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Join 167,000 companies like Paul Smith, Castor, Mixed Tiles, who choose Klaviyo for better customer relationships and faster growth. Grow with Klaviyo B2C CRM at klaviyo.com forward slash UK. Hello and welcome to Decoder. I'm Eli Patel, editor-in-chief of The Verge, and Decoder is my show about big ideas and other problems. Today, we're talking about the protests against Tesla, which have been branded on social media under the hashtag TeslaTakedown.
Those protests are, of course, a reaction to Elon Musk, who has managed to install himself as basically the not-so-shadow president and is tearing the federal government apart, leaving confusion and destruction in his wake. It's fair to say that quite a lot of people are very unhappy with that state of affairs. And because Elon is not an elected official, but is in fact a car salesman,
Many of those frustrated and angry people are taking aim at the most visible and accessible symbol of his wealth and power, Tesla itself. There are protests at Tesla showrooms and charging stations every weekend now, and they're just getting bigger. Along the way, they've attracted police presence and now threats of prosecution from the government. Trump and his attorney general, Pam Bondi, have said that any violence aimed at Tesla vehicles or property would be prosecuted as domestic terrorism.
This is all very Trump, in the sense that there's not actually a specific federal domestic terrorism law, but, you know, Trump. In any case, these protests seem like they're working. Tesla's stock price has been sinking, new car registrations are down, and merely owning a Tesla, especially a Cybertruck, has become uncomfortably political for a lot of people.
We're also seeing the hype around Tesla fade in ways that are frankly surprising. Popular YouTubers are pointing out that vehicles like the Cybertruck simply aren't very good, and that Tesla's missed ship dates and big claims about the capabilities of its self-driving tech.
don't really hold up. And if hype fades enough, it's possible to break Tesla itself. As we've discussed on the show before, Tesla's sky-high valuation is entirely based on promises about the future, not the cars it sells in the present. So to help me pull all this apart and understand the protest in that context, I asked Ed Niedermeyer to join me on the show.
Ed published a book about Tesla in 2019 called Ludacris, the Unvarnished Story of Tesla Motors. And he hosts a podcast called the Atomicast about autonomous vehicle technology. Ed's sizable following on Blue Sky has made him one of the leading organizers of the Tesla takedown protests, especially where he lives in Portland, Oregon. So I wanted to talk to Ed about what he sees with both the big picture of Tesla as a company and on the ground at the protests that he's attended.
There's a lot happening here, and the story is changing fast, even just since Ed and I talked at the beginning of the week. But that bigger picture, the disconnect between what Ed calls the myth of Tesla and the reality, and how the protest movement is beginning to impose that reality on the myth? That's shaping up to be the defining story of Tesla's next chapter. Okay, Ed Niederbeier, here we go.
Ed Niedermeyer, welcome to Decoder. Thanks so much for having me. You've covered Tesla for a long time. I was reading some of your posts on Blue Sky just today, pointing out that... The mood around Tesla is shifting. Creators are covering Tesla differently. Describe Tesla as a company, what people thought it was, what it might actually be, where you think that's starting to break.
There's been so much that's changed about Tesla over the years. The one thing that's always been consistent and it's always been the heart of the story for me is the disconnect between perception and reality. Like there's two Teslas. There's the Tesla that everyone knows with great certainty exactly what it is.
is. This has always been sort of fully formed, even though it's actually changed a lot over time as well. But then there's the reality. For me, I got sucked into the whole thing because i decided to look at the reality i decided to not take the perception for granted and said just look at the reality and i think that what we're seeing now is folks catching up with it right like that that you can't just take it for granted that as as nice as it is to think that Tesla's this, you know,
beautiful, wonderful thing that we've all wanted to believe it is for so long that the underlying reality is quite different. And I think once you're willing to see the reality and you want to see the reality and the myth is no longer satisfying, there's a lot of evidence. now over the years that kind of lets you know more what's really going on here. Be more specific. What is the myth and what is the reality? To go back to the beginning, the myth was sort of the main...
pillars that were sort of exposed for me. So one was technological superiority and the other is sort of environmental sense of mission. Right. And the third sort of is is that a startup automaker can be a good investment, which is, you know, these are all sort of complicated and interesting things. But the very first thing I looked at was the battery swap program that Tesla had in California and technologically.
I think they sort of designed some kind of automated swap system, but it wasn't being made available the way they said it was to the people they said they were making it available to. And then instead, when I went to go check it out, they were...
bringing in diesel generators and hooking up extra superchargers to them. And so there was like the technology that was going to be a game changer for EVs was not real. The commitment to making sure as much zero emission energy was going into these vehicles was not real. And then...
that whole thing was a way to game the California's EV credit system. So there was like these layers of facade. There was the mission facade, there was the technological leadership facade, and there was this profitability facade, all of which kind of turned out to not really be the case.
