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Let me tell you we have a new star. A star is born Elon.
Juson Kennedy.
He is the Thomas Edison plus plus plus.
Of our age.
Holy, his whole life is from a position of insecurity. I feel for the guy.
I would say ninety eight percent really appreciate what he does. But those two percent that are nasty today, I'll pay in four post.
We are meant for great things in the United States of America, and Elon reminds.
Us of that.
I'm very disappointed in Elon. I've helped Elon a lot. Welcome to Elon, a Bloomberg's weekly podcast about Elon Musk. It's Tuesday, July eighth. I'm your host, David Papadopolos. Okay, America, are you ready for the America Party? Elon Musk appareently thinks you are launching the third Party late last week and making bold declarations about upending the US political order and what amounts to a dramatic escalation of his feud
with President Donald Trump. So we're going back to DC to bring in another one of our star political reporters, Nancy Cook, to get into the nitty gritty with me and Elon inks stalwart Max Chafkin. Hello to you both.
Hey, David, Hi, David, Hi Max. Thanks for having me.
Yeah, Nancy, you know, thanks for coming back. It's been a while, it's been too long. Now listen. If Elon's politics are the yin well, then Tesla and its wobbly share price is the yang. By the way, I actually have no idea if this actually makes any sense, but I'm gonna go with it. In with Max, you sort of yeah, sure, well it's close enough, yeah, good enough for rock and roll. And we'll bring in Esha Day to talk about the growing ang swirling in the market
as Musk wades right back into politics. Okay, now, Nancy, so with your colleague there in Washington, Josh Green, we had previewed this last week, but then the big beautiful bill got final approval in Congress and signed into law by Trump on the fourth of July, and Musk then announces the formation of the America Party the very next day. So tell us here, what do we need to know about the America Party And what as you see it, do the prospects look like for this thing?
Well, so Elon Musk was not happy with the tax bill, which I think that you guys have talked about extensively, and also hasn't been happy with the tariffs, and so he has broken with Trump and his advisors on some very key policy areas and then has threatened to start this third political party on X. And so far the idea just lives on X.
And you use the term threat. Is that really all it's still is at this point a threat?
Yes, that's all it is. I mean, creating a third political party is a huge heavy lift, and not just heavy lift initially, it's a sustained heavy lift.
What are some of the mechanics of this heavy lifting?
Sure, so it would require a ton of money. He has that, but you know, does he want to you know, invest that money for the long term to make an effect in both the midterms and the twenty twenty eight presidential election or does he need to focus on his companies? So money is one? Two is his attention span?
You know?
Sure he is threatening Trump and Trump officials about this on X. But to create a third political party, you have to register with a federal election commission. You have to go to each individual state and make sure that
your party is registered in each political state. Like you know, there are some political consultants, I'm sure in DC who are salivating at the idea of taking Elon's money and doing this, But to actually do it, it's so much effort in all these states to do it, and there's so much paperwork, and so, you know, in addition to the money, question is does he have sort of this sustained attention span to do this. And then the other thing is that we have never really seen a successful
third party. You know, Ross Perrot has tried it in the past, Andrew Yang tried it, Eddie Roosevelt, yeah, exactly, No Labels has tried it, but we've never seen like Wallace. Sure, but we've never seen like a really successful bid for a third party. This is sort of a threat that he's making.
That is true. But Teddy Roosevelt and the Bull Moose Party, I believe, and Ross Perro and whatever the hell the name of his party was, they did very much affect those elections.
Sure, there is no question that it could affect the election, and it could you know, sort of siphon off votes for a Prima Democrat or Republican party. Like Americans are very unhappy with the political system at this point. But I think it's just like, does he have the attention span and the money to do it? You know, for a while, because really the next marker would be the midterms, the twenty twenty six mid terms, when Republicans could lose
the House. That's sort of what's up for grabs. Then and then the twenty twenty eight election, the presidential election. You know, assuming Trump doesn't try to say a third term, which would require him changing the constitution, but let's not put it past him. It will be a totally open election. There will be people running on the Republican side and people on the Democratic side, and I think it will be a very crowded field. And so, you know, does
Musk want to put up a candidate for that? You know, I think that that's a ways off, but you know, I think that there are certainly these conversations happening.
