← Bulwark Takes
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- [00:00]
Ryan Seacrest
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- [00:25]
Andrew Egger
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- [00:30]
JVL
Hello everyone. I'm JVL here with my bulwark colleague Andrew Egger. And normally this is a channel for doom and gloom and all the horrors which are afflicting America right now at this moment in time. But not today. Not today, Andrew. Today we have Schadenfreude. Are you ready?
- [00:53]
Andrew Egger
Let's do it man. Let's get to it.
- [00:55]
JVL
Yesterday, Tesla held an earnings call with investors and it turns out Elon Musk's company not doing so good. Another earnings miss. Lots of, lots of bad stuff happening. For instance, the cybertruck. You're aware of the cybertruck, right? In the second quarter they sold 4300 of them. That is a 50% decline from last year. Now keep in mind, last year's Q2 number on Cybertrucks was disastrous. And so going down half from an already very, very bad sales number. Unbelievably bad. All made worse by the fact that they have scaled up production capacity for the cybertruck so that they are prepared to be doing 250,000 of these a year. Which means that their upfront costs and like all that stuff is going to have to be repurposed because they ain't never selling 20,000 of these things a year again, let alone 250,000.
- [02:12]
Andrew Egger
Can you imagine just the dystopia that we could have been living in if for some reason these happen to have catch caught some nerve in the public and be seen as like really cool. Like widely only 4,000 were sold. I feel like half of those must have been sold in Northern Virginia because I see them around now, I'm like, like what is going. Like they uglify. Not that this is like a, you know, a car show, but like they, they just make the whole environment worse. Like any landscape that one of those is in, any parking lot that you see one, it's like everything around it suffers. And it's like I've never seen a Car quite like it. It's really remarkable.
- [02:44]
JVL
Well, let me prepare you for something, Andrew, because again, this is a happy show with schadenfreude, but I do want us to be a little grounded. Twenty years from now, the hipsters of America in 2025 will be driving cybertrucks ironically. And I believe that eventually the cybertruck will become kind of a collector's item in the way that, like, certain unbelievably failed products have become. And it will be adopted as a sort of ironic pose of, oh, I went and got a cyber truck. Can you even believe it? Look at this.
- [03:27]
Andrew Egger
That's. That's like a hopeful future. That's a future where we still have, like, you know, luxury money to burn In America 20 years, 20 years down the line for. For conspicuous consumption of oddities like. Like the old cybertruck.
- [03:42]
JVL
Sure. So, okay, next item from the earnings call. Tesla had promised that it would have a new model on sale that would be its cheapest car, a brand new car by the end of June. You may have noticed, if you pay attention to automotive press, that that has not happened. There is no model. There are not even pictures of this model or details of what this model is or pricing for what this model will eventually be called. But. But Tesla did say that it plans to have them being sold soon. Is this how real car companies operate? Does Toyota say, we are going to have a new subcompact out in June, and then June comes and goes and like, the Toyota people are just like, yeah, whatever, you get it when you get it, bitches. I don't think that's how it works in this industry.
- [04:40]
Andrew Egger
Well, and this is kind of the problem with Musk. I mean, even before all of the new problems with Musk is that kind of all along, he was never really the guy who was going to necessarily excel at running, like, a real car company. Right? Like. Like being in a crowded market with a bunch of competitors at parity that he was going to need to, like, beat out by inches. I mean, like, what he has always specialized in doing and had a lot of success in doing is creating new markets, right? Like going somewhere nobody else was thinking of going, getting there first, trying to corner that market. And that's why, you know, Tesla stock went to the moon and had this unbelievable valuation, because this was the idea was kind of like, oh, I guess these are the electric cars, and electric cars are coming and pretty soon everybody's going to have one. So I guess that's going to be Tesla. Right? But then Everybody else started piling into the market, right? Everybody's. Everybody's got a hybrid or an electric car on the way. And so even before he went ketamine crazy and cooked his brain on Twitter and cooked his reputation in the White House, this was going to be a problem for him, right? And so I think, like, it would be interesting to be able to kind of hop in a time machine or, you know, the, your multiverse travel box, head over to some comparable place where he just never got involved in politics at all. And my hunch, and I think a lot of people much smarter than me about this stuff, hunch, is that he would still be having a lot of these problems, just maybe on a much less accelerated timeline and much less catastrophically.
