the federal government.
Speaker 3 (02:32):
Just tell us what happened as far as you understand.
Speaker 4 (02:34):
It well, And there was a really unusual confrontation in fact,
on Saturday between a group of what people are calling
the Doge kids. These are young technologists who seem to
have an ideological bent that is similar to Elon's. And
they've been tapped by Musk and this new Doge team
(02:56):
to go in and look for spending cuts and they
took aim last week at USID, and so they show
up on Saturday as the building is empty, and they
demand access to the entire suite of offices, root around,
and after some back and forth, one of the members
of the Dose team calls Elon himself, and Elon gets
(03:19):
on the phone with the security office of USAID and says, look,
if you don't let us in, I'm going to call
the Marshall Service. Which is kind of an extraordinary circumstance,
kind of an unheard of conversation between these two sides.
Speaker 3 (03:31):
They get in.
Speaker 4 (03:32):
It's our understanding that they do in fact go through offices.
They're looking, in fact in desk drawers, and ultimately they
want to get into a security office, a secure facility
that you need a certain security clearance to get into.
Security says, no way, you can't do it. One of
our piece of our reporting suggests that they actually tried
to open a locked door to this secure facility. There's
(03:55):
a big blowout, the security officials are put on leave.
It's unclear at this point where than in fact they
did get into this office and what they were seeking.
Speaker 2 (04:03):
Okay, so I want to get more into this confrontation
over the weekend before we do that, Ted, There's been
a lot happening with DOGE in Washington. We've seen Musk
sort of go after a handful of targets, the Office
of Personnel Management, which is like HR for the government
General Services Administration, which controls I think the buildings the
Treasury Department's payment system. We talked about that on the
(04:25):
Emergency podcast over the weekend. Can you just sort of
put this latest thing into context for us, sure?
Speaker 1 (04:31):
I mean what Anthesy is describing as an especially dramatic
and colorful version of what has happened at a bunch
of these other offices you just mentioned, where these landing
teams of DOGE employees are just showing up and requesting
access to the basic plumbing systems of the federal government,
how money moves around, how people get hired, the information
(04:52):
that is stored about every program and every person who
works in the federal government. So it really is exactly
what the executve orders that created this non agency agency promised,
which is that they've they've given him the keys to
all the systems, or they're trying to at any rate.
In some cases, obviously they're having to try to take
them because they lack the legal authority. But it does
(05:13):
seem like this is this attempt to kind of get
over top of the whole machine and figure out how
it works.
Speaker 3 (05:19):
And Dana, is you on doing anything else of the moment?
Speaker 2 (05:23):
Is he basically just is this like a doze like
one hundred percent full time right now.
Speaker 5 (05:28):
He did take an hour out of his busy schedule
last week to like be on Tesla's earning call, but
he is hunkered down in Washington, d C. His plane
has been at Dulles for two weeks. And Anthony, what
kind of really struck me about your story over the
weekend is kind of the gleeful abandon with which Musk
and the Doze crew, where kids as some as some
(05:49):
have called them, are going about this. I listened to
Elon Musk do his X spaces on Sunday night, and
he was like very euphoric about about what they had done.
Speaker 6 (05:59):
To be clear, shutting down which we're in the past
is doing shutting down USAID. The reason for that, as
opposed to simply, you know, trying to do some minor
house cleaning, is is that as we dug into USAID,
it became apparent that what we have here is not
an apple with a worm in it, but we have
actually just a bowl of worms.
Speaker 2 (06:21):
He also said, we spent the weekend feeding USAID into
a wood chipper. Could have gone to some great parties,
did that instead?
Speaker 5 (06:29):
Yeah, Anthony, I think this is a really important point.
Like Musk is not a nine to five person. He
operates a lot on the weekends and a lot late
at night, and the fact that this kind of confrontation
happened on a Saturday is just super striking to me.
I think that's by design. And could you just talk
a little bit more about like who the doged landing
team at USA I did is? I mean you and
(06:50):
Jason and your story actually had like the names of
these people and many of them are like twenty five
and under, recent college graduates, young engineers who have worked
for Elon's other companies. Can you give us a little
bit more census to who exactly they are. Do they
have security clearances? Are they special government employees?
Speaker 3 (07:07):
They are all great questions, we think.
Speaker 4 (07:09):
So far, they've been assigned to other government offices, the
Office of Personnel Management, the GSA, the Small Businesses Administration.
I believe one of them has been and they all
seem to have, like I said earlier, an ideological bent
as far as we can tell. For instance, there's a
fellow called Gavin Kleeber. He's a twenty something who has
(07:30):
a blog, and on his blog he expounds on these
kind of conspiracies about how the CIA was responsible for
everything that happened to Congressman Matt Getz. There's another individual
on that that sort of beachhead team that was at usaid.
This is a person who is a teeal fellow. Right,
So we're seeing people who come from that sort of strainingly.
Speaker 2 (07:51):
Online right wing conspiratorial ecosystem.
Speaker 3 (07:55):
Right, your words are perfect, right.
Speaker 4 (07:57):
These are the people who sort of believe in that mission,
whatever you think of it, and they've been hired and
tasked with many of the similar things. I mean, there's
a brilliant story in the New York Times about how
this mirrors what happened at X right that they go
in and wipe out half the staff and figure it
out later. And folks at USAID are saying to us, like,
(08:19):
you can't break malaria coverage, like it's irresponsible to stop
some of the funding of these measures, and they've to
use his words, put it in a wood chipper.
Speaker 5 (08:31):
It also really mirrors what happened at TESLA, right, So
like last spring, Elon Musk fired nearly twenty percent of
the staff at Tesla and people literally like were going
to work in the morning and they only knew that
they had been dismissed because their badges no longer worked
and they were immediately cut off from all systems. That's
what's happening at USAID right. Like people that are like
in missions around the world are like all of a
(08:53):
sudden like told like that they're fired, but they can't
even access any kind of system to like get reimbursed
for they're plane ticket home or like to close out
what they'd been working on with their partners. I mean,
people are really like around the globe or left hanging.
Speaker 1 (09:08):
There's medicine on the loading dock in some cases, like
there's just we've just walked away from real obligations that
affect real lives.
Speaker 2 (09:16):
TED build on that a little bit, because I don't
think we've totally established what said stake here, Like, first
of all, I don't think it's clear that Elon Musk
has in fact destroyed like he I'm not sure that
you know, sorry to use the metaphor, but put it
in the wood chipper. And also like if he were
to destroy USID, like, what does this organization actually do well?
Speaker 1 (09:37):
I mean, to your first point, there are a lot
of people who point out he legally lacks the authority
to destroy USAID was created by a statute. It was,
you know, a law made this thing. He can't undo
it by waiving a magic wand at it. The question
is whether anyone in Washington who opposes this is going
to stand up to it or going to find a
way that's effective. And we don't really know the answer
to that. USADA is broad, and it's like a lot
(10:00):
of federal agencies where it's it's they all have something
that we've talked about this before. It's easy to pull
out and make fun of. You know, there's always some
budget line for research that sounds stupid if you want
to make it look like they're just out there wasting money.
