Tesla Has a Problem: Elon Musk

Summary

Podcast Summary: The Journal – "Tesla Has a Problem: Elon Musk"

Release Date: March 11, 2025

Hosts: Jessica Mendoza, Becky Peterson
Production: The Wall Street Journal & Gimlet, in collaboration with Spotify

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1. Introduction: Escalating Protests Against Tesla

The episode opens with Jessica Mendoza highlighting the surge of protests targeting Tesla locations across the United States. On a recent Saturday, a Tesla showroom in lower Manhattan was overtaken by demonstrators, resulting in its temporary closure. Mendoza states, “Demonstrations like this broke out around the country this past week” (00:19).

Becky Peterson adds, “Nobody voted for Elon Musk” (00:15), emphasizing the grassroots nature of the protests. These demonstrations have escalated beyond peaceful protests, with incidents of arson and vandalism reported in Colorado and Oregon, including “Molotov cocktails” and “bullets” fired at Tesla locations (00:19; 00:58).

2. Tesla's Foundational Mission and Initial Success

Jessica Mendoza recounts Tesla’s origins, founded by Elon Musk with the mission “to help stop climate change by making electric vehicles cool” (03:30). During Tesla’s annual meetings, Musk articulated his vision for a “fully sustainable global economy” (03:41). Becky Peterson explains that Tesla quickly gained popularity, especially in environmentally conscious regions like California, where consumers viewed Tesla as a “high tech answer to climate change” (04:18).

By 2020, Tesla had become the world’s most valuable carmaker, and Musk had ascended to become the world’s richest person. Musk was celebrated for his ambitious ideas, from space exploration to advancing electric vehicle technology (04:49; 05:03).

3. Elon Musk's Shift into Politics

The narrative takes a pivotal turn in 2022 when Musk acquired Twitter, rebranding it as "X" (05:28). This move marked the beginning of Musk’s foray into political discourse. His posts began to encompass a broader range of topics, extending beyond business and technology (05:39).

As the 2024 presidential campaign intensified, Musk emerged as a significant political figure on the right. He donated approximately $288 million to Donald Trump’s campaign and made public appearances at Trump rallies, donning a MAGA hat and energetically engaging with supporters (05:51; 06:11). Following Trump's election, Musk was appointed the head of the Department of Government Efficiency, colloquially referred to as "Doge" (06:23).

4. Public Backlash and Declining Tesla Loyalty

Musk’s political activities have alienated a substantial portion of Tesla’s customer base. Mendoza notes that consumers who previously admired Tesla’s eco-friendly image are now protesting Musk’s political stance by boycotting Tesla products. Examples include bumper stickers stating, “I bought this before we knew Elon was crazy,” and individuals opting to purchase non-Tesla vehicles to dissociate from Musk’s influence (06:42; 07:04; 07:09).

Becky Peterson highlights a significant downturn in Tesla’s sales: “Last year, Tesla sales fell 7% in the US and continued to fall into 2025” (07:04). Internationally, Tesla has suffered as well, particularly in Germany and France, with sales dropping by 76% and 26%, respectively, compared to the previous year (07:43; 08:03).

5. Political Polarization Impacting Sales

The intertwining of Musk’s politics with Tesla’s brand has shifted the company’s market demographics. Contrary to Tesla’s historical appeal among Democrats, recent data shows a decline in interest from Democratic buyers—from 23% in 2023 to 13% in February 2025—while interest among Republican buyers has risen from 15% to 26% (08:26). However, Peterson notes a challenge: “Conservatives are still more hesitant to buy EVs, so they’re not really naturally interested in the product” (08:26), indicating that the shift in political alignment has yet to translate into substantial sales growth.

6. Financial Repercussions and Stock Decline

Tesla’s financial health has been adversely affected, with the company losing $700 billion in market value, more than half of its total valuation (08:26). Wall Street analysts are questioning Musk’s involvement in day-to-day operations, suggesting that his focus on political roles may have detracted from addressing Tesla’s business challenges (09:34).

In an interview with Fox News, Musk acknowledged the strain his governmental role is placing on his ability to manage Tesla and his other ventures effectively, stating, “With great difficulty” (09:40; 09:43).