Automakers in general are historically somewhat complicated investment, right? They don't have big recurring revenue lines. If you think about buying a GM or a Ford in the pre-software era, customers would buy the car. That was the money. Maybe they made some money on leasing or financing, but there's no recurring revenue on the car. They just got to sell another car. You get to Tesla, and the idea is there's going to be a long-term revenue story around this car.
Whether that is software and services in the vehicle, whether it's advertising in the vehicle, which a lot of automakers are into, whether that's BMW saying the heated seats are going to cost money. Or with Tesla, it's autonomy, right? It's we're going to turn all the cars into taxis. That feels like the heart of the Tesla story. Has any of that come true? Is there something to pin investor hopes on there or is that just a mirage?
To give credit where it's due, they have sort of brought some things to the auto industry that the other automakers are sort of like, oh, that is actually good for us business-wise, right? One example of this is really, really Spartan interiors. Tesla literally couldn't afford the injection molding to get high.
quality switches and knobs and dials for a small company with a small volume that they have, the tooling cost was way too high. They turned that negative into a positive and put everything on one screen and they saved all this money on switches and stuff.
That's an example of something that you've seen the other automakers sort of adopt more, maybe not as extreme as Tesla has, because ultimately switches and dials and knobs are actually good user interface for cars in a way that they're not for phones. So there's that. But you're absolutely right. high level, the idea that Tesla has changed the fundamental economics of the car business.
is not true. In 2012, 2013, when Tesla was first showing the prototype of the Model S, which was this huge game-changing vehicle for them, Jurvetson, one of the investors, Elon's in the car with him telling him, hey, we're going to have this app store. and we're going to have third-party developers doing it. That's what it would have taken for a Tesla to be a smartphone, right? Like everybody says, it's the iPhone of cars. Well, what makes the iPhone is not just the user interface.
It's the app ecosystem. It's the fact that this became a platform that created a whole new form of the internet that created this whole economy that was built on top of it. That's why the iPhone is the iPhone. And so, you know, in Ludacris, in the last chapter, I talk about how...
In a way, the Model S is like using tail fins. In the 50s, the Detroit automakers, they did try and make cars using jet engines. Chrysler did one. We actually put tax dollars towards cars with jet engines. Turns out it was a terrible idea. But jets and rockets were the sexy thing at the time.
What did work though, what sold cars back then was tail fins because you're adopting the aesthetics, the feel of this other technology and associating cars with them. That's what Tesla's done is make cars look and feel like iPhones. What it hasn't replicated is business model that I think all along is what people thought this play was supposed to be getting towards, which is that cars are this platform. Well, in order for that to work, you need the self-driving.
And in order for the self-driving to work, it needs to be affordable and it needs to be able to work everywhere, right? Tesla spent eight years promising that it's right around the corner. It hasn't materialized. It's not going to materialize. And it's because that private car model is so hard to make work with. with how driving automation technology works. I want to connect this to the protests. Obviously, Elon is embedded in the government. He is the face of...
Really austere cuts across the entire federal government, heartless cuts in many cases, important cuts in the case of potentially Social Security, our nuclear program. There's a lot of Elon baggage associated with this brand. And I think a lot of people... are looking at Elon, what he has become politically, the protests and the stock price going down and saying, OK, that's I get it. There's a causality there. This man is toxic. Stock price goes down.
What you're pointing at is that there's a much bigger weakness in the stock price, right? There's a weakness in the business that the protests are actually putting pressure on. Is the weakness just that the cars can't drive themselves? Is it something else?
From the very beginning of Tesla, they've kind of underestimated how hard the business would be, overestimated how much profit they'd be able to make. And so they sort of got on this very common thing for startups, which is the sort of fundraising treadmill, right? Where you constantly have to promise something new. to raise the money to pay for the old thing. And you're sort of always like a little bit behind. And full self-driving was really where that hit escape velocity.
And that was sort of 2016 when they started taking money from it. Charging people $10,000 per car of basically pure profit. I mean, that is a... a finger on the scale of profitability that other automakers could only dream of. They just know that over the long term, right, if you can't deliver that, then it's a liability, not an asset.
