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Let me tell you we have a new star. A star is born.
Elon comed up on mars Juson Kennemy.
He is the Thomas Edison plus plus plus of our age.
Probably 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, they are up in four post.
We're meant for great things in the United States of America, and Elon reminds us of that.
We don't have a fourth branch of governments called Elon Musk.
Welcome to elan Ink, Bloomberg's weekly podcast about Elon Musket's Tuesday, April eighth. I'm your host, David Popotopolis. Now Here at Bloomberg, the news has been dominated by last week's tariff announcements. They've upended markets, sparked of imported olive oil and iPhones, and created the first major policy rift between Musk and
President Donald Trump. All the CEOs in America, Musk, the White House first buddy, has arguably been the loudest critic of Trump's tariffs, like calling Trump's trade architect a quote total moron, kind of loud. A very dangerous game here with very high stakes. So we'll get into what the tariffs mean for Musk's many businesses and then talk about the political fall and the potential beginning of the end for Doge. As always, I'm joined by our regulars, Dana
Hull and Max Chafkin. Dana, Hello there, Hey, hey, hey, and Max how are you hey? David, how are you doing? Excellent? Okay? And Craig Trudell, our global autozar, is on to talk tariff nitty gritty Craig, welcome, thanks for having me. And later on Nancy Cook, a senior reporter in Washington, will hop on to talk politics with us. Before we talked tariffs for one second, Max, I listened to the debut last week of your new podcast, Did you wow Everybody's Business? I thought it was great.
Yeah, Everybody's Business. We had our first episode on Friday. If you didn't listen, it is a weekly show in which myself and Stacey Mannix Smith, who's a wonderful financial journalist, a longtime reporter, talked through the news of the week and what it means it's going to be in this feed. The elon ink feed every Friday for the next few weeks, and then eventually if David, if you like it, we'll
move to our own feed and you can subscribe. And we did get into the tariff talk last week in a big way.
All right, there are other things to talk about besides everybody's business, like the tariffs, Craig Chudell. They were announced last Wednesday, shocked, I think just about everybody. Markets collapsed, tesla'st collapsed, everybody up in arms. I will note at here as we record Tuesday morning, markets are relief, rebounding a little bit, but still a whole lot of anxiety
out there. Craig, tell us exactly how you expect this to affect the price of Tesla vehicles and how it will affect their operations.
Well, so, I think we should start by talking about, you know, acknowledging the fact that Tesla does sort of lay claim to having the most you know, sort of American made cars.
And they do this in large part.
There's a an annual study that this group at cars dot Com does. It's called the American Made Index. They look not just at the final assembly locations for vehicles, but also parts content, and I think, you know, I've sort of actually taken a closer look at the most
recent index that cars dot Com release. One of the things that I found so interesting is that one of the ways that they sort of one of the inputs for this data is actually from a US law where they include Canadian content along with US content as a measure of americanness. That speaks to just, you know, just how crazy the last few weeks have been for this industry.
That you know, it was a given that you know, in the past and since nineteen ninety four, when you look at, you know, a window sticker on a car for what percentage of the parts content for that vehicle is quote unquote made in America, Canada gets thrown in there. That that speaks to just how international this industry is.
Well, and it also, I suppose speaks to how, of course America is more than the United States. You know, it's America and the broadest sense of America. Yeah, And it was just it is what is America? What is America? Canada was always just assume it was just part of US. It was all just one big market. And this trade war is so vast that even that is very very very much in doubt.
Yeah, it's up in the air.
And so, you know, I think while Tesla was coming into this trade war from a sort of relative point of strength in the fact that, you know, the vehicles that they sell in the US, they make in the US, they don't entirely have a US supply chain, and they acknowledge that themselves back in March, in March eleventh, they sent a letter to the Trump administration where they said, you know, even with the aggressive localization of their supply chain,
there are certain parts and components that are, in their words, difficult or impossible to source within.
The United States.
And an instance of there not being any winners in this trade war for the auto industry, that there may be sort of you know, relative losers in terms of who's losing the most.
But Tesla absolutely is being hit by this.
And I think there's also real concern about sort of second order effects here that when the US puts tariffs on other parts of the world, that Tesla will be sort of caught up in the crossfire, that they will be targeted as a result of these tariffs.
