March 25, 2025 • 32 mins
Elon Musk’s leverage over the Republican Party, made plain by his threats to finance primary challenges against anyone who fails to fully support Donald Trump, comes from his multibillion-dollar bank account. Recently, he’s decided to spend some of that money on behalf of the party. In Wisconsin, Musk has spent upwards of $13 million to sway a state supreme court race that has ramifications for Republican control of the US House of Representatives. To discuss this, host David Papadopoulos is joined by Elon Musk reporter Dana Hull, Bloomberg Businessweek senior writer Max Chafkin and politics reporter Ted Mann. Then, later in the episode, Bloomberg Intelligence analyst Steve Man joins to talk about his optimistic view on Tesla sales.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:08):
Let me tell you we have a new star.
Speaker 3 (00:10):
A star is born Elon up On Mars Juson Kennedy.
Speaker 4 (00:15):
He is the Thomas Edison plus plus plus of our age.
Speaker 2 (00:18):
Probably his whole life is from a position of insecurity.
Speaker 3 (00:21):
I feel for the guy.
Speaker 2 (00:22):
I would say ninety eight percent really appreciate what he does.
Speaker 3 (00:25):
But those two percent that are nasty, they are I'll
pit in fourth post.
Speaker 2 (00:30):
We are meant for great things in the United States
of America, and Elon reminds us of that we don't
have a fourth branch of governments called Elon Musk. Welcome
to Elon Ing, Bloomberg's weekly podcast about Elon Musk. It's Tuesday,
(00:50):
March twenty fifth. I'm your host, David Papadopolis. This week
we're talking about a place that doesn't usually come up
on the show, Wisconsin, where Elon's pack is poor bring
millions of dollars into the state Supreme Court race. Now
the campaign has become a key early test of the
electorate's mood in the wake of the twenty twenty four vote,
and Elon is using a very similar playbook to the
(01:11):
one he used then. But will it work this time?
And then we'll talk Tesla with Steve Mann, an analyst
at Bloomberg Intelligence. After cratering for a week, the stock
has finally started to bounce back, and Man believes there's
a much needed rebound coming in the company's sales. But
joining me now to talk Wisconsin politics is another man,
(01:32):
Ted Man, a reporter in our Washington bureau. Hello, Ted, Hi,
thanks for having me, And of course we have our regulars,
Max Schafkin and Dana Hall. Max Eloser, Hello, David, Dana,
how are you. I'm good, excellent, excellent, Okay, Ted. So
you know I have a long standing policy of not
fouling Wisconsin Supreme Court race votes closely. So tell this
(01:57):
is just for decades. This has been a policy of mine,
dating back like the eighties.
Speaker 1 (02:00):
What do you have against Wisconsin jurisprudence?
Speaker 2 (02:03):
So tell me and our listeners what we need to
know about this race.
Speaker 1 (02:07):
I mean, the main thing you need to know about
the Wisconsin Supreme Court race on the elections on April first,
is that it is already the most expensive judicial election
in the history of the United States. More than seventy
three million dollars has been spent, and the biggest spender
in that seventy three is Elon Musk. He's given Brennan
Center I think has more than fourteen million to various
(02:30):
groups who are putting money behind the Republican Brad Schimmel,
who is trying to defeat the Democrat Susan Crawford. That
would give conservatives a majority on the Wisconsin Supreme Court.
Speaker 2 (02:40):
Okay, so the court. The balance at stake here is
which side effectively controls the court once again.
Speaker 1 (02:48):
And for those who are dedicated followers of Wisconsin Supreme
Court news, it's yeah, this is a this is a
Supreme court where this sort of this contest between conservatives
and liberals potentially holds huge importance for things like how
they manage their election laws in a critical swing state,
for abortion policy, for a number of other huge social
(03:10):
political issues.
Speaker 4 (03:12):
So in the House, like the House of Representatives, right,
I mean, and we.
Speaker 2 (03:17):
Have a hold on we actually have Elon talking about
the race and just how important it is.
Speaker 5 (03:22):
Yeah, I think it's just worth makes make sure that
you know, people in Wisconsin understand like this Supreme Court race,
you know, as has a big effect on the House
of Representatives and House Representatives is raised it and margins
so effectively. Like, the reason I'm bringing this to people's
attention is because this really has implications for Wisconsin, but
(03:42):
for the whole country. So that's why I really urging
you know, please, if anyone, if you have any friends,
family in Wisconsin, send them a note and ask them
to vote early for Justice Shimmel. And because this actually,
this this selection is going to affect everyone in the
United States.
Speaker 2 (04:02):
So ted Elon said something there that Dana had just
said a minute ago, which is, this has huge bearing
on the House of Representatives. Sorry, help me out tell
me why.
Speaker 1 (04:13):
Well, because redistricting is done by the state, and so
a future redistricting in Wisconsin.
Speaker 2 (04:18):
Is there already one being planned or in the case
of if it should come.
Speaker 1 (04:21):
Up, I mean, yes, the redistricting will come up. And
so the issue here is do you have a conservative
majority at the Supreme Court level in the state who
will ultimately probably be the arbiter of.
Speaker 2 (04:34):
What plan how you're trying to jerrymander one ware or
the exactly.
Speaker 1 (04:37):
So basically what he's saying is the Republicans need to
win this judicial race because that is what is going
to enable them to select a favorable redistricting plan in
this critical swing state and to boost the potential majority
of the Republicans so that they can hold the House.
Speaker 6 (04:53):
These redistricting plans often end up in the courts. And
then the other thing is there's like a symbolic quality.
This is the first election since November. If you were
a big mega donor like Elon Musk, this is the
only game in town right now.
Speaker 2 (05:08):
And as far as like, where's nowhere else your money?
Speaker 1 (05:10):
Exactly totally, And it's like Shimmel has been campaigning with
an inflatable Trump, and it's also a referendum on Musk too,
Like Crawford has been calling Shimmel elon.
Speaker 2 (05:19):
So he like walks around, he carries it under his
arm or something.
Speaker 1 (05:23):
Everybody's at a rally. I no, I think it was.
I'm imagining.
Speaker 2 (05:26):
It's too big. It's so big you can't carry it
under your arm.
Speaker 1 (05:30):
Not a portable Trump.
Speaker 2 (05:33):
Thank god.
Speaker 4 (05:34):
It's also super interesting because Trump is not on the ballot.
Typically turnout is low in these kinds of elections, but
apparently turnout is very high right now. Spaces that must
coast it over the weekend. He said that Democratic churnout
was higher than they wanted it to be. And this
is to a Ched's point, this is really a referendum
on Elon. I mean, Elon is now the public face
of Doge. He's out there with his chainsaw. Every veteran
(05:58):
or personal social security or a fan of bulk education
or someone who likes their National park system like now
knows that like Elon and Doge are the face of
this dismantling of the federal government. And so I think
that for Elon it's like it's a real test of
his America pack and they're staying power in these down
ballot races. You know, he has said when Trump was
(06:20):
running like that his pack is here to stay, and
he's going to be focusing on judicial races and district
attorney races, and this is the first big race that
we're seeing him wait into.
Speaker 2 (06:28):
Yeah, I mean, Ted, isn't that the risk here as
Dan is getting at that in throwing himself into this race,
as he has mosque and throwing this much money at it. Yeah,
maybe the money goes a long way, and maybe it
helps you, you know, lure some voters your way, but
you also unwittingly kind of turn the vote into a
(06:51):
referendum on you, Elon Musk at a time when you're
not exactly the most popular person in America.