There have been different points where the fundamentals of the business have become weak. During the pandemic, they got really strong, right? They had the Model Y come out. The market was structurally undersupplied. They could charge what they wanted. And so for a number of years...
the core business was looking really good. And during that time, the self-driving stuff was like a lottery ticket where it's like, if it works out great, but if not, the underlying business is doing pretty well. Over the last two years, the underlying business has withered on the vine. And so now you have the speculative play on full self-driving and then, of course, the humanoid robots and everything else that's sort of built on top of quote-unquote solving real-world AI.
But what's happening is that the core business is the brand doesn't have the momentum. The sales don't have the momentum. The profit margins have been compressing. There's no new products coming out. They fail to expand the market. They build their lead by expanding the market with more affordable options. business is dying. And I think this has been the key thing.
where the protests actually started just because people thought, oh, like, these businesses belong to Elon Musk. This is where we go to express our concern and our anger about what he's doing. What I've been trying to help people understand is that... This is not an ordinary boycott situation. This is a business whose core fundamentals are already nosing over towards negative profit margins and certainly negative growth.
Meanwhile, the stock is widely overvalued because of the full self-driving thing. That creates an opportunity to not just go to these places because they're associated with him, but actually push the business that is already... moving in the wrong direction, further in that direction to actually materially hurt the guy who's doing these bad things. So here's the part that I have struggled with, and maybe you can help me understand. During the pandemic, you are correct that...
Tesla was just one of the winners in the car industry. I used to go on CNBC and joke that Tesla had perfectly elastic demand. They could charge any price for the car. The Model Ys were flying off the shelves. And you... saw the entire automotive industry react to this. I've had any number of automaker CEOs on the show tell me that what they saw was demand for EVs and what they meant was demand for Teslas. And that's why...
They were all in on EVs by whatever date they would say on the show. The CEO of Rivian, RJ Scringe, came on the show and made fun of Ford for basically taking the dimensions of the Model Y and making the Mustang Mach-E exactly a Model Y. And he was like, I don't think that's how this goes. Like you have to differentiate the cars. But you could see that distortion in the market, right? Tesla was so successful that the race to emulate Tesla was on. That has all collapsed.
Right. Like the demand for EVs that we see is going up, but it's not perfectly elastic. You can charge any price. And then Tesla itself, which was such a far and away winner for a period of years. Their sales have dropped too. What is that attributed to? Is it just people have enough Teslas?
As with all things with consumer adoption, there's always going to be some mystery, right, about how and why these things play out exactly the way that they do. I think there's a number of things going on. I think if you really... put your finger on the one thing that Tesla did that everybody else in the industry failed to do and should have, that this was part of their job that they didn't do, was identifying technology, the tech sector, as a market.
There's this class of wealthy people who are not only all wealthy, people who made money from the technology sector. They also have shared values, shared aesthetics, and this idea of what... products should be how they should be and tesla identified that market very well and served that market very well and did so at a time where
the power of the tech sector and the wealth of the tech sector was seen in this really sort of generally very positive light. And I think one of the things that we're seeing now is that vibe has shifted, right? The tech sector is no longer just seen as like, oh, these guys were... trying to make the world a better place, right? There's a much more ambiguous picture of that. I think also one of the pathologies of Silicon Valley is this sort of tendency to overhype.
where this is all going. And from my perspective, if Tesla had always said, look, we're going to be a couple million units, maybe a year, premium automaker, we're going to push the industry forward, but we're not going to try and be everything to all people. The stock wouldn't have gone as crazy, but it would have been a more sustainable business because that's kind of where they've ended up. And I think one of the downsides of this whole approach is that, you know.
They say aim for the stars and land on the moon. But the reality is that when you overhype things and there's disillusionment afterwards, you can put the whole trend at risk. And I think that's one of the things that's really happened in the EV sector in the US. We have to take a short break. We'll be back in a minute. Support for Decoder comes from Poly AI.
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Whose mission? I think AI is one of the biggest threats, but I think we can aspire to guide it in a direction that's beneficial to humanity. To prevent the AI apocalypse. I'm like, damn, I think I can actually move the needle on this. Good Robot, a four-part series about AI from Julia Longoria and Unexplainable, wherever you listen. Welcome back. I'm talking with Ed Niedermeyer about Tesla and the Tesla takedown protests.
To target a company with protests, you need to understand what that company is and does. And so we've been kind of talking about a major question. Is Tesla even a car company anymore? Its cars had a strong reputation at first, but are they still good? What makes them popular?
Who's buying a Tesla now, and how do you convince them to stop? You're mentioning the shared value system and maybe the life experiences of people who are buying early Teslas. Candidly, that was just a bunch of rich, liberal people on the coast. That's where the Teslas are. That's where the supercharging networks are. Elon himself has made a pivot to the hard right in a variety of ways. Is that working? I think I see a lot of people reductively see this.
