Well, Elon Musk gives now the richest person on the planet.
More than half the satellites in space are owned and controlled by one man.
Starting his own artificial intelligence company.
Well, he's a legitimate super genius. I mean legitimate.
He says. He's always voted for Democrats, but this year it will be different. He'll vote Republican. There is a reason the US government is so reliant on him.
Elon Musk is a scam artist and he's done nothing.
Anything he does is fascinating the people.
Welcome to Elon Inc. Where we discuss Elon Musk's past corporate empire, his latest gambits and antics, and how to make sense of it all. I'm your host, David Popadopolis. I really thought we'd talk about Cybertruck this week, and we will, I promise. But first, I'm sure you've seen the videos and photos. On Monday, Elon Musk put on body armor to take a tour in Israeli kibbutz that
was attacked on October seventh. Speaking to Israel Prime Minister Benjamin and Yahuan x, he offered to help rebuild Gaza. Those are a crazy couple of sentences. The head of six cutting Edge Companies took his private jet to the site of a Hamas massacre just miles from an active war zone. It raises a lot of questions, what is Musk doing? Why? What is he trying to accomplish? To discuss his trip to Israel, we've brought in Marissa Newman,
our Israeli tech reporter. Marissa, thanks for making time for us. We know you've been very, very busy.
Thank you.
And Max Chafkin, senior reporter at Bloomberg BusinessWeek. Hey, then we'll dig into all things cyber truck with longtime Tesla reporter Dana Hull. Okay, Israel, Marissa, what was Elon mush there?
So officially he was here for a solidarity visit during the war, he tore the key boots in the south on the cause of border that was the site of one of the massacres. But the context of his visit came after he was embroiled in another anti Semitism scandal when he endorsed a tweet that was anti Semitic, and the last time that he had been in a similar situation. He met Nitao Nitunio traveled to California, and this visit was also seen as sort of a way to walk himself out of the latest scandal.
Now, numbers are you during that last meeting they had in September in California? You were there, correct?
Yeah?
And and what was it like then and how was that different than now?
So at the time, Nitaniello said to him, you know, we hope that within the confines of the First Amendment, you'll fight anti semitism on X. And then that gave Musk sort of the platform to say, well, you know, I'm a post anti semitism, I'm post of racism in any form. And during this visit they had sort of a spaces conversation on X, and anti semitism didn't really
didn't come up at all. Musk also met with the Israeli president and another cabinet member, and they brought up anti semitism, but they spoke generally about combating anti semitism X. They didn't directly confront him about his own actions. So definitely, from Nitagnell's point of view, it wasn't a focus.
But now, Max, we do know that Musk has done some tweeting or xing about his most recent embrooliers.
Yeah.
Yeah, So as as Marissa says these Net and Yahoo meetings were clearly, you know, part of an effort by Elon Musk to say, you know, how could I be an anti Semi. I'm like good friends with the you know, the leader of Israel. He has all along besides these two meetings, he's had a very kind of steady drumbeat of interviews essentially claiming that, you know, he's not an anti Semi. He went on Ben Shapiro's show, he said that he's you know, Jewish in the kind of George
Santos way. He Yesterday, while this was going on, one of his fans said, you know, I hope this puts arrest to the to these you know, rumors that Elon Musk is anti Semitic, and Musk responded, yeah, I hope so too. I'm paraphrasing here, but essentially endorsed that. So he's more or less said that that was one of
his goals here. I think there are real questions about whether it will achieve what he wants to achieve, because of course, you know, there's an Israeli audience and then there's a US audience, and it's a US audience of advertisers, in particular, who are you know, still concerned about extremist content on X and the possibility that their ads will show next to it.
So, Marissa, how has Musk been received there in Israel?
So Musk was received warmly by politicians, with the exception of the Israeli president sort of bring anti Semitism as an issue. There's been just a wave of world leaders who have been visiting Israel, and among Israelis there's a certain appreciation for those for those visits, those wartime visits. On the other hand, there definitely is a lot of criticism over both disinformation on X and conspiracy theories about the war that are that are not being curbed.