But it's also it's an agency directing soft power by
funding humanitarian efforts around the world. It's intended from its
(10:22):
outset to project American benevolence and force in opposition to
other superpowers, namely Russia and China. So, yeah, that's the
thing that they have just switched off with no warning.
It does sound like it's very analogous to what you're
describing Dana Tesla and what happened at X, but you know,
it's a little bit different when we're talking about baby formula.
Speaker 2 (10:43):
Yeah, this has come up in a few stories and
Anthony and maybe it's you've even come across it.
Speaker 3 (10:48):
I'm curious.
Speaker 2 (10:48):
But like the idea that they're using quote unquote AI,
these these dose kids are using AI to essentially figure
out what's cut And I feel like, to Ted's point,
like a lot of these things you do a search
for them and it sounds pretty bad or it sounds like, oh,
this is some frivolous thing. But a lot of what
USAID does is sort of project American influence in the world,
(11:11):
Like this is this is like a big part of
our like Foreign Policy and.
Speaker 4 (11:18):
Foreign Policy Magazine once describe usa AIDA's work as trying
to do good things in bad places. And it's everything
from again, like HIV treatment in Sub Saharan Africa, it's
rebuilding Ukraine. They've got there' spent loads of money there,
appropriate loads of money there. And I think to its critics,
(11:42):
like their USAID is seen as sort of a front
for the CIA. I mean, there's not real evidence to support,
at least in recent years anyway, but you can see
why it might be a target of folks like Elon
Musk or Donald Trumptil who have an ideological bent against
expound our power. And also, like Trump, ran on an
(12:03):
America first platform, and their argument is going to be
I think that these programs still serve Americans first. Right,
No one on this call is going to be the
beneficiary of a USAID program. But I think you could
make an argument that like solving famine and poverty in
(12:23):
developing countries does keep the United States safe. I mean,
that's like what JFK started this whole thing about, right.
JFK in nineteen sixty one, to combat some Soviet Union
essentially said that American security American national security is best
served by stability across the world. So he starts a
program that will reduce famine, war, and poverty across the
(12:46):
world in the hopes that it will keep us safe
here at home. And I think that's what soft power
looks like.
Speaker 2 (12:57):
So we've seen a couple of congress people, Senator Roger
rit Wicker of Mississippi kind of pushback gently. He said
he'd seen usaid kind of to your point, Anthony as
quote our way of combating the Belton Road initiative, that's
like the Chinese equivalent of soft power. We've also seen
Democrats push back, probably even more strongly. Let's play a
(13:18):
clip from Senator Bryan Shatz.
Speaker 7 (13:20):
You cannot wave away an agency that you don't like
or that you disagree with by executive order or by
literally storming into the building and taking over the servers.
Speaker 2 (13:33):
Yeah, that's kind of where the Democrats are, Dana, do
we have a sense of where President Trump is here?
I mean this has been kind of a running theme,
like how like plugged in, is President Trump here? How
was he like, Yeah, Elon, go go destroy usaid, go
put in the woodshipper, or did Elon kind of do
this on his own.
Speaker 5 (13:51):
I think that Elon did it with Trump's blessing. I
think that there was a comment from Trump at one
of the briefings that Elon can't do everything that he wants,
but he checks in and like this was okay. Marco
Rubio yesterday said that now parts of USAID are going
to be sort of absorbed into the State Department. So
this is not Elon going rogue. Elon Musks thinks that
(14:12):
he has a mandate to do this, and until the
Trump administration stops him, he is not going to stop.
I think what has surprised people is like the speed
with which he is doing it. It's almost like watching
like a foreign nation get sacked, where like they take
like city over city over city, and they're going agency
by agency by agency. And I think that they've had
(14:33):
this plan in the works for months. And I'm also
super interested in how Doge is working with either in
tandem or in parallel with the folks at omb and
Ross Voyd and Project twenty twenty five, Like these are
very similar objectives.
Speaker 3 (14:48):
Yeah.
Speaker 2 (14:48):
Absolutely, And I think we're gonna we're gonna have to
talk about Russ Vaught at some point on this podcast.
I wanted to play one more clip from that very
surreal Twitter spaces. You know, first of all, the who
is out at Dose just like showed up as a
co host, which was sort of weird and amusing, and
there was this like slightly awkward vibe I thought between
the two men. And then there was also this moment
(15:10):
where Musk actually spoke to his kind of relationship with
President Trump. Let's just listen to that real quick.
Speaker 6 (15:17):
And this could be done without the full support of
the President and with regard to the USA, I do stuff.
Speaker 3 (15:22):
I went went over with him, you know, in.
Speaker 6 (15:24):
Detail, and he agreed with the that we should we
should shut it down. I mean, that's want to be clear,
that's and I actually checked with him a few times.
Speaker 3 (15:35):
Are you sure, like yes, so we're shutting it down?
Speaker 2 (15:38):
Ted, Did you take that as Musk having Trump's full
and complete endorsement or whatever? Like there was something a
little bit like like protest too much to me about
Like I asked him once and he said yes. Then
I asked him again and he said, like it just
I don't know, there was something about that. And I
also just sort of wondering, you know, we're seeing Congress
people senators and House members make statements, do you sense
(16:00):
any kind of political blowback or even the beginnings of
political blowback, either from Republicans or Democrats.
Speaker 1 (16:06):
I don't know how much Musk was sensing blowback in
that moment when he said that, it's certainly I hear
it the same way that if the blowback is coming,
he's reminding everybody that the leader of their group, of
their movement approves of what he's doing, or at least
has given him the whip hand. But there is blowback coming.
Like Bill Cassidy is a center from Louisiana, he's also
a doctor, and I think it was earlier today, if
(16:27):
not yesterday, he was criticizing the fact that this is
shut down PEPFAR, which is probably the most successful public
health initiative certainly of the last half century, which is
also a Republican program. It's a Bush program. People are
starting to grapple with the consequences, and it's not just
Democrats complaining. I think Musk probably is aware that he's
going to have to sort of defend some of this
(16:48):
stuff if he wants it to stick. I would just
point out, though I think you used the word glee earlier.
There is like on the subject of russ Vote, like
in the way that the DOGE people are talking to
the civil servants who are going after the weird shot
at all of them in the offer of the retirement package,
where they said, we'd like to move you from low
productivity public sector work into the private sector. Like this
(17:11):
disdain for anyone who works for the government is a
connective tissue to the rest of MAGA. That's the way
russ Vote has spoken about wanting every civil servant to
feel like a villain and to not want to go
to work in the morning. And there is this shared
antipathy for the government worker has a type, and I
think that that is the way at least right now
(17:31):
where they're working in harmony.
Speaker 2 (17:33):
Yeah, Anthony, I was curious if that came up in
your reporting, just the extent to which part of the
goal here seems to be the performance as much as
it is the actual like actually cutting these programs, but
to make civil servants feel bad or something like that.