As a play to expand the Tesla customer base and get a bunch of people in red states to buy cyber trucks or something. Is that working? You're right that the early core market was absolutely sort of wealthy, liberal kind of people. And for those people, the idea that you're buying, not just buying a car for yourself, but that you're helping funding the future of more affordable EVs for everyone, that was so crucial to that early.
phase of Tesla fandom and stuff, but there actually was this transition sort of since then, and it's kind of hard to date at all, where it has become sort of more divorced from the environmental mission, and it has really been more about the... technology sector and that this is a car that embodies really like the ideology of Silicon Valley high-tech culture, which is this sort of complicated and evolving thing. And I think that that shift sort of maybe...
led Elon to think that this was a shift from left to right and that he can kind of keep going in that direction. I think it's pretty clear that his involvement in politics is not about selling more vehicles. It's about... playing defense, not offense. It's about avoiding the consequences, right? I think under the Biden administration, you started to see investigations and moving towards prosecution on full self-driving, right? There was wire and securities fraud investigations going through DOJ.
environmental issues. You had labor law issues. These things were starting to catch up with him. I think that's why he's in politics. And we just saw him and the president selling Teslas in front of the White House, which was an extraordinary thing to see. We've never seen anything quite like this in the auto industry before. It seemed very rushed and very sort of like end of quarter freak out versus some like planned strategic thing. And I think at the end of the day...
Even the people who buy Teslas now, already sort of buying them, who are kind of leaning more Trump or maybe already voted for Trump, they're not the red hat wearing MAGA Trump voters. They're the kind of gray tribe, sort of they think of themselves as apolitical and that they vote for Trump because he's like...
not going to spend his time in the White House inventing new genders or something. You know what I mean? But I don't think these are people who want to visibly be seen as partisan. I think Tesla buyers in general... And the people that I appeal to want to see themselves as more apolitical. And so I'm very skeptical that this is going to turn into more sales. And we certainly haven't seen it yet. There was a lot to pull out of the White House event.
with Trump and Musk a lot. Elon promised that he would double production of Teslas in the United States during Trump's second term, so over the next four years. And we're seeing sales fall. Who is he selling these cars to? Where are they gonna go? Is that a viable thing to promise?
No, absolutely not. Well, okay. So it's viable in the sense that they probably have overbuilt their manufacturing footprint for where demand actually is and certainly where it's going. This is how automakers die, right? You build too many factories and you can't keep them going because...
demand is not there. It's very much in keeping in sort of the promotional vibe that happens around Trump and certainly around Elon. This is what they have in common is make big promises and kind of never really face any consequences for it. But I wouldn't take it seriously.
The thesis here is that there's something inherently flawed about Tesla's business. They're a carmaker wrapped up in the economics of another company. On this show, we've described them as wanting to be a software company. They would like the margins of the software. companies, but they ship some of the biggest physical products you can ship around the world. Is there anything that closes that gap? Is there evidence that full self-driving might give them
Even the economics of Uber, which, by the way, not great economics, but still, is there anything to say that they're going to get there on Optimus or AI or any of these other pieces? Is there anything that might square the circle? Uh, no, is the real simple answer. I mean...
It's a big, complicated topic because, again, it's another multi-hour long conversation that we could have. It's a book I'm working on right now. It sort of explains everything that's going on with the driving automation tech that Tesla is doing. The simple version is the reason... that this has gone on for eight years and isn't already universally recognized as the biggest fraud in Silicon Valley history is that
it's what's being sold is not technologically plausible at all. Like we know what works with the technology, right? Waymo is doing 200,000 fully driverless rides every week. We know what works. Okay. And we know that it's been eight years since they promised that this software is a software update. away, and we know that that hasn't worked out.
It's not technologically possible. What it is, is it fits the mental model that people have in their mind for this technology, right? When you say self-driving car, autonomous vehicle, people build a mental model based on what they know and what they start with is a car, right? But the problem is there's two things.
come along with that mental model, which is the car is something you personally own, so it has to be affordable enough for you to buy and own, and cars are fundamentally what you call level five in that anywhere you want to be able to go, whether it's a mile or a thousand miles, the desert or the mountains or wherever, it has to be able to go there. Well, those two things, getting the cost of the sensor suite down to the level that's affordable and then validating, let alone...
developing the level of performance, but then validating in an infinite operating domain. These are the two hardest things you can do in any kind of automation technology. And so what I encourage people to do is to think of this as... Stop building your mental model around the car, because the car fundamentally gives you a skewed perspective on the whole technology. Instead, replace it with a robot.