Yeah, so Max, this is something that Josh Green also raised, the attention span issue, the stick to itiveness sort of dubious, like Nancy is and Joshing General has a very grim
outlook on the future of the America Party. But it's curious to me that they both raised that question from afar and I get it at some level because the guy just bounces around all over the place, and yet at the same time, it strikes me that you doubt him, you question him and his stick toitiveness on something that he starts obsessing about, and you can get burned.
Right, Yeah, it's true.
And you know, some of what Musk has said over the last couple of days has suggested that he's thinking about this in the same way that he's thinking about these big bets. He keeps reposting these comments from fans that say, like.
They doubted he could start space X and he did.
You know, so this is like his next act.
People forget though, that Musk has threatened to start lots of that he never actually followed such a so he threatened to start like a news outlet, or he's done it a few times, so, you know, made various threats about media. You know, even give you well he did, You're right, he did by X. But he said he was starting this thing called Pravda a few years ago and that never happened. It's not like he never sort of flakes out on it. In fact, he flakes out on threats that he makes on X.
What's just hit rich.
I don't know.
Now obviously, the like sort of maximalist version of this, which is like he finds, like I don't like, you know, four hundred congressional candidates and goes through the very hard, very boring, probably humbling work of trying to get these people on ballots in individual districts. It's this is what Nancy's talking about. It would take forever, it would be very expensive. These candidates would also have to raise a
ton of money from outside. It would just be like a very messy thing, pretty much the opposite of like flying into Butler for an hour and enjoying the fun
of a shop rally. But I do wonder what if something in between happens, right, and Musk has already floated various versions of this, like he could just like fund a handful of Republican primary challenges, call it the America Party, like not actually file with the FEC, but just say, like, you know, that's what this effort is, and just act like a normal kind of right wing mega donor attempting essentially to drag you know, the MAGA coalition to the
right and also probably in the direction of subsidies, you know, for his companies.
So like the Tea Party is a wing of the Republican Party, so too with the America Party. That's what I'm saying now, Nancy, are you familiar with the term man moot?
I am not.
Oh that's our version of taco. It's Musk always makes up with Trump. So it's this idea, and I feel like you are even buying into it in this answer. It's this idea that like.
Yeah, don't don't tell her what.
He's talking a big game, but he's not really gonna follow through, you know, and we kind of saw this.
He's got a lot more to lose than Trump does. But I gotta say this, Max, this is my point here. Man moot's not right now. It's a looking a little rough. I actually think it's looking a little bit more like twamum, what is that? Just that's me moood backwards? Right, But you're still all in on that mood.
No.
I mean, I just think that the force pushing Musk and Trump together remains, and like you see it even in the way that Trump is attacking Musk, like he has like insulted Musk a few times, but it doesn't feel like and maybe Nancy, maybe I'm just you know, failing to appreciate this. But like it feels like he hasn't used his like meanest insults yet. He's also focused on the third party, not as this like hideous affront, but he's just sort of said, it's impractical, this is
the way the system is. It feels like he's pulling his punches a little bit and avoiding giving Musk the full double barreled you know, insult canon that he sometimes reserves for his enemies.
It's always been a two party system, and I think starting a third party just adds to confusion. It really seems to have been developed for two parties. Third parties have.
Never worked, so he can have fun with it, but I think it's ridiculous.
Well, Trump also just historic, like does get mad at people. But I would say one interesting thing about him and he will attack them and he can be vicious, is there are very few people that he like the Bridges are totally burned. You know, he was furious with Steve Bannon when Steve Bannon left the White House during the first term. Now they talk. You know, Steve Bannon was at lunch at the White House, you know, a few
days before Trump bomb Durant. Trump is willing to make up with people, like I think, much more so than people realize, and so I could see them one hundred percent making up. I also just want to make the point that Elon doing this, you know, also runs the risk of just really alienating Republican voters who are completely beholden to Trump, and like, if they're going to pick
someone Trump versus Elon, they're going to pick Trump. I mean, Trump is not just like a political figure or president, do you know, He's almost like a movement figure in terms of politics. I mean, people just feel so strongly about him. His supporters, his detractors also feel strongly that I just think, you know, Musk would not just have to take on the mechanics of the third party and the money and the time and the attention, but also just take on sort of the cult of Trump's personality.