Speaker 4 (17:51):
No, not as much as not explicitly. The thing that
did come up is a real lack of transparency. It's
very difficult for us to understand who in fact works
for doughe like, what are they do? Like, how are
they communicating with one another? Like my colleague, you guys
probably know Chas Leopold is the most aggressive user of
the Freedom of Information Act. And I am sure we
(18:14):
will be litigating some of these issues, but I am
struck by the lack of complete transparency. I mean, it's
happening on a social media platform that the great world's
richest man owns, Like he's setting and explaining public policy
on an all on a business that he owns. That
does not strike me as being businesses as usual.
Speaker 2 (18:35):
Yeah, to the point about lack of transparency, We've seen
reports saying that these doge kids are will.
Speaker 3 (18:41):
Like refusing to give their last name.
Speaker 2 (18:43):
So like many of the people at these agencies don't
even know who they're dealing with. And just to be clear, like,
legally Elon cannot shut down usaid ted you kind of
you said it, but I just want to establish that, right.
Speaker 1 (18:55):
Yeah, that's certainly the argument you hear from every Democrat
in Congress I've heard talk about this to say, Look,
he's got an executive order saying that he can recommend
changes to the government, but that doesn't mean that he
can go in and remove something that is in the
Statutes of the United States that was created by law.
But that's going to be something where I think every
indication is they're going to dare the other side to
(19:16):
fight them and to take it to court.
Speaker 2 (19:18):
And anthony this kind of these tactics, this kind of playbook.
Do we have any sense of whether it has been
replicated at any other federal agencies or whether we expect
to see the same kind of approach anywhere else within
the government.
Speaker 3 (19:32):
Yeah, I think so.
Speaker 4 (19:33):
We don't know yet where they've gone, but we do
know we understand that one of the main DOGE kids,
for lack of a better word, is a guy called
Gavin Kleeger, and his name has not been copied on
a number of other emails to other agencies. So the
thought is from people who work at these agencies, if
(19:53):
we're not now we're next right, that they are priming
the pump, so to speak, to come knock on our
door in the future. So it doesn't seem to end
with USAID or GSA or oh PM. It looks like
this is going to be a step by step process.
Speaker 2 (20:11):
As you guys are saying, they're going to be more
of these standoffs.
Speaker 3 (20:15):
We're going to be following it. Anthony, hope to.
Speaker 2 (20:17):
Have you back to talk about as you as you
and your colleagues follow these stories.
Speaker 3 (20:21):
Thanks again for being with us, Thanks for having me.
Speaker 2 (20:27):
All right, let's talk about the impact that these very
well publicized antics and potentially consequential handtics are having on
Musk's businesses.
Speaker 3 (20:38):
You know, we have talked over and.
Speaker 2 (20:39):
Over again on this podcast, Dana will know ted you
may have even picked up a hint of it because
it comes up so often about the prospect that Musk's
politicking will somehow hurt Tesla. David Popadopolis is like obsessed
with this question. He's always trying to force Dana to
admit that that maybe there's an impact.
Speaker 3 (20:58):
And Dan, I think we've got it now, right.
Speaker 2 (21:00):
Tesla's sales declined in California pretty significantly, the Model three,
especially down by like a third. Are we ready to
start saying, hey, like Tesla's sales may be suffering because
of Elon Musk's politics.
Speaker 5 (21:14):
Yes, I would just caution that Tesla gets like like
forty percent of Tesla's sales are in China, and it
is a global auto market, and for every person that says,
I hate Elon Musket as politics. I'm never going to
buy a Tesla, Like people don't buy cars in the
same way that they buy like bud Light or shop
Target versus Costco. But yes, you are seeing people trade
(21:36):
in their Tesla's four rivians. You saw sales dip in
the in particularly in California, which is like the most
mature ev market in the country. You're seeing people's spray
paint stuff on the side of cyber trucks and vandalized stores,
and like you are seeing those sort of goofy bumper stickers.
I bought my Tesla before Elon went crazy, Like more
are more common now.
Speaker 2 (21:56):
The cyber truck in particular is almost like a rolling
bodiment of the dynamic that we discussed earlier. Right, it's
like two big, it's sort of like bullying the road.
Like it almost feels like that car in particular sort
of increasing this sense of Elon as a political figure
in a way that if they had, you know, had
a nice much smaller car, like a little smart car
(22:20):
type thing, maybe maybe it would it would counter it.
Speaker 1 (22:22):
I think the cyber truck is the magahead of the
musk movement. It's a provocation, like you are asking for
the eyeball to even drive it down the street.
Speaker 3 (22:31):
Yeah. Absolutely.
Speaker 2 (22:31):
And also what's crazy about these sales numbers in the
US anyway, is that they Tesla had a new model,
essentially like a cyber truck is relatively new, and so
so the fact that the sales are falling despite the
cyber truck, or maybe because of it, seems doubly concerning
ted Let's let's let's stay with you and and move
(22:52):
on to tariffs, because we've seen this kind of Trump
sort of threatened tariffs against Canada Mexico and then quickly
reverse course. We have the prospect of tariffs on China.
And you wrote a story for Bloomberg over the EV
graphite and the prospect of much much greater tariffs on graphite,
which is necessary, I believe to make batteries. Where does
(23:13):
that stand and how big a deal is it for Tesla.
Speaker 1 (23:18):
It's a potentially big guilt for all the EV makers,
especially Tesla, as well as just the battery companies too.
This is an interesting example that we chose partly because
it starts in the first Trump term, when Trump imposed
duties on imports from China. One of the things that
got hit in that first wave was graphite, which is
needed in huge quantities and a great purity to make battery.
(23:40):
Sells the anode of a battery, so a ton of
it gets imported, including by Tesla, also by Panasonic and
other battery makers. They were hit with this duty the
first time around when Trump imposed tariffs on China. They
successfully Tesla succesfully lobbied for an exclusion. In other words,
they got to not pay the tariff, which was raising
their input costs for this this material that they desperately needed.
(24:02):
Under the Biden administration, where Biden kept some of those
tariffs in place, you could petition to have your exclusion
continued and renewed, and they lost theirs. They failed to
get the renewal, so now they're paying a twenty five
percent duty on the graphight that they import. The issue here, though,
is the domestic graphight producers in the United States are
(24:23):
seeking a much much larger tariff on that material coming in.
They say there's no chance that a big industry that
we will really need for EVS but also for the
energy transition, because you'll need a lot of energy storage
systems will never be able to produce that raw material
if China is flooding the market with super low cost,
improperly low cost graphite, So they're asking for more than
(24:46):
nine hundred percent tariffs on graphite imports, and Tesla is
lobbying against that, which we just found. It's pretty interesting, right,
this is Donald Trump's favorite rich guy and Donald Trump's
almost only economic theory, which is just imposing tariffs on
everybody else and then you'll get a revival of American manufacturing.
And the two are directly at loggerheads.
Speaker 2 (25:07):
Tesla is in certain ways almost like a Chinese car company,
or it's like an American company and a Chinese car
company married together or something. And as Ted is kind
of hinting at, you know, it's not just the tariffs
are a big issue for Trump, but China is a
big issue. I mean where do you have any sense
of like where and how Tesla could be hurt by
(25:29):
Trump's approach to China, whether he's he takes a harder
line than Biden or maybe a sort of lighter touch.