Because a robot is a spectrum of automation, right? And on one extreme, you have the kind of robot that Tesla is also selling, which is like the self-driving car of robots, which is a humanoid general purpose robot. This is science fiction. You know, we're moving towards some of that capability.
still a ways off. The other end of that spectrum is an arm with a tool inside of a cage. Those robots are very real, and they make millions of dollars every second around the world collectively. And so if you think about it as a robot, then you understand sort of more why...
Waymo's approach is working, right? Because you can't sell that car. The car is too expensive. And even if you could, it can only work in San Francisco or LA. That's great for a taxi. You're automating a taxi. You're making a robot taxi. But again, what Elon does is just like... Trump, where it's not about whether or not it's possible. It's about whether or not it fits the missing puzzle piece space in people's brains. And that's what it's done.
It can't go on forever. At some point, right, people have to face the reality that it's just simply not being delivered on. Who's running Tesla right now? It's not Elon. Is someone in charge? Is there an executive who's managing the day-to-day? I don't think there's one. I think it's a committee a little bit at this point. This is sort of the big challenge is that I think for when Tesla was well run, Elon was driving things, but he had sort of support. So I think one of the issues is that...
the real talented folks at Tesla have all left, right? Tesla is a culture, the only real value is loyalty to Elon. And so it's less of a, you know, Elon coming in and having these really talented people around him and then having this sort of...
engagement with them. And I think you see this with the Cybertruck, right? Like all of a sudden you go from Tesla's looking, you know, maybe a little on the bland side, but very handsome. No one hates how most Teslas look to the Cybertruck, which is a super, super polarizing design. I think what it reflects is sort of. this shift where Elon sort of is parachuting in more and more, and that the sort of...
court there has less talent and less ability to sort of say like, hey, that's a cool idea, Elon. Maybe it'd be better if we kind of did it this way, sort of a thing that could kind of worked when there was sort of more talent there. The top leaders are people who have been at the company a long time. Like in the case of Autopilot, it's a guy.
who's only ever worked at Tesla, which is a huge red flag. And I think you see this reflected in the lack of progress on some of the technology stuff, on the lack of new products, and just on the lack of vision. Where is the new product? And I think this is also sort of broadly the problem that Elon and Tesla both have, which is, where do you go from here? So I think that brings us to the protest, right? There's this inherent weakness in the stock price.
The sort of professional investment class has been making this argument for years, right? Tesla is an incredibly well-shorted stock. There are lots of people playing the other side of the Tesla bet. The cars are – Until recently, we're selling extraordinarily well. The stock was performing. Their financials were...
performing to whatever extent you want to say performing. Now you have the protests. Now you have his involvement in politics in a very deep and meaningful way that is extraordinarily polarizing. Are these protests organized? I know you're sort of a leading figure in the movement. Just before the show, we were debating whether or not to call you an organizer. Where are they coming from?
I think Joan Osborne was the first person to post about sort of Tesla protests. She's based in Boston. I saw Alex Winter then sort of pick that up on Blue Sky. And then I sort of saw it and it started off as this idea of like, well, these are just...
businesses that Elon Musk owns, if we're unhappy with what he's doing, that's the place to protest. The role I've been trying to fill in this movement, which I think it is very decentralized, certainly in my experience. I've just had the fifth week of Saturday protests here in Portland. I literally just post on Blue Sky and people just show up. There is no more organizing to it than that. And what I've been trying to do is help people understand.
Not just how vulnerable Tesla is, but that Tesla is the linchpin for Muscle Empire. It's the only actual business. None of the other companies are actually businesses. Tesla is the only one. It's in trouble. It's the only publicly traded stock, too. So it's the only one where his... Wealth can be turned into any kind of liquid cash. This is it. This is the linchpin. And so for me, I see it as my role as pointing to the opportunity. And then, you know.
People can decide whether they want to protest, whether they want to call and do fake test drives that they have no intention of ever buying a vehicle. It's up to people to use whatever tactics they want to sort of capitalize on that opportunity. And what's exciting to me is that when people understand... hey, like, there is an actual opportunity to bankrupt not just a billionaire, but...
kind of the worst one out there, people get excited and people who are not otherwise like political protesting kind of people suddenly want to find ways to get involved in the movement. And I think that's really cool. I understand how Tesla is a business. I understand how Neuralink or The Boring Company or even Twitter are not actually businesses.