You know.
I've seen Nancy brought up these political consultants like salivating over the chance to take Elon Musk's money, and I uctually see some of this slipping out into public. Andrew Yang has been tweeting at Musk. Mark Cuban has been tweeting at Musk. These consultants are all talking about how great an idea a third party is. But most of these people are talking about a centrist third party, which is not what Elon Musk is talking about. He's talking
about like a far right political party. Yes, all right, what is his complaints, Like, what are his policy positions? Well, his policy position is that we need to drastically cut the deficit. Essentially, it's not that the Big Beautiful Bill is bad because it cut Medicaid, which is what the centrists think and which actually might be a credible position from which to start trying to build some kind of
political movement. It's that they didn't cut enough. He's called social Security a Ponzi scheme on the Joe Rogan Show. He is not in sort of the mainstream of like what centrist voters think. His views are sort of out there. They're all over the place, and he's attacking Trump from the right.
Okay, So that is a fair point that saying we got to go harder at social Security and Medicare and Medicaid is not a centrist view. But Nancy's saying that the debt is out of control and our deficits are out of control. That's not far right politics, is it.
That's just not a view that is in vogue right now in Washington, I would say broadly. And it's not something that voters are caring about. And talking about cutting social security regardless of party is like the third rail for voters. Like old people want their social security. They don't want to support some political figure who talks about cutting it or even changing it. I mean that's why Doje I think was so unpopular. That's not a winning position.
Yeah.
I mean we're seeing like a little mini illustration of how what a headache doses is going to be both for the White House but also maybe even more so for Elon Musk with this tragedy in Texas right like one of the subplots. And I think we're I don't think we know yet, but you're starting to see reports about was Noah the Weather Service essentially understaff? Did that contribute to not predicting? Like there's just like a lot of ways in which.
An understaff because potentially they were gutted by Doge.
Yeah, And they're just all sorts of these kind of little things where we're attacking government services that were working well, created all sorts of liabilities for Musk and then in turn for.
And whether or not that actually turns out to be the case or not. And I'm not sure we know the answer to that. The narrative politically certainly does not help.
Yeah, no, no, And it just shows that like beyond just like going to the DOGE website and seeing the top line number, you know, one hundred billion or whatever, like, there aren't a lot of successes that you can point to. So it's like it's like a lot of political liabilities and a lot of disruption, kind of in the bad sense, without necessarily a ton of political upside.
Dirt parties have never worked in the sense that they've never won an election, as you were pointing out, Nancy, but as I was remembering, Teddy Roosevelt did cause believe William Howard Taff to lose the election way back when. And I think you can make an argument that Ross Perrot cost George Bush the nineteen ninety two election. If the America Party picks off voters, who is it picking off, even if it's some at the margin, is it twenty
something year old guys, And where is it pulling people from? Well, what's a.
Little early to say, because you would often also have to see like who are the candidates that this party is putting forth and backing, and what do those people look like? But I think it would probably pick up off like you know tech bros who are like, oh right, we should cut social security, we should shrink the federal government.
I'm not sure like how big of a slice of the electric it is, But again, it would really depend what Elon's going to have to do if he does the Third Party is find all these candidates who also want to cross Trump, and then he will put them
up for different congressional seats. But each candidate will sort of have to run his or her own race and have his or her own policy positions, which I guess Elon would have to support, And so you know, I think each of those candidates would appeal to probably different people.
Yeah, now, Max, when we were talking about what this party stands for, down on very very much against debt and deficits. That, by the way, is also the origin story of Doge. What else in his eeks is in such do we know that this party will stand for?
It's like a combination of Elon's interests and sort of techno Silicon Valley right wing is and I'm piecing this together from a bunch of tweets, but Elon has indicated that modernizing the military with AI and robotics.
Pro tech, pro crypto, pro natalist.