Yeah, and especially if China. I mean, I think the big thing to think about with regards to Tesla is on the one hand, they have really worked very hard to localize their supply chain in every country where they sell vehicles. But on the other hand, they are very exposed in China, which accounts for roughly twenty percent of
their sales. And if the trade war escalates with China, like you could see this big knockoff effect where like the Chinese government encourages people to not buy Tesla's and to buy domestic suppliers.
You know, conventional wisdom around tariffs, and Tesla has been that, like Craig is saying that it's going to be the least big loser among car companies. I have to say, as I've watched Elon mus react to these tariffs.
It's giving me reason to doubt.
I am wondering how much we should credit this cars dot Com list in the first place. And you know, looking at the methodology, it seems like they count the number of parts and then divide how many of those parts come from these It's the.
Same mathematical formula they used to set the terror It just.
Sounds I'm just saying, are we sure that there are not big unknown vulnerabilities in Tesla's supply chain? That maybe people are are not considering or underrating battery components in particular, that is a business that China has long dominated. I know that Tesla has has battery making in the US, but I have to say, like watching Elon Musk react to this stuff, just it does not look like a guy who's approprating from a position of strength.
I see, I see so certainly very possible. I mean, his protestations have indeed been very very loud. But Craig, I'm to go back to the beginning and the first question I asked you, because you tap danced around it, you can't trick me, pal. Are there car prices going up already? And if not, how soon do we expect them to go up? If at all?
We have not seen Tesla make moves to its vehicle prices on its website, and I do think that that will be something that we ought to watch over the next you know, a few weeks in the sense that they are very different from the rest of the industry. Right where the manufacturers suggested retail prices you know, tend to be kept pretty static by the rest of the industry. Other automakers, they don't, you know, sort of mess around
with MSRPs. Tesla is very different in that, you know, and we saw that coming out of the pandemic right where or early on in the pandemic, we saw them jack up prices in this is very open way along with the rest of the industry, where because everybody was production constrained.
Let me pause there for a second, So you're saying that when we had the last major supply shock, which is essentially what this is. These tariffs are a supply side shock, Tesla was the first and the most aggressive in jacking up prices of the major automakers.
I think they were.
They were both aggressive and the way that they moved, but also just much more open where because they don't have a dealer base, because they don't have dealers and independent retailers who in the end get to go with the manufacturers suggested retail price are not.
They set their own prices.
And they do so very openly for everyone to see on their website, and so they're unique. And yeah, you know, just as Musk is loud and the way he protests and the way he does virtually everything, Tesla is very loud and how they set their prices. I also think, you know, whereas other manufacturers may have, you know, no
choice but to jack up prices. I do wonder how much you know, sort of ability Tesla has to use pricing power, given the fact that they really, you know, have started from such a hole in terms of you know, the first quarter delivery numbers that they reported last week were awful, and you know, they were off of a awful base a year ago. So for them to start the year by saying, you know, we expect to return to growth, they've really got to sort of you know, move.
The metal this year.
And will we see them keeping pricing steady and eating these tariffs.
More so than other carmakers.
Okay, we are going to leave the teriff side of this for here, at least the mechanical and the nitty gritti sid of the teriff side. Here, Craig driudell as always, sir, thank you for joining us.
Thanks chuys.
Oh and by the way, Craig, shout as soon as you see price increases, if you do see them.
Absolutely, thanks gus.
Awesome man. Okay, we're now joined by Nancy Cook, a senior correspondent for US in Washington. Nancy, Hello, thanks for having me. Okay, now, So, Nancy, as I got it say, it seems as I watched the ixing and the posting on social media, it seems to be getting pretty hot and heavy right now between Elon Musk and several members of the Trump inner circle, in particular with one Peter Navarro. Navarro, of course, helped steer Trump to these very aggressive tariffs,
Musk is dead set against them. Tell us, how do you see this playing out and what does it look like up close and personal there in DC.
Well, so, I think that what is happening is that Elon musk time in the White House is coming to an end, and you know he is going to leave, you know, roughly at the one hundred and thirty day mark. How the White House Counsel's Office kind of calculates that is still up for grubs, but we're expecting him to leave around May or June. You know, he has driven a lot of White House aids nuts and has stepped on a lot of toes. And I think you know now that Trump is also previewing that he's going to
be leaving. I just think that everything, things that were happening behind the scenes are sort of spilling out into the open. A bit more.