- [06:04]
JVL
That's right. So, but the other problem is that he might not have gotten the stock left, right? Because again, like, so his valuation of Tesla shares, which we're going to get to in a minute, has been buoyed by this cult of, like, weird incels around him. And he did have to keep those people on side. So maybe the dabble in politics was part of that. I don't know. We're going to keep going. He did say yesterday that by the end of this year he would be having this new cheapy model, the Econo Tesla. It would be selling by the end of the year. I do have a question for you. If you are an investor and the CEO is saying, yes, we're going to have this thing on sale by June, and then June comes and goes, and not only is it not on sale, but you don't have pictures of it, you don't have pricing of it, you don't have any specs on what it is. And he says, yes, it'll be on sale by the end of the year. What is the rationale for believing that?
- [07:08]
Andrew Egger
I mean, this is just where the, where the kind of cult of personality comes into play, right? Because you were gesturing at it before. Elon Musk's sort of legion of fanboys are not just fans. They're not just like people who follow him on Twitter. A lot of them are retail investors who have poured a good amount of money into Tesla themselves. It's not just, you know, it's not like he just has to convince Vanguard and BlackRock and whoever else to, you know, big, big money managers and investment funds that he remains a good bet. He has this kind of like baked in, I don't know what you'd call it, this life raft of people who are bought in on the Elon project. And I don't have a good sense of where those people are. I mean, like, most of, most of the suffering that Elon has undergone has been everybody else, right? It's like it was not just those people who were purchasing Teslas back in the day. It was a lot of different kinds of people who were purchasing Teslas. So his problem is with the much broader band of society that has stopped purchasing them at a remarkable speed. But I don't have a good clock on, on kind of where the median Elon fanboy is on all this stuff, do you? I mean, are you plugged into that at all?
- [08:14]
JVL
Beats me. Beats me. So let me, let me just tick through some more things for me, some more numbers. From the presentation. From April to June, the company, the company netted $1.2 billion. This is down from $1.44 billion a year ago. Sales fell from 25.5 billion to 22.5 billion. So that's a pretty, pretty precipitous fall. Now, one of the things that's interesting in this is that Tesla has been really leaning heavily on incentives and discounting to try to move these things because people don't want to buy their cars anymore. And one of the things that the Trump administration is going to make a bunch of the things that they use to, to get people to buy cars go away. So the EV deduction of $7,500 federal deduction, that's going to be going away. And when you look at the breakdown from the numbers yesterday, what you find is that Tesla's profit margin was due entirely to its resale of carbon credits. That's it. So, you know, when we say that they had a $1.2 billion profit, we. Where did that money come from? That came from the sale of carbon credits, which is just free money that Tesla gets. One of the things Trump is doing is phasing those out. Huh. Wonder how that's going to affect the business.
- [09:36]
Andrew Egger
What a perfect storm. I mean, like, this guy was. Is still is, right? He's the richest man in the world, right? I mean, like, how far? But it's all, it's all Tesla and SpaceX stock, right? And primarily Tesla, right? It's like that's his cash cow. Can you imagine another, like, financial story like that? I mean, like the financial stories that come to my mind are the ones that just turned out to be like, totally fraudulent, like, like Theranos or something like that, right? But, but in terms of like a product that basically works the way that it has always Been pitched to work. That was totally right.
- [10:06]
JVL
The valuation was insane. Right. I mean, because Tesla's stock valuation as a company was larger than every other automaker on Earth put together. So Tesla was worth more than Toyota plus Honda plus Ford plus GM plus BMW plus Mercedes plus Stellantis. It was worth all of those things and more. And it's coming back to earth some more things. So those carbon credits revenue's already declined. They're down by half from a year earlier. Kind of a problem. They're going to keep going away. So sales have collapsed in America, but nothing like they've collapsed in Europe. And in Europe, again, things are still good for electric vehicles in Europe. The total sales of electric vehicles keep increasing every quarter. People are buying more and more and more EVs. And yet while that's happening, Tesla's sales in Europe are declining. And they were down 33% in the first half of this year in Europe, by a third. Do you know how bad things have to be for you to sell fewer items in a market where everybody's buying more of those items? That's bad. It isn't like, you know, like, well, it's been a tough quarter over in Europe and people are just cutting back on their purchases of electric cars. No, no. People like, we want me some EVs, they just don't want Teslas. And it is now the case where Tesla is no Longer the number one seller of EVs in Europe.
- [11:37]
Andrew Egger
Just to put a fine point on that as well. Again, like, even if Tesla were only kind of flatlining here, like, even if they were only significantly slowing in their growth future sales, that would still be like catastrophic financial news for this company, which. Which the entire valuation of and the entire pitch of was, we're going to go to the moon forever because we.
- [11:57]
JVL
Have a car and we'll be a monopoly. The only cars anybody buys will be Teslas. Yeah, okay.