How isn't SpaceX a business? So SpaceX is not my main area of expertise and it's not a publicly traded company. So we haven't really looked at the financials. I mean, I think right off the bat. If Elon can make a halfway plausible claim about something, he will. And even if it's not halfway plausible, he will. He's never claimed SpaceX is profitable. So that's a pretty big tell right there. They've also raised cash basically every year for the last, at least...
three or four years. They've been pretty much in nonstop fundraising mode. You don't typically do that if you're generating enough cash flow to fund your operations. But my understanding of it is that essentially it's a... Like, a lot of things that Elon Musk does is play on scale, right? Which is like, we're going to invest in this scale, which is going to lower the cost of launch, right? And people focus on the reusability. It's really...
small rockets at scale. You have to have a lot of launches happening. That's really how you're bringing down the cost. It's not really the reusability. And if you bring down the cost of launch, then you broaden the demand for it and everyone is going to pay you to go into space. Well, if you have 85% or so of the launch market and you're having to fill at least half of your launches with your own Starlink satellites, this is like a car company.
saying, you know, we're going to build, you know, a million units instead of half a million and we're going to be so much cheaper, but then people aren't actually buying them at the lower price. And so you have to put them into a rental fleet that loses money. That's what, right? They're soaking up their own demand.
scale play that they can't then fill up with actual demand. So Starlink is a money losing way to fill up. And apparently 50% of their launch revenue comes from Starlink. And Elon has said that Starlink won't be... sustainably profitable until they're launching bigger satellites on the Starship. So whatever else you might think about the company, the core premise of small rockets, expanding scale, building this demand, it's just hard to make money in space. And what SpaceX needs is...
that can make money in space to pay them to send their stuff into space. And it's simply not developing and doubling down on the starship, which has a lot of... issues going on with itself as well. Again, maybe it works, maybe it doesn't. Like all things with Elon, it's a big binary bet. The important thing is that... the whole narrative about the company up to Starlink is all busted because it's now become a binary bet on Starship and Starlink.
So Tesla is the one you can see. It's one of the stock price graphs that moves up and down. It's the one with cars regular people can buy. People like them. Are the protests working to shift that? perception? Are you seeing sales come down? Are you seeing the negative sentiment towards Cybertrucks, for example, get applied to the more mainstream products like the Model 3?
So I think that question will really be answered when the first quarter earnings come out. I think definitely. So in Europe, where we have monthly registration data. We're seeing huge declines in Europe. Now, we also know that Europe has much more traditions of boycott, different ways of sort of wielding political power. So I think the U.S. is the real battleground. I think in China, you see a sort of more modest decline in sales.
happening. And again, I think that's because of competition. I think Tesla just can't keep up with the competition in China, which is its own fascinating... story and situation that's going on there. The real question is, is the US going to be sort of more of that sort of 10% down and more due to competition? Or is this going to be 20, 30, 40, 50, 60, 70?
80 90 percent in some european markets that we're seeing and and you know i think we can't really answer that question until we see q1 we just don't have that kind of granular registration data on as regular a basis as we get out of Europe and China. Are there any other softer signals? What's the vibe at the protests themselves? The people who had Teslas, they want to give them up. It's people who never would have bought Teslas.
Here in Portland, one of the things that I've noticed is that everybody who drives past us in a Tesla is waving and honking and showing support almost universally. We do get flipped off even here in Portland, right? We do get the negative feedback. It's always from people. driving big trucks or like Mercedes SUVs or things like that. The people that are driving Teslas are...
seem to be in support. I know that there's a lot of concern about the resale value and taking the financial hit. It's hard to translate your political principles into a $10,000 or more financial hit. I get that. I've got a sign that I have.
out there at the protest that says the price isn't going up. You know what I mean? Like, yes, there's going to be a financial hit if you sell your Tesla, but the best deal you're going to get is today. And the next best deal is tomorrow. I think that for me, the growth... of the protests, the diversity of the people getting involved, the diversity of reasons that people are getting involved.
is incredible. I've never seen anything really quite like it. I'm certainly someone who's not typically engaged in this kind of political activism either. So I think my involvement of it in this sort of speaks to the sort of unusual nature of it and the momentum just keeps going and going the stock keeps going down the crowds keep getting bigger i would say you know maybe at some point when those trends reverse if if those trends reverse then maybe i'll you know
start to see this differently. But at this point, I mean, I would be terrified if I were Elam. We have to take a short break here. We'll be right back. Welcome back. I'm talking with Ed Niedermeyer about the Tesla takedown protest movement. We've been discussing a lot of the reasons why Tesla could be vulnerable to a protest movement, but there's a pretty big difference between being vulnerable and actually falling to that movement. So I had to ask Ed.