Speaker 5 (25:36):
Well, Tesla is in better shape that other car companies
in terms of tariffs, just because they most of you know,
the cars that they sell in the United States, they
make in the United States, and they have a very
high percentage of American content. They are not making cars
in Mexico. They're not importing a lot from Canada. Like,
they have a very domestic supply chain, which is why
they benefit so much.
Speaker 3 (25:55):
They make all their parts or most of them.
Speaker 5 (25:57):
Yeah, and it's why they actually benefit quite so much
from Biden's inflation Production Act is because they have so
much domestic content and domestic manufacturing. But with China, like
the plant in Shanghai exports those vehicles to Europe and
to Canada and is the most productive factory that they
have on the globe. And so as the trade war
(26:19):
evolves and like other nations get involved, like if Europe
gets dragged in, you could just see it having like
longer repercussions. But I think that like Musk is kind
of okay with tariffs because it hurts his competitors more
than it hurts him. I don't think Elon really cares though.
Speaker 2 (26:35):
I do think though, that Musk cares about his companies,
and I think that as much as he's political, and
I will point out like he's had some real wins,
wins for his companies. So the new head of NASA
is a big fan at Elon Musk. The guy who's
(26:55):
gonna run the Air Force is a guy that Musk wanted,
and like these these are potential buyers of SpaceX's services.
I mean ted to me like one of the ways
that we're going to evaluate Elon's sort of performance in government,
there will be the doge metrics how much money did
he does he say cut? And then also like how
does it help his companies? I mean, where do you
(27:17):
think he stands right now? Like in terms of if
you were just looking this as a transactional thing, like
what is he getting for all of this?
Speaker 3 (27:27):
Do you think he's gotten anything? A lot, a little.
Speaker 1 (27:29):
I would answer that question by pointing you to the
story that our Collie Kelsey Griffiths reported last night, which
is that the Trump folks are bringing in a critic
of the Biden era broadband rollout, which has been delayed
and subject of controversy. That's a forty two billion dollars
pot of money that was not designed to just go
to starlink and they're not going to give it all
(27:50):
the month, but they're bringing in someone who didn't like
the program that he didn't like, who will presumably approach
it in a different fashion and will give him a
better opportunit getting some of that federal money. So I
think that that's the approach that we should expect him
to continue, taking a Dana, your point is well taken
that he's willing to have there be short term chaos
(28:13):
and pain and to do things that are not immediately
to his you know, you know, benefit on day two.
But I also do think that there's this sense that,
as you said, that there will be more contracts.
Speaker 5 (28:25):
Elon gets the trough no matter what Biden is president,
Like this fire hose of money in the form of
the Inflation Reduction Act is like aimed squarely at Tesla.
Trump gets elected, like now we're going to see maybe
more contracts for Starlink. Like no matter who's in power,
Elon wins. And it's because, frankly, his companies are the best,
Like SpaceX is the low cost provider that has conquered
(28:49):
the launch market, Tesla is the most profitable ev maker
in the United States, and and Elon has you know,
he's played both sides like throughout his career very adroitly.
Speaker 2 (29:02):
I just want to end with sort of asking guys
to look ahead a little bit and sort of say,
what do each of you think we're going to be
talking about on the subject of Elon Musk and the
government next week? Which agency I guess is the next
target ted I'll start with you.
Speaker 1 (29:20):
Oh, I have to pick an agency. I'm not going
to pick an agency. I will just say that these
guys are dedicated to doing what they're doing to the government.
They also seem a little bit new at it in
the way they talk about must keep saying we'll just
get rid of rules and add back one if we
decide we needed it suggests a total unfamiliarity with the
process that they're disrupting. And one aspect of that will
(29:42):
be they're going to gore an ox that they're not
expecting will be as big of a problem as it is.
And you're seeing that even among conservative Republican senators talking
about foreign aid, which they usually have no problem just
talking about how foreign eight is all the waste, But
even there you're starting to hear those rumblings of blowback.
And if continues with this approach, agency by agency across
(30:03):
the government, you start to hit things that people actually
do care about and that people who in the abstract
are for tearing it all down don't actually like when
you do it. So I think that that will be
the question is where does he cross that line with
which part of the Republican majority and what happens then.
Speaker 5 (30:20):
So there are like four hundred government agencies and including
some small ones that nobody has ever heard about. But
I personally am going to keep my eye on the
Department of Education because, as we've reported, like Musk has
a huge interest in education himself. He has a foundation
that's very dedicated to education. He has started a preschool
in Texas. A lot of this is ideological around wokeism,
(30:43):
and you know, we don't have a confirmed head of
the Department of d yet, but I just sort of
worry and predict that, like you will see Doge at
the Department of Bed relatively soon.
Speaker 2 (30:55):
Yeah, And to Ted's point, I mean that is going
to be.
Speaker 3 (30:58):
A massive vector for blowback.
Speaker 2 (31:00):
People get mad when their public schools start to get defunded,
and depending on how subtle this is, there could be
real consequences. Let's end there. Ted, Dana, thanks for being here.
Really appreciate it.
Speaker 3 (31:16):
Thank you, Thank you.
Speaker 2 (31:24):
This episode was produced by Stacy Wong. Anna Masarakis is
our editor, and Rahan Harmanci our senior editor. Blake Maple's
handles engineering and Dave Purcell fact checks. Our supervising producer
is Magnus Hendrickson. The Elanink theme is written and performed
by Taka Yazuzawa and Alex Sagierra. Brendan Francis Newnham is
our executive producer, and Sage Bauman is the head of
(31:45):
Bloomberg Podcasts Big thanks to Joel Weber.
Speaker 3 (31:48):
And Brad Stone. I'm Max Chafkin.
Speaker 2 (31:50):
If you have a minute, rate and review our show,
it'll help other listeners find us and we will see
you next week.
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:12):
Well, Elon Musk is now the richest person on the planet.
More than half the satellites in space are owned and
controlled by one man.
Speaker 3 (00:21):
Well, he's a legitimate super genius. I mean legitimate. He
says he's always voted for Democrats, but this year it
will be different.
Speaker 1 (00:27):
He'll vote Republican.
Speaker 3 (00:29):
There is a reason the US government is so reliant
on him. Elon Musk is a scam artist and he's
done nothing.
Speaker 2 (00:34):
Anything he does, he's fascinating the people. Welcome to Elon Ink,
Bloomberg's weekly podcast about Elon Musk. It's Tuesday, February fourth.
I'm your host, Max Chafkin in for David Papadopoulos. A
(00:57):
few months ago, many people, although not let's be clear,
the people on this podcast, were seeing Elon Musk as
at best sort of a figurehead within the Trump administration,
somebody who'd be on a blue ribbon panel and would
mostly spend his time running his six very large, very
important companies. But the events of the past few days
(01:18):
have been shocking even to those of us who thought
that Elon would take a big role. Starting late last week,
Musk and his Doge team members went out across numerous
federal departments and armed with Trump's executive orders, began sowing chaos.