7. Strategic Shifts: From Automotive to AI and Robotics

Amidst declining car sales, Musk is redirecting Tesla’s focus towards artificial intelligence and robotics. Originally slated to release a low-cost $25,000 vehicle to broaden their market, Tesla abandoned this plan. Instead, the company is pivoting towards developing fully autonomous vehicles and AI-driven services:

• Fully Self-Driving Supervised (FSD Supervised): Tesla currently offers a limited version of this software, with Musk envisioning a future where cars operate entirely autonomously. Subscription plans are set at $99 per month, with aspirations to expand into indefinite subscriptions and Robo Taxis (11:18; 12:11).

• Cyber Cab: Unveiled in October at a private event, the Cyber Cab is Tesla’s prototype for an autonomous ride-hailing service. Musk demonstrated a fleet of 50 driverless vehicles navigating a mock cityscape, aiming for production commencement in 2026 (13:52; 14:32; 14:47).

Becky Peterson elaborates on this strategic shift, stating, “Tesla is in the process of moving from a revenue model that's almost entirely based on selling cars to one where Tesla is an AI and robotics company” (11:46). This transformation includes transitioning away from low-margin automotive sales towards more lucrative software revenue streams.

8. Regulatory Challenges and Future Prospects

Musk faces significant regulatory obstacles in realizing his vision for fully autonomous vehicles. Currently, autonomous vehicle regulations are handled on a state-by-state basis, a fragmented system Musk seeks to streamline under a unified federal framework. During a Tesla earnings call, Musk expressed the necessity of national approval for autonomous vehicles and hinted at leveraging his position in the Department of Government Efficiency to advocate for regulatory changes (15:07; 15:11; 15:27).

Furthermore, Musk has been vocal about his desire to eliminate certain environmental regulations that he deems obstructive to Tesla’s production efforts. This stance has been consistent across his ventures, including his aerospace projects, where local environmental regulations are perceived as hindrances (15:27; 15:52; 15:36).

9. Investor Sentiment and Market Confidence

Despite Tesla’s innovative pivots, investor confidence appears mixed. Investors are accustomed to Musk’s forward-thinking visions, but the disconnect between Tesla’s current performance and Musk’s grand plans raises concerns. Becky Peterson remarks, “The future that Musk has painted of an autonomous vehicle company is not yet something that customers can invest in” (16:26). The absence of fully autonomous vehicles and the pending rollout of the Robo Taxi service contribute to uncertainty about Tesla’s ability to deliver on its promises.

10. Conclusion: Navigating a Tumultuous Path Forward

Jessica Mendoza and Becky Peterson conclude that Musk’s steadfast convictions and political engagements are a double-edged sword for Tesla. While his vision for an AI-driven future holds potential, the immediate challenges of declining sales, regulatory hurdles, and polarized consumer sentiment present substantial obstacles. Peterson suggests that Musk’s political endeavors might be more of a philosophical stance than a calculated strategy, leaving Tesla at a crossroads where the path forward remains uncertain (17:13; 17:50).

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Notable Quotes:

• Becky Peterson: “Nobody voted for Elon Musk.” (00:15)
• Elon Musk: “What are all the things that need to be done in order to transition to a fully sustainable global economy? Which I think, you know, the sooner we do that, the better for the planet.” (03:41)
• Elon Musk: “With great difficulty.” (09:43)
• Elon Musk: “All driverless. You'll be able to take a ride in the Cyber Cab. There's no steering wheel or pedals, so I hope this goes well.” (14:32)
• Elon Musk: “Some things in the US are state by state regulated, like, for example, insurance. It's incredibly painful to do it state by state, 50 states.” (15:11)
• Becky Peterson: “Elon is famous for making these really bold claims about the companies.” (16:19)

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Timestamp Reference:

For ease of navigation, notable quotes and significant points are marked with their corresponding timestamps in the transcript. These references allow listeners to locate specific segments within the episode.

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Final Thoughts:

"The Journal's" episode on Tesla and Elon Musk delves deep into the intersection of business, politics, and public perception. As Tesla grapples with declining sales and a shifting consumer base, Musk’s political engagements add complexity to the company’s trajectory. The episode provides a comprehensive analysis of how personal leadership and broader socio-political factors can profoundly impact a leading business in the competitive electric vehicle market.