Speaker 1 (06:57):
I think that's definitely a risk, although we don't quite
know how much voters are going to pay attention to that,
or how how long their memories will be. It's also
the case that as as Dan is saying, he's seeing
these opportunities to throw a ton of money into a
contest that has great political outcomes or there's where there's
going to be tremendous political ramifications. And it is a
(07:19):
ton of money. It is the most expensive judicial race ever,
but it's also not a lot of money. It's the
richest guy in the world, you know, and it's fourteen
million bucks. You know. It's a rounding era for him,
and it's so in a way, it's it's kind of
similar to what others have said about him and Trump
in the in the presidential election. Yeah, he spent two
hundred and fifty million or a little shy of that,
(07:40):
but that isn't that much to him, and if you
look at what it got him, it was a pretty
good investment.
Speaker 6 (07:46):
Yeah.
Speaker 2 (07:46):
Isn't that the old, uh, you know expression that you know,
it's ultimately kind of depressing how little money for someone
as wealthy as these people, you know, to effectively buy
a politician. It's just not all that much money.
Speaker 4 (07:58):
Wisconsin is also super interesting because remember in November, of
all the seven swing states, Trump's margin of victory in
Wisconsin was the narrowest. So this is a blue collar
state where you know, Trump did not win by a
ton and the Wisconsin Dems are very organized and they
are really making Elon the focus of this campaign. It's
not really about Shimal and Crawford. It's about Elon and
(08:20):
his money and oligarchy like running the race, and you
know Elon is doing his same playbook. You can sign
a petition and get a hundred.
Speaker 6 (08:29):
Bucks, and yeah, I have a lot of family in Wisconsin.
My mother lives there, my sister in law lives there,
my wife grew up there. And I got a text
from somebody I know well asking me, Hey, Max, how
do I get my hundred bucks from Elon Musk.
Speaker 2 (08:48):
They went to you because you have the because of
the show. Yeah, because of the show exactly.
Speaker 6 (08:52):
And the intent, as I understood it from the question
was to not to sign it as a as a
Committee supporter of Shimmel, but as a as a thing
that was being passed around by various now I explained
that the point of these petitions is to collect emails.
(09:13):
So if you you're what you're effectively doing is selling
your contact information to Elon Musk for one hundred dollars.
But if you are not likely to vote for Elon
Musk aligned Republicans, then your contact contact information isn't necessarily worth.
Speaker 2 (09:27):
That much to set individuals get there.
Speaker 6 (09:30):
I have not fired up, but I will. But it
does seem like, you know, this was interesting because during
the presidential election, to sign the petition and collect the money,
you had to be a registered Republican. This one is
open to anyone who is registered in Wisconsin, and so
you could imagine this costing a lot of money. I mean,
(09:52):
the New York Times reported that America Pak has five
hundred canvassers in the state. It's a big staff of.
Speaker 2 (09:57):
People like he is.
Speaker 6 (09:58):
He is going big here, and if the Republican underperforms,
I do think that's gonna Look, this is gonna be
a test one way or another. If if Shimmel does well,
it's gonna we're gonna say, like Wow, like this America
Pack thing, it wasn't They weren't just a one hit wonder.
They are capable of doing, you know, effective campaigning. And
(10:20):
if it if it doesn't do well, I'm not sure
it's necessarily an indictment of America Pack's ability to campaign.
But it does look like wow, like the Elon Musk
brand may be pretty divisive. This might not be the
best thing for a candidate in a swing state to
be allied.
Speaker 2 (10:34):
At this at this moment, right now now, Dana Max
says that the pack Elon's Pack is going all in
on this, and I guess I wonder if you have
any sense at all if he's going himself, if he's
throwing himself into this, like is he sleeping somewhere in Wisconsin?
He's sleeping in you know, the fifty yard line of
lambeau Field.
Speaker 4 (10:52):
And no, no, no, I mean so far he's basically
still been in DC, although what I checked last night,
his plate is now in San Jose. He has not
shown up in Wisconsin yet. But the fact that he
took time out of his weekend when he was basically
traveling with Trump to do this Twitter or this x
spaces with Shimmel for over an hour. I mean his
(11:15):
time is very valuable. He is a huge megaphone that
was a very well attended spaces and just like everyone
is always competing for fractions of Elon's time, the fact
that he is dedicating time to this race as well
as money is significant. He doesn't need to go to
Wisconsin himself, Like, I don't know what that would accomplish.
Speaker 6 (11:36):
Well, I don't know that's true, Dan, because like when
you know, talking in sort of reporting on what was
really important in the America pack thing in Pennsylvania, I
do think Elon Musk's presence in the state made a difference.
Speaker 2 (11:51):
And it doesn't make anyone spend like weeks at a time. Yeah,
I mean he did rallies.
Speaker 6 (11:55):
He made you know, like there was there were there
were quite a few kind of in person rallies.
Speaker 4 (12:00):
He's way more polarizing now, yes, I mean in Pennsylvania
in the fall, he was like he had he could
like bring like the young men who were like Elon interested,
but they canto.
Speaker 2 (12:13):
He doesn't still lure those people.
Speaker 6 (12:14):
The question is like, and this would be a question
even if Elon were not involved like Trump. Since Trump's
rise in the Republican Party, there have been turnout issues
when Trump is not on the ballot, and and Trump
is not on the ballot, So like the do these
voters who feel like a profound, you know, personal connection
to Donald Trump and his movement, are they willing to
(12:35):
turn out?
Speaker 2 (12:36):
Well, it's the large, inflatable Trump.
Speaker 6 (12:38):
Yeah, that's why you need the inflatable Trump. That's why
the endorsement matters even more.
Speaker 1 (12:42):
To the point, like the America pack mailers say President
Donald Trump needs your vote, and they say with Susan
Crawford is going to stop President Trump's agenda. So to
that point, yeah, they're trying to make this. They're trying
to put him on the ballot because they feel like
that's what will actually drive the turnout and tilt the race.
Speaker 2 (13:05):
So, Ted, I wonder if, or I guess I should say,
I wonder how much we can read into the outcome
of this vote in terms of looking ahead to the
mid terms eighteen months out or god forbid, looking ahead
to twenty twenty eight. We seem pretty far from those things.
This is just a Supreme Court race in one state that,
(13:29):
as we said at the top of the show, we
don't typically talk too much about how great a barometer
is it for the electorate's mood across the country right now,
I don't.
Speaker 1 (13:39):
Know that I could speak to the electorate's mood, but
I know some people who will be paying very close
attention to Crawford's campaign, and that's every consultant who works
for the Democratic Party, which is currently just a trash
fire of recrimination and doubt. And you know ageist arguments.
Speaker 2 (13:53):
Like they're looking for they're looking for a winning formula.
Speaker 1 (13:57):
Is that what you're saying, They're looking for any strategy.
And if they see that billboard saying don't let eon
Musk by the Supreme Court seem to work, you better
believe that that's going to find its way into every
single midtermad Right Like, he's made himself the largest figure
in the political landscape other than Trump, and if it
looks like throwing things at him is good for you electorally.
(14:20):
Based on what happens on April first, I got to
think that the default strategy going into the midterms will
be bashing Musk.
Speaker 2 (14:26):
So Max, it's hard not to notice, and that he
suddenly this is Wisconsin gambit is coming up as Doze
seems to be slowing and petering out a bit, and
I wonder if that is that just merely a coincidence
and just just one of these things that hey, these
two things are happening simultaneously and one has no bearing
(14:48):
in the other, or is he shifting attention elsewhere as Indeed,
it seems like Doze is being a little bit handcuffed
and limited in what it's what it's being able to do.