I mean we should also say that, like there is this thread of Elon Musk's endorsement of an you know, anti Semitic conspiracy theory. But Elon Musk also just generally likes to throw himself into the mix when there is a big global controversy. You know, he vowed to fix the Flint water system during the water crisis. He inserted himself into the into the Tie Cave rescue. This is a guy who you know, likes to be the main character and and of course that gets him in trouble
a lot of the time. But I think you know, he often does this thing which world leaders also do, which is, hey, there's a big conflict, let me put myself in this.
So this is this is geopolitical elin right, the sover that the sovereign Republic of Elon Musk, all right, so rises, So what other global CEOs have shown up on in Israel and gotten this kind of tour from Benjamin Nettanna.
Who none President Biden was here. He got a warm welcome. World leaders were here, but no CEOs. Obviously this is very unusual, and it's it's worth pointing out that nittaill went down south to do this.
Tour with him, taking away from what is presumably fairly busy agenda.
Now yeah, I mean there's a ceasefire so but definitely definitely it's the middle of the war and there are hostage exchanges every night. And Ntoniello was in the South giving Musk the tour of the key.
Boots, right. So Max, that really does, though, speak again to to the power of the geopolitical Elon and and and the and the influence he wieled you once ranked him if you were a country, you said, He were barely top two hundred. That's crazy. He's totally totally top two hundred.
I mean he's he's the richest person in the world. So so that gives him a certain status he operates all these companies. Also, he's got a unique willingness, a a Kardashian level appetite to be in the middle, middle of the storm. And obviously net and Yahou has something to gain Bye Bye by showcasing a relationship with Elon Musk. And so you have this kind of mutual trade which we've seen other world leaders make, you know, in the UK, you know, and elsewhere. It'll it will continue where where
Elon Musk is able to command these audiences. And it's in everybody. It's in both sides interest to show that he is of this status and that they are able to attract, you know, the great the world's great industrialist
as they see it, to their country. And at the same time, right there's this possibility that Starlink is going to become a government contractor, it's going to offer its its internet services to governments and and so maybe there's a dual purpose here with this visit, both in terms of potentially marketing Starlink and making contacts with the Israeli government and also trying to say like, how could I
anti Semitic If I, you know, have friends. Look at my Jewish friend over here, how could I be an anti Semite?
Right?
So, two birds with one stone now Marissa Starlink his satellite unit within SpaceX. It came up to a certain extent during this visit.
It did come up early on in the war. The Israeli Communications Ministry said that they were interested in Starlink to back up Israel's communications during the war. And then a few weeks later, Musk tweeted that he would be willing to give Gaza International aid organizations in Gaza access to Starlink, which immediately infuriated the Israelis, who said that
that would be exploited by Hamas. Then Musk walked it back, said, oh no, we wouldn't do that without sort of the approval of the Israeli Defense Establishment and the US Department of Defense. And then on the morning of his visit, while he was sort of in the south with Ntagne touring the key Boots, the Communications Minister said that they had reached some sort of understanding under which Israel would control Starlink in Israel and in Gaza. That doesn't seem
to be a done deal Starlight. You know, no one on Musk side has confirmed that, and the Ministry is saying that it's an understanding, but it's not. It's not final, but it's definitely something that's that's coming up in the talks and as part.
Of this got it, we got it. Got it. So no concrete deal yet, but max in general conflict has been very good for Starlink's business. Yes, well, and.
It's been very good for SpaceX's business. I mean, people forget this, but SpaceX is a massive defense contractor and Starlink the satellite unit, which you know, we and others have reported, is you know at least considering an IPO moving towards an IPO via some kind of spin off. You know, it would be a natural way for this company to you know, get more revenue and also do a thing that Elon Musk is good at, which is
you know, kind of court governments. Uh and and and convince them to give him write him very large checks.
And so last thing. So he is right. Elon fancies himself this world leader, and other world leaders seem eager and keen to make time for him. Why Marissa does Benjamin and Yahoo make time for him and entertain him? And by the way, I think it was it was no small deal when they went to the to effectively, you know, a place that was just miles from an active war zone. What's in it for him?