Transcript

[Jessica Mendoza]

We need Tweeter, not another billionaire. On Saturday, scores of people converged on a Tesla showroom in lower Manhattan.

[Becky Peterson]

Nobody voted for Elon Musk.

[Jessica Mendoza]

Nobody voted for Some demonstrators went inside while others locked arms to block the door. For a while, the showroom was shut down. Demonstrations like this broke out around the country this past week. In Colorado, one Tesla showroom was hit with Molotov cocktails. In Oregon, another location was riddled with bullets.

[Becky Peterson]

Seems like people are finding that Tesla stores Tesla superchargers and Teslas they see on the street are good locations to protest what's happening in the federal government.

[Jessica Mendoza]

That's our colleague Becky Peterson, who covers Tesla.

[Becky Peterson]

So across the country, we've seen protests at Tesla sales locations. We've also seen arson at Superchargers and people spray painting graffiti on random cars.

[Jessica Mendoza]

This blowback against Tesla is coming as the company's founder, Elon Musk, has risen in the new Trump administration. And people aren't just using signs and slogans to show their disapproval, they're protesting with their wallets.

[Becky Peterson]

People see Tesla as a way to directly respond to what's happening in the government. Musk wasn't elected. There's not a lot of ways to hit back directly, so there's sort of a movement to try to get at him. Financially, Tesla's sales are declining for the first time. That's at a company that has only seen growth for the last decade.

[Jessica Mendoza]

Welcome to the Journal, our show about money, business and power. I'm Jessica mendoza. It's Tuesday, March 11th. Coming up on the show, are Elon Musk's politics getting in the way of Tesla's business?

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[Jessica Mendoza]

When Elon Musk founded Tesla, he had a mission to help stop climate change by making electric vehicles cool. Here's Musk at one of Tesla's annual meetings.

[Elon Musk]

What are all the things that need to be done in order to transition to a fully sustainable global economy? Which I think, you know, the sooner we do that, the better for the planet.

[Becky Peterson]

Tesla's mission is to accelerate the world's transition to sustainable energy. So Tesla had a stellar reputation as being sort of this luxury car. It has electric battery, it doesn't use gasoline. So a lot of buyers saw it as a way to address climate change head on.

[Jessica Mendoza]

And who have been Tesla's primary customers? What sorts of people were buying these cars?

[Becky Peterson]

It really took off among buyers in California. Democratic state had a lot of success in areas like San Francisco and Los Angeles, where, you know, people are dependent on cars, but are also more conscious about climate change and driving's impact on the environment. And so Teslas were seen as this sort of like, high tech answer to climate change. It's kind of hard to overstate how popular it is among Californians and in other areas like that.

[Jessica Mendoza]

Tesla's took off. By 2020, the company had become the world's most valuable carmaker. Soon after, Musk became the world's richest person. And he was known as someone who had big ideas and wanted to change the world.

[Becky Peterson]

Musk has always been an outspoken figure. He mostly, in the early days, stuck to making big claims about space flight and sort of painting this vision of a future where everyone's driving EVs. He's going to take us to Mars. He was making bold claims, but they mostly were focused on the future of technology.

[Jessica Mendoza]

Then in 2022, Musk made a major decision. He bought Twitter and renamed it X. And his big, bold statements started to include more than just his takes on business and tech.

[Becky Peterson]

He started posting a lot more about politics and getting involved in sort of like the global order of things. He has expressed opinions on everything.

[Jessica Mendoza]

By the time the 2024 presidential campaign was in full swing, Musk had become a major political presence on the right. He began donating to then candidate Donald Trump, ultimately giving the campaign around $288 million. Musk also started appearing at Trump rallies. Come here.

[Becky Peterson]

Take over, Elon. Yes, take over.

[Jessica Mendoza]

At his first one, he wore a MAGA hat and bounded onto the stage.

[Becky Peterson]

Hi, everyone.

[Jessica Mendoza]

After Trump was elected, Musk was appointed the head of the Department of Government Efficiency, or Doge. And he's frequently been at the President's side. To some customers who bought into the original vision of Tesla as an eco friendly, save the world kind of company. Musk's turn has been disillusioning.