Speaker 6 (14:59):
Just because we I've seen a lot of legal challenges,
legal challenges. I think, first of all, Elon Musk doesn't
necessarily have like the most He's not the most focused
guy in the world. Like you could imagine him kind
of his attention wandering regardless of like what was happening
in the courts or what was happening in public opinion,
or what the president was saying. But also, you're right,
there are lots of reasons why if Elon Musk cares
(15:23):
about his like reputation and his and the and the
effect he has on elections and so on, he would
deemphasize DOGE because a lot of this stuff seems at
least so the idea of cutting government I think is popular,
but the Doge execution has been very very unpopular. There's
(15:43):
been a steady drumbeat of kind of problematic stories that
don't necessarily help Trump like this, you know, these stories
about Social Security and wait times on Social Security?
Speaker 2 (15:55):
What exactly what do those things look like?
Speaker 6 (15:57):
Well, so they in cutting cast right. There are there
are reports anyway that like wait times to get to
talk to somebody from the Social Security Administration have gone
way up that like people, Yeah, I talked about this
last week, Like the customer experience has has degraded as
you'd expect it would if you if you you know,
massively cut spending. And then you also have you know,
(16:18):
Musk going on Rogan saying social Security is a Ponzi scheme,
like that is going to play in you doubt it's
a I just know for a fact that Democrats are
going to use that over and over and over again,
just like they're going to use Howard Lunnox comments uh
from from last week, uh also kind of implying that
people might, you know, maybe maybe some Social Security payments
(16:40):
won't go out or whatever. It's no big deal. So
it's it's just it's like, this is not a good
political story. And and so I think there are reasons
for it, although I don't know. Like Danna said, Elon
had signaled he was going to do this from the jump.
We knew he was. He thought America packed, you know,
did well. I think objective they did accomplish a lot.
(17:02):
So in that sense, like, who knows, maybe he'd be
doing this either way.
Speaker 2 (17:06):
If you're saying coming out of November, he was immediately saying, Hey,
this thing isn't going away. Yeah, We're going to be
bigger and badder than ever.
Speaker 6 (17:12):
Like on election night, like but even before the results,
he was signaling this kind of thing, and since then
he has continued to signal it along was saying he's
going to play in the midterms. So so again, I
think it would be surprising at this point if he
pulled out. Although if if the Republicans get absolutely shellacked
on April first, then I think we have to start asking, like, no,
does Zelon start to say, like, hey, maybe I didn't
(17:34):
want to spend fifteen million dollars on petitions or whatever.
Speaker 1 (17:39):
Could I just just to pivots the doge in the
popularity of what they're doing. I think it's absolutely the
case that their execution or the sort of immediate effect
of the cuts and the sort of disorder that they're
sowing is an issue politically for the popularity of what
they're doing. But we have also written about the goal
that the actual target that they're pointing at musk saying
he's going to cut a trillion dollars out of the
(18:01):
budget in a single year, which is like that is
Margaret Thatcher level austerity in terms of the reduction and
GDP on a faster timeline, and the administration if you
listen closely, keeps kind of waffling on this. They keep
saying there will be a period of pain, We're going
to have to take some medicine best and is comparing
(18:22):
it to detoxing on you're trying to get off of
a substance. And then like Stephen Myron, I think the
interview was yesterday, was kind of like not quite willing
to say, oh, yeah, there will be some pain for
doing this thing that we're trying to do. And I
think that even like that's part of the problem for
DOGE is they have ostensibly the authority to go do
(18:44):
this incredibly aggressive thing that is for you know that
the ECON guys really think is a good strategy to
drive future growth, but there doesn't seem to be total
commitment to the pain that it will cause.
Speaker 2 (18:56):
All right, we listen, Ted, this was great. We appreciate
having you on, and depending on how this vote goes
in Wisconsin, perhaps you'll have to come back on and
tell us all about it.
Speaker 1 (19:05):
Sounds great, I'd love to.
Speaker 2 (19:11):
Okay, now we're joined by Steve Man, an analyst at
Bloomberg Intelligence who covers Tesla for us. Okay, Steve, so,
as we were preparing for the show, your report hit
and it really caught our eye. You are forecasting a
rebound in Tesla sales, in car sales, and you're expecting
(19:32):
it to happen pretty quickly coming up here in the
second quarter. You know, for us watching Tesla's being burnt
and sales plunging across the world, it's kind of a
little bit hard to see, or at least for me,
it is. So lay things out as you see them,
and how we get from deep decline in sales right
(19:53):
now to a pickup in the second quarter.
Speaker 1 (19:56):
Yeah.
Speaker 3 (19:57):
Sure, I'm not brushing off some of the the politics
that Elon Musk is in and the reaction from from
the public, but you know, from my standpoint I do.
I mean the bus business fundamentals have you know bottom okay, uh,
you know, there's been a lot of complaint the marketplace
(20:17):
in terms of you know, when is Elon, Musk and
Tesla are going to roll out a new vehicle there
the cars are getting old. Well, they launched a Highland
Model three. It's not you know, it's not the best
selling car. The Model why is the best selling car.
And they're actually rolling a new one out as we
speak in March. They did that a little bit earlier,
(20:39):
and so you know, from personal experience, you know, I
actually worked at the auto industry for a while. You know,
rolling out vehicles is not that easy. It's an eight
hundred pound gorilla. So you know, March they come out
with a new car. Not surprised, not surprised that the
you know, old one uh is you know rolling off
(21:00):
and not selling very well. They shut down the plant
by the way in Berlin and Shanghau, and they're doing
the same thing at Fremont to actually change over the
tooling for the new vehicle. So our view basically is
that you know, we're probably going to see an inflection
point in the second quarter of this year. You know,
April sales may come up a little bit weak because
(21:23):
they're ramping up vehicles, but beyond that, I think we'll
see improvement.
Speaker 2 (21:27):
So you do believe that this rollout alone, in this
refresh of this model HI is enough to offset I mean,
so I think you're thinking second quarter sales are going
to be up something like six percent or so something
like that.
Speaker 3 (21:41):
That's right.
Speaker 2 (21:42):
You know, we've been seeing some of the numbers coming
out for the first quarter. They're not just down, they
are down with the capital D so to go all
the way up to positive, even if it's just mid
single digits, it's a pretty big it's quite a leap,
right right.
Speaker 4 (21:59):
But David, I think part of the reason why it's
why the sales are down is because of the supply.
The factories are offline. So you're seeing some of the
analyst reports coming out saying that, yeah, Q one is
going to be lousy, but it's because like literally they're
not making cars right now as they're they're turning over
the production lines to the refresh model. Why at all
four plants, you know, Fremont, Austin, Berlin and Shanghai.
Speaker 6 (22:23):
You know, the kind of political story and the story
of Elon Musk's degrading brand, at least with the left,
is a story that is has been going on for years.
And I think to Steve's point, a couple of years ago,
Elon Musk was talking about fifty percent year over year
growth as like as far as I could see, and
(22:44):
to go from there to maybe six percent is a drop.
Speaker 3 (22:48):
Like even if we.
Speaker 6 (22:49):
See, even if we see the sales come back the
way we're expecting, like, it doesn't mean that the brand
is improved or it could continue to of course, like
Trump is gonna keep trying to do stuff. I think,
like if public polling, historical public polling is any guide,
he will become more unpopular as the months and years
(23:11):
go on. So like there's a chance that the Tesla
brand could degrade even further than it than it already has. Steve,
I wanted to ask how different is are Tesla's new
models from traditional automaker's new models, because like they seem
to talk about them a little bit differently, they don't
make as clear a delineation between like the old Model
(23:32):
three and the new one, the old Model one and
the new one, and like I can't even personally like
tell the diff Like maybe just because I'm not sophisticated enough,
but like, like I don't know that I could clearly
identify the old Model three from the new model three.
It seems like the company has sort of been based
on this understanding that like they're not really going to
refresh these things all that much.