Well, originally when he went to California, it came in sort of at the height of protests in Israel's over his judicial reforms, and that was being led by the tech community, and at the time now was very keen to show that he's tech friendly, that he's sort of he cast himself as the person who built Israel's tech economy, and so that embrace with Musk at the time was sort of framed around that. And I think that's still
something that he's looking for. He's you know, the Israeli government has sort of spoken about trying to get Musk to invest in AI in Israel, to sort of have a presence in Israel, and I think that's something that continued. Those talks areits are ongoing. And one of the meetings Musks had when he was here was with tech entrepreneurs, with cybersecurity officials in Israel.
There's also the question of does this help Elon Musk. We should say, first of all, Musk has denied, and we've said this on other podcasts, denied that he's anti Semitic, that this isn't entirely just like a bogus media conspiracy.
I think like that.
It's it's unlikely that this is going to make much of a dent, either in the advertising boycott or in the like larger narrative about him.
I mean, you know, we're.
We're seeing essentially a similar strategy to one that Donald Trump deployed right where he was. He was very close to net Yahu and also very unpopular among American Jews. And so it is not necessarily like those two things, they don't necessarily go together. It's not clear that anyone's going to buy this. It's it's a pretty weak defense of the of the bad tweet that he did. When he could, he still could just apologize, and of course he's not doing that.
Yeah, it's not it's not on brand, and he's not doing it, nor do I suspect will he listen, Marissa, thank you very much for your time.
Thank you.
We'll have you on again soon. Okay, we're back and joining me and Max now is Dana Hall. Dana, welcome back.
Good morning.
So then when I woke up this morning, and as I always do, I went right to my Bloomberg terminal, the number one read story this morning was your story. Musk's cybertruck is already a production nightmare for Tesla. It is indeed, these things are hitting the road. What's gone so wrong? Why has it taken so long for them to get it here? And what does it look like going forward in terms of them ramping up output.
Yeah, so I think what's interesting to me is that, as you all may remember, Musk first unveiled this cyber truck four years ago in November of twenty nineteen, and that was the big event where, you know, it was like this huge viral event. They sort of unveiled the truck, were kind of a gast and shocked at how weird it looked. They tried to prove that the glass was shatterproof, and they threw like a mallet or a ball at it,
and the glass shattered and it went viral. It was like this incredible, incredible event.
Well, maybe that was a little too hard.
Four years later, the night, you know, we're finally going to actually see the vehicles like handed over to the first trusted customers. It'll probably be a mix of like employees and friends of Elon, and so Tesla is having this big event on Thursday to kind of do the handover of the very first cyber trucks. And in the meantime, cyber trucks have shown up in showrooms. So I went
on Sunday to go see one. I had a showroom here in the Bay Area, and you know, the cyber truck is like surrounded by ropes and everyone's like crammed in like taking selfies of it, and so it's like the vehicle exists, like you can go see them.
So there was a big there's a big crowd.
Oh yeah, it was a big It was a big like Black Friday shopping things, a big way for Tesla to get folks into the showroom. But simultaneously, everything that Elon Musk has said about the cyber truck just like gives me the spidy sense that things are not going well. And the wonderful thing about Elon as a CEO is that he's remarkably frank, almost frank to a fault, And on the last Ernie's call, he just went on and on about how the cyber truck is going to be
really hard to make. It's going to take blood, sweat and tears to get it to volume production. He went so far as to say that they dug their own grave.
We dug our own grave of cer cyber trucks, every big tigs are gray better than themselves.
When he does say that, when he says things like we dug our own grave, which, by the way, Max, in terms of hopping on on a call with investors and saying something like that about a product you're about to release, that's pretty unusual.
