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
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:
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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).
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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).
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)
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.
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.