Speaker 3 (23:54):
Yeah, that's a very good question. I think what I
really understand, just getting back to your earlier comment, well,
you know Elon Musk and car sales and the politics
around it. What I really don't understand is if I
step take a step back. Look, you know, I've been
looking at the industry for like thirty years, the auto industry,
and it's amazing. I'm just so surprised that, you know,
(24:17):
a we've seen new automakers springing springing up. You know,
you have Tesla Ariba. I never thought of a new
automakers can come into the market because the barrier of
entry is just so high. There's so much capital investment
that needs to be made. So for Elon Moss to
you know, come in, it's an American may Car to
(24:39):
come in and actually sell millions of cars and take
market share from legacy automaker. It's a huge seat. You know,
I think personally, I think we should celebrate the fact
that you know, he's able to do that right now?
You're right.
Speaker 6 (24:56):
Uh.
Speaker 3 (24:56):
You know these vehicles, even the model wide, it's from
a it's mostly a cosmetic change, like from a from
a consumer perspective.
Speaker 2 (25:06):
You mean the new one that's about to come out.
Speaker 3 (25:09):
Yeah, right, the new one is aboucked to come out.
It's a lot of it's cosmatic changes. Is a front
bumper has changed, the lighting has changed.
Speaker 2 (25:17):
Lightebar, right, the light bar is very different.
Speaker 3 (25:20):
Yeah, yeah, the light bar.
Speaker 2 (25:21):
Steve. The thing on how different this new model Why
is versus the old one is I think a pretty
important thing, Max, and I've been talking about it off
the air the last few days. I think that those
cosmetic differences in the new model Why are significant enough
that people will recognize them and they'll say, oh, that's
(25:42):
a new model Why versus an old model Why. And
so I guess my pushback to your whole thesis that
the new model Why is going to help sales is
what if it hurts sales? What if it tethers me
more closely when I buy it? To this version of
Elon Musk I lose as a buyer pausible deniability, and
(26:02):
I could say, oh, I bought this TK years ago.
Speaker 6 (26:05):
You got to get Steve more context. This is the
I bought this before he was crazy theory Tesla Steve.
Speaker 2 (26:10):
Steve knows I can tell from the look at his
face and he knows it right, So right, I mean,
I guess what I'm also getting is because when you
came up with these numbers, you used historical comparison. You said,
when when Tesla did previous refreshes, this is the kind
of growth that followed it. And I just wonder if
that is applicable to this day and age.
Speaker 3 (26:30):
Yeah, I mean that is That's a good question. Like,
you know, history doesn't predict the future.
Speaker 1 (26:35):
I know that.
Speaker 3 (26:36):
I think, you know, putting that number out is important.
But you know, if I you know, I think if
you look at the model, why and you know I've
started to see him on the street here an.
Speaker 2 (26:49):
The new ones. You're already seeing them.
Speaker 3 (26:51):
The new ones. Yeah, I seen they have you.
Speaker 2 (26:55):
Seen bumper stickers on him that said I bought this
where I realize Eline went crazy?
Speaker 3 (27:01):
Yeah, and look I look at some of the statistics
in China. You know, some of the social media reports
on China. Some of the people I talked to in China,
By the way, I know, I actually covered the Chinese
auto for fifteen years not too long ago. The reaction
on the new model is quite positive. Right if you
(27:22):
look at China, the FSD is I feel like it's
going to help quite a bit for the Chinese consumer.
They rave about it. It's it's you know, it's in
awe for them. So I think that demand's there.
Speaker 2 (27:37):
See, there's the point that Dana brings up often is
that China is hugely important for Tesla and its sales,
and I get the sense very much that there isn't
the nearly as much controversy or you know, the stigma
with buying a Tesla there like you'd have here in
the US or in Europe right now, right, I just don't.
(27:59):
I don't know the Chinese consumers think about him and
the brand that way. Is that fair?
Speaker 3 (28:04):
Yeah, exactly, that's fair. He's idolized over there, still still is.
I mean, there's some debates around it, but it still is.
From my.
Speaker 2 (28:13):
So when you when you when you have low single
digit growth coming ahead, uh for the company, sales is
a lot of that China driven.
Speaker 3 (28:23):
A lot of it is China. It is a lot
of China driven. We actually think even in the month
of March, in April, uh in April, we'll probably see
your rear increase in that marketplace. So a lot of
it is driven by by China. But we can't forget
about Europe. You know, Europe being down, it is a concern.
(28:45):
It has been becoming a smaller market for them. But
you know, especially you know Januine February sales are down.
I think it's mostly contributed by the changeover the shutdown
of the Berlin Plan.
Speaker 2 (28:58):
Wait, wait, so just for a second, there, so we
when you when we see that Europe is down like
forty percent sales wise in February, you're saying that the
vast bulk of that forty percent decline is indeed a
reflection of the fact that output was shut down, and
not the fact that buyers don't want these cars.
Speaker 3 (29:17):
Oh no, I don't want to say no. I think
there so there's three actually components to it. I think
in Janul February the large part of the decline was
the model year Changeler. But if you look at full
year twenty twenty four, I think that the client is
not necessarily a model of why they're waiting. It's not
necessarily they're waiting for the motto of why. I think
there's a huge a lot of competition from the Chinese
(29:40):
over there. Even you know, with the tariffs that the
Europeans are slapping on, there's still you know, they still
have value for money. And then you know there's you know,
consumer spending is weakened over there, subsidies have gone away,
so there is quite a bit of competitive element in
in Europe. But I still think that they will improve
(30:03):
in the coming quarters.
Speaker 4 (30:05):
Fantastic think people are just ascribing too much to Elon's politics.
And I mean, yes, Elon got very involved in the
German elections, so surely some of the drop off in
like German demand was probably because of Elon and politics.
But to Steve's points, like car purchases are impacted by
things like tariffs and local incentives and whether you're like
(30:25):
waiting for the next model to come out, and we
just can't ascribe too much to the politics alone. And
what's happening is that Tesla is like clearing inventory while
they're refreshing the model. Why now the model why is
starting to come out. You are going to see a rebound.
I'm going to push back on your number. I don't
think we're going to see four hundred thousand in the
first quarter. I think that's too high. I think it's
(30:46):
going to be way lower than that.
Speaker 3 (30:48):
I mean, first of all, I think the four hundred
numbers really for the second quarter it's in the first quarter,
is going to be way under like three hundred and fifty.
Speaker 2 (30:57):
Okay, Okay, So Steve, we need to rin app but
we will have you back on in a few months,
uh to talk about how the second quarter sales went
and if it turns out when we have you back
on in a few months. Your prediction was wildly off
and you and you totally flamed out here. What will
you say, like, what are the most probable causes for
(31:18):
your for the demise of your prediction if it goes
awry on you? What? What is it? What? What? What?
What rears it?
Speaker 3 (31:24):
I you know, I think, like I said earlier, I'm
not denying you know, there's you know, political impact in
terms of the consumer sentiment on the vehicles. If sales
are down. You know, I'll first admit look wrong, and uh,
we'll move on and uh, you know, I'll probably talk
about the robotex.
Speaker 2 (31:46):
You'll go you'll go full, you'll go full elon mode
and you start spinning. But papat Apples, look at the
robo taxi. It's coming. It's coming, all right, Steve mac Stana,
thanks for joining, Thank you.
Speaker 3 (32:03):
Thank you.