And when you say he's driving members of the inner circle nuts, who and exactly how is that playing it? What does that look like?
So what has happened is that I think people have been very cautious around him. A lot of Trump sort of people in the White House but also advisors and allies around him have been very cautious.
But when you say cautious, seem me like fearful.
Fearful exactly. That's a good word, better word. They have been fearful to criticize Musk because he was like Trump's bff for a long time and sort of still is around all the time. You know, he was at Mar A Lago, he was kind of like living down there, but also in DC. He was on Air Force one
all the time. He had given so much money to the campaign, And it was funny because I would make all these calls to you know, Trump people when Elon first really stowed up in the White House and was doing all these dotge cuts, and people were so fearful to kind of say anything negative about him, even on background. And I do think that that has changed a little bit.
You know, they take their cues from the President. I think, you know, President Trump still is, I think, on pretty good terms with Elon, but is starting, I think to see that he has is becoming at a little bit of a political liability. And Trump himself has sort of said Elon is going to be leaving, like this is not a permanent thing, and so the aids are taking their cues from him.
So, Nathan, when you say your sources, people close to Trump were so fearful of Elon they wouldn't even you know, talk about him or throw shade, I should say at him on background, they are doing so now I think.
They're just they're not as fearful as they once were. They are tired of him. He has worn out his welcome. You know, they lost that key state Supreme Court race.
Remind our listeners a little bit about that for a minute.
So I think Elon's been driving people in the White House crazy for months, and you know, all these doze things were you know, viewed as things that he sort of did, you know, without vetting them with the White House, sort of went ahead and charged ahead. And so a real test case of his standing in Trump world was with this, you know, state Supreme Court seat in Wisconsin.
Elon was out there campaigning the weekend before, he raised a bunch of money to try to you know, in the race to back his candidate, and they lost and it was, you know, an embarrassment. And I do think Trump world right now, like the people immediately around Trump are very political people. And so that is led by his chief of staff, Susie Wilds, who is like a longtime political operative. Trump calls her the ice Maiden. You know, she looks sort of grandmotherly, but but do not fall
for that. You know, she is a tough woman. Trump loves her, the family loves her, and.
She's really into like as like a political person. She's really into like message discipline and I think that and like running like a disciplined political operation. And the thing that people need to learn very quickly about Elon is he is not disciplined. I mean, he will post at all hours, he will wildly cream from one position to another. He will be off message, he will be at odds
with the Trump administration. And you're seeing that play out in real time today with what he's saying about Peter Navarro, who is like the lead person along with Lutnik on this whole tariff issue. So that's got to be causing more consternation internally.
Yeah, you know, Max as Dennis saying here, Musk was out this morning hammering Navarro, hammering him.
I don't even know if I could say I believe he called Peter Navarro Peter Retardo.
I didn't see that one. He called him a total moron. No no, no, no, truly a more truly a moron, excuse me, and that what he says here is demonstrably false. He also says apparently that he is dumber than a sack of bricks. So yeah, I'm guessing at Susie wilds ain't loving now I was.
I want to add a point out that, just I believe it was a week ago or a week and a half ago, Elon Musk was in a cabinet meeting wearing a hat that said Trump was right about everything.
That was different than the cheese had had that was.
It was it was not shaped like a wedge of cheese. It was shaped like a normal baseball cap. So huge, huge difference there. So Dan is right like Elon Musk, He's an impulsive guy. I think the inciting thing here, beyond just the tariffs and the fact that that is hurting his business. But we know for a fact that Elon Musk is willing to accept some pain, some business
pain on behalf of Donald Trump. But Navarro went on, I can't remember, I think it was CNBC and he was asked a question about this, and he said that Tesla is not an American auto manufacturer, It's an American assembler, which is the worst thing you could say to Elon. I cannot imagine a worse like something that would hurt Elon Musk more than that. Number one, because he he values being a manufacturer.
But number two, there is just the faintest kernel of truth to.
That statement, because Tesla is modeled after these consumer electronics companies.