[Becky Peterson]

We're seeing all across the country, and I've even heard stories about it happening in Europe. People buying bumper stickers or magnets to put on their cars to distance themselves from Musk's politics.

[Jessica Mendoza]

Bumper stickers that say things like, I bought this before we knew Elon was crazy. And this Tesla does not endorse Elon Musk. Some people are even getting rid of their Teslas.

[Becky Peterson]

I want to get away from Elon Musk, everything.

[Jessica Mendoza]

Elon Musk, what he stands for.

[Becky Peterson]

I decided I don't want to drive a Muskmobile is what I've been calling this car. I love the car. I don't like driving something that supports Elon Musk.

[Jessica Mendoza]

So we're getting rid of it. Last year, Tesla sales fell 7% in the US and continued to fall into 2025, according to Automotive industry analysts. The company has felt the pain internationally too, as Musk has shown support for a far right party in Germany. Musk has also waded into international politics. How has that sort of shown itself in terms of foreign buyers?

[Becky Peterson]

You know, in areas like Germany, it's pretty clear. So sales in Germany in February were down 76% compared to February last year. And in France, they were down 26% compared to February of last year. But that's after having like another huge drop in January.

[Jessica Mendoza]

And what's at stake for Tesla here?

[Becky Peterson]

Just a question of how much further can that go? But worldwide, we're seeing it lose market share in some of its most popular regions. So even though industry wide EV sales rose 25%, Tesla sales still declined last year.

[Jessica Mendoza]

To be clear, Tesla's problems go beyond Musk's politics. The company is also facing growing competition from EV makers domestically and in China, where Tesla sales have taken a hit as well. But since Trump's inauguration, Tesla's stock has plummeted. The company has lost $700 billion, more than half of its value.

[Becky Peterson]

The sales and survey data that we looked at definitely shows that politics is affecting demand. Republicans are more likely to say that they would buy a Tesla than Democrats, which is a sharp reversal from what we've seen for most of the company's history. So the percentage of Democrats who said they would consider buying a Tesla declined from 23% in 2023 to 13% in February. And over that same period. The percentage of Republican buyers that would be interested in it grew from 15% to 26%. But the challenge for Tesla, some analysts say, is that conservatives are still more hesitant to buy EVs, so they're not really naturally interested in the product.

[Jessica Mendoza]

Yesterday, Musk acknowledged in an interview with Fox News that his work with the government is taking a toll.

[Becky Peterson]

How are you running your other businesses?

[Elon Musk]

With great difficulty.

[Jessica Mendoza]

Later, Trump posted on social media that he would buy a Tesla as a show of support for Musk. As Tesla struggles, Wall street has questioned why he hasn't been around enough to fix things. So what is Musk doing with Tesla? That's after the break.

[Becky Peterson]

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[Jessica Mendoza]

While it seems Musk hasn't been spending a lot of time getting Tesla out of its sales slump, Becky says he's focused on steering the company in a different direction. For instance, Tesla was set to release what the company called its low cost car last year. It was supposed to sell for $25,000, giving the company a chance to dramatically increase the number of EVs and Teslas on the road. But Musk pulled the plug on that model.

[Becky Peterson]

Tesla is in the process of moving from a revenue model that's almost entirely based on selling cars to one where Tesla is an AI and robotics company.

[Jessica Mendoza]

These days, Musk sees the future of Tesla as largely in self driving cars. To make this happen, the company is working on an AI assisted software that it says will one day fully operate a car.

[Becky Peterson]

I think that the big shift that Musk has suggested is that Tesla could become more Like a software company. So right now it sells cars which are low margin, they're expensive to make, there's limitations on how much people are willing to spend, and it's just a lot of work to build a car.

[Jessica Mendoza]

The software is called Fully Self Driving Supervised or FSD Supervised. The software is already available and Tesla owners can use it in a limited capacity. But Musk wants to make the cars fully autonomous.

