
Tesla woes continue & Amazon wants to listen to everything
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Kyle Hagee
Foreign.
Neal Freyman
Brew Daily Show. I'm Neal Freyman.
Kyle Hagee
And I'm Kyle Hagee.
Neal Freyman
Today, Elon Musk says things at Tesla could go from bad to worse.
Kyle Hagee
And Amazon buys a company that listens to everything you're saying. Today is Thursday, July 24th. Let's ride.
Neal Freyman
Toby's out for the rest of the week at a bachelor party. Turns out he has friends besides me. Yeah, well, all good, because the fantastic Kyle is here to help take us into this summer weekend. Kyle, did you play Little League growing up?
Kyle Hagee
You know, look at me. Of course I played Little League growing up.
Neal Freyman
Okay, so you know how intense it can get. But one controversy has caught national attention this week. A 12 year old playing for a New Jersey town was suspended. Suspended from the state finals because he had bat flipped after hitting a home run in the previous game. He was ejected and suspended for violating Little League's rule for no horseplay and unsportsmanlike conduct. But the dad isn't going down without a fight. Filing an emergency temporary restraining order in court to overturn the suspension. Saying that Little League promotes bat flipping all over the website and social media platforms. So it's hypocritical that they'd suspend defend someone for doing that. Kyle, if there's one kind of person you don't want to be on the wrong side of, it is a Little League dad.
Kyle Hagee
It's so true. And I played myself, but I was not good. So I never had the opportunity to flip a bat after a home run. I would flip a bat after a strikeout. Maybe that is allowed. I'm not sure. But I feel like if you hit a home run, you should flip the bat. That's my take.
Neal Freyman
Okay. I mean, Little League is trying to promote sportsmanship here. I think most public opinion says this is quite egregious. We'll see what the court says. And if this kid can can play in the state finals, I want to mention this is a very competitive league and town. They're trying to go to the Little League World Series in Williams Sport. So I think that's another reason why it's sort of got national headlines.
Kyle Hagee
I stand with the kid.
Neal Freyman
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Kyle Hagee
I love a good screwdriver.
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Kyle Hagee
Tesla to a Supercharger because the company is looking a little low energy during its latest earnings report, the EV company reported a double digit drop in adjusted earnings for the second quarter and a record sales drop in the same period. Sales went from 25.5 billion in Q2 of 2024 to 22.5 billion in Q2 of this year. The company's adjusted net income, which is a key number, Wall street focus fell $419 million from one year ago to 1.4 billion. That's a 23% drop. The aforementioned sales weakness has been attributed both to backlash from Elon Musk's foray into politics, as well as increased competition in the global EV space, especially from automakers in China like By D. In addition, the recently passed one big beautiful bill was basically a giant Yield sign on Tesla's road to continued to growth. The bill forces a $7500 tax credit for US EV buyers to expire in October, and it eliminates the market for regulatory credit sales, which has fed $11 billion to the company's bottom line since 2019. This market allowed for some gas powered carmakers to buy emissions credits from Tesla since its EVs came in below emission limits to avoid paying a fine. And Tesla would have lost money in the first three months of the year without its revenue from selling those credits. Now it wouldn't be a Tesla's earnings report without Elon Musk promising that some groundbreaking technology is right around the corner. He focused some of his remarks on Autonomy, both of the Tesla Robotaxi service and Optimus, their humanoid robot. Musk said, quote, autonomy is the story. It amplifies the value to stratospheric levels and said that these technologies will make Tesla the most valuable company in the world by far. Neil Elon's prediction is quite ambitious, but it always has been. What stood out to you about the recent Tesla numbers?