It's like a bunch of essentially you know, internet guy ideas. But again, like I don't know how Big Musk's bases, Like, it's not that many people. It's enough people to build a very successful car company. I'm not sure it's enough people to build a successful political movement, you know, watching this so I covered Peter Teal's donations in the twenty twenty cycle, and he, you know, Teal spent all the time. I had, I don't know, more than fifty million dollars.
To get too.
Essentially two Republican Senate candidates who are sort of far right candidates to win their primaries.
And it was it was pretty successful. Both JD.
Vans and Blake Masters managed to win their primaries, and one of those two guys, JD. Vans, won a Senate election that costs fifty million dollars. And the reason it worked primarily was not the money, but the fact that Donald Trump endorsed both of those guys, and in those elections,
the big thing as big as the money was. It was trying to get Trump to endorse those guys, and it just kind of shows you that, like on the right, it's pretty hard to run a successful election and not get smushed if you're on the wrong side of Trump.
To me, Elon sort of putting together this third party, I'm like, who does that appeal to, apart from David Sachs, who like maybe would go along with him.
I don't know, Nancy, I don't know. David sax is a pretty good job right now. He may stick with it, which is which is he's the President's AI advisor. He's in proximity to power.
Right So if he goes with Elon, which I could sort of see him being one of the few people who does, he will lose that job because the Trump people are all about revenge and leverage and they will lace out anybody who goes along with this Elon idea.
Nancy, on your point about how Trump has a way actually of making up with quite a few people, Does he have a sense of gratitude towards Musk and the money in the ground game in twenty twenty four, and is Donald Trump in the White House right now? If not for Elon Musk.
So I haven't talked to Trump about this specifically, so I have no idea exactly what he's thinking. I mean, I think, you know, the people around Trump and sort of the Trump world at large, you know, I think they're grateful for Elon's money. I think they think Elon's a little weird. I think Elon made a bunch of people in the White House mad or annoyed them. But I also think they think they won also because of Trump and like the political figure that he is, and
and the team's of sort of political savviness. I don't think that they give all the credit to Elon. I think they would be like offended by that suggestion.
Not all the credit. But did he perhaps tip the balance?
I guess would be I don't think they would say he tipped the balance. I think that they would say things like Trump getting indicted, which like supercharged the bas's sense of grievance and like made really people coalesce around him, was a key moment, you know, the assassination attempt, Biden just being such a bad candidate. I think that there were a bunch of things Musk helped with some money
in some key primary states. But I don't think that they would say they owe the election to him, and I think that he has created a lot of headaches for them since then. I will also just say, like broadly, the vibe in the White House now and in Trump world is like they feel like they're winning. Their ecstatic you know, they feel like they passed this big tax bill. You know, Trump is like riding high. Staff is riding high,
and Elon, meanwhile, is just kind of annoying them. And so that is the kind of the context in which all of this is happening.
Okay, So Naty, I'm going to ask you again now about mam moot and whether you indeed subscribe to the Max Chaffkin theory. Do you believe in memot? Yeah?
I think people miss this about Trump. One is that he is a very hospitable person and like is actually more charming in person than people think. And the second is is that he he will like accept people's apology or forgive people. So I feel like, yeah, Elon's not in the wilderness like they could make up, you know today without an issue.
Listen, Trump hasn't even given Muscow a diminutive nickname yet and until that happens like, I don't even think this is a full true feud.
Final question for the two of you. In November twenty twenty six, does the America Party take at least one one seat in either the chambers of Congress? Nancy Cook, Nope, Max Chefkin No.
My answer is no. But I think that Elon Musk will successfully back one House candidate, not necessarily on an America Party line.
Gotcha, I could see that. I agree with Max.
Nancy come back and join us again soon anytime.
Thanks for having me.
So. Max and I are now joined by Esha Day, a stocks reporter here at Bloomberg. Thank you for having me, Esha. In the wake of the launch of the Great America Party on Saturday, the stocks sank seven percent yesterday, which, as you've often told us, Escha, by Tesla's standard, it's not an enormous move yet seven percent, you know, seven percent bounce back a little bit today, But the mood out there seems pretty glum. That angst that among the bulls that we've noted in recent months seems to keep
building and building. Tell us about what you're reading in notes from analysts. What kind of you know, what you're hearing in conversations you're having what is Esha day seeing.