Are the Tesla takedown protests actually working? And how would he know when they are? Do you think that the protests are having a direct impact on the stock outside of we've made it? more culturally unviable to buy a Tesla? Or do you think it's more of what we've been talking about here? It's exposing more people to the idea that the fundamental of the business is bad.
When you're trying to dislodge investors from a position and a mindset that they've had for some time, you got to give them as many reasons as you can. And luckily, like I said, Tesla, the reason that this movement is successful is as much because of what Tesla's doing and how Elon Musk is running the... company as it is the protests themselves right his neglect like the failure to invest in new product the sort of haphazard marketing of you know
Clearly, he's only paying attention to even Tesla in the last couple of weeks of the quarter, which, by the way, if you've been paying attention, this is also something he's been doing for a really long time. So I think he's giving a lot of reasons for investors to sort of start to worry. Again, too, when the fundamentals of the business go down, then you have to think harder about, are they really going to deliver on FSD? And it's less of sort of like a free lottery ticket kind of mentality.
What the protests are doing is just sort of... adding to that, amplifying that. And it's a study in contrast in trends. Because Tesla is not rooted, the stock value is not rooted in the fundamentals and never hasn't been basically since 2013. It has fundamentally been a momentum play.
to a lot of investors over the years who are really smart people who I can lay out all of the criticisms of every piece of this company and what they're doing. And they're like, yeah, yeah, yeah. But like, I just think that someone else is going to buy the stock at a higher price down. And I'm like, okay, well, I can't really argue with that. All I can talk about is the fundamentals of this company.
When the valuation is so dependent on momentum, the reversal of these trends is everything. The hedge funds are absolutely paying attention to each one of these trends. And as they build up, at some point, they're just going to accept.
This thing has reversed. The momentum is all going the opposite way. It's just like the people with the cars. It's no longer a question of are you going to lose money? It's a question of how quickly can you get out to cut your losses? There is one other narrative pushing it. Against that, I've heard Speaker Mike Johnson put this idea out onto television. I've heard Elon say it. Federal law enforcement is starting to whisper about it. It's the idea that these are all paid protesters.
And these actions are illegal and that maybe everybody at a Tesla takedown protest should be arrested. How much paid protesting activity is occurring at a Tesla dealership on a given weekend? I've seen zero evidence that anyone's paid. I mean, I've been doing this for 10 years. Trust me, my...
professional decisions could have been, you know, I could be making a lot more money doing other things over the last 10 years than trying to get the word out about this. But no, again, what I think is really interesting is that everyone's there for different reasons. You have people out there with the Ukrainian flag.
You have people out there talking about the Constitution. I think some of the most betrayed and angry people are the people who thought Elon was this icon of science and who's now out cutting critical funding for science and biomedical research. The foreign aid that, you know, now...
potentially millions, hundreds of thousands, millions of deaths that are going to arise from this. So there's just so many reasons for people to be out there everyone i've ever spoken to has a very genuine reason for being there so i i've seen no evidence of it and i think this is what this is evidence of is is elon musk's you know sort of famous at this point uh commitment
One of the reasons people protest is to gather attention, right? It's to make a focal point of attention, to change a narrative or to apply pressure on a company. Very challenging to do when Elon owns the platforms that that attention has been focused on for so, so long. That's X, formerly Twitter. I've seen some reports, some conspiracy theories that the Tesla takedown hashtag on X is...
being astroturfed in some way or throttled another way. Is this a good time to protest? It seems like algorithmic media does not like it. I actually wouldn't know because I've been on Blue Sky for at least 18 months now. I think it's coming up on two years. So I really have not been on X to the Everything app. I would absolutely assume. I mean, Elon, again, the idea that he has any sort of...
principle commitment to free speech is absolutely ludicrous. The idea that he has ever treated any of his critics fairly or reasonably is just absurd. And I think that people should absolutely be off. off X, right? I would say Blue Sky is where this is all happening. All of these things sort of combine into how do we collectively build a future that... doesn't give people like Elon Musk these opportunities to manipulate us.
There's a darker side to these protests. We've seen a lot of vandalism against Teslas. There's been arson at some Tesla charging stations. There's been gunshots fired at other Tesla locations. Is that part of the movement? Is that something you can –
break yourself away from? Is that something you want to explicitly disavow here? Yeah. People who show up to peacefully protest, the psychology could not be more different from those who are going out and doing violence. And I do disavow the violence. I don't think it's effective.