Neal Freyman
Well, we knew this was going to be a bad earnings report because Tesla already reported its Delivery numbers for Q2. This is for its traditional EV business, which it doesn't really want to talk about anymore. That was a 13.5% drop year over year. Investors did not like what they heard on this earnings report. They're not sort of buying Elon's vision for the future. 100%. The stock was down more than 6% in after hours trading. Amid all of the optimism about autonomy and humanoid robots, Musk also warned, he said on the call, we probably could have a few rough quarters, but once you get to autonomy at scale in the second half of next year, certainly by the end of next year, I would be surprised if Tesla's economics are not very compelling. What I'm hearing from that is that Tesla's economics are not going to be compelling at all for at least the next year. And a large reason for that is what you mentioned. These regulatory credits are going away. That was basically pure profit for Tesla because they don't have to make anything. They just sold because they make EVs. They just sold these credits to other automakers. They made $1.8 billion last over the entire 2024 from these credits. And now that's going to go to zero. And then the 70$500 consumer credit is also going away. Those are more headwinds in addition to the many challenges that Tesla is facing in its traditional EV manufacturing business.
Kyle Hagee
Yeah, and there' it's been much covered, but a decent sense of irony for Musk supporting the Trump administration so much during the campaign. And then the one big beautiful bill coming in and really hurting a pure profit play for Tesla. The stock has been on a hell of a run though in the company over the last 18 months. It's kind of started to go a little downhill. But before that there was only one quarterly year over year sales drop for the company before 2024. That quarter was at the height of the COVID 19 pandemic. So an incredible run for the company. And it's a bit of like a meme stock plus an actual valuable product. And I think Elon and maybe the cult of personality has built a really loyal base of investors. And so it's tough to maybe disaggregate the stock price from how the company is performing. The other thing I want to say is you mentioned this earlier. The play might not be for EVs but for other elements inside of Tesla. Tesla's core business, auto auto revenue fell 16% from April to June, but overall revenue dropped less than that. It fell 12%. This company is now slowly maybe becoming a bet on AI, a bet on energy, a bet on Autonomy. And if they can make that pivot, maybe they can continue to see the growth this company's had in the past.
Neal Freyman
Yeah, that's what Elon is promising. They did have a robo taxi rollout in Austin that investors were anxiously awaiting. That happened last month. That went okay. They didn't provide many details on it on the earnings report, which is probably one of the reasons the stock dropped more than 6%. El says that they're going talking with a bunch of other cities and states to roll out this robotaxi service from Austin to places like the Bay Area, Phoenix, other hotspots. But there's also a lot of competition there. Waymo is in all of those places as well. The future of this company, as Elon says, as everyone says, is autonomy. The faster they can get there, the faster they can perhaps stop the bleeding. Global markets rejoice yesterday after President Trump announced Tuesday night that the US And Japan had secured a trade deal. The biggest fish reeled in yet on the admin quest to seal agreements with major trading partners before higher tariffs kick in. On August 1, Japan's Nikkei index shot up 3.5%, Toyota climbed 14%, and other Japanese automakers, including Honda, Subaru and Mazda, posted double digit gains. US Stocks closed higher on hopes that the US Japan understanding would grease the wheels for more agreements to come. So what's in this trade deal? Thankfully not Shohei Ohtani. He gets to stay here. The headline is the US will place a 15% tariff on Japanese exports, a lower rate than the 25% that Trump had threatened. And crucially, tariffs on Japanese cars and auto parts, which had been at 25%, will be lowered to 15% in line with other goods, which is why you saw those auto stocks pop yesterday. Vehicles had been a major sticking point during negotiations because of how important they are to Japan's economy and its export base. Around 80% of Japan's trade surplus with the US is in cars and auto parts. In exchange, Japan pledged to invest $550 billion into the U.S. and while the details are scarce, it looks like this investment will take the form of a sovereign wealth fund type vehicle that will finance projects in America. Handpicked by Trump, Japan has also agreed to open more of its markets to US Vehicles and rice. All in all, analysts viewed this agreement as an optimistic sign that the US Would come to terms with with other trading partners, particularly the eu, before those higher reciprocal tariffs go into effect next week. At the same time, it also establishes a 15% tariff as the effective baseline for negotiations, which is much, much higher than tariffs on Japan before. It was 1.6% previously.