- [12:03]
Andrew Egger
And instead we live in this world where not only was that never going to be true, but also he, you know, brought Judgment Day down on himself much more quickly than for all the reasons that we have discussed in terms of, like, just destroying the brand and all that stuff.
- [12:19]
JVL
You gotta bring the girls in.
- [12:21]
Andrew Egger
I know.
- [12:21]
JVL
I think put the girls on camera.
- [12:23]
Andrew Egger
No, this goes to YouTube. I think the girls could stay off.
- [12:26]
JVL
I know. We should keep them off camera. All right, so last thing. So this is an earnings call in which Musk is just laying out loads and loads of bad news. Everything's going sideways, the company's in trouble. He says that they could be in for probably, probably could have a rough few quarters until the robo taxis begin generating profits next year. Robo taxis, which haven't even been proven safe yet, they've got like 10 of them running around in, in Austin and anyway, unimportant. But next year the robo taxi money boy that's going to be making it rain now. But Musk then said at the end of the call that he believes that Tesla and the board of directors should grant him more shares of the company above and beyond the 13% that he owns. I'm just going to read the quote. I hope that this is addressed to the next year's meeting. He said, I have so little control, I could easily be asked to buy activist shareholders. The guy who's running the company into the ground believes that the company should give him more shares so he can have more control so that nobody could stop him from running it into the ground. Yay, capitalism. Because let me tell you, Andrew, the board of directors is going to give it to him.
- [13:46]
Andrew Egger
Yeah, maybe. I mean, in a certain sense, couldn't you argue that the system works, right? I mean like, this is, this is one of the most like insane, ludicrous, like out there blips in the whole market, right? I mean, like for all the reasons we discussed, the weird cult of personality around the guy, and yet here comes the correction, right? I mean, unless something changes, this is not a, this is not going to be looking like one of the big success stories of, of the auto industry or, you know, US Markets or something like that for the next five or ten years. Unless, you know, maybe Elon, maybe he's, maybe he's the smart one and we're the idiots and we're going to look back on this video and be like, oh man. But I kind of doubt it. You know what, jbl, I'm not, I'm not. Can I talk, can I say one more thing on that Robotax thing? Because that's so, like, that is so funny to me. Like, this is how you can tell he's really scraping the bottom of the barrel idea wise. Because this is not the kind of market that we were talking about before where he's like on the cutting edge of this and is going to like make bank while everybody else rushes to catch up. He is already chasing Google, chasing Waymo.
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JVL
He's behind.
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Andrew Egger
Yeah, he's way behind.
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JVL
Way behind.
- [14:47]
Andrew Egger
Waymo has been. I mean, what's the number? I mean, I read this a week or so ago, like some astonishing number of like total miles Driven and they're self driving taxis that are deployed in all kinds of cities. You know they will have problems scaling but like they're already, already like the problems that are facing Waymo are like, all right, it works great in Phoenix. How are we going to get it working in Seattle where it's wetter and like, you know, it's, you know, there's all kinds of these new problems. They're already getting to like that stage where they just have to like triage for like individual location problems. Tesla's, these robo taxis, they're not even, they don't exist yet. They're not off the ground and over Elon's shoulder. He's not even that far ahead of the other people who are trying to pile into the market. Uber just put in a, a massive new investment. Uber, which obviously is way ahead of Tesla in the ride sharing game on its own because of its own whole, whole thing that it's been doing for decades now. So it's just if he is having to reach for that as like the silver bullet that's going to put all of this right, it is, it is really bad and he knows it's really bad.
- [15:48]
JVL
Well, don't worry because once it becomes clear that the robo taxis aren't going to succeed, everything will be a pivot to Xai and then it will be actually the robo. Actually, actually the robo taxis don't matter. What they really matters is X AI and that's where we're going to grok. Grok. Grok. Grok.
- [16:07]
Andrew Egger
Robo taxis out. Mecca Hitler in. That's the name.
- [16:10]
JVL
Mecca Hitler in. I it couldn't happen to a nicer human being. And but I will give him credit, one thing he was very right about this quarter was that the President United States seems to be involved in the Epstein list. And so you know what? I want to give Elon credit where.
- [16:27]
Andrew Egger
It'S due, right on the money, total vindication. He tweeted that like two weeks or something like that after Pam Bondi apparently according to the Wall Street Journal told Trump that he was in there. So yeah, I guess maybe he was a fly on the wall for that meeting and I guess maybe they would have been glad to keep him out if only the relationship had fallen apart a little sooner. I'm sure Donald Trump is thinking to.
- [16:47]
JVL
Himself, good luck America.
- [17:12]
Ryan Seacrest
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- [17:37]
Andrew Egger
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