We're going to get into what happened and what might
come next, and then take a look at how Musk's
(01:39):
actual businesses are doing with a trade roar at home
and all of this Musk created chaos and political divisiveness
here at home. It's a lot to discuss all this.
We have Bloomberg's elon Musk reporter Dana Hull Hey Dana
Hey Nax and Bloomberg Politics reporter Ted Man joining us
from DC Hey, Tedy. And here in New York, Anthony Cormier,
(02:03):
a investigative reporter who co authored a great story yesterday
from inside the offices of Musk's attempted takeover of USAID.
Speaker 3 (02:12):
Welcome Anthony, Thanks for having me.
Speaker 2 (02:14):
All right, So, Anthony, you co wrote this story with
our colleague Jason Leopold.
Speaker 3 (02:19):
It is basically an inside.
Speaker 2 (02:22):
Account on what's kind of like a battle almost that
played out inside of this us AID, which is a
big foreign aid office inside the federal government.
Speaker 3 (02:32):
Just tell us what happened as far as you understand.
Speaker 4 (02:34):
It well, And there was a really unusual confrontation in fact,
on Saturday between a group of what people are calling
the Doge kids. These are young technologists who seem to
have an ideological bent that is similar to Elon's. And
they've been tapped by Musk and this new Doge team
(02:56):
to go in and look for spending cuts and they
took aim last week at USID, and so they show
up on Saturday as the building is empty, and they
demand access to the entire suite of offices, root around,
and after some back and forth, one of the members
of the Dose team calls Elon himself, and Elon gets
(03:19):
on the phone with the security office of USAID and says, look,
if you don't let us in, I'm going to call
the Marshall Service. Which is kind of an extraordinary circumstance,
kind of an unheard of conversation between these two sides.
Speaker 3 (03:31):
They get in.
Speaker 4 (03:32):
It's our understanding that they do in fact go through offices.
They're looking, in fact in desk drawers, and ultimately they
want to get into a security office, a secure facility
that you need a certain security clearance to get into.
Security says, no way, you can't do it. One of
our piece of our reporting suggests that they actually tried
to open a locked door to this secure facility. There's
(03:55):
a big blowout, the security officials are put on leave.
It's unclear at this point where than in fact they
did get into this office and what they were seeking.
Speaker 2 (04:03):
Okay, so I want to get more into this confrontation
over the weekend before we do that, Ted, There's been
a lot happening with DOGE in Washington. We've seen Musk
sort of go after a handful of targets, the Office
of Personnel Management, which is like HR for the government
General Services Administration, which controls I think the buildings the
Treasury Department's payment system. We talked about that on the
(04:25):
Emergency podcast over the weekend. Can you just sort of
put this latest thing into context for us, sure?
Speaker 1 (04:31):
I mean what Anthesy is describing as an especially dramatic
and colorful version of what has happened at a bunch
of these other offices you just mentioned, where these landing
teams of DOGE employees are just showing up and requesting
access to the basic plumbing systems of the federal government,
how money moves around, how people get hired, the information
(04:52):
that is stored about every program and every person who
works in the federal government. So it really is exactly
what the executve orders that created this non agency agency promised,
which is that they've they've given him the keys to
all the systems, or they're trying to at any rate.
In some cases, obviously they're having to try to take
them because they lack the legal authority. But it does
(05:13):
seem like this is this attempt to kind of get
over top of the whole machine and figure out how
it works.
Speaker 3 (05:19):
And Dana, is you on doing anything else of the moment?
Speaker 2 (05:23):
Is he basically just is this like a doze like
one hundred percent full time right now.
Speaker 5 (05:28):
He did take an hour out of his busy schedule
last week to like be on Tesla's earning call, but
he is hunkered down in Washington, d C. His plane
has been at Dulles for two weeks. And Anthony, what
kind of really struck me about your story over the
weekend is kind of the gleeful abandon with which Musk
and the Doze crew, where kids as some as some
(05:49):
have called them, are going about this. I listened to
Elon Musk do his X spaces on Sunday night, and
he was like very euphoric about about what they had done.
Speaker 6 (05:59):
To be clear, shutting down which we're in the past
is doing shutting down USAID. The reason for that, as
opposed to simply, you know, trying to do some minor
house cleaning, is is that as we dug into USAID,
it became apparent that what we have here is not
an apple with a worm in it, but we have
actually just a bowl of worms.
Speaker 2 (06:21):
He also said, we spent the weekend feeding USAID into
a wood chipper. Could have gone to some great parties,
did that instead?
Speaker 5 (06:29):
Yeah, Anthony, I think this is a really important point.
Like Musk is not a nine to five person. He
operates a lot on the weekends and a lot late
at night, and the fact that this kind of confrontation
happened on a Saturday is just super striking to me.
I think that's by design. And could you just talk
a little bit more about like who the doged landing
team at USA I did is? I mean you and
(06:50):
Jason and your story actually had like the names of
these people and many of them are like twenty five
and under, recent college graduates, young engineers who have worked
for Elon's other companies. Can you give us a little
bit more census to who exactly they are. Do they
have security clearances? Are they special government employees?
Speaker 3 (07:07):
They are all great questions, we think.
Speaker 4 (07:09):
So far, they've been assigned to other government offices, the
Office of Personnel Management, the GSA, the Small Businesses Administration.
I believe one of them has been and they all
seem to have, like I said earlier, an ideological bent
as far as we can tell. For instance, there's a
fellow called Gavin Kleeber. He's a twenty something who has
(07:30):
a blog, and on his blog he expounds on these
kind of conspiracies about how the CIA was responsible for
everything that happened to Congressman Matt Getz. There's another individual
on that that sort of beachhead team that was at usaid.
This is a person who is a teeal fellow. Right,
So we're seeing people who come from that sort of strainingly.
Speaker 2 (07:51):
Online right wing conspiratorial ecosystem.
Speaker 3 (07:55):
Right, your words are perfect, right.
Speaker 4 (07:57):
These are the people who sort of believe in that mission,
whatever you think of it, and they've been hired and
tasked with many of the similar things. I mean, there's
a brilliant story in the New York Times about how
this mirrors what happened at X right that they go
in and wipe out half the staff and figure it
out later. And folks at USAID are saying to us, like,
(08:19):
you can't break malaria coverage, like it's irresponsible to stop
some of the funding of these measures, and they've to
use his words, put it in a wood chipper.
Speaker 5 (08:31):
It also really mirrors what happened at TESLA, right, So
like last spring, Elon Musk fired nearly twenty percent of
the staff at Tesla and people literally like were going
to work in the morning and they only knew that
they had been dismissed because their badges no longer worked
and they were immediately cut off from all systems. That's
what's happening at USAID right. Like people that are like
in missions around the world are like all of a
(08:53):
sudden like told like that they're fired, but they can't
even access any kind of system to like get reimbursed
for they're plane ticket home or like to close out
what they'd been working on with their partners. I mean,
people are really like around the globe or left hanging.