Kyle Hagee
Yeah, this was really big news, obviously, and I see the sizzle. I want to see some of the stake when it comes to the details, particularly of this $550 billion investment in the US during the negotiations, the administration had this big card that was outlining what they were going to get from it. Originally it said 400 billion. Someone had crossed it out and wrote 500 billion. And then Trump on Truth Social put 550 billion. So I want to know what the actual number is. And then there's some, I think, disagreements around what makes up that investment pool. Is it Japan just giving us $550 billion? Trump called it, quote, a signing bonus. At an AI summit on Wednesday. Andy La Perriere, the head of U.S. policy research at Piper Sandler, said that Japanese officials are, quote, describing it differently when it comes to that investment plan. Japan's leaders, he said, see the $550 billion figure as a cap and inclusive of government loan guarantees. So I think good momentum for US And Japan. I'm very curious about the details that will follow. I think the big story here, though, is the shifting of the, quote, unquote, overton window on tariffs. You mentioned that the rate used to be, you know, super, super small when it comes to a tariff rate on Japan. Now we're seeing 15% is almost a victory, even though if it was Originally announced at 15% six months ago, markets would have been spooked. So Trump really has normalized these higher baseline tariff rates. And I think that is truly the big story.
Neal Freyman
Right, because now the US Wants to take what it just secured with Japan, go out to other countries, other major, major trading partners and say, look, this is what we. This is what we expect in a trade deal. Japan gave this to us, their fifth largest trading partner. Now let's go to our top largest trading partner, the European Union, and that is the biggest fish left in the pond. We heard yesterday that there was progress on the US and the EU moving to a deal. The US would have 50% tariffs on the EU and there would be certain exemptions going back and forth. It was interesting how this particular deal was received in the American auto manufacturing community. They were actually a little ticked off. Tariffs are supposed to help domestic manufacturing, but they said, and this is the lobby that oversees or that represents gm, Ford and Stellantis. They said any deal that charges a lower tariff for Japanese imports with virtually no US Content than the tariff imposed on North American vehicles with high US Content is a bad deal for US Industry and US Auto workers. What they're talking about is There is currently 25% auto tariffs from Canada and Mexico, where they make so much of their cars and bring them into the United States with certain exemptions. There's also 50% tariffs on steel that is remaining at 50% and that's what they use to build cars. Meanwhile, this, when this deal, you know, Japanese cars have a tariff of 15%, which is lower than both of those rates. So they're a little ticked off. That said, all of their stocks gained yesterday on the hopes that more deals would be reached and overall tariffs would not come out to this worst case scenario, right?
Kyle Hagee
And all you have to do is look at the market too, about how this was received in terms of Japanese car companies. Toyota popped 14%, Honda rose over 11%. So good news for the Japanese auto market. Amazon, the company whose logo boasts an arrow going from A to Z, has made the next most logical acquisition purchasing B. No, not the letter the company B spelled B E E, which makes a device for your wrist that looks similar to a Fitbit. But instead of telling you how many steps you took over the day, it transcribes every conversation you have to generate personalized summaries of your day as well as reminders and suggestions. Now you can engage with Bee through the wearable and its app, which also with your permission, can get access to emails, contact, calendar and other data sets. To give it even more context about your life, you can also use what is basically fact, Tinder, swiping right or left on facts, B thinks about you to continue honing its context. Now zooming out, Jeff Bezos in December of 2024 at the New York Times DealBook Summit, said that AI would be like electricity. Quote, these kind of horizontal layers like electricity and compute and now artificial intelligence, they go everywhere. There is not a single application that you can think of that is not going to be made better by AI. This statement should come as no surprise then, when you look at Amazon's AI strategy. The company has introduced a series of AI products, including its own models, chips, a shopping chatbot, a marketplace for third party models, an overhaul of Alexa and implementing generative AI to its ring cameras. So while the big news is Amazon getting B, the letters it's clearly focusing on are A and I. Neal, the AI where too much word play. My God, the wearable space is heating up. What do you make of it?