Sure, I think the mood I would call it one of extreme caution at this point. So most of the people that I'm speaking to, and mind you, these are mostly TESLA investors or I would say bullish and bearish analyst as well, but essentially everybody's kind of keeping their fingers crossed and really hoping that this will just kind of blow over.
You're just hoping it's going to go away.
You hear what you hear what Ash's saying, right, She's talking about Memoot, Musk and Trump that this will just knock over. He's not going to do this. They're gonna make up. That's the trade.
Okay, So they're hoping for Memoot, but at the same time they're not thrilled, right, I mean, I think among those expressing concern at a louder and louder you know level, is Dan ives How do you refer to.
Dan Ives man the QAnon shaman of right?
I mean, what did he what did he write? Was it just today? I think it's just today?
But I mean, this is not the first time that Dan is coming out and kind of, you know, really pushing back on this what he called the soap opera, and he's saying that soap opera needs to stop. But his note this morning, he doesn't.
He's not enjoying, no, clearly not, which.
Is which is unusual for Dan, I would say. So he's essentially saying that the company is now at a tipping point, I mean, big words. His point is a Tesla board. This is the time for Tesla board to really step in and make some changes and try and rain in Musk and his antics somewhat. And he believes that this is the time to do it. I mean the note is pretty forceful. As Max said, I would call Dan an uber bull. His price target on the
Tesla stock is the highest on what Street. It's five hundred dollars.
What is the stock at right now?
I think it's around two hundred dollars, yes, yeah, and it's been the stock has been hovering around that level despite some fairly large ish moves for about a month or so now, so, yeah, it's three hundred dollars. He has a five hundred dollars price stylege.
So Max, the board, mister Ive says, is going to step in. I mean he's gonna him to heal.
You read dan Ives note, and as Iha says, you can.
Sort of see why it's a problem because because dan Ives his big thing after the election was that this was great news for Tesla because Trump, the most powerful man in the world, is suddenly aligned with the CEO of Tesla. You know, Trump is going to basically sort of use his political force to essentially legalize autonomous cars all of a sudden.
That's going to ease the path for Tesla's robotaxis. That was the thesis. Now as that thesis is falling apart, obviously.
That that's going to create problems, and that's why you see dan Ives wanting to find finding move, find some way to avoid.
A protracted feud.
However, when you read this note that Ash's talking about this morning, you sort of see why it's going to be pretty hard for the board to do any of the stuff that dan Ives says, because there's no real stick. Dan Ives doesn't propose threatening to fire Elon because that is pretty much unthinkable to the Uber. Part of ives thesis is that Elon Musk creates a lot of the value for the company. So his solution is essentially the other version of this, which is to just pay him a lot of money.
So the way wait, wait, so really.
The proposal is to encourage bad behavior.
The proposals where there's a fork in the road. Musk is out of control and.
To fix this, essentially, he wants the Tesla board to write him a big check. And not only one big check, because the plan is, if you read this note, is to give Musk a new pay package that will bump his equity up to twenty five percent. This is the idea that if if Musk owned a little bit more of Tesla, maybe he would be incentivized to spend some
more time there. He also wants for the board to consider writing a second check, which is to buy Xai, which of course would be another mega payout for Elon Musk. And remember Xai is this company that Elon sort of started in his spare time, recruited a bunch of ex Tesla engineers. In certain ways, it seems kind of competitive to Tesla. So the solution is to Musk and line essentially by aligning the incentives. Another way to say that would be to give him a bunch of more money.
Right, so tie him closer to the company, you punish him, you punish him Max by throwing bigger checks at him. I mean, I may you know it drives. I mean, but here's the thing. If your musk, Esha, and your net worth is what roughly, it obviously goes.
Up and down a lot. But right now it's around three hundred and forty five billion.
Dollars, all right, I mean, is an extra four seven eight ten billion? I mean, does it matter? I mean, I guess it would only matter if it helps you fund the America Party. But part of the whole thesis is I did iways want to pry you away from that god forsaken idea. So I don't know. I mean to Max's point, though, Esha, about how much Elon is
Tesla and Tesla is Elon. You had somebody quoted in his story recently saying that fully ninety five percent of the value of Tesla, of the market cap, which is some nine hundred and sixty billion dollars, ninety five percent is not derived from current operations, but from anticipation of what is to come, new business lines, new revenue streams.