Speaker 2 (32:10):
This episode was produced by Stacy Wong. Anna Masa Rakus
is our editor, and Rayhan Harmansi our senior editor. Blake
Maple's handles engineering, and Dave Purcell factchecks. Our supervising producer
is Magnus Hendrickson. The Elunning theme is written and performed
by Taka Yasuzawa and Alex Sugi Eira. Brandon Francis Newnham
is our executive producer, and Sage Bauman is the head
of Bloomberg Podcasts. A big thanks as always to our
(32:33):
supporters Joel Weber and Brad Stone. I'm David Papadopoulos. If
you have a minute, rate and review our show, it'll
help other listeners find us. See you next week.
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:08):
Let me tell you we have a new star.
Speaker 3 (00:10):
A star is born Elon up On Mars Juson Kennedy.
Speaker 4 (00:15):
He is the Thomas Edison plus plus plus of our age.
Speaker 2 (00:18):
Probably his whole life is from a position of insecurity.
Speaker 3 (00:21):
I feel for the guy.
Speaker 2 (00:22):
I would say ninety eight percent really appreciate what he does.
Speaker 3 (00:25):
But those two percent that are nasty, they are I'll
pit in fourth post.
Speaker 2 (00:30):
We are meant for great things in the United States
of America, and Elon reminds us of that we don't
have a fourth branch of governments called Elon Musk. Welcome
to Elon Ing, Bloomberg's weekly podcast about Elon Musk. It's Tuesday,
(00:50):
March twenty fifth. I'm your host, David Papadopolis. This week
we're talking about a place that doesn't usually come up
on the show, Wisconsin, where Elon's pack is poor bring
millions of dollars into the state Supreme Court race. Now
the campaign has become a key early test of the
electorate's mood in the wake of the twenty twenty four vote,
and Elon is using a very similar playbook to the
(01:11):
one he used then. But will it work this time?
And then we'll talk Tesla with Steve Mann, an analyst
at Bloomberg Intelligence. After cratering for a week, the stock
has finally started to bounce back, and Man believes there's
a much needed rebound coming in the company's sales. But
joining me now to talk Wisconsin politics is another man,
(01:32):
Ted Man, a reporter in our Washington bureau. Hello, Ted, Hi,
thanks for having me, And of course we have our regulars,
Max Schafkin and Dana Hall. Max Eloser, Hello, David, Dana,
how are you. I'm good, excellent, excellent, Okay, Ted. So
you know I have a long standing policy of not
fouling Wisconsin Supreme Court race votes closely. So tell this
(01:57):
is just for decades. This has been a policy of mine,
dating back like the eighties.
Speaker 1 (02:00):
What do you have against Wisconsin jurisprudence?
Speaker 2 (02:03):
So tell me and our listeners what we need to
know about this race.
Speaker 1 (02:07):
I mean, the main thing you need to know about
the Wisconsin Supreme Court race on the elections on April first,
is that it is already the most expensive judicial election
in the history of the United States. More than seventy
three million dollars has been spent, and the biggest spender
in that seventy three is Elon Musk. He's given Brennan
Center I think has more than fourteen million to various
(02:30):
groups who are putting money behind the Republican Brad Schimmel,
who is trying to defeat the Democrat Susan Crawford. That
would give conservatives a majority on the Wisconsin Supreme Court.
Speaker 2 (02:40):
Okay, so the court. The balance at stake here is
which side effectively controls the court once again.
Speaker 1 (02:48):
And for those who are dedicated followers of Wisconsin Supreme
Court news, it's yeah, this is a this is a
Supreme court where this sort of this contest between conservatives
and liberals potentially holds huge importance for things like how
they manage their election laws in a critical swing state,
for abortion policy, for a number of other huge social
(03:10):
political issues.
Speaker 4 (03:12):
So in the House, like the House of Representatives, right,
I mean, and we.
Speaker 2 (03:17):
Have a hold on we actually have Elon talking about
the race and just how important it is.
Speaker 5 (03:22):
Yeah, I think it's just worth makes make sure that
you know, people in Wisconsin understand like this Supreme Court race,
you know, as has a big effect on the House
of Representatives and House Representatives is raised it and margins
so effectively. Like, the reason I'm bringing this to people's
attention is because this really has implications for Wisconsin, but
(03:42):
for the whole country. So that's why I really urging
you know, please, if anyone, if you have any friends,
family in Wisconsin, send them a note and ask them
to vote early for Justice Shimmel. And because this actually,
this this selection is going to affect everyone in the
United States.
Speaker 2 (04:02):
So ted Elon said something there that Dana had just
said a minute ago, which is, this has huge bearing
on the House of Representatives. Sorry, help me out tell
me why.
Speaker 1 (04:13):
Well, because redistricting is done by the state, and so
a future redistricting in Wisconsin.
Speaker 2 (04:18):
Is there already one being planned or in the case
of if it should come.
Speaker 1 (04:21):
Up, I mean, yes, the redistricting will come up. And
so the issue here is do you have a conservative
majority at the Supreme Court level in the state who
will ultimately probably be the arbiter of.
Speaker 2 (04:34):
What plan how you're trying to jerrymander one ware or
the exactly.
Speaker 1 (04:37):
So basically what he's saying is the Republicans need to
win this judicial race because that is what is going
to enable them to select a favorable redistricting plan in
this critical swing state and to boost the potential majority
of the Republicans so that they can hold the House.
Speaker 6 (04:53):
These redistricting plans often end up in the courts. And
then the other thing is there's like a symbolic quality.
This is the first election since November. If you were
a big mega donor like Elon Musk, this is the
only game in town right now.
Speaker 2 (05:08):
And as far as like, where's nowhere else your money?
Speaker 1 (05:10):
Exactly totally, And it's like Shimmel has been campaigning with
an inflatable Trump, and it's also a referendum on Musk too,
Like Crawford has been calling Shimmel elon.
Speaker 2 (05:19):
So he like walks around, he carries it under his
arm or something.
Speaker 1 (05:23):
Everybody's at a rally. I no, I think it was.
I'm imagining.
Speaker 2 (05:26):
It's too big. It's so big you can't carry it
under your arm.
Speaker 1 (05:30):
Not a portable Trump.
Speaker 2 (05:33):
Thank god.
Speaker 4 (05:34):
It's also super interesting because Trump is not on the ballot.
Typically turnout is low in these kinds of elections, but
apparently turnout is very high right now. Spaces that must
coast it over the weekend. He said that Democratic churnout
was higher than they wanted it to be. And this
is to a Ched's point, this is really a referendum
on Elon. I mean, Elon is now the public face
of Doge. He's out there with his chainsaw. Every veteran
(05:58):
or personal social security or a fan of bulk education
or someone who likes their National park system like now
knows that like Elon and Doge are the face of
this dismantling of the federal government. And so I think
that for Elon it's like it's a real test of
his America pack and they're staying power in these down
ballot races. You know, he has said when Trump was
(06:20):
running like that his pack is here to stay, and
he's going to be focusing on judicial races and district
attorney races, and this is the first big race that
we're seeing him wait into.
Speaker 2 (06:28):
Yeah, I mean, Ted, isn't that the risk here as
Dan is getting at that in throwing himself into this race,
as he has mosque and throwing this much money at it. Yeah,
maybe the money goes a long way, and maybe it
helps you, you know, lure some voters your way, but
you also unwittingly kind of turn the vote into a
(06:51):
referendum on you, Elon Musk at a time when you're
not exactly the most popular person in America.
Speaker 1 (06:57):
I think that's definitely a risk, although we don't quite
know how much voters are going to pay attention to that,
or how how long their memories will be. It's also
the case that as as Dan is saying, he's seeing
these opportunities to throw a ton of money into a
contest that has great political outcomes or there's where there's
going to be tremendous political ramifications. And it is a
(07:19):
ton of money. It is the most expensive judicial race ever,
but it's also not a lot of money. It's the
richest guy in the world, you know, and it's fourteen
million bucks. You know. It's a rounding era for him,
and it's so in a way, it's it's kind of
similar to what others have said about him and Trump
in the in the presidential election. Yeah, he spent two
hundred and fifty million or a little shy of that,
(07:40):
but that isn't that much to him, and if you
look at what it got him, it was a pretty
good investment.