Neal Freyman
It really is. I mean, Amazon's buying B and it is very. It's not lost on anyone that Amazon is a company that said for many years that Alexa, which was this home assistant that it has, was not listening to any all the things you were saying. Now it is buying a company whose explicit purpose is to just be in the background and listen to everything you are saying. So it's an interesting concept. I have thought about whether I would want something like this in my life to just be around, just be in the background listening to all of my conversations, going with me about my day and taking notes essentially and telling me all the stuff that I said I would do but I would forget about. And there are probably quite many things. So I think there might be, you know, demand or market for this type of thing that summarizes your day and helps you make efficient use of all the stuff that you forgot about. At the same time, there are a lot of privacy concerns. Even in certain states it's not legal for you to for me to record our conversation without me asking your consent. And if I'm wearing a bee, I'm probably not going to tell you every single time I have a BE on like we are being recorded right now. You can see other huge privacy implications. Joanna Stern, who is the Wall Street Journal tech columnist, tried BE out. She had a lot of good things to say. She said within hours of wearing it, I was blown away at how quickly it turned ramblings and random chatter into useful actionable information. But at the end of the day, she said the privacy risks don't outweigh those efficiency gains or that usefulness that I found from it. She said the privacy privacy risks were just too high.
Kyle Hagee
Yeah, there was a Victoria Song from the Verge had a funny experience with BE where it has a hard time distinguishing between conversation having with a person and radio or tv. And so she was watching Abbott elementary and BE generated a to do list suggesting she keeps an eye on the SEPTA strike as it would affect her abilities, her students ability to commute. So there's still some kinks to work out here, but I think it's a nice acquisition by Amazon. And clearly OpenAI is moving into some wearables with Joni Ivy. There's the Ray Ban metas that are moving into this wearable space. The future of COMPUTE seems to be maybe off the phone and onto these devices you actually wear on your body.
Neal Freyman
All right, don't go anywhere because up next it's Neil's numbers.
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Head to mizzenmayne.com and get 20% off your first purchase with code brew20. That's mizzen and me.com and code brew20 welcome to Neil's Numbers, the segment where I share three stats from the week's news that will cause you to do a mental bat flip. My first number will motivate you to grab your Halloween kick hats and Reese's Cups asap. Hershey's said the prices of its candy are going to go up by double digits, generally falling between the low teens and 20%. And psych, it's not because of tariffs and it's because of soaring cocoa prices. Chocolate Candy accounts for 67% of Hershey's sales, but raw ingredient costs have gone parabolic. Last year, thanks to bad harvests in West Africa, cocoa futures rose 178% on top of a 61% gain the year before that. While cocoa prices have stabilized this year, they remain at more than double their levels two years ago and have proven too high for chocolate companies to absorb without passing it on to the consumer. Hershey said that despite the price hikes, 75% of its product portfolio will remain under $4, so it's still economical to go to CVS before a movie and Sneak in a chocolate bar. Elevated cocoa costs have forced other chocolatiers to raise prices. The Swiss giant Lint jacked up prices by 16% in the first half of the year. And Oreo maker Mondelez also announced a price hike. Kyle, when cocoa prices soar, I always ask myself www.what would Willy Wonka do?
Kyle Hagee
That is the question everyone should be asking right now. I mean, first you have GLP1 drugs, now you have high cocoa prices. It's a tough day to be in the chocolate industry. And these changes normally take about 90 days to take effect. I did the Math. Yeah, that's 90 days is right before Halloween. I see what you're doing. Hershey's. Okay, so get your Halloween candy now before this price increases. But I guess a smart business move by Hershey's to land this right before everyone buys their chocolate.