I mean, it's a staggering number. I think for most companies, the value that the CEO or the value of what is to come down the line and things that we can't quite even see yet is going to be far, far smaller than that. This is the cult of Musk and the genius of Musk, as dan Ives is saying, you may be furious with him and disappointed, but you're you're stuck with him. Absolutely.
Yes, what dan Ives is saying, and the really strict measures that he's putting out, they really speak to this kind of oh, you know, push and pull that Tesla investors are feeling right now, like they are furious. They do think it's a it's a huge distraction. You know, this is they're powerless though they're powerless because I mean they have put that power in that man in some ways as well.
So powerless that I've says, give him more money, Look, I give him a bigger cat. I think.
Honestly, there's a sense to it. I mean, it does.
It does seem like, as you say, David, incentivizing bad behavior. Although it's hard to imagine Musk responding well. Everything we know about Elon Musk, it's hard to imagine him responding well to an ultimatum. You worry, you give him an ultimatum he might do something even more rat We've seen that over and over again, and that is you know, in a weird way, right, It's what gives him so much power, is that is that he is a little
bit of erratic. There is this kind of wild card factor. Again, it's a little it's a little bit trumpy.
It is a little bit trumpy. By the way, Esha I will note that since Tesla joined the S and P five hundred at the end of twenty twenty, the stock is wildly underperformed the S and P five hundreds, up all of twenty six percent. I mean for that period basically what you could get from owning treasury bills. The S and P is up seventy seven percent in that time to on a total return basis, and the
Nasdaq is up eighty three percent over that time. Granted, this strips out the immediately preceding period, which was the pandemic, the crazy pandemic rally that sent Tesla soaring. But yeah, you're not talking about a four and a half year period where the stocks treading water.
Yep, that's true. And why is that? One part of it is definitely that there was it was preceded by that seven hundred and fifty percent rally in twenty twenty.
Say that number again, was it seven hundred and fifty bigger than I remember? How do we miss that?
Max?
But some of it is also just this like constant noise that has surrounded the stock since then, the ev business has kind of stabilized, so there's not a lot of surprise in there.
Then there was a stabilized it's kind of but then.
Yes, and then it started kind of slowing down, So that was one disappointment. You know, the core business isn't really growing kind of leaps and bounds as it was supposed to. Then there was the noise around Twitter, him buying Twitter, and that entire distraction around it, him having
to sell stock. I mean, and when I talked to investors right now, that is one instance that keeps coming up a lot, not so much his other controversies, of which there have been many, but that the Twitter controversy or you know, buying Twitter, and the distraction related to Twitter which is now X and now his political foray. These are the two big.
So the soap opera that I've refers to, I mean, there is really several soap operas that seem.
Refers to the political soap opera, which I think has just gone completely out of control, especially after Musk and Trump had their fallout. So, you know, I mean, it was always kind of a wild bed, right, like the fact that these two men are really close and just the proximity to the president will give Tesla some sort of a wild edge over competitors. It was always a lot.
There was a lot of steam. It was a lot of smoke. Max, being the the ace reporter he is, he sniffed that out in November, to which I had said, well, if that is true, if it's all smoke and mirrors, you know, just just collect the gains and sell the stock. And I don't know, And in hindsight.
Yeah, that would have been Would we should charge.
More for this podcast?
Yes? All right, Esha, thanks for joining Max, Thanks as always, Thank you, Thanks David. This episode was edited by Anamas Racus and produced by Stacy Wong, with help from Rachel Lewis, Chrisky Wait, Maple's Handles Engineering, and Dave Percelfact checks. Our supervising producer is Magnus Henrikson. The elon Ingk theme is written and performed by Taka Yasuzawa and Alex Sugiira. Brendan Francis Newnham is our executive producer, and Sage Bauman is
the head of Bloomberg Podcasts. A big thanks as always to our supporters Joel Weber and Brad Stone. I'm David Papadoppo. If you have a minute, rate and review our show, it'll help other listeners find us. See you next week.