[Becky Peterson]

Software revenue is just a lot more valuable. So right now, if you own a Tesla and you want to subscribe to FSD Supervised, the hardware is already on the car and then you pay $99 a month to subscribe to this service. And I think Musk envisions a future where you pay $99 a month to subscribe indefinitely. There's also plans for Tesla to roll out Robo taxis, which is more in line with what Waymo is doing. So in that case, Tesla would own a fleet of vehicles that people could use as a ride hailing service around the country right now. The plans, though, are limited in scope. Tesla said it's going to roll out that service and in Austin in June, and we know it's also applied for some early permits that would allow it to eventually roll out something similar in California. So Musk really has this vision of a future where all cars are autonomous. So in his brain and in the brain of Tesla's most bullish investors, they can potentially convert every single possible driver in the world to being a Tesla FSD subscriber.

[Jessica Mendoza]

Tesla investors are used to betting on Musk's vision well before the products exist. That's where they see a lot of value in his companies. And Musk is moving forward on these ideas. He's poured money into a new kind of self driving car he calls the Cyber Cab. Tesla unveiled the model in October at a private event on a film lot in Los Angeles.

[Becky Peterson]

We got the first view of the Cyber Cab. It's this tiny little two seater and sort of gave a vision of what it would look like if a city was full of autonomous vehicles.

[Jessica Mendoza]

50 robo taxis carry guests around movie sets that look like city streets. And from a stage, Musk addressed the crowd.

[Elon Musk]

All driverless. You'll be able to take a ride in the Cyber Cab. There's no steering wheel or pedals, so I hope this goes well.

[Jessica Mendoza]

Tesla says it'll start producing the Cyber cab in 2026. But getting those autonomous cars on the road involves clearing regulatory hurdles.

[Becky Peterson]

Right now, autonomous vehicle regulations are done on a state by state basis, which is something that Elon and his executives are eager to change.

[Jessica Mendoza]

Here he is on a Tesla earnings call in October.

[Elon Musk]

Some things in the US Are state by state regulated, like, for example, insurance. It's incredibly painful to do it state by state, 50 states.

[Jessica Mendoza]

Musk wants the system to be centralized under a single federal rule. And he wants it sooner rather than later.

[Elon Musk]

It really needs to be like a national approval is important. If there's a Department of Government Efficiency, I'll try to help make that.

[Jessica Mendoza]

He said that if the Department of Government Efficiency was created, he'd try to shift regulations away from the state level. Musk also wants to get rid of certain environmental protections he said is holding back his production facilities at Tesla and his other companies.

[Becky Peterson]

Musk has complained about this for ages across a range of different projects, especially when it comes to rockets. But basically they just see local regulations, especially environmental regulations, as getting in the way of their ambitions.

[Jessica Mendoza]

Now Musk is in a much better position to actually make that happen. Musk has gotten very close to President Trump. Will that help him achieve some of these goals?

[Becky Peterson]

That's the hope of people close to Tesla and investors in Tesla.

[Jessica Mendoza]

What do you think this means for the future of Tesla?

[Becky Peterson]

Elon is famous for making these really bold claims about the companies. Recently he's been talking a lot about the potential for Tesla's transition to be an AI and robotics company. He said that one day Tesla could ultimately be worth $30 trillion. But the future that Musk has painted of an autonomous vehicle company is not yet something that customers can invest in. The cybercab is not available to customers. FSD is not fully autonomous. We're still waiting for Tesla to roll out its ride hailing service.

[Jessica Mendoza]

So when you look at what's happening now, what does this tell you, Becky, about Musk's strategy here?

[Becky Peterson]

Musk is a man of very strong convictions. I don't think we know for sure that it's all strategy. I think it's very likely that he just really believes in the politics that he's advocating for right now, that it's sort of a philosophical position. But if you are an investor and you're looking toward the grand vision, it seems there's an argument that Tesla could benefit from less regulation.

[Jessica Mendoza]

Before we go, we wanted to tell you that we're thinking about hosting a live Journal event. Tell us what you want to see by taking our survey. There's a link in our show notes and for updates on our plans, please leave us your email address. That's all for today. Tuesday, March 11th. The Journal is a co production of Spotify and the Wall Street Journal. Additional reporting in this episode by Sean McLean. Thanks for listening. See you tomorrow.