Does Elon Musk Still Have The Juice?

I listened to the entire Tesla investor call last night and, amid the exaggerations and big promises, the one thought that I couldn’t shake was that this didn’t sound like Iron Man. I don’t know that any human being is well-equipped to gain the kind of adoration and wealth that Musk acquired, let alone so quickly, which may explain why he seems unable to maintain either.

His ability to gain all that money and all that fame had less to do with a specific genius, and more to do with a somewhat ineffable quality of showmanship. The ideas may not be his, but his gift has always been in a certain kind of external and internal aggrandizement that inspired his employees to do what some thought could not be done, and that inspired investors to put money behind yet-unrealized goals. He had the juice.

I don’t love putting a question in a Morning Dump headline, but I’m so far from an answer that I couldn’t make it definitive. Does Elon Musk have the juice? I don’t know. It doesn’t seem like it, and the Q1 call and numbers aren’t supportive of the notion that he does.

It’s not like everyone else has the answers. Chinese automakers are obviously killing it when it comes to electrification. They have an abundance of juice, and that, itself, is a problem. GM is stuck in a weird spot with its own electrification, being both ahead and also, still, tentatively behind.

Does Matt Farah have the juice? Zack and Matt just did their 1,000th episode, so it seems likely. Matt also gets a fun profile in Bloomberg that’s worth reading.

Tesla Was Profitable In Q1 Thanks To Regulatory Credits

Tesla has sold the most popular car in the world for roughly the last two years. Built in the United States, Germany, and China, the Model Y is a global phenomenon. Last quarter, the automaker embarked on the ambitious project of switching over all lines almost simultaneously to start pumping out the revised Model Y.

In any other universe, this would be a big accomplishment that would dominate the headlines about the company around the world. That’s not what happened. Tesla’s Q1 numbers were bad in a way that these plant disruptions cannot fully explain. All the numbers are here if you want to look. The company’s once mighty operating margin, which reached into the teens as recently as Q2 2024, dropped to just 2.1%.

What’s the cause? Here’s how Tesla describes the ongoing issues the company faces:

Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers. This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term. We remain committed to expanding our business model to include delivering autonomous robots across multiple form factors and use cases – powered by our real-world AI expertise – to our customers and for use in our factories, as we navigate these headwinds.

It is easy to point out that the tariff uncertainty, caused entirely by the current administration he helped elect, is partially his fault. On the call, Musk reiterated many times that he’s not the President, so it’s not his decision. But it’s hard to see the “changing political sentiment” as anything other than an own-goal. Musk may be trying to save the planet with the Department of Government Efficiency, but right now the biggest shift in money seems to be to investors shorting Tesla stock and not to taxpayers.

Musk said last night that he’d be stepping away from DOGE soon, as he’d done the hard work of setting it up and trying to control the “insane deficit.” That is, in theory, a noble goal. We do have a large deficit, and it does need to be addressed, and a car blog isn’t going to be the place that solves that problem, but the chainsaw approach hasn’t exactly endeared Tesla to a lot of its natural buyers. Here’s how Musk responded to that concept in his opening:

The natural blowback from [my work] is those who were receiving the wasteful dollars and the fortunate dollars will try to attack me and DOGE team and anything associated with me. So, but then I’m really left with two choices. Should we just let the waste and fraud continue?

Some of these cuts suggested by DOGE have included such “wasteful” dollars as, let’s pick a random one: the people who run the Veterans Affairs Suicide Hotline (though these folks were reportedly re-hired — an indication of just how hastily this is all happening).

As Electrek points out, this is all a bit ironic given that Tesla wouldn’t be profitable this quarter without the existence of a government-engineered wealth transfer in the form of regulatory credits:

[It’s] particularly relevant today, to the very earnings call where Musk made his ridiculous assertion, because in Q1 2025, Tesla only turned a profit due to government credits. Without them, it would have lost money.

Per today’s earnings report, Tesla earned $595 million in regulatory credits in Q1. But its total net income for the quarter was $409 million.