Neal Freyman
All right, for my next number, Venus Williams just defied time. At age 45, the tennis legend defeated her opponent at the D.C. open Tuesday night, becoming the second oldest woman to win a tour level singles match in pro tennis history, only behind Martina Navratilova at age 47. Back in 2004, in front of 7,000 delirious fans, Williams took down Peyton Stern 6,364, which is wildly impressive on a number of levels. Number one, Stearns is ranked 35th in the world, while Venus hasn't played a competitive match in 16 months. Number two, Stearns is 23 years old or 22 years younger than Venus. In fact, Venus won four Grand Slam trophies before Stearns was even born. After the match, Venus spoke about grinding day in and day out to rehab from injuries and get back to the top level. Do you know how hard it is to play tennis? She said, you guys don't know how much work goes into this. Like it's 9 to 5, except you're running the whole time, lifting weights and just like dying and then you repeat it the next day. Seems like the literal blood, sweat and tears paid off. But the road doesn't end here. Venus will take on the 24th ranked player in the next round tonight.
Kyle Hagee
Yeah, I mean, she is a legend. And I think we're seeing a trend where athletes are able to extend their playing lifespan well into, you know, their 40s. You see LeBron and the NBA Venus here in tennis, I could probably podcast into my 70s, so the elite athletes are going longer. It's funny, in a viral clip, Venus was saying that she saw her cobra bill and she was like, okay, I got to get back in to get these benefits. On. So, lots of complaints about the US Health care system, but one thing about cobra, it's very motivational. So good luck to Venus for my final number.
Neal Freyman
Think about how great life would be if you didn't get allergies. Well, there is a way to avoid the seasonal sniffles or eat all kinds of food you want. You just need to be Amish. According to the Washington Post, the Amish are remarkably resistant to allergies. Just 7% of Amish children had a positive response to one or more common allergens, compared to more than 50% for the entire US population. And there's one Amish community in northern Indiana that scientists consider one of the least allergic populations ever measured in the developed world. So what's going on? Why do the Amish breathe easy while the rest of us sneeze, wheeze, and break out in hives? Researchers led by Carol Ober, chair of Human Genetics at the University of Chicago, suspect it has to do with the amount of exposure young Amish children get to farm animals or barns. The farm dust that these kids encounter contains protective agents, beneficial bacteria that isn't harmful enough to make you sick, but it trains your immune system to be less responsive to allergens down the road. This finding builds on the famous hygiene hypothesis from 1989 that found hay fever and eczema were less common among children born into larger families, presumably because of more contact with older siblings. For the big takeaway, one of the authors said, I don't know that we can give every family a cow, but we are learning from these time honored and very stable environments what type of substances and exposures are needed.
Kyle Hagee
Yeah, super interesting. I had not heard of the quote unquote farm effect before I read this story. So really, really interesting. I feel like I have $1 billion business idea for the Amish. They already dominate the furniture market. They need to come out with an Amish Amish farm dust supplement. I feel like that would absolutely rock in today's landscape where people are super interested in supplements. So if any Amish people or you know of any Amish people, send them that idea because it's a billion dollar business.
Neal Freyman
Well, that is the reason that they're doing these studies, these researchers at the University of Chicago, because they want to study resistant, allergen resistant populations to see if they can get treat and create treatments from them to help out the rest of us that are suffering through some spring. So they're trying to maybe create essential oils or other type of concoctions that borrow this farm dust that makes kids so resistant and then, you know, eventually maybe bring it to the market and make some money off of it. Okay, let's sprint to the finish with some final headlines. Uber is trying to make its ride sharing service a safer experience for women. Yesterday, the company rolled out new features that aim to make it easier for women to ride with drivers who are also women first. When a woman opens up the app, they'll see an option allowing them to request a woman driver. They'll also be able to adjust their settings to signal a preference for a woman driver whenever they call an Uber. And then on the driver side of things, women can also adjust their settings to request women passengers. The features are rolling out in the next few weeks, beginning in L A, San Francisco and Detroit. It's about giving women more choice, more control, and more comfort when they ride and drive, an Uber VP said. In Uber's latest annual safety report, which covers 2021 and 2022, it said there were more than 2700 incidents of serious sexual assault and misconduct, a 22% drop from the previous report.