Speaker 6 (07:46):
Yeah.
Speaker 2 (07:46):
Isn't that the old, uh, you know expression that you know,
it's ultimately kind of depressing how little money for someone
as wealthy as these people, you know, to effectively buy
a politician. It's just not all that much money.
Speaker 4 (07:58):
Wisconsin is also super interesting because remember in November, of
all the seven swing states, Trump's margin of victory in
Wisconsin was the narrowest. So this is a blue collar
state where you know, Trump did not win by a
ton and the Wisconsin Dems are very organized and they
are really making Elon the focus of this campaign. It's
not really about Shimal and Crawford. It's about Elon and
(08:20):
his money and oligarchy like running the race, and you
know Elon is doing his same playbook. You can sign
a petition and get a hundred.
Speaker 6 (08:29):
Bucks, and yeah, I have a lot of family in Wisconsin.
My mother lives there, my sister in law lives there,
my wife grew up there. And I got a text
from somebody I know well asking me, Hey, Max, how
do I get my hundred bucks from Elon Musk.
Speaker 2 (08:48):
They went to you because you have the because of
the show. Yeah, because of the show exactly.
Speaker 6 (08:52):
And the intent, as I understood it from the question
was to not to sign it as a as a
Committee supporter of Shimmel, but as a as a thing
that was being passed around by various now I explained
that the point of these petitions is to collect emails.
(09:13):
So if you you're what you're effectively doing is selling
your contact information to Elon Musk for one hundred dollars.
But if you are not likely to vote for Elon
Musk aligned Republicans, then your contact contact information isn't necessarily worth.
Speaker 2 (09:27):
That much to set individuals get there.
Speaker 6 (09:30):
I have not fired up, but I will. But it
does seem like, you know, this was interesting because during
the presidential election, to sign the petition and collect the money,
you had to be a registered Republican. This one is
open to anyone who is registered in Wisconsin, and so
you could imagine this costing a lot of money. I mean,
(09:52):
the New York Times reported that America Pak has five
hundred canvassers in the state. It's a big staff of.
Speaker 2 (09:57):
People like he is.
Speaker 6 (09:58):
He is going big here, and if the Republican underperforms,
I do think that's gonna Look, this is gonna be
a test one way or another. If if Shimmel does well,
it's gonna we're gonna say, like Wow, like this America
Pack thing, it wasn't They weren't just a one hit wonder.
They are capable of doing, you know, effective campaigning. And
(10:20):
if it if it doesn't do well, I'm not sure
it's necessarily an indictment of America Pack's ability to campaign.
But it does look like wow, like the Elon Musk
brand may be pretty divisive. This might not be the
best thing for a candidate in a swing state to
be allied.
Speaker 2 (10:34):
At this at this moment, right now now, Dana Max
says that the pack Elon's Pack is going all in
on this, and I guess I wonder if you have
any sense at all if he's going himself, if he's
throwing himself into this, like is he sleeping somewhere in Wisconsin?
He's sleeping in you know, the fifty yard line of
lambeau Field.
Speaker 4 (10:52):
And no, no, no, I mean so far he's basically
still been in DC, although what I checked last night,
his plate is now in San Jose. He has not
shown up in Wisconsin yet. But the fact that he
took time out of his weekend when he was basically
traveling with Trump to do this Twitter or this x
spaces with Shimmel for over an hour. I mean his
(11:15):
time is very valuable. He is a huge megaphone that
was a very well attended spaces and just like everyone
is always competing for fractions of Elon's time, the fact
that he is dedicating time to this race as well
as money is significant. He doesn't need to go to
Wisconsin himself, Like, I don't know what that would accomplish.
Speaker 6 (11:36):
Well, I don't know that's true, Dan, because like when
you know, talking in sort of reporting on what was
really important in the America pack thing in Pennsylvania, I
do think Elon Musk's presence in the state made a difference.
Speaker 2 (11:51):
And it doesn't make anyone spend like weeks at a time. Yeah,
I mean he did rallies.
Speaker 6 (11:55):
He made you know, like there was there were there
were quite a few kind of in person rallies.
Speaker 4 (12:00):
He's way more polarizing now, yes, I mean in Pennsylvania
in the fall, he was like he had he could
like bring like the young men who were like Elon interested,
but they canto.
Speaker 2 (12:13):
He doesn't still lure those people.
Speaker 6 (12:14):
The question is like, and this would be a question
even if Elon were not involved like Trump. Since Trump's
rise in the Republican Party, there have been turnout issues
when Trump is not on the ballot, and and Trump
is not on the ballot, So like the do these
voters who feel like a profound, you know, personal connection
to Donald Trump and his movement, are they willing to
(12:35):
turn out?
Speaker 2 (12:36):
Well, it's the large, inflatable Trump.
Speaker 6 (12:38):
Yeah, that's why you need the inflatable Trump. That's why
the endorsement matters even more.
Speaker 1 (12:42):
To the point, like the America pack mailers say President
Donald Trump needs your vote, and they say with Susan
Crawford is going to stop President Trump's agenda. So to
that point, yeah, they're trying to make this. They're trying
to put him on the ballot because they feel like
that's what will actually drive the turnout and tilt the race.
Speaker 2 (13:05):
So, Ted, I wonder if, or I guess I should say,
I wonder how much we can read into the outcome
of this vote in terms of looking ahead to the
mid terms eighteen months out or god forbid, looking ahead
to twenty twenty eight. We seem pretty far from those things.
This is just a Supreme Court race in one state that,
(13:29):
as we said at the top of the show, we
don't typically talk too much about how great a barometer
is it for the electorate's mood across the country right now,
I don't.
Speaker 1 (13:39):
Know that I could speak to the electorate's mood, but
I know some people who will be paying very close
attention to Crawford's campaign, and that's every consultant who works
for the Democratic Party, which is currently just a trash
fire of recrimination and doubt. And you know ageist arguments.
Speaker 2 (13:53):
Like they're looking for they're looking for a winning formula.
Speaker 1 (13:57):
Is that what you're saying, They're looking for any strategy.
And if they see that billboard saying don't let eon
Musk by the Supreme Court seem to work, you better
believe that that's going to find its way into every
single midtermad Right Like, he's made himself the largest figure
in the political landscape other than Trump, and if it
looks like throwing things at him is good for you electorally.
(14:20):
Based on what happens on April first, I got to
think that the default strategy going into the midterms will
be bashing Musk.
Speaker 2 (14:26):
So Max, it's hard not to notice, and that he
suddenly this is Wisconsin gambit is coming up as Doze
seems to be slowing and petering out a bit, and
I wonder if that is that just merely a coincidence
and just just one of these things that hey, these
two things are happening simultaneously and one has no bearing
(14:48):
in the other, or is he shifting attention elsewhere as Indeed,
it seems like Doze is being a little bit handcuffed
and limited in what it's what it's being able to do.
Speaker 6 (14:59):
Just because we I've seen a lot of legal challenges,
legal challenges. I think, first of all, Elon Musk doesn't
necessarily have like the most He's not the most focused
guy in the world. Like you could imagine him kind
of his attention wandering regardless of like what was happening
in the courts or what was happening in public opinion,
or what the president was saying. But also, you're right,
there are lots of reasons why if Elon Musk cares
(15:23):
about his like reputation and his and the and the
effect he has on elections and so on, he would
deemphasize DOGE because a lot of this stuff seems at
least so the idea of cutting government I think is popular,
but the Doge execution has been very very unpopular. There's
(15:43):
been a steady drumbeat of kind of problematic stories that
don't necessarily help Trump like this, you know, these stories
about Social Security and wait times on Social Security?