This means that without those regulatory credits, Tesla would have posted a -$189 million loss in Q1. It was saved not just by credit sales, but credit sales which increased year over year – in the year-ago quarter, Tesla made $442 million in regulatory credits, despite having higher sales in Q1 2024 than in Q1 2025. So not only were credits higher, but credits per vehicle were higher.

Having the juice means your haters can’t touch you. I think it’s a big sign that the market response to the company’s numbers, as measured by how Tesla futures performed, was pretty muted, but then went up when Musk said he was getting the hell outta DOGE. The company’s stock opened higher this morning, but isn’t as high as you’d expect given that other market trends (President Trump seeming to back down on firing the Fed Reserve Chairman and China) are propelling stocks forward.

The whole call was like this. Musk sounded listless and unmotivated, broken up by the occasional laugh. Most of his pronouncements were a rehash of previous statements or a downgrade of previous promises. As mentioned yesterday, the cheap Teslas are likely to be decontented cars. Musk had to make it clear to people who were expecting Cybercabs on the streets of Austin soon that the vehicles will, in fact, just be Model Ys.

From the SeekingAlpha transcript of the call:

The team and I are laser-focused on bringing robotaxi to Austin in June. Unsupervised autonomy will first be solved for the Model Y in Austin. And then — actually you should parse out the terms robotic taxi or robotaxi and just generally like what’s the Cybercab, because we’ve got a product called the Cybercab and then any Tesla which could be an S3 extra wide that is autonomous, is a robotic taxi or robotaxi. It’s very confusing. So the vast majority of the Tesla fleet that we’ve made is capable of being a robotaxi or robotic taxi.

Later on the call, he goes further to admit that the company will launch with 10-20 of them, maybe, and someone else from Tesla says that, of course, there will be remote teleoperators.

Here’s the weirdest exchange, though:

Elon Musk

Yeah, I mean, very basic terms. If that — if we’re seeing an accident every 10,000 miles, well, then you have to drive 10,000 miles of average before you get an accident or an intervention. So, it’s like, okay, I mean, we must be really, you don’t have to be very worked out by the sheer number of Teslas doing [indiscernible] in Austin right now. We’re like, it’s going to look pretty bizarre.

Ashok Elluswamy

Some people are chasing us away.

Being charitable here, maybe he’s talking about interventions only, because an accident every 10,000 miles is bad. That’s an accident every year. If you’re getting into an accident every year, you’re not a good driver.

At this point, I could keep going through parts of the call I found underwhelming, but it doesn’t matter. Elon Musk is famous for pulling rabbits out of his hat, and it’s possible that in five years, everyone is sleeping inside autonomous Teslas, humanoid robots are doing all of our jobs, and Tesla’s AI rules everything. It’s possible.

The important thing for me, though, is that Musk’s explanations and enthusiasm have never sounded further from reality. That’s subjective, so I invite you to listen to the call and see if that sounds correct to you. The stock will probably rally today, and if it does so, it’s probably not because Musk wowed the crowd with a new idea, but because he’s taking a break from extracurriculars.

I mean, when you’ve lost longtime cheerleader Ross Gerber:

The billionaire’s work as an adviser to Trump and his embrace of right-wing politics in Europe have drawn widespread opposition, including protests and vandalism at Tesla showrooms.

“His time is very valuable, and I think Tesla needs his attention,” said Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management and a prominent investor.

“But it doesn’t change that people don’t want the Tesla brand. I don’t know how you fix that.”

You fix it with the juice, which is not always a renewable resource.

China Has The Cars, What It Needs Is The Customers

It’s the big Shanghai International Automobile Industry Exhibition this week, which is what no one calls it. Instead, it’s Auto Shanghai, and the home automakers are happy to celebrate that local Chinese brands now control 70% of the marketplace after taking a back seat to Buick, Volkswagen, and other Western cars for years.

China has the juice. So much juice. Too much juice. There simply aren’t enough customers even in China to contain all that juice. The juice must be released somehow.

Per Bloomberg:

While barely any Chinese EVs are sold in the U.S. — meaning the new 145% tariffs U.S. President Donald Trump has imposed on China have little direct impact on them — any hopes of expansion into one of the world’s biggest markets may be dashed. Other governments’ efforts to avoid a flood of imports and slower global economic growth also pose threats.