No, well, I mean, I think he's trying to manage expectations because from the sort of like Tesla bowl point of view, the cyber truck has a lot of potentially You got to remember, like big picture, he Tesla has has been struggling or at least managing demand, like how much do customers really want these cars? They've sold so many model threes, And this is a car that's been on the market and model wise, the suv version of the All three, this is a car that's been on
the market for a really long time. You know, there's a potential for sort of fatigue. Right, You're basically talking about a sensible, you know, smallish car. It's not the kind of thing that people get really excited about. On top of that, you have Elon Musk kind of every day going on Twitter and saying stuff that is you know, edgy or borderline you know, racist, as we discussed earlier, and so like that. These things are all, you know,
arguably harming to demand for these cars. Meanwhile, you have this brand new design. It's really snazzy. It's in a category that you know, obviously moves a lot of numbers. Trucks are you know, bigger category than cars in the United States. So so this is like a huge opportunity, and I think Elon Musk has been trying diligently to get investors to understand that, Yeah, while he sees the opportunity, it's a long term opportunity, not something that's going to happen in the next year.
Now, Dan, when he came up with this super unique design, I think inspired in part by one of his children, what is the profile of the buyer that he had in mind? As a truck owner myself, I do not see myself changing turning in my Chevy Colorado anytime soon for a cyber truck. Who is the buyer of this vehicle?
Well, that's the big question, right. So the truck market in the United States, it's pretty formulaic. You have some big brands like the Ford F one fifty, the Chevy Silverado, and you know, trucks kind of look the same and like every new truck is basically an iteration of the very basic design with better specs, And this is like a category defining vehicle. Will the contractor who needs to like haul lumber to their job site, like drive this thing?
I don't know. I mean there's a lot of questions about what is the actual Well, we don't know the specs yet, and we don't know the range, and we don't know the price, because those are sort of big unknowns that I presume we'll get on Thursday.
When I think about trucks, I feel like I break them down and truck buyers into two categories. Those who buy trucks for the utility of them, and then those who buy trucks for the statement and the look. I don't I can't envision anybody who's a truck buyer who's looking for the utility of the vehicle it's hauling and so on and so forth, even though of course I know the cyber truck can do those things. Is looking to hey, let me get me, we when we plunk
down X amount of dollars for that thing. To me, it's almost more like your buyer is like the buyer who bought Hummers years ago.
Right.
The other thing to remember about the truck market is that like half of it is fleet sales, like you know at and t utility workers, you know, like PG. I mean, a lot of a lot of these, a lot of a lot of truck A lot of trucks are bought by corporate fleets, and so I don't think that the cyber truck is going to appeal to that buyer. So you've got sort of the consumer who's buying it as a lifestyle statement, you know, I mean, it will
have it a certain appeal. There are definitely fanboys and Tesla fans, you know, who will buy this thing, But how many how many are we talking about?
That fleet buyer is precisely to the point that fleet buyer is absolutely a utility buyer. It's it's utility of the vehicle.
Right utility buyers. You know, like if a corporation wants to buy a bunch of trucks for their contractors or their workers, they tend to want to buy them in bulk. They want to make sure that the parts are there to fix them if needed. They want to have a pretty quick turnaround time in case there's any maintenance issues, Like they are not going to be plunking down to buy this vehicle in high numbers anytime soon. And I don't even think the fleet buyer is part of the
equation at all. So it's consumers. Is it the La guy who wants to pretend that he's Mad Max on the freeways of southern California? Is it the Texas person?
You know?
And there's all these like bells and whistles that they keep talking about like it's bulletproof or you can sling an arrow at it, Like do you need that? Like does does is that something that the that the American consumer actually needs? So it's it seems like it's it's you know, they're they're obsessing about these things that like I wasn't really aware that the average American truck buyer
was crying out for a bulletproof vehicle. Like maybe maybe I'm maybe I'm an optimist about the state of the world, But yeah, who who buys this is a very interesting question. There will be buyers, no question, but I think it's gonna be pretty niche just like the Model X.
If you're reading tat turn and you're watching those SpaceX launches, you are going to buy a cyber truck. But but the truth is that is a narrow constituency. The big constituency are these kind of sensible car buyers, and that is a group he is not speaking to right now.
