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All right, let's get to one stock in the move. A's Tesla shares down by about two percent. They're off the lows of the session. It reported first quarter deliveries that went below analyst estimates, touching the lowest level since the second quarter of twenty twenty two. I want to talk to Steve Mann, Bloomberg Intelligence Global Audios and Research analyst joining us. Hey, Steve, what would behind the drop
in sales? That may seem like an obvious question, but it feels like there are lots of layers here to this.
Yeah, Admittedly, the thirty percent decline was a little bit more than what we were expecting. We were expecting around three hundred and fifty thousand, came in at around three hundred and thirty six. But you know, it's if you look below the headline, it's actually operating as we expected. It's unfolding as we expected. China sales. Retail sales is actually up despite production down year on year. US is kind of flatish. Really, the dent to the quarterly sales
was in Europe. It seems like March. March is a little bit worse than February and January. But our thesis has not changed. You know, we still think the inflection point is in second quarter. We believe China sales improvement will extend into the second quarter, and then, you know, the Model Y has already launched in the US and we expect, you know, some improvement in sales in the US as well in the second quarter.
Talk to us about the model. Why I know Matt Miller has yet to take me in a model. Why so I don't know anything about it. Tell me about the model. Why is it a game changer? Is it just a slight move. Talk about this new model what it might mean.
Yeah, Yeah, there's some cosmetic changes in the front end and the rear end. The lighting in the rear end is is pretty cool if you haven't seen it yet. But I think the most biggest, some of the biggest changes are inside the user experience. There's a monitor at the back, there's a nice little cooler up in the front end. So you know, there's people who have held off buying the model, why anticipation of the new one.
But how much of this is reputational damage? It might be too early to say, right because it's still through March. But I hear you that on principle, you're bullish on the car and sales in essence. But I mean, we can't ignore the reputational damage. I mean, I know that I'm in Brooklyn, but I see like get rid of your Tesla signs everywhere at this point, that's right, I don't.
I don't think we can ignore that what we're seeing in the media and what happening to test the cars and in showrooms, it is having an impact. It definitely is having some impact in Europe. But at the end of the day, you know, we feel that a lot of it is being priced in. The stock has come off from its highs since the election. You know, the P four pe ratio is around eighty five times twenty twenty five earnings. That's just about ten percent above where
it traded before the presidential election. So I think, you know, I think the stock has pretty much factored that in, and you know, we're looking ahead and we think business fundamental should improve in the second quarter. You deliver, it should improve in the second quarter.
Does the company does the stock need Elon Musk to come back to the company?
I personally, I think so because he's he's an industrialist. He's an avid cost cutter, and that's really what you really need in the auto industry given the price competition that we're seeing around the world. And uh uh you know, hopefully later in the year, when you know, when he gets thosee up and running in a steady pace and uh you know, he can maybe step off and refocus on on his businesses.
What does Tesla need to refocus on? Like what company does Tesla now need to be?
Well, they need to continue to be an innovator. I think there's a lot of debate out there why Tesla deserves a higher valuation than like GM and Ford. Look, you know they have they they're doing something that you know, we I couldn't imagine anyone can do in the auto industry, which is to start a new automaker in this day and age, it's high barriers of entry, and they're doing
it in a way that it's profitable. Right. Uh, you know, there's there's a lot of debate, but you know they are, they are booking profits on EV sales and uh, you know it's it's hard to find, you know, an automaker that can still do this and do it do it in a consistent manner.
Steve, I just bought a vehicle. I mean, I'll have you know. It is a hybrid, so I'm getting there slowly.
He's not actually driving it, but it's a fair point.
So Steve is b y D and the Chinese automakers. Are they going to take over the e V world?
You know, it looks like it.
Time will tell. They're very aggressive. You know, they've you know, they've cornered the market in China, right, they've basically, through price they have pushed out a lot of the foreign automakers out of China.
Uh.
And then you know they're actually branching out into the rest of the world. Not not in the US. They're making headways in Europe despite the tariffs there. But they're really aggressive in emerging markets, which is competing a lot with the likes of Toyota and the Koreated South Korean Handay. So you know they're if you can think of you know, they're kind of encircling the US at the moment, North America at the moment. So, uh, they don't have to
be in the US. But if you know they're in there, if they're strong in China and there's strong in other emerging markets, uh, you know they will they will eventually dominate.