Car similar is DEM's fighting words. I know, look you're saying to his face, and don't call me a car similar either, But I gotta say, like, you know, Elon doesn't even want the cars really to be about the hardware. They're all about the software, which is which is what is really the other big dig right. It's like, no, I'm some great, you know, brilliant, you know, technologist, And so I suppose that's what really is is part of what's got him calling Navarro Trulia moron and a set
dumber than a sack of bricks. Okay, so, Nancy, we've established that he's warring with Peter Navarro. Who are his other big enemies? As do you understand it there in and around that White House?
I mean, I think he's made everyone mad. Like we don't need to name names. I think you could just say, like the waterfront of top White House, aids have been annoyed by Elon or gotten into it with him, or been disappointed by his lack of message discipline, or how he's gone and done things with Doje that they didn't know about ahead of time. I mean, it has just been a problem, and people have been fearful to say anything. And I think that you know, what's happening with Navarro
and Musk. It's interesting, you know. Navarro is like one of the most people who escalates, goes from like zero to one hundred faster than anyone I've ever seen. You know, in the first Trump term, he really got into it with like you know, Republicans on Capitol Hill, they hated him, you know, people in the White House hated him. But he went to jail for four months for defying a subpoena.
And you cannot underestimate in Trump's mind how much that demonstrated his loyalty and the currents that he has in the West wing because of that, I think Peter Navarro is at the apex of his power right now. Whether that last, we'll see. But with these tariffs, he's really at a height of power, and for Elon to be picking a fight with him, it is just like, not good for Elon.
I gotcha, No, that's fantastic stuff. I had forgotten about that time in jail he did. So let me ask you this, though, are you saying that your sense is that loyalty that I'm willing to spend time in the clink loyalty is worth more to Trump than Elon Musk's money.
I mean, I wouldn't put it that way, but I just say, like, Musk is messing with someone who, in Trump's mind, is like just on this high perch because of the jail time, and it's just probably not a good fight to pick.
Now.
Is Trump going to exile Elon? Nope, because he wants that money for the midterms. Republicans will need that money for the midterms. But I think that my sense is that I think Trump's inner circle hopes that Elon just goes away after you know, May or June, late May or June. He can still be a friend of the White House. You know, he'll still be able to come into the West Wing. You know, maybe once or twice a week he'll show up at mar A Lago. No one thinks he's going away. Doge is there to stay.
They're going to stay in the agencies. But I think that people are hoping maybe Doge is like less of a lightning rod for Democrats if Musk himself is not like jumping up on stage all the time, or with Trump all the time, or at mar A Lago, sort of like in this Buddy Cop movie.
I totally agree.
I think, like it's not that it's not that Musk is not going to be in Trump's orbit or whatever. It's just it's just like a mutual away that they can mutually take a step away from one another. I will say this Wisconsin race, like, I don't think we can. I don't think you'd be right to blame Elon Musk for like losing the race.
Filon Musk is you can extract that variable from the whole picture. The Dems still win.
I don't think we would be surprised if the Dems had won even without Elon.
Musk being such a factory.
But listen, like it's a low turnout election and then you know, like there been there are historical examples like like this where the candidate who just who just lost the presidency overperforms in a special lee.
But I'm distracting you, But it's just.
Like Nancy's right, Like Elon's big value to Trump is the mid term is like putting I don't know, hundreds of millions of dollars into midterm elections and then using the thread of that to intimidate like like other Republicans into kind of falling in line. We just saw Elon Musk put a huge amount of money like basically press the button as hard as he could for the Republican candidate, and and like nothing happened, right, Like like that's the best case.
I mean nothing. I think something happened. I think he drove right, maybe he even made it worse.
And so like the value of Elon Musk's presence is probably lower than it has been at any point because we're seeing Musk create all of these scandals. You know, he goes on Twitter and makes a Nazi joke, right, like that is not what that wasn't on you know, Susie Wiles's like plan for the week or whatever, and his money just is not moving the needle, or maybe
is moving the needle in the wrong direction. So like there are reasons why, like somebody like Navarro would feel comfortable like going on TV and saying something that is not like one hundred percent laudatory of Elon Musk or privately, maybe you're seeing people in Trump's inner circle starting to let things slip about how they truly feel.