I have another question for you, Dan and your piece today, does indeed get at this a lot? Let's pretend indeed that demand for these vehicles is booming. And by the way, demand for vehic for EV's in general, including some EV trucks from Ford and Chevy's, kind of seems a little spotty. But let's pretend it does boom. Can they ramp and scale up output as needed to meet that demand?
Well, that's what he's warned is going to be very very slow. And I think that when Elon Musk says something's going to be hard, like listen to him, Like this guy has done this before. And what's fascinating is that it's like it's almost like they're repeating the same mistake that they made with the Model X. They've they've sort of fell on their sword and finally emitted the Model X, you know, had too much new technology that it was a victim of Tesla's own hubris. And now
here he is like audit earnings calls. Heelling investor is very clearly like, we're about to go through production hell all over again. We dug our own grave. This is a unique complex vehicle. It's going to take eighteen months till we get anywhere close to volume production. So you know, I think it'll be very interesting to see who gets these first vehicles on Thursday at the big handover event.
And then when Tesla reports sales in quarterly sales in January, like how many cyber do they deliver in the fourth quarter? Is it ten?
Oh, it's going to be very like ten?
Is it fifteen?
And you know, eventually they will get there. But it's not just the steel. It's like all these new things, like they're using their in house battery cells, it's eight hundred volt architecture, there's like an oval seering wheel, there's like you know, dynamic suspension. I mean, there's a lot of like cool things that I think are cool, but like in aggregate to make sure that all those things
cool things are working. It's just like a lot of little engineering issues that are going to continue to crop up until they smooth it out. And I mean that's what happens whenever you launch a new vehicle. It's just surprising to me that at this stage and the company's development, that they've chosen to go with the vehicle that seems to just be saddled with so many things that could go wrong.
Yeah, And it's funny because one thing we should remember is that in the Isaacson book on Musk, it came out Dana right that designers at Tessel were so freaked out by this design and so unnerved by the design that they were secretly plotting to build and design their own truck. Right.
Yeah, that was that was a big chapter in the Isaacson book. And it's it's hard not to look at this and think, Okay, this had like a focus group of one and that one person happens to be ahead of the company, like and I would love to know, like Tesla engineers if you're listening, like, did you focus group this with like tech with truck buyers in Michigan and Ohio and Texas.
Like he never must never does he never does focus groups, right.
Not usually. So if this seems like one of those things where like Elon, Elon sort of he gets obsessive about certain details, Like with the Model X, he was he had to have these Falcon wing doors and like every engineer at the company was like, oh my god, these doors are such a pain in the ass, but like Elon was insistent on them. It seems like with the cyber truck, he's like insisting on certain elements and you know, I don't know what the design discussions were like those doors.
For I gotta just remind everybody that car, the X that Dana has been talking about, it was supposed to be the Sensible, it was supposed to be the minivan, Tesla's minivan. It's a big, it's a three row kind
of hybrid suv. You know, it's for families. It was the family car, and they designed these crazy doors that like literally only appeal to like a very narrow subset of childless man, right, Like you have to be like like very versed in the you know, automotive details of sports cars and like back to the future for this to make sense, and we're kind of seeing the same thing all over again. And the crazy thing is, Dana points out, is must just acknowledge this. He's talked about
how this was a mistake. These were not things that people actually wanted. It was a mistake to sell you know, basically moms and dads on these psychotic wars.
It didn't didn't work that well.
Just look at the chart that's at our story today. It took them so long to ramp the X, and
then the X has never been a big seller. Now the Model Why is this huge hit, But the Model Why is like does not have those crazy doors and the why is awesome, Like whenever I rent a Tesla from Hurtz, I always rent a Model Y. I think it's a fantastic car, but it's like simple and so like why, Like if you're going to make a truck, if you're going to enter the highly competitive truck market, like, okay, you want it to look like a blade Runner thing, fine,
but like why adding all the bells and whistles like Musk called it like an insane. I think he called it an insane technology bandwagon, Like why complicate it for yourself? Like why make it harder?