Okay, but thirty seconds or so, lepstive. But speaking of when Paul bought the car, it was a Honda and it was you made in the US. So, like, why have foreign automakers been able to move manufacturing here in a way that US automakers haven't.
Yeah, you know, I think I think a lot of automakers over time has been very focused on driving profitability. And there's nothing wrong with that, right, There's nothing wrong with that, and that's that's the only reason why we people go into business is to make money. But I think, uh, you know that that you know, there has to be a balance. I think, and you know, driving costs is great, but can we drive costs with innovation? And I think that's what Trump is trying to do based on his rhetoric,
is to bring back manufacturing. So like, how can The question is how can automakers actually build a low cost car in the US through innovation.
It's Steve Man, a Bloomberg Intelligence at Global Autos and Industry at the Analysts. Thank you very much for joining us.
You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on Applecarplay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
That Musk news is really interesting. It's great for the stock stocks. Up four percent is Genosis reporting, So I'm sure the investors there are happy. Let's get right down to DC and get it from the a source, our source. Then in DC. Nathan Dean, senior policy analysts for Bloomberg Intelligence. Nathan in the Beltway, what was the feeler and what
is the feeling about Elon Musk? His role, his proximity to the president is so so close, and it's been that way since the inauguration here, But is anybody surprised that he may be leaving maybe leading soon?
So I don't think I was surprised. I think this makes sense. And obviously if you're in Tesla investor, you're going to like the idea that Elon Musk returns to the company. But if you think about it, you know, the Doge Committee, the Doge Group, if you will, they've been expanding. Bloomberg News just reported a few minutes ago that Kelshi's chief regulatory officer is going to Doge. What Elon Musk essentially has done is he's created a group and they're going agency by agency, but they can only
cut so much. You know, if they cut too much, then eventually it's going to be a political blowback. And Elon Musk doesn't have the power to go after the mandatory spending, which is where the big ticket items in terms of reducing the deficit is. So I think this makes sense. He's going to return to the Tesla. Assuming Political is reporting is correct, he'll return to Tesla, but nothing prevents him from coming back. Nothing prevents them from
going into the White House. And I think if you're a Republican on Capitol Hill, you'll love the idea that maybe you're not going to have the White House calling for deep cuts to Social Security, the mandatory spending. If you will, they'll be left to Congress. So I think they may be pleased with this as well.
So this is not the end of DOGE. If this is indeed true, this is just sort of an evolution of DOGE, So we can still expect that to come and bring hammers to everyone's payrolier.
Absolutely well, at least in terms of your first question in terms of this is not the end of DOGE. Dog is going to continue. But what Elon must did is essentially created a group of advisors and individuals that are going in agency by agency and they're looking at identifying areas to cut. But for Elon's mangal of deficit reduction, he's not going to be able to do that with DOGE. They just do not have the power to do that.
It requires an Act of Congress. So you are going to see DOGE continue probably for the next year, if not a little bit longer, until they really get to the point where they are streamlined and they feel that they've adequately right sized those agencies. But for the big ticket items, we're going to see that in the upcoming tax debate in terms of things like MEDICAIDS, snap benefits.
You know obviously that was a mandatory, but social Security, the really key things that are really important to the deficit. DOJ and Elon Musk just don't have the ability to control. He's going to need Congress to do that. And I think Congress is going to be happy. They're now going to be in the back in the driver's seat, assuming that Elon Musk does leave.
And Nathan, I wonder if the last night's race in Wisconsin, with the addictional race where Elon Musk candidate did not win, do you think that had anything to do with his decision making.
I don't think so. But I think what last night didd was the indication of what Republicans fear may happen eighteen months from now. I mean, if you look at midterm elections, they always swing back the other way. I mean the joke is, think of US politics as like a car out of control going down the street. It hits guardrails left and right, left and right, it never goes straight. And so you know, the tendency here is is that the House of rep is going to be
in play for Democrats. And I think yesterday just told a lot of those Republicans on Capitol Hill that a year from now this may be something that hurts them politically. And so I don't think anybody's going to vote off
of what happens right now eighteen months from now. But I do think that this decision for Elon Musk to maybe step away from Washington and go back to Texas and Florida and so forth like that will make a little bit of the Republicans and capitall breathe a little bit easier, just because they can get a little bit more control of the narrative.