China’s passenger vehicle exports hit 6.4 million units in 2024, more than 50% above second-ranked Japan, according to consulting firm AlixPartners. But it estimates that export growth will slow to just 4% in 2025, from 23% last year, due to the effects of tariffs.

A bright spot for Chinese exporters has been Russia and Belarus, which have been under economic sanctions from the West since Moscow’s invasion of Ukraine, noted Andrew Bergbaum, global leader of automotive and industrial practice at AlixPartners. “China’s car sales to Russia and Belarus have more than doubled over the past five years, insulating it in part from the volatility of tariffs,” Bergbaum said.

You can’t gamble feeding BYD on that Belarusian money; it might not always be sufficient. (hopefully that link explains what this line means)

A Rocket Scientist Cannot Buy The Silverado EV He Wants

Here’s a remarkably good but frustrating story from Jackie Charniga over at the Detroit Free Press (who has consistently impressed me with her work the last few months). It’s a literal rocket scientist trying to buy a Silverado EV and not being able to do it.

From the story:

For David Rosing, a former system engineer at the CalTech Jet Propulsion Laboratory in Sunland, California, the decision to purchase an electric vehicle was far from rocket science. After meticulous research and a thorough understanding of the technology, Rosing decided back in January to purchase a Chevrolet Silverado EV.

Since then, he has tried, and failed, to procure the exact version he wanted. When he learned that the assembly facility that produced the truck of his dreams would be laying off employees, he felt betrayed.

“I would love to get the message to the C suite at GM that there’s a lot of people ticked off at Tesla looking for something else,” Rosing told the Detroit Free Press. “Please pass along a message to the workforce at Factory Zero that there is, indeed, demand for their products.”’

This seems to be the classic trimflation problem, where given limited production, it’s not easy to find the exact lower trim model that you want because the automaker is not economically incentivized to build it (in this case, it sounds like a specific blue LT extended range).

Matt Farah, Pro-Urbanist Car Guy

I’ve been meaning to write up the 1,000th episode of The Smoking Tire podcast because it’s a big deal. I’m a bad friend and haven’t done so yet. It’s above. Please watch and enjoy it. The show’s hosts, Matt Farah and Zack Klapman, are great people and super knowledgeable.

Matt, like many of us, recognizes that for all the good cars bring into our lives, some walkability isn’t the worst idea. Here’s a long profile in Bloomberg from David Zipper that gets into how loving cars and loving cities don’t have to be contradictory thoughts:

“In this city, some of the most desirable places to live are the most walkable,” he told me over lunch that afternoon. “But you can’t build more places like that right now, because of parking minimums and stupid s— like that.”

In addition to gushing over the latest Lamborghinis, Farah can hold forth on the benefits of multimodal streets, the perils of car bloat, and the upsides of upzoning. He believes that it’s entirely possible to love cars while recognizing that cities would be better if fewer people used them.

“LA is a place that doesn’t understand the difference between car dependence and car enthusiasm,” Farah said. “If I can just make that one point, I think that would do a lot of good.”

I think this is correct. Wanting a car and needing a car are sometimes different things. Commuting in Houston and being stuck on freeways didn’t make me love cars. Being able to take the train into New York and then come home and have the energy to take my BMW on a joyride upstate makes me love cars.

Farah also goes on to say that the idea of a “war on cars” is dumb:

“Car enthusiasts hear talking points like that and think ‘They’re going to take your cars away.’ Of course nobody wants to do that.”

It’s a fun profile. You should consider reading the whole thing.

What I’m Listening To While Writing TMD

ABBA’s “Mamma Mia” just turned 50, and it would be a shame to honor that here. It’s fine if you’re not an ABBA fan. I am not an ABBA fan. But I’m not not an ABBA fan. If the sound of this song brings you no joy, then you must be one who enjoys only sadness.

The Big Question

Who, in the automotive industry, has the juice right now?

Top photo: Austin Powers, Depositphotos.com