Because he loves the challenge, I suppose to a certain degree. Let me ask you this as we wrap up here on the cyber truck. If it were to fail Dana Hall and be a bust and a flop either because the demand's not there because they can't scale it, how big a deal is it to Tesla and to Tesla's stock price?
That's a good that's a good question. I think that investors tend to be pretty forgiving of Tesla, and I think that Musk has really tempered expectations for this vehicle by going on and on the way he did on the call. So I don't know what part of the valuation of the company right now is resting on this vehicle. I don't think it's a lot.
We should probably try to just like imagine how this could work out, just just because you never know. I mean, like, maybe it turns out that some of these things that are so difficult to manufacture actually do have a lot of utility. You could imagine, right, fleets do care about paying for gas? You know, maybe a lot of these trips are short. Maybe there are ways that this is
more practical than we're anticipating. And also maybe you know, there were a lot of hummers sold in the in the ninety tons, and maybe this does capture the imagination in a way that you know, becomes a cultural icon. But then you're back to this problem of Okay, well now you have to manufacture them.
You got to if you gotta make them. Yeah, my whole thing Just just to be clear on the utility, it's not that the cyber truck doesn't have utility. It's like I've had friends who've tried to get me convinced me to buy didn't Jeep come out with some sort of gladiator the gladiator? And my point to them was very simply, I'm not going to pay the premium for the look in the statement, right, like there's a whole like hipster value to it that No, I just want
the util the truck. And so you know that what does this cyber truck even Max you're entertaining.
You're you're I was wondering when you brought up the question of who are the real truck guys versus posers? Which category you were in I'm glad to know clearly.
I'm a real truck. But what what is the price?
I mean, that's the other thing that's bananas. We don't know the price, We don't know the battery range, we don't have any real specs in terms of just like a lot of things.
Okay, so listen, find a little bonus segment here. As these cyber trucks are released into the wild, I'm gonna ask you, guys, who, among us, including our good friend Sarah Fryar, is most likely to first hop behind the wheel? Max.
I think it's me, unfortunately, just because I think I'm the only one who's willing to admit that I sometimes think about pickup trucks, and not for utility. Reason is because I think they're cool.
You want to be cool, you want to be a badass.
I want to be a cool man with a pickup truck cigar in your mouth. And this is probably a thing that Odyssey drivers, you know, just go through.
Uh mine's the twenty nineteen. Probably when you.
Get to your third or fourth year with the Odyssey, you start to think about pickup trucks.
And that's me right now, you got young kids, you still embrace that all right, Dana. If it's not Max, who is it? Or do you too say Max?
Yeah, I could see Max. I could see Max going for it. You know, it fits his brand, Mad Max gets the cyber truck. I could see him doing a story. He's going to drive across the country in it, you know, maybe take the kids slits of national parks. I could see it.
I would also say Max as well, because yeah, because he's he's just got that, he's got that desire to be cool. Well, I I out in myself as not a real truck guy. Also, this is correct and and so you know, but that is, if there are enough Max Chapkins out there in the United States of America, this thing is going to be an enormous thing, isn't it.
What's what's that old like stereotype about men having their midlife crisis and they buy is it a is it a Maserati or a Ferrari? Maybe this is the new Maybe this is the new midlife crisis car for a certain kind of man.
All right, thanks for listening to Elon Inc. And thanks to our muscologists, Dana. Max. Great to be here, Always a pleasure. This episode was produced by Stacy Wan, Naomi Shaven and Rayhan Harmansi are our senior editors. The idea for this very show also came from Rayhan. Blake Maples handles engineering, and we get special editing assistants from Jeff Grocott. Our supervising producer is Magnus Henrickson, thanks a bunch of BusinessWeek editor Joel Weber. The Elon Inc. Theme is written
and performed by Taka Yasuzawa and Alex Sugiura. Sage Bauman is the head of Bloomberg Podcast and our executive producer. If you have a minute, rate and review our show, it'll help other listeners find us. I am David Papadopolis. See you next week.