I think originally with with Doge, like Elon was the public face of Doze, and he was like the buffer, like he absorbed the blast radius. Right, So like as people got upset about Doge, as you know, as government workers and lawsuits were filed, like Elon absorbed the blast. But now, like his his brand is so toxic nationally that like it's no longer an asset to have him
so closely aligned. And you saw that in Wisconsin, and you saw that this weekend where there were massive protests like not just in New York City but in like Utah and Montana and in red states of people protesting
Trump and Musk. I mean, so many of the signs that people were caring were about Musk and about Doge, and like that's got to have impact because they're seeing now like, oh, you know, like we thought, like we thought we were going to like waltz into the midterms with all of this advantage and that we were gonna have delivered all this stuff for the American people. And
you're also seeing like Kimball Musk, Elon's younger. No, I'm sorry, I mean I meant like also like chiming in about how the tariffs are a bad idea, and Bill Ackman, I mean like all the billionaire the billionaires are not happy about this.
Drunk the billionaires. But I mean, I don't know. I do feel like, though, Max, it is pretty insane that while Acman's out there and Jamie Diamond of JP Morgan started to make some comments and the Drunke and Miller stand Druck and Millers and others are saying things. Man, I don't know that anyone's making a bigger fuss about the tariffs than Elon Musk than the first buddy, And if you think about it, that's kind of crazy.
I mean, I don't think that's totally true. There are lots of people who are mad about.
The No no, no, no, I'm sorry I misspoke of major CEOs of major American companies or you know, and actually forget about Acman and druck A Miiller because they're not really CEOs of a major American companies. I mean, Jamie Diamond said some words yesterday. Then we're exactly fighting words. I mean, Elon Musk is calling the chief architect of these tariffs a moron and dumber than a second David.
That's that's that's because he was.
Just like normal, got to watch stuff, David. He's got to.
Wind it back like that's like, because if Navarro hadn't said what he said about Tesla being an assent maker, I don't.
Think so let's wind okay, let's wind investigating that for terrorism actually, but let's wind it back before then the car assembler comment, what did had Musk said to prompt Navarro to say that? What did? What did? What Musk had been saying was these tariffs are a crap idea.
No, and he had he had very gently criticized it. He had said Tesla had written a letter not from Elon Musk, but from the company just warning about retaliation, which is not exactly the same thing as saying the tariffs are bad. And Musk had said had in response to some stories maybe two weeks ago, essentially saying that Musk that Tesla was the best positioned automaker, basically a
reply tweet that said we are not unaffected. So he had he had pushed back, but like he was not the Navarro thing is what has been the real Like Spark, I want to just say, to the point about protests, it's not just nationwide protests. He has also oh lost
the gamers. So he went on a live stream recently in the last couple of days, and I guess now I'm reading this in a blog called futurism, so perhaps they're cherry picking quotes, but there are a lot of quotes from these gamers on Elon Musk's own live stream that were very negative. People you know, say he had no friends, siding with his strange daughter. Just kind of an ugly scene, even in a domain where like Elon Musk, you know, might otherwise expect to have mastery.
He's losing friends and allies everywhere right now as we speak, I will note though, Nancy that and I'm going to bring this up in a large part to try to refute Max and Dana here, who are feuding with me right now. Senator Ted Cruz yesterday really imploring President Donald Trump to listen to the better angel perched on his shoulder, that being Elon Musk. Does Musk actually have the President's
ear on this topic right now? I mean, certainly, looking at the facts, looking at the things that are coming out of Trump's mouth and the things he's doing, the answer would seem to be no. But is there any kind of line of communication on this one issue?
I mean, Musk spend so much time with Trump and you know, has to cell phone and you know, talks to him all the time. But my reporting shows that, you know, he's not in these like final meetings about the tariffs. You know that group is that there was a dinner at mar A Lago the Friday night before they put out the tariffs. I'm like losing track of time.
I guess this is classic and we all are and we're in Trump time now.