Speaker 1 (09:08):
There's medicine on the loading dock in some cases, like
there's just we've just walked away from real obligations that
affect real lives.
Speaker 2 (09:16):
TED build on that a little bit, because I don't
think we've totally established what said stake here, Like, first
of all, I don't think it's clear that Elon Musk
has in fact destroyed like he I'm not sure that
you know, sorry to use the metaphor, but put it
in the wood chipper. And also like if he were
to destroy USID, like, what does this organization actually do well?
Speaker 1 (09:37):
I mean, to your first point, there are a lot
of people who point out he legally lacks the authority
to destroy USAID was created by a statute. It was,
you know, a law made this thing. He can't undo
it by waiving a magic wand at it. The question
is whether anyone in Washington who opposes this is going
to stand up to it or going to find a
way that's effective. And we don't really know the answer
to that. USADA is broad, and it's like a lot
(10:00):
of federal agencies where it's it's they all have something
that we've talked about this before. It's easy to pull
out and make fun of. You know, there's always some
budget line for research that sounds stupid if you want
to make it look like they're just out there wasting money.
But it's also it's an agency directing soft power by
funding humanitarian efforts around the world. It's intended from its
(10:22):
outset to project American benevolence and force in opposition to
other superpowers, namely Russia and China. So, yeah, that's the
thing that they have just switched off with no warning.
It does sound like it's very analogous to what you're
describing Dana Tesla and what happened at X, but you know,
it's a little bit different when we're talking about baby formula.
Speaker 2 (10:43):
Yeah, this has come up in a few stories and
Anthony and maybe it's you've even come across it.
Speaker 3 (10:48):
I'm curious.
Speaker 2 (10:48):
But like the idea that they're using quote unquote AI,
these these dose kids are using AI to essentially figure
out what's cut And I feel like, to Ted's point,
like a lot of these things you do a search
for them and it sounds pretty bad or it sounds like, oh,
this is some frivolous thing. But a lot of what
USAID does is sort of project American influence in the world,
(11:11):
Like this is this is like a big part of
our like Foreign Policy and.
Speaker 4 (11:18):
Foreign Policy Magazine once describe usa AIDA's work as trying
to do good things in bad places. And it's everything
from again, like HIV treatment in Sub Saharan Africa, it's
rebuilding Ukraine. They've got there' spent loads of money there,
appropriate loads of money there. And I think to its critics,
(11:42):
like their USAID is seen as sort of a front
for the CIA. I mean, there's not real evidence to support,
at least in recent years anyway, but you can see
why it might be a target of folks like Elon
Musk or Donald Trumptil who have an ideological bent against
expound our power. And also, like Trump, ran on an
(12:03):
America first platform, and their argument is going to be
I think that these programs still serve Americans first. Right,
No one on this call is going to be the
beneficiary of a USAID program. But I think you could
make an argument that like solving famine and poverty in
(12:23):
developing countries does keep the United States safe. I mean,
that's like what JFK started this whole thing about, right.
JFK in nineteen sixty one, to combat some Soviet Union
essentially said that American security American national security is best
served by stability across the world. So he starts a
program that will reduce famine, war, and poverty across the
(12:46):
world in the hopes that it will keep us safe
here at home. And I think that's what soft power
looks like.
Speaker 2 (12:57):
So we've seen a couple of congress people, Senator Roger
rit Wicker of Mississippi kind of pushback gently. He said
he'd seen usaid kind of to your point, Anthony as
quote our way of combating the Belton Road initiative, that's
like the Chinese equivalent of soft power. We've also seen
Democrats push back, probably even more strongly. Let's play a
(13:18):
clip from Senator Bryan Shatz.
Speaker 7 (13:20):
You cannot wave away an agency that you don't like
or that you disagree with by executive order or by
literally storming into the building and taking over the servers.
Speaker 2 (13:33):
Yeah, that's kind of where the Democrats are, Dana, do
we have a sense of where President Trump is here?
I mean this has been kind of a running theme,
like how like plugged in, is President Trump here? How
was he like, Yeah, Elon, go go destroy usaid, go
put in the woodshipper, or did Elon kind of do
this on his own.
Speaker 5 (13:51):
I think that Elon did it with Trump's blessing. I
think that there was a comment from Trump at one
of the briefings that Elon can't do everything that he wants,
but he checks in and like this was okay. Marco
Rubio yesterday said that now parts of USAID are going
to be sort of absorbed into the State Department. So
this is not Elon going rogue. Elon Musks thinks that
(14:12):
he has a mandate to do this, and until the
Trump administration stops him, he is not going to stop.
I think what has surprised people is like the speed
with which he is doing it. It's almost like watching
like a foreign nation get sacked, where like they take
like city over city over city, and they're going agency
by agency by agency. And I think that they've had
(14:33):
this plan in the works for months. And I'm also
super interested in how Doge is working with either in
tandem or in parallel with the folks at omb and
Ross Voyd and Project twenty twenty five, Like these are
very similar objectives.
Speaker 3 (14:48):
Yeah.
Speaker 2 (14:48):
Absolutely, And I think we're gonna we're gonna have to
talk about Russ Vaught at some point on this podcast.
I wanted to play one more clip from that very
surreal Twitter spaces. You know, first of all, the who
is out at Dose just like showed up as a
co host, which was sort of weird and amusing, and
there was this like slightly awkward vibe I thought between
the two men. And then there was also this moment
(15:10):
where Musk actually spoke to his kind of relationship with
President Trump. Let's just listen to that real quick.
Speaker 6 (15:17):
And this could be done without the full support of
the President and with regard to the USA, I do stuff.
Speaker 3 (15:22):
I went went over with him, you know, in.
Speaker 6 (15:24):
Detail, and he agreed with the that we should we
should shut it down. I mean, that's want to be clear,
that's and I actually checked with him a few times.
Speaker 3 (15:35):
Are you sure, like yes, so we're shutting it down?
Speaker 2 (15:38):
Ted, Did you take that as Musk having Trump's full
and complete endorsement or whatever? Like there was something a
little bit like like protest too much to me about
Like I asked him once and he said yes. Then
I asked him again and he said, like it just
I don't know, there was something about that. And I
also just sort of wondering, you know, we're seeing Congress
people senators and House members make statements, do you sense
(16:00):
any kind of political blowback or even the beginnings of
political blowback, either from Republicans or Democrats.
Speaker 1 (16:06):
I don't know how much Musk was sensing blowback in
that moment when he said that, it's certainly I hear
it the same way that if the blowback is coming,
he's reminding everybody that the leader of their group, of
their movement approves of what he's doing, or at least
has given him the whip hand. But there is blowback coming.
Like Bill Cassidy is a center from Louisiana, he's also
a doctor, and I think it was earlier today, if
(16:27):
not yesterday, he was criticizing the fact that this is
shut down PEPFAR, which is probably the most successful public
health initiative certainly of the last half century, which is
also a Republican program. It's a Bush program. People are
starting to grapple with the consequences, and it's not just
Democrats complaining. I think Musk probably is aware that he's
going to have to sort of defend some of this
(16:48):
stuff if he wants it to stick. I would just
point out, though I think you used the word glee earlier.