But I think it's worth noting what we haven't seen is any protests turn violent, right? The argument that's being made is that Tesla takedown and these sort of the organized parts of this are themselves terrorist organizations. In general, it's a very decentralized movement. is changing you are seeing more sort of organization start to take place within tesla takedown in particular and a few other groups but but what i would say is generally still very decentralized and
There is no crossover between the protests and the violence. The protests are organized groups that show up at the same time. to specifically stigmatize the brand and get the message out there and exercise free speech in hopes of a peaceful resolution of the situation, the violence that you're seeing in every single instance that I've looked at has all been individuals acting alone, often in the middle of the night.
And I think at the end of the day, with all of this, right, the only thing that we have in common, whether you're going on and protest or doing some of these other things that you're seeing people do, is that we're all trying to find ways to have some... some impact on a situation where our electoral power has not been able to have effect, right? I think to the extent that you're seeing all of this, it's a product of the fact that...
our legitimate political means of affecting the situation have been effectively taken away. When that happens, when people's ability to legitimately engage in the political process is taken away, violence is almost always a part of what happens after that. And I do think, though, it's important to distinguish between those who are taking that route and those who are trying to say, hey, please take this protest movement seriously so that this doesn't descend further into violence.
As you look at the stock price, the size of the protests continuing on every week, is there a number that you're looking for that says, OK? These have been effective protests. We've broken the company. Is there a particular stock price? Is there a percentage change that would indicate success to you? I think already the fact that they had to hold this...
hilarious event on the White House lawn. I mean, that to me is success. Like, clearly we've gotten them. It's clearly Elon is scared. He's scared enough that he's able to get the president on TV trying to sell his cars. I don't know what more validation I could have even dreamed up. for than that. But no, in terms of the stock price, look, we have a long way to go. I'm loving the progress so far, but the reality is that this is a company that
is not sustainably profitable at any volume. I don't know exactly where Elon Musk's margin calls kick in, right? But he certainly has loans that are backed by... by Tesla stock. If the value goes below a certain point, he'll have to start selling that to pay off his margin calls, which then creates a death spiral. We're a long way from that, but I think that's what I'd like to see. I'd love to see Elon get margin calls, get forced to sell, and then he has to sell.
left all of his empire at fire sale prices to get himself out of this cash crunch. That's the goal. And then finally, he'll have to rely on his government paycheck. The final bit of karma. Historical timescales are long. You can look at the car industry and say, boy, a lot of car companies were started and run by people who are not regarded well in history. Henry Ford, raging anti-Semite. Volkswagen.
It started by Hitler. Like there it is. They're all right there. I know a lot of people who will never buy a German car ever. Can you rehabilitate Tesla the way that Ford and Volkswagen and BMW and Mercedes have managed to rehabilitate themselves over the years? I'm skeptical. I mean, never say never. I've been asked a version of this question for many years. Can Tesla sell to another car company? Is that an exit plan here? A lot of the divestment...
that already is actually even just now starting to happen, happened because of the pay package dispute that happened about a year ago. You know, you've already seen there, that was a really important test of Tesla's governance. And what it proved is that the board...
essentially is completely captured by Elon. They're never going to be able to separate him from the company. It confirms what we sort of already knew, which is that the whole company is as much... It's Elon's meme coin, is really what Tesla stock is in so many ways. And so... The board's not going to get rid of him. I think the second Elon is out, in any capacity...
The loss of confidence that we're already starting to see, that also becomes the death spiral, right? Which is why he's sort of trapped in this situation. I just don't see how he gets out. He also can't stop being involved with politics because I think then his legal... problems potentially become a reason for concern again this is why i think he's in
politics, as he's concerned about his sort of legal liabilities. And as long as he's in there, that he sort of is safe from prosecution. I'm very skeptical that anybody at Tesla is going to be able to sort of like...
pull off this sort of this exit that they're sort of barreling down now. And I don't think there's any evidence that the board is going to kind of stop it until like seconds before it hits the wall, at which point it's too late. And the reality is, is because it's been, it's become more of a stock pump than a car.
that actually even integrating like like how a deal would work integrating it into another car company would actually be very hard because the manufacturing systems are totally different they run very differently and and frankly a lot of the factories are not
interesting or value to other car companies because of the way they're run. I'm just very skeptical. I think this is the really exciting thing about this moment and exciting in a positive, but also scary way because this will have ripple effects for good companies to the outside of town.
Tesla, is that this thing is barreling towards a wall with nothing really to stop it or slow it. Elon's not stopping or slowing or steering away. The board isn't really in a position to do it. The stakes are very, very high here. I'd like to thank Ed Niedermeyer for joining me on Decoder, and thank you for listening. I hope you enjoyed it. If you have thoughts about this episode or really anything else, you can email us at decoder at theverge.com.
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