You know what this did do We didn't talk about tariffs for four minutes. Yes, I'm just saying that newsful definitely just changed. Nathan. Okay, So four o'clock today, I'm going to be sitting on set on TV, gonna have my terminal NI heads for all the pros out there. What are the headlines that you the literal headline that crosses that you're going to be most interested in.
So obviously the biggest question is is this going to be a country tax or a tariff? Or is this
going to be a tariff tariff? Sorry, tiered tariff. But you know, one of the big questions we're getting from clients this morning is they're focusing on Secretary I'm sorry, Treasury Secretary of Scott Beston is saying in terms these are a cap is essentially floating the idea that these are a cap, with the idea here that potentially President Trump will be willing to negotiate going forward and bringing this down from like a cap down to a reciprocal tariff.
And so the question for me is, in this statement tonight at the White House or sorry, at the Rose Garden, is President Trump going to give any indication that he'll be willing to pick up a phone tomorrow. Because if that's the case, you know, he can come out and say twenty fifteen, twenty percent universal tariff, whatever it may be, but tomorrow it may be different. And so you're not going to get that clarity of this is what the
tariff policy for the United States will be. I don't think the markets will like that, just because I don't think that clarity is coming.
So do you expect any pushback feedback once we do know what the policy is from either obviously the Democrats or maybe even some in the Republican Party.
Well, absolutely, I mean I think we're going to see, you know, obviously the sometime today pick up their resolution to try and you know, overturn these tariffs that were up with Canada, and you know, my vote count, I at least I had. You know, the Democrats need four Republican senators to go along with them, and I think.
They have it.
So you are going to begin to see a public rebuke of some of these tariffs. I would just caution though, and say that, you know, tariffs are the power of the presidency. Congress delegated its authority a long time ago, so there's only so much Congress can do to actually advise the presidents say maybe you should scale this back.
So it's ultimately President Trump's decision. And I think that for him to be able to walk back this tariff, and this is just my own personal belief, you're going to you're going to need to see consumer confidence or sticker shock amongst things that you know, Americans just buying a daily basis for him to actually walk back a lot of their tarff threat.
And of course, though the goal is to shipt the economy though away from physical spending to private led investments, is that a possible thing.
Not in the short term.
I mean, this has been the White House plan all along, is that you're going to have short term pain for long term gain. But you know, some of these pains
are going to be very, very, very permanent. I mean, if you think of just the farmer argument in particular that you know, if the United States does move forward and use the USDA to implement subsidies for farmers, farmers aren't going to like that because essentially what it means is that you're going to be thrown out of the supply chain and in the future, maybe instead of buying goods from the United States, they're going to buy it from Brazil. That's not something that you're going to be
able to easily reverse. So yes, you are going to get this shift. And we've heard from clients saying, look, I want to potentially buy a factory in the United States. I just can't do it in twenty twenty five, probably can't even do it by twenty twenty seven. So you know, again it's really how long how long can the White House really keep with this strategy to try and transform that economy.
All right, Nathan, thank you so much. We appreciate it, and you're going to have a long afternoon and into the evening analyzing what we will hear from the President this scepter and Nathan Deane, Senior policy analyst Bloomberg Intelligence. He's based down there and wash it in DC. He does a wonderful job explaining all the mechanizations of what happens down there in Washington and Congress and Capitol Hill and in the White House as well.
You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on Applecarcklay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube in DC.
It's not just about musk, It's not just about tariffs. It's also about TikTok. Potentially. President Trump is weighing plans for TikTok sale today at a meeting. We want to get more on this. And Matt you St and Hell media litigation analyst for Bloomberg Intelligence, he joins us now from DC. All right, remind us of where we are in the law and what Congress did and where we're at here.