Right, We're in Trump time. But like Lutnik was there, Howard Lutnik, for instance, the Commerce Secretary Scott Besson, the Treasury Secretary, was there. I have no reporting that suggests Elon Musk was there at that dinner or like in these final White House meetings about what they should do about the tariffs. And granted this was a contentious issue and there was differing views among Trump's economic aids. You know,
Elon Musk was not in those meetings. And so of course he has influence, Like you know, one Trump person told me, you know, he will always have influence. He will always be able to access the West wing. You know, he will always be able to call Trump. Trump is impressed by the fact that he's a billionaire, you know, loves that brand name support. But but no, he was not like in the core group of people deciding what the tariffs were going to look like and going back and forth on them.
I wonder how this would be playing out if if Tesla were doing a little bit better, if they weren't having these serious demand challenges, if the stock wasn't there had fallen by fifty percent. Elon Musk had lots of opportunity during the campaign to you know, like like you go back and listen to those X spaces he had, Like he didn't bring up the tariffs as a potential point of contention. I'm not sure if he even saw them as a potential point of contention back then.
And so you think that's because he didn't think they were going to be a big issue, or he too was blindsided by the nature of these terrors. I think.
I think think it's a combination of him, like many business leaders sort of not expecting Trump to take such a hard line here, expecting what basically Trump one point zero, the kind of more restrained version of Donald Trump. And I think it's also that he just felt like he
was in a position of much greater strength. I mean, his his position has just gotten so much weaker over the past few months, and like you look at Tesla's market value, you look at the demand, you look at these protests, like he is just under a threat in a way that I don't think he anticipated. I think he thought that this was going to go a lot differently than it has gone.
And also I'll just chime in, like I also think Trump has changed as a leader since he was president the first time. I think he is more self assured. He cares a lot less what people think, and a lot less like what the world thinks. You know, he used to view the stock market as a barometer, like almost like an approval rating poll. I don't think he cares that much anymore. You know, he's not running for reelection. I just think he is much more confident making decisions
and letting the chips fall where they may. And also I think he's interested in a very small group of people's opinions. You know, donors and Wall Street people are largely freaking out about the tariffs. And I talked to one person yesterday. He was like, yeah, donors could call him, but there's like a very small circle of people who he would actually listen to on this, And I'm just not sure you would listen to Elon.
Well, no, he's not so far listen. I wanted to ask this because Doze briefly came up here and I'm wondering, Nancy, what of Doze? As I've been asking periodically the last few weeks. It's from Afar. It seems to be petering out a little bit and losing momentum. Is that true? Or is it just going on and beavering away and doing its things? What do you mean?
What?
I'm sorry, what do you mean petering? Out and losing moments. Federal workers are still getting fined.
Like, what are they the savings? I thought the saving they had one hundred billion they were reporting in savings in the first two weeks. What's that number up to now?
You know, I'm not tracking that that closely, like what the savings are. But I will say DOGE is not going anywhere, and people in the White House have made that clear to me. So there are still DOGE people embedded in tons of the agencies. They're still doing work to sort of, you know, they say, make the tech systems more efficient, but also define savings. They just put out another email at some agencies and then other people at other agencies are getting it, sort of offering like
the second fork in the road, bigger buyout packages. I think more federal employees are thinking about taking it. So DOGE lives on, and I think will live past Elon. It just may not have sort of the controversial frontman
that it had before. But there are other people in the administration who want to shrink the size of the federal government, like Russ Vote, who's the head of the OMBE, Like they haven't He doesn't necessarily like the way that Elon's gone about doing it, but there are other people in the Trump orbit who are interested in cutting the guvernant way down.
So it's like a dessert fork or a fish fork instead of the main course forks.
Nancy, do you think that the tariff dispute is going to be like the undoing between Musk and Trump or was it already sort of underway post Wisconsin?
I think it was already frame. This is just another data.
Point, Max, Dana, Nancy, thanks for joining.
Me, Thanks for having me.
Thank you great to be here. This episode was produced by Stacy Wong. Anna Masirakis is our editor and Rayhan Harmansi our senior editor. The idea for this very show also came from Rayhun Blake Maples handles engineering, and Dave Purcell fact checks. Our supervising producers Magnus Henrickson. The Elining theme is written and performed by take Yasuzawa and Alex Sugi Eerra. Brendan Francis Newnham is our executive producer, and Sage Bauman is the head of Bloomberg Podcasts. A big
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