Speaker 2 (15:55):
What exactly what do those things look like?
Speaker 6 (15:57):
Well, so they in cutting cast right. There are there
are reports anyway that like wait times to get to
talk to somebody from the Social Security Administration have gone
way up that like people, Yeah, I talked about this
last week, Like the customer experience has has degraded as
you'd expect it would if you if you you know,
massively cut spending. And then you also have you know,
(16:18):
Musk going on Rogan saying social Security is a Ponzi scheme,
like that is going to play in you doubt it's
a I just know for a fact that Democrats are
going to use that over and over and over again,
just like they're going to use Howard Lunnox comments uh
from from last week, uh also kind of implying that
people might, you know, maybe maybe some Social Security payments
(16:40):
won't go out or whatever. It's no big deal. So
it's it's just it's like, this is not a good
political story. And and so I think there are reasons
for it, although I don't know. Like Danna said, Elon
had signaled he was going to do this from the jump.
We knew he was. He thought America packed, you know,
did well. I think objective they did accomplish a lot.
(17:02):
So in that sense, like, who knows, maybe he'd be
doing this either way.
Speaker 2 (17:06):
If you're saying coming out of November, he was immediately saying, Hey,
this thing isn't going away. Yeah, We're going to be
bigger and badder than ever.
Speaker 6 (17:12):
Like on election night, like but even before the results,
he was signaling this kind of thing, and since then
he has continued to signal it along was saying he's
going to play in the midterms. So so again, I
think it would be surprising at this point if he
pulled out. Although if if the Republicans get absolutely shellacked
on April first, then I think we have to start asking, like, no,
does Zelon start to say, like, hey, maybe I didn't
(17:34):
want to spend fifteen million dollars on petitions or whatever.
Speaker 1 (17:39):
Could I just just to pivots the doge in the
popularity of what they're doing. I think it's absolutely the
case that their execution or the sort of immediate effect
of the cuts and the sort of disorder that they're
sowing is an issue politically for the popularity of what
they're doing. But we have also written about the goal
that the actual target that they're pointing at musk saying
he's going to cut a trillion dollars out of the
(18:01):
budget in a single year, which is like that is
Margaret Thatcher level austerity in terms of the reduction and
GDP on a faster timeline, and the administration if you
listen closely, keeps kind of waffling on this. They keep
saying there will be a period of pain, We're going
to have to take some medicine best and is comparing
(18:22):
it to detoxing on you're trying to get off of
a substance. And then like Stephen Myron, I think the
interview was yesterday, was kind of like not quite willing
to say, oh, yeah, there will be some pain for
doing this thing that we're trying to do. And I
think that even like that's part of the problem for
DOGE is they have ostensibly the authority to go do
(18:44):
this incredibly aggressive thing that is for you know that
the ECON guys really think is a good strategy to
drive future growth, but there doesn't seem to be total
commitment to the pain that it will cause.
Speaker 2 (18:56):
All right, we listen, Ted, this was great. We appreciate
having you on, and depending on how this vote goes
in Wisconsin, perhaps you'll have to come back on and
tell us all about it.
Speaker 1 (19:05):
Sounds great, I'd love to.
Speaker 2 (19:11):
Okay, now we're joined by Steve Man, an analyst at
Bloomberg Intelligence who covers Tesla for us. Okay, Steve, so,
as we were preparing for the show, your report hit
and it really caught our eye. You are forecasting a
rebound in Tesla sales, in car sales, and you're expecting
(19:32):
it to happen pretty quickly coming up here in the
second quarter. You know, for us watching Tesla's being burnt
and sales plunging across the world, it's kind of a
little bit hard to see, or at least for me,
it is. So lay things out as you see them,
and how we get from deep decline in sales right
(19:53):
now to a pickup in the second quarter.
Speaker 1 (19:56):
Yeah.
Speaker 3 (19:57):
Sure, I'm not brushing off some of the the politics
that Elon Musk is in and the reaction from from
the public, but you know, from my standpoint I do.
I mean the bus business fundamentals have you know bottom okay, uh,
you know, there's been a lot of complaint the marketplace
(20:17):
in terms of you know, when is Elon, Musk and
Tesla are going to roll out a new vehicle there
the cars are getting old. Well, they launched a Highland
Model three. It's not you know, it's not the best
selling car. The Model why is the best selling car.
And they're actually rolling a new one out as we
speak in March. They did that a little bit earlier,
(20:39):
and so you know, from personal experience, you know, I
actually worked at the auto industry for a while. You know,
rolling out vehicles is not that easy. It's an eight
hundred pound gorilla. So you know, March they come out
with a new car. Not surprised, not surprised that the
you know, old one uh is you know rolling off
(21:00):
and not selling very well. They shut down the plant
by the way in Berlin and Shanghau, and they're doing
the same thing at Fremont to actually change over the
tooling for the new vehicle. So our view basically is
that you know, we're probably going to see an inflection
point in the second quarter of this year. You know,
April sales may come up a little bit weak because
(21:23):
they're ramping up vehicles, but beyond that, I think we'll
see improvement.
Speaker 2 (21:27):
So you do believe that this rollout alone, in this
refresh of this model HI is enough to offset I mean,
so I think you're thinking second quarter sales are going
to be up something like six percent or so something
like that.
Speaker 3 (21:41):
That's right.
Speaker 2 (21:42):
You know, we've been seeing some of the numbers coming
out for the first quarter. They're not just down, they
are down with the capital D so to go all
the way up to positive, even if it's just mid
single digits, it's a pretty big it's quite a leap,
right right.
Speaker 4 (21:59):
But David, I think part of the reason why it's
why the sales are down is because of the supply.
The factories are offline. So you're seeing some of the
analyst reports coming out saying that, yeah, Q one is
going to be lousy, but it's because like literally they're
not making cars right now as they're they're turning over
the production lines to the refresh model. Why at all
four plants, you know, Fremont, Austin, Berlin and Shanghai.
Speaker 6 (22:23):
You know, the kind of political story and the story
of Elon Musk's degrading brand, at least with the left,
is a story that is has been going on for years.
And I think to Steve's point, a couple of years ago,
Elon Musk was talking about fifty percent year over year
growth as like as far as I could see, and
(22:44):
to go from there to maybe six percent is a drop.
Speaker 3 (22:48):
Like even if we.
Speaker 6 (22:49):
See, even if we see the sales come back the
way we're expecting, like, it doesn't mean that the brand
is improved or it could continue to of course, like
Trump is gonna keep trying to do stuff. I think,
like if public polling, historical public polling is any guide,
he will become more unpopular as the months and years
(23:11):
go on. So like there's a chance that the Tesla
brand could degrade even further than it than it already has. Steve,
I wanted to ask how different is are Tesla's new
models from traditional automaker's new models, because like they seem
to talk about them a little bit differently, they don't
make as clear a delineation between like the old Model
(23:32):
three and the new one, the old Model one and
the new one, and like I can't even personally like
tell the diff Like maybe just because I'm not sophisticated enough,
but like, like I don't know that I could clearly
identify the old Model three from the new model three.
It seems like the company has sort of been based
on this understanding that like they're not really going to
refresh these things all that much.