There is like on the subject of russ Vote, like
in the way that the DOGE people are talking to
the civil servants who are going after the weird shot
at all of them in the offer of the retirement package,
where they said, we'd like to move you from low
productivity public sector work into the private sector. Like this
(17:11):
disdain for anyone who works for the government is a
connective tissue to the rest of MAGA. That's the way
russ Vote has spoken about wanting every civil servant to
feel like a villain and to not want to go
to work in the morning. And there is this shared
antipathy for the government worker has a type, and I
think that that is the way at least right now
(17:31):
where they're working in harmony.
Speaker 2 (17:33):
Yeah, Anthony, I was curious if that came up in
your reporting, just the extent to which part of the
goal here seems to be the performance as much as
it is the actual like actually cutting these programs, but
to make civil servants feel bad or something like that.
Speaker 4 (17:51):
No, not as much as not explicitly. The thing that
did come up is a real lack of transparency. It's
very difficult for us to understand who in fact works
for doughe like, what are they do? Like, how are
they communicating with one another? Like my colleague, you guys
probably know Chas Leopold is the most aggressive user of
the Freedom of Information Act. And I am sure we
(18:14):
will be litigating some of these issues, but I am
struck by the lack of complete transparency. I mean, it's
happening on a social media platform that the great world's
richest man owns, Like he's setting and explaining public policy
on an all on a business that he owns. That
does not strike me as being businesses as usual.
Speaker 2 (18:35):
Yeah, to the point about lack of transparency, We've seen
reports saying that these doge kids are will.
Speaker 3 (18:41):
Like refusing to give their last name.
Speaker 2 (18:43):
So like many of the people at these agencies don't
even know who they're dealing with. And just to be clear, like,
legally Elon cannot shut down usaid ted you kind of
you said it, but I just want to establish that, right.
Speaker 1 (18:55):
Yeah, that's certainly the argument you hear from every Democrat
in Congress I've heard talk about this to say, Look,
he's got an executive order saying that he can recommend
changes to the government, but that doesn't mean that he
can go in and remove something that is in the
Statutes of the United States that was created by law.
But that's going to be something where I think every
indication is they're going to dare the other side to
(19:16):
fight them and to take it to court.
Speaker 2 (19:18):
And anthony this kind of these tactics, this kind of playbook.
Do we have any sense of whether it has been
replicated at any other federal agencies or whether we expect
to see the same kind of approach anywhere else within
the government.
Speaker 3 (19:32):
Yeah, I think so.
Speaker 4 (19:33):
We don't know yet where they've gone, but we do
know we understand that one of the main DOGE kids,
for lack of a better word, is a guy called
Gavin Kleeger, and his name has not been copied on
a number of other emails to other agencies. So the
thought is from people who work at these agencies, if
(19:53):
we're not now we're next right, that they are priming
the pump, so to speak, to come knock on our
door in the future. So it doesn't seem to end
with USAID or GSA or oh PM. It looks like
this is going to be a step by step process.
Speaker 2 (20:11):
As you guys are saying, they're going to be more
of these standoffs.
Speaker 3 (20:15):
We're going to be following it. Anthony, hope to.
Speaker 2 (20:17):
Have you back to talk about as you as you
and your colleagues follow these stories.
Speaker 3 (20:21):
Thanks again for being with us, Thanks for having me.
Speaker 2 (20:27):
All right, let's talk about the impact that these very
well publicized antics and potentially consequential handtics are having on
Musk's businesses.
Speaker 3 (20:38):
You know, we have talked over and.
Speaker 2 (20:39):
Over again on this podcast, Dana will know ted you
may have even picked up a hint of it because
it comes up so often about the prospect that Musk's
politicking will somehow hurt Tesla. David Popadopolis is like obsessed
with this question. He's always trying to force Dana to
admit that that maybe there's an impact.
Speaker 3 (20:58):
And Dan, I think we've got it now, right.
Speaker 2 (21:00):
Tesla's sales declined in California pretty significantly, the Model three,
especially down by like a third. Are we ready to
start saying, hey, like Tesla's sales may be suffering because
of Elon Musk's politics.
Speaker 5 (21:14):
Yes, I would just caution that Tesla gets like like
forty percent of Tesla's sales are in China, and it
is a global auto market, and for every person that says,
I hate Elon Musket as politics. I'm never going to
buy a Tesla, Like people don't buy cars in the
same way that they buy like bud Light or shop
Target versus Costco. But yes, you are seeing people trade
(21:36):
in their Tesla's four rivians. You saw sales dip in
the in particularly in California, which is like the most
mature ev market in the country. You're seeing people's spray
paint stuff on the side of cyber trucks and vandalized stores,
and like you are seeing those sort of goofy bumper stickers.
I bought my Tesla before Elon went crazy, Like more
are more common now.
Speaker 2 (21:56):
The cyber truck in particular is almost like a rolling
bodiment of the dynamic that we discussed earlier. Right, it's
like two big, it's sort of like bullying the road.
Like it almost feels like that car in particular sort
of increasing this sense of Elon as a political figure
in a way that if they had, you know, had
a nice much smaller car, like a little smart car
(22:20):
type thing, maybe maybe it would it would counter it.
Speaker 1 (22:22):
I think the cyber truck is the magahead of the
musk movement. It's a provocation, like you are asking for
the eyeball to even drive it down the street.
Speaker 3 (22:31):
Yeah. Absolutely.
Speaker 2 (22:31):
And also what's crazy about these sales numbers in the
US anyway, is that they Tesla had a new model,
essentially like a cyber truck is relatively new, and so
so the fact that the sales are falling despite the
cyber truck, or maybe because of it, seems doubly concerning
ted Let's let's let's stay with you and and move
(22:52):
on to tariffs, because we've seen this kind of Trump
sort of threatened tariffs against Canada Mexico and then quickly
reverse course. We have the prospect of tariffs on China.
And you wrote a story for Bloomberg over the EV
graphite and the prospect of much much greater tariffs on graphite,
which is necessary, I believe to make batteries. Where does
(23:13):
that stand and how big a deal is it for Tesla.
Speaker 1 (23:18):
It's a potentially big guilt for all the EV makers,
especially Tesla, as well as just the battery companies too.
This is an interesting example that we chose partly because
it starts in the first Trump term, when Trump imposed
duties on imports from China. One of the things that
got hit in that first wave was graphite, which is
needed in huge quantities and a great purity to make battery.
(23:40):
Sells the anode of a battery, so a ton of
it gets imported, including by Tesla, also by Panasonic and
other battery makers. They were hit with this duty the
first time around when Trump imposed tariffs on China. They
successfully Tesla succesfully lobbied for an exclusion. In other words,
they got to not pay the tariff, which was raising
their input costs for this this material that they desperately needed.