Kyle Hagee
Yeah, it's important to note too that this women driver preference feature was actually unveiled in 2019 in different countries. It's now up to 40 different countries. And the real challenge for Uber here will be making sure that there's enough supply and demand of women drivers and riders to make this feasible. Because if not, then your wait times are going to go up, your prices might go up. But I think the idea is is really, really solid. You just mentioned some statistics that this feature is hoping to mitigate.
Neal Freyman
Finally, when it comes to the worst traffic in America, the Beltway has toppled the 405. An annual ranking from Consumer affairs found that Washington, D.C. overtook Los Angeles as the U.S. city with the worst traffic, with the average daily commute clocking in at 33.4 minutes in the nation's capital, compared to just over 30 minutes for Los Angeles. The survey author said that Trump's return to office mandates contributed to DC's traffic woes. While bus and train use is still far below 2019 levels, rounding out the top five worst cities for traffic after D.C. and L A, Miami, San Francisco and Atlanta.
Kyle Hagee
Neal, I have a maybe a hot take here. What do people do on their drive to work? They listen to podcasts. Congestion is good for business for us. So I want more traffic. I want it everywhere. And about a 30 minute commute is perfect because that's the length of the podcast.
Neal Freyman
Well, if you don't want traffic, unlike Kyle, you can add to these cities because they had the least traffic congestion of any in the United States. Rochester, New York, number one, then Salt Lake City, then Cleveland, then Hartford, then St. Louis. And I was in Cleveland recently. And this is true. I believe this study wholeheartedly because in downtown Cleveland, I did not see a single car. I mean, it was just buses. I mean, it was crazy. I've never seen anything like it. There was no private cars in downtown Cleveland. It's kind of a ghost town, a little spooky, great city. Maybe much of the activity is happening in the suburbs, but downtown there were just no cars. And I'm not surprised that it is one of the least congested cities in the country. Okay, that is all the time we have. Thanks so much for starting your morning with us and have a wonderful Thursday. Kyle, appreciate you as always for joining us. You're clearly not shy around a microphone.
Kyle Hagee
It's true, Neil. I sometimes hop in for this show, but I do have a weekly show at Morning Brew called per my last email. It's all about career advice, work, life tactics and tips. We've been running that for about a year and so we'll drop a link in the show description if you want to get more of me in your in your earbuds. And thanks for having me on.
Neal Freyman
Awesome. And if you have any other thoughts on today's episode, send an email with questions, comments or feedback to Morning Brew daily@morning brew.com it is time to reveal the next clue for Password, the game we're running this week asking you to find a secret word from a series of hints. So open up your notes app with the clues from the past few days and write down down this next one. The password opens with the sound of a greeting. The password opens with the sound of a greeting. Hopefully that clinches it for you. And when you think you've got the answer, head to the form in our show description to submit for a chance at the prize. Let's roll the credits. Emily Milian is our executive producer. Raymond Lu is our producer. Our associate producers are Olivia Graham and Olivia Lake. Hair Makeup is stuck in traffic, hopefully listening to the show. Devin Emery is our president and our shows are production Morning Brew.
Kyle Hagee
See y' all tomorrow.
Neal Freyman
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Morning Brew Daily - Episode Summary
Episode Title: Tesla Hurting from EV Tax Rollback & Amazon Dives Into AI Wearables
Release Date: July 24, 2025
Hosts: Neal Freyman & Kyle Hagee
Description: A comprehensive discussion on the latest business and economic news, featuring insights into Tesla’s financial challenges, Amazon’s strategic acquisitions in AI wearables, international trade deals, and more.
Overview: Neal Freyman and Kyle Hagee delve into Tesla’s recent disappointing earnings report, highlighting a significant drop in both sales and adjusted net income. The discussion centers around the factors contributing to Tesla's decline, including the expiration of crucial EV tax credits and increased competition in the global electric vehicle (EV) market.
Key Points:
Earnings Decline: Tesla reported a double-digit drop in adjusted earnings for Q2 2025, with sales falling from $25.5 billion in Q2 2024 to $22.5 billion this year. Adjusted net income decreased by 23%, from $419 million to $1.4 billion.
“The company is looking a little low energy during its latest earnings report...”