Yeah, So we are at the point where Congress adopted this law last year that effectively bans TikTok in the United States. As of January nineteenth. The Supreme Court upheld that law after TikTok Talk brought a constitutional challenge, and then President Trump adopted an executive order just before the law was going to take effect in mid January to say that, look, companies that are at risk under this law, don't worry about it. Right now, we're not going to
enforce that law. So app stores like Google and Apple and Oracle, companies that host TikTok, potentially faced billions of dollars of liability under the law. Trump's Attorney general sent a letter saying, don't worry about it. We don't think you're in violation of the law, so you can continue to host TikTok. That executive order from President Trump ran for seventy five days. That takes you to Saturday, April fifth. So we're at the point where there's likely to be
some action. And as you said, there's a meeting in the White House today.
It's a good time for this discussion. Matthew had read headline crossing the Bloomberg terminals we speak, Amazon puts in a last minute bid to acquire all of TikTok. What do you make of that?
That's that's that's fascinating. I mean to me, that underscores how far we are away from a resolution here and you're talking about, you know, you know, some indication that they that a deal could be in place by by Saturday. I don't think so. There there are so many moving pieces here and new bids coming in that the idea that all of this is going to be resolved in
three days seems pretty fantastic. So I think what you're likely to see is sort of some indication of movement towards a deal and President Trump again kicking the can down the road. And the only question is is anyone going to stand up to that. There was a lot of political courage to to, you know, advocate for a ban of TikTok last year. There were some votes in
Congress that were fifty to zero for it. But now President Trump has a warm spot in his heart for TikTok, as he says, and suddenly some of that courage is falling away. So that's going to be the interesting dynamic is how much lawmakers or maybe TikTok's competitors stand up and say, hey, we have a law on the books here that that that bands TikTok. Are we going to enforce it or not?
So to that point, I guess I wonder what part of TikTok is still left to be bought in that is it just going to be the US stuff, which may not be as valuable, or is it going to also be the technology that kind of sits in China. And if that's the case, how do we get.
That That's that's sort of the million dollar question here, because there was a lot of pushback in Congress for the idea that a company tied to China would still have control over the algorithm, and and a lot of the solutions you're seeing floated around look a lot like what TikTok was pitching as Project Texas last year, where the US opperations what would work here maybe under Oracle or someone else, but the algorithm would still ultimately be
controlled by by byte Dance. And the question is is that the sort of solution that we're talking about here, because ultimately China and byte Dance need to agree to this, and and with with Trump kicking the can down the road on this van, I'm not sure they have a
lot of concern. I don't know that the US has a lot of leverage to force them to sell the algorithm, So it seems very likely that we're looking at some sort of solution that that keeps that algorithm tied to China, tied to byte Dance, And the question is is Congress going to be okay with that now in a way they weren't last year?
I mean, silly question, but there's no indication that byte Dance wants to sell here. So I mean an Amazon bid is impressive, but I don't think I've got a seller there, do I.
That's exactly that's been the problem, you know through this whole process, is is bike Dance really willing to sell and especially the algorithm component here with with China needing to to bless that. So yeah, a lot of offers, a lot of talk, but but I think we're far from from any sort of final resolution here.
So to that point, this goes back to the earlier headline that Paul just broke that Amazon's putting in that last minute bid to acquire all of TikTok this according to the New York Times, who else quickly is on the docket to potentially buy?
Yeah, so I mean you keep seeing Oracle mentioned as a potential bidder. You saw Frank McCourt was on Bloomberg Television earlier, and you know a number of other names, you know, floating around. I don't have great visibility into all those offers. I've heard four offers you know, talked about. But just I think we'll learn more this afternoon after this meeting, as as President Trump considers next steps here.
But again a lot of open questions on the law and big questions politically of whether whether people are going to advocate for the law that was adopted last year.
All right, so you know, Alex that Matt does all the litigation around the media communications, which means he's going to be going out to the NAP conference out in Vegas, National Association of Broadcasters. So I asked him offline, where are you staying in Vegas? Because that tells me a lot about a person, you know. His response, he didn't know.
Yeah, Al did not like this.
By the way, Matt, I booked someplace. I got to look it up.
All thank goodness, because I mean, you know, when I was out there, first it was the mirage, then Bolagio nounce the win. But it's it says a lot about it.
But if you don't know where you're staying, that just means that you got you've got nothing going noew lots of shade, Lots of shade. Met Schettenhelm of Boomberg Intelligence Litigation Analysts, thank you so very much.
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