(24:02):
Under the Biden administration, where Biden kept some of those
tariffs in place, you could petition to have your exclusion
continued and renewed, and they lost theirs. They failed to
get the renewal, so now they're paying a twenty five
percent duty on the graphight that they import. The issue here, though,
is the domestic graphight producers in the United States are
(24:23):
seeking a much much larger tariff on that material coming in.
They say there's no chance that a big industry that
we will really need for EVS but also for the
energy transition, because you'll need a lot of energy storage
systems will never be able to produce that raw material
if China is flooding the market with super low cost,
improperly low cost graphite, So they're asking for more than
(24:46):
nine hundred percent tariffs on graphite imports, and Tesla is
lobbying against that, which we just found. It's pretty interesting, right,
this is Donald Trump's favorite rich guy and Donald Trump's
almost only economic theory, which is just imposing tariffs on
everybody else and then you'll get a revival of American manufacturing.
And the two are directly at loggerheads.
Speaker 2 (25:07):
Tesla is in certain ways almost like a Chinese car company,
or it's like an American company and a Chinese car
company married together or something. And as Ted is kind
of hinting at, you know, it's not just the tariffs
are a big issue for Trump, but China is a
big issue. I mean where do you have any sense
of like where and how Tesla could be hurt by
(25:29):
Trump's approach to China, whether he's he takes a harder
line than Biden or maybe a sort of lighter touch.
Speaker 5 (25:36):
Well, Tesla is in better shape that other car companies
in terms of tariffs, just because they most of you know,
the cars that they sell in the United States, they
make in the United States, and they have a very
high percentage of American content. They are not making cars
in Mexico. They're not importing a lot from Canada. Like,
they have a very domestic supply chain, which is why
they benefit so much.
Speaker 3 (25:55):
They make all their parts or most of them.
Speaker 5 (25:57):
Yeah, and it's why they actually benefit quite so much
from Biden's inflation Production Act is because they have so
much domestic content and domestic manufacturing. But with China, like
the plant in Shanghai exports those vehicles to Europe and
to Canada and is the most productive factory that they
have on the globe. And so as the trade war
(26:19):
evolves and like other nations get involved, like if Europe
gets dragged in, you could just see it having like
longer repercussions. But I think that like Musk is kind
of okay with tariffs because it hurts his competitors more
than it hurts him. I don't think Elon really cares though.
Speaker 2 (26:35):
I do think though, that Musk cares about his companies,
and I think that as much as he's political, and
I will point out like he's had some real wins,
wins for his companies. So the new head of NASA
is a big fan at Elon Musk. The guy who's
(26:55):
gonna run the Air Force is a guy that Musk wanted,
and like these these are potential buyers of SpaceX's services.
I mean ted to me like one of the ways
that we're going to evaluate Elon's sort of performance in government,
there will be the doge metrics how much money did
he does he say cut? And then also like how
does it help his companies? I mean, where do you
(27:17):
think he stands right now? Like in terms of if
you were just looking this as a transactional thing, like
what is he getting for all of this?
Speaker 3 (27:27):
Do you think he's gotten anything? A lot, a little.
Speaker 1 (27:29):
I would answer that question by pointing you to the
story that our Collie Kelsey Griffiths reported last night, which
is that the Trump folks are bringing in a critic
of the Biden era broadband rollout, which has been delayed
and subject of controversy. That's a forty two billion dollars
pot of money that was not designed to just go
to starlink and they're not going to give it all
(27:50):
the month, but they're bringing in someone who didn't like
the program that he didn't like, who will presumably approach
it in a different fashion and will give him a
better opportunit getting some of that federal money. So I
think that that's the approach that we should expect him
to continue, taking a Dana, your point is well taken
that he's willing to have there be short term chaos
(28:13):
and pain and to do things that are not immediately
to his you know, you know, benefit on day two.
But I also do think that there's this sense that,
as you said, that there will be more contracts.
Speaker 5 (28:25):
Elon gets the trough no matter what Biden is president,
Like this fire hose of money in the form of
the Inflation Reduction Act is like aimed squarely at Tesla.
Trump gets elected, like now we're going to see maybe
more contracts for Starlink. Like no matter who's in power,
Elon wins. And it's because, frankly, his companies are the best,
Like SpaceX is the low cost provider that has conquered
(28:49):
the launch market, Tesla is the most profitable ev maker
in the United States, and and Elon has you know,
he's played both sides like throughout his career very adroitly.
Speaker 2 (29:02):
I just want to end with sort of asking guys
to look ahead a little bit and sort of say,
what do each of you think we're going to be
talking about on the subject of Elon Musk and the
government next week? Which agency I guess is the next
target ted I'll start with you.
Speaker 1 (29:20):
Oh, I have to pick an agency. I'm not going
to pick an agency. I will just say that these
guys are dedicated to doing what they're doing to the government.
They also seem a little bit new at it in
the way they talk about must keep saying we'll just
get rid of rules and add back one if we
decide we needed it suggests a total unfamiliarity with the
process that they're disrupting. And one aspect of that will
(29:42):
be they're going to gore an ox that they're not
expecting will be as big of a problem as it is.
And you're seeing that even among conservative Republican senators talking
about foreign aid, which they usually have no problem just
talking about how foreign eight is all the waste, But
even there you're starting to hear those rumblings of blowback.
And if continues with this approach, agency by agency across
(30:03):
the government, you start to hit things that people actually
do care about and that people who in the abstract
are for tearing it all down don't actually like when
you do it. So I think that that will be
the question is where does he cross that line with
which part of the Republican majority and what happens then.
Speaker 5 (30:20):
So there are like four hundred government agencies and including
some small ones that nobody has ever heard about. But
I personally am going to keep my eye on the
Department of Education because, as we've reported, like Musk has
a huge interest in education himself. He has a foundation
that's very dedicated to education. He has started a preschool
in Texas. A lot of this is ideological around wokeism,
(30:43):
and you know, we don't have a confirmed head of
the Department of d yet, but I just sort of
worry and predict that, like you will see Doge at
the Department of Bed relatively soon.
Speaker 2 (30:55):
Yeah, And to Ted's point, I mean that is going
to be.
Speaker 3 (30:58):
A massive vector for blowback.
Speaker 2 (31:00):
People get mad when their public schools start to get defunded,
and depending on how subtle this is, there could be
real consequences. Let's end there. Ted, Dana, thanks for being here.
Really appreciate it.
Speaker 3 (31:16):
Thank you, Thank you.
Speaker 2 (31:24):
This episode was produced by Stacy Wong. Anna Masarakis is
our editor, and Rahan Harmanci our senior editor. Blake Maple's
handles engineering and Dave Purcell fact checks. Our supervising producer
is Magnus Hendrickson. The Elanink theme is written and performed
by Taka Yazuzawa and Alex Sagierra. Brendan Francis Newnham is
our executive producer, and Sage Bauman is the head of
(31:45):
Bloomberg Podcasts Big thanks to Joel Weber.
Speaker 3 (31:48):
And Brad Stone. I'm Max Chafkin.
Speaker 2 (31:50):
If you have a minute, rate and review our show,
it'll help other listeners find us and we will see
you next week.
Host
David Papadopoulos
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