— Kyle Hagee [03:00]
Tax Credit Expiration: A newly passed bill mandates the expiration of the $7,500 tax credit for US EV buyers in October and eliminates the market for regulatory credit sales. These credits had contributed $11 billion to Tesla's bottom line since 2019.
“Elon's prediction is quite ambitious, but it always has been.”
— Neal Freyman [04:41]
Competition and Market Factors: Increased competition from Chinese automakers like BYD and Elon Musk’s political activities have also negatively impacted Tesla’s performance.
Future Outlook: Musk remains optimistic about Tesla’s pivot towards autonomy and robotics, predicting that these technologies will eventually make Tesla the most valuable company in the world.
“Autonomy is the story. It amplifies the value to stratospheric levels.”
— Elon Musk [04:35]
Insights: Neal emphasizes that Tesla's traditional EV business is underperforming, suggesting that the company's future growth may heavily depend on its ventures into autonomous driving and humanoid robotics. The hosts also discuss investor sentiment, noting a 6% drop in Tesla’s stock post-earnings.
Overview: The hosts explore the recent trade agreement between the US and Japan, which has positively impacted Japanese automakers and global markets. They analyze the specifics of the deal, including tariff reductions and investment pledges, and discuss its broader implications for US trade policy.
Key Points:
Trade Agreement Details: The US agreed to reduce tariffs on Japanese exports from 25% to 15%, particularly benefiting the automotive sector, which constitutes 80% of Japan’s trade surplus with the US.
“The US will place a 15% tariff on Japanese exports, a lower rate than the 25% that Trump had threatened.”
— Neal Freyman [08:00]
Investment Commitment: Japan pledged to invest $550 billion into the US, likely through government loan guarantees aimed at financing projects across America.
“Japanese officials are describing the $550 billion figure as a cap inclusive of government loan guarantees.”
— Kyle Hagee [09:54]
Market Reaction: Japanese auto stocks surged, with Toyota up 14% and Honda exceeding 11%, reflecting investor optimism about the deal.
Implications for Future Trade Negotiations: The agreement sets a higher baseline for tariffs, which may influence ongoing and future negotiations with other major trading partners like the European Union.
“Trump really has normalized these higher baseline tariff rates. And I think that is truly the big story.”
— Kyle Hagee [10:00]
Insights: Neal and Kyle discuss the potential ripple effects of this deal, emphasizing how it signals a shift in US trade policy towards maintaining higher tariffs as a standard negotiating tool. They also highlight concerns from the American automotive industry regarding the balance between tariffs and domestic content requirements.
Overview: Amazon has acquired Bee, a company specializing in AI-driven wearable devices that transcribe conversations to generate personalized daily summaries. Neals and Kyle discuss the strategic significance of this acquisition in the context of Amazon’s broader AI initiatives.
Key Points:
Product Functionality: Bee is a wrist-worn device that listens to conversations (with user permission), transcribes them, and creates actionable summaries, reminders, and suggestions based on the data.
“Amazon is buying a company whose explicit purpose is to just be in the background and listen to everything you are saying.”
— Neal Freyman [14:34]
AI Integration: This move aligns with Amazon’s extensive AI strategy, which includes products like Alexa, AI models, and generative AI applications across various platforms.
“AI is like electricity. These kind of horizontal layers like electricity and compute and now artificial intelligence, they go everywhere.”
— Jeff Bezos [13:30]
Privacy Concerns: The acquisition raises significant privacy issues, as the device continuously listens to users. Neal references Joanna Stern's positive experience with Bee but acknowledges the overarching privacy risks highlighted by critics.
“Privacy risks don't outweigh those efficiency gains or that usefulness that I found from it.”
— Joanna Stern, Wall Street Journal [16:16]
Market Potential: While there is interest in devices that aid daily productivity, the balance between functionality and privacy remains a critical challenge for widespread adoption.
Insights: Neal and Kyle explore the dual-edged nature of such technology—its potential to enhance personal efficiency contrasted with the imperative to protect user privacy. They also speculate on the future of AI wearables and how they might evolve beyond current applications.