Speaker 3 (23:54):
Yeah, that's a very good question. I think what I
really understand, just getting back to your earlier comment, well,
you know Elon Musk and car sales and the politics
around it. What I really don't understand is if I
step take a step back. Look, you know, I've been
looking at the industry for like thirty years, the auto industry,
and it's amazing. I'm just so surprised that, you know,
(24:17):
a we've seen new automakers springing springing up. You know,
you have Tesla Ariba. I never thought of a new
automakers can come into the market because the barrier of
entry is just so high. There's so much capital investment
that needs to be made. So for Elon Moss to
you know, come in, it's an American may Car to
(24:39):
come in and actually sell millions of cars and take
market share from legacy automaker. It's a huge seat. You know,
I think personally, I think we should celebrate the fact
that you know, he's able to do that right now?
You're right.
Speaker 6 (24:56):
Uh.
Speaker 3 (24:56):
You know these vehicles, even the model wide, it's from
a it's mostly a cosmetic change, like from a from
a consumer perspective.
Speaker 2 (25:06):
You mean the new one that's about to come out.
Speaker 3 (25:09):
Yeah, right, the new one is aboucked to come out.
It's a lot of it's cosmatic changes. Is a front
bumper has changed, the lighting has changed.
Speaker 2 (25:17):
Lightebar, right, the light bar is very different.
Speaker 3 (25:20):
Yeah, yeah, the light bar.
Speaker 2 (25:21):
Steve. The thing on how different this new model Why
is versus the old one is I think a pretty
important thing, Max, and I've been talking about it off
the air the last few days. I think that those
cosmetic differences in the new model Why are significant enough
that people will recognize them and they'll say, oh, that's
(25:42):
a new model Why versus an old model Why. And
so I guess my pushback to your whole thesis that
the new model Why is going to help sales is
what if it hurts sales? What if it tethers me
more closely when I buy it? To this version of
Elon Musk I lose as a buyer pausible deniability, and
(26:02):
I could say, oh, I bought this TK years ago.
Speaker 6 (26:05):
You got to get Steve more context. This is the
I bought this before he was crazy theory Tesla Steve.
Speaker 2 (26:10):
Steve knows I can tell from the look at his
face and he knows it right, So right, I mean,
I guess what I'm also getting is because when you
came up with these numbers, you used historical comparison. You said,
when when Tesla did previous refreshes, this is the kind
of growth that followed it. And I just wonder if
that is applicable to this day and age.
Speaker 3 (26:30):
Yeah, I mean that is That's a good question. Like,
you know, history doesn't predict the future.
Speaker 1 (26:35):
I know that.
Speaker 3 (26:36):
I think, you know, putting that number out is important.
But you know, if I you know, I think if
you look at the model, why and you know I've
started to see him on the street here an.
Speaker 2 (26:49):
The new ones. You're already seeing them.
Speaker 3 (26:51):
The new ones. Yeah, I seen they have you.
Speaker 2 (26:55):
Seen bumper stickers on him that said I bought this
where I realize Eline went crazy?
Speaker 3 (27:01):
Yeah, and look I look at some of the statistics
in China. You know, some of the social media reports
on China. Some of the people I talked to in China,
By the way, I know, I actually covered the Chinese
auto for fifteen years not too long ago. The reaction
on the new model is quite positive. Right if you
(27:22):
look at China, the FSD is I feel like it's
going to help quite a bit for the Chinese consumer.
They rave about it. It's it's you know, it's in
awe for them. So I think that demand's there.
Speaker 2 (27:37):
See, there's the point that Dana brings up often is
that China is hugely important for Tesla and its sales,
and I get the sense very much that there isn't
the nearly as much controversy or you know, the stigma
with buying a Tesla there like you'd have here in
the US or in Europe right now, right, I just don't.
(27:59):
I don't know the Chinese consumers think about him and
the brand that way. Is that fair?
Speaker 3 (28:04):
Yeah, exactly, that's fair. He's idolized over there, still still is.
I mean, there's some debates around it, but it still is.
From my.
Speaker 2 (28:13):
So when you when you when you have low single
digit growth coming ahead, uh for the company, sales is
a lot of that China driven.
Speaker 3 (28:23):
A lot of it is China. It is a lot
of China driven. We actually think even in the month
of March, in April, uh in April, we'll probably see
your rear increase in that marketplace. So a lot of
it is driven by by China. But we can't forget
about Europe. You know, Europe being down, it is a concern.
(28:45):
It has been becoming a smaller market for them. But
you know, especially you know Januine February sales are down.
I think it's mostly contributed by the changeover the shutdown
of the Berlin Plan.
Speaker 2 (28:58):
Wait, wait, so just for a second, there, so we
when you when we see that Europe is down like
forty percent sales wise in February, you're saying that the
vast bulk of that forty percent decline is indeed a
reflection of the fact that output was shut down, and
not the fact that buyers don't want these cars.
Speaker 3 (29:17):
Oh no, I don't want to say no. I think
there so there's three actually components to it. I think
in Janul February the large part of the decline was
the model year Changeler. But if you look at full
year twenty twenty four, I think that the client is
not necessarily a model of why they're waiting. It's not
necessarily they're waiting for the motto of why. I think
there's a huge a lot of competition from the Chinese
(29:40):
over there. Even you know, with the tariffs that the
Europeans are slapping on, there's still you know, they still
have value for money. And then you know there's you know,
consumer spending is weakened over there, subsidies have gone away,
so there is quite a bit of competitive element in
in Europe. But I still think that they will improve
(30:03):
in the coming quarters.
Speaker 4 (30:05):
Fantastic think people are just ascribing too much to Elon's politics.
And I mean, yes, Elon got very involved in the
German elections, so surely some of the drop off in
like German demand was probably because of Elon and politics.
But to Steve's points, like car purchases are impacted by
things like tariffs and local incentives and whether you're like
(30:25):
waiting for the next model to come out, and we
just can't ascribe too much to the politics alone. And
what's happening is that Tesla is like clearing inventory while
they're refreshing the model. Why now the model why is
starting to come out. You are going to see a rebound.
I'm going to push back on your number. I don't
think we're going to see four hundred thousand in the
first quarter. I think that's too high. I think it's
(30:46):
going to be way lower than that.
Speaker 3 (30:48):
I mean, first of all, I think the four hundred
numbers really for the second quarter it's in the first quarter,
is going to be way under like three hundred and fifty.
Speaker 2 (30:57):
Okay, Okay, So Steve, we need to rin app but
we will have you back on in a few months,
uh to talk about how the second quarter sales went
and if it turns out when we have you back
on in a few months. Your prediction was wildly off
and you and you totally flamed out here. What will
you say, like, what are the most probable causes for
(31:18):
your for the demise of your prediction if it goes
awry on you? What? What is it? What? What? What?
What rears it?
Speaker 3 (31:24):
I you know, I think, like I said earlier, I'm
not denying you know, there's you know, political impact in
terms of the consumer sentiment on the vehicles. If sales
are down. You know, I'll first admit look wrong, and uh,
we'll move on and uh, you know, I'll probably talk
about the robotex.
Speaker 2 (31:46):
You'll go you'll go full, you'll go full elon mode
and you start spinning. But papat Apples, look at the
robo taxi. It's coming. It's coming, all right, Steve mac Stana,
thanks for joining, Thank you.
Speaker 3 (32:03):
Thank you.
Speaker 2 (32:10):
This episode was produced by Stacy Wong. Anna Masa Rakus
is our editor, and Rayhan Harmansi our senior editor. Blake
Maple's handles engineering, and Dave Purcell factchecks. Our supervising producer
is Magnus Hendrickson. The Elunning theme is written and performed
by Taka Yasuzawa and Alex Sugi Eira. Brandon Francis Newnham
is our executive producer, and Sage Bauman is the head
of Bloomberg Podcasts. A big thanks as always to our
(32:33):
supporters Joel Weber and Brad Stone. I'm David Papadopoulos. If
you have a minute, rate and review our show, it'll
help other listeners find us. See you next week.
Host
David Papadopoulos
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