Overview: In the "Neil’s Numbers" segment, Neal shares three intriguing statistics from the week's news, each accompanied by insightful commentary.
Key Points:
Hershey’s Price Hike Due to Soaring Cocoa Prices
Statistic: Hershey plans to increase candy prices by 10-20% due to cocoa prices rising over 178% in the past two years.
Impact: Despite the hike, 75% of Hershey’s products will remain under $4, maintaining affordability for consumers.
“Chocolate Candy accounts for 67% of Hershey's sales...”
— Neal Freyman [18:13]
Industry Trend: Other chocolate manufacturers like Lindt and Mondelez are following suit with similar price increases.
Venus Williams' Remarkable Tennis Victory at Age 45
Statistic: Venus Williams became the second-oldest woman to win a tour-level singles match at 45, defeating a 23-year-old opponent.
Significance: Highlights the evolving landscape of athlete longevity and the increasing ability of athletes to compete at high levels later in their careers.
“Venus spoke about grinding day in and day out to rehab from injuries and get back to the top level.”
— Neal Freyman [19:51]
Amish Community's Resistance to Allergies
Statistic: Only 7% of Amish children exhibit positive responses to common allergens, compared to over 50% in the general US population.
Explanation: Researchers attribute this to high exposure to farm environments, which may train the immune system to be less reactive to allergens.
“They are learning from these time-honored and very stable environments what type of substances and exposures are needed.”
— Neal Freyman [22:00]
Insights: Neal uses these statistics to highlight diverse areas of interest—from consumer behavior influenced by raw material costs, advancements in sports, to groundbreaking medical research inspired by traditional lifestyles.
Overview: The hosts wrap up the episode with brief coverage of Uber's new safety initiatives and the latest traffic congestion rankings in U.S. cities.
Key Points:
Uber’s Safety Enhancements for Women:
Features Introduced: Options for female riders to select female drivers and vice versa, aiming to create a safer and more comfortable experience.
“This feature is hoping to mitigate... serious sexual assault and misconduct.”
— Neal Freyman [25:05]
Implementation: Rolling out in major cities like Los Angeles, San Francisco, and Detroit over the coming weeks.
Challenges: Ensuring sufficient supply of women drivers and riders to maintain efficiency and affordability.
Traffic Congestion Rankings:
Top Traffic Woes: Washington, D.C. surpassed Los Angeles as the most congested U.S. city, with an average commute of 33.4 minutes.
“I believe this study wholeheartedly because in downtown Cleveland, I did not see a single car.”
— Neal Freyman [26:08]
Other Notable Cities: Miami, San Francisco, and Atlanta round out the top five worst cities for traffic.
Least Congested Cities: Rochester, Salt Lake City, Cleveland, Hartford, and St. Louis lead in having minimal traffic issues.
Insights: Neal and Kyle discuss the economic and social implications of traffic congestion, touching on how it affects daily commutes and business operations. Kyle humorously suggests that increased traffic could benefit podcast listenership, while Neal provides a contrasting perspective on cities with effective traffic management.
In this episode of Morning Brew Daily, Neal Freyman and Kyle Hagee provide an in-depth analysis of Tesla’s financial challenges amid policy changes, Amazon’s strategic move into AI wearables, and significant international trade developments between the US and Japan. Through engaging discussions and insightful commentary, the hosts shed light on the intricate dynamics shaping the business and economic landscape, offering listeners valuable perspectives on current events.
Notable Quotes:
“Autonomy is the story. It amplifies the value to stratospheric levels.”
— Elon Musk [04:35]
“Privacy risks don't outweigh those efficiency gains or that usefulness that I found from it.”
— Joanna Stern [16:16]
“The US will place a 15% tariff on Japanese exports, a lower rate than the 25% that Trump had threatened.”
— Neal Freyman [08:00]
For more detailed discussions and the latest updates, visit Morning Brew Daily on your preferred podcast platform or YouTube.