Have you heard of Microsoft, Meta, SAP, Target, Merck, or Walmart? Of course you have. Could you name the CEOs of any of those companies? Yeah, you could probably name at least two or three. And, for those you can actually name, can you articulate their political dispositions?
Probably not.
There’s a good reason for this. The first reason is: who cares? If I need to buy cough syrup, I’m not going to trouble myself with what the CEO of the maker of that cough syrup thinks about politics, family life, religion, or any other personal topics. I just want to stop coughing.
The second reason is: most CEOs are shrewd enough to know that there’s absolutely no value or benefit to them running around shrieking about their opinions on anything except their own company’s products and services. If the CEO of IBM thinks that there should be a special 5% universal tax to fund transgender surgery, they’re not going to go onto CNBC to chat about it, because they would be idiots to do so. It’s a longstanding tradition among business leaders to keep their traps shut and to stay in their lane.
Having said all of that, I present to you the stock of Tesla, which is presently down 52%. I don’t think it is done dropping. As I’ve said already, my target is somewhere in the 190s before it stabilizes. The 500 protests (!) scheduled for March 29th (which as we all know is Slope’s 20th birthday) isn’t going to help.
What’s more amazing is that from October 23rd through December 18th, a period of not even two months, Tesla’s stock more than doubled in value, based on the now disproven notion that, with such proximity to power, Musk could surely bend space and time to the tremendous benefit of his own corporations. Instead, the entire experience has been positively poisonous.
Tesla is many things. It is a car company, a self-driving technology company, an energy storage company, a robotics company, and – – crucially – – a Robotaxi company. The Cybercab, shown below, has been heralded as absolutely essential to Tesla’s future success. The vision of millions of these things zipping around the world, carrying passengers (while the car drives itself) is absolutely key to the company’s lofty valuation.
Those of you who know my work and writing realize that I’m a Tesla fan. I bought my first Tesla in 2012, wrote a lengthy, over-the-top positive review about it, and have penned probably a hundred posts about Tesla as a company and stock over the past decade, most of them very positive. A certain someone with whom I’ve very close was the principal creator behind their present incarnation of self-driving technology, and while employed at the organization, he was given an absolutely obscene stock grant which would turn into valuable shares if and when robotaxi hit various milestones.
Something just occurred to me, however, and I think it’s worth mentioning. Perhaps you’ll recall a prediction I’ve made many times over the past few months, which is that Elon will abandon this whole DOGE thing before the end of April. He’ll probably leave his team behind, and will say something about continuing to guide them, but the fact is that between all the judges, court orders, bad press, huge personal financial losses, and frustration, he’s going to reach two conclusions: (1) Screw (2) This.
At that time, the healing can begin. I daresay that over a period of months, the animosity toward will him abate, and only the most strident people will choose NOT to purchase a Tesla based only on the CEO’s political beliefs. But when it comes to the potentially huge Cybercab business, there’s a very different problem, and it is this:
Local governments. I don’t pretend to be an expert about the legal requirements surrounding the deployment of Cybercabs, but I am highly confident that you just can’t show up to a town with 1,000 of the things and let ’em loose.
Self-driving cars require the legal blessing of the governing region in which the vehicles are driving, and while I don’t think a huge number of people are going to, on an individual basis, refrain from buying a superb product like a Tesla vehicle just out of spite, it’s an entirely different kettle of fish when it comes to city councils (or state legislatures for that matter), because even if 1% of the people will never forgive Musk, all it takes is for some of these fruit loops to show up at meetings with their signs and their little speeches and cause total mayhem.
As an example, here in my fair city of Palo Alto, the city council has been grappling for literally years over the relatively benign topic of whether or not an ethnic studies program should be a required course for students to graduate from high school. If a single class for children is such a big issue for a town of 50,000 people, can you imagine the wrangling that will take place in cities across America about 3,000 pound robot-cars driving all over the place with the helm of the organization being someone so controversial?
My point is that I think Tesla as the seller of cars to individuals will eventually recover, but I think Musk’s dalliance with politics may have harmed his Cybercab prospects for years, and probably to the tune of many billions of dollars in revenue. There’s a stunning amount of discord being directed at the man, and the aforementioned fruit loops aren’t ever going to forget it.
In the meanwhile, he’s still deeply engaged with the government, and no one except him can know what he’s thinking in terms of damage control. I have no idea if he wishes he could turn back the clock and basically never have gotten involved in the first place, but I’m confident of what his options-holding employees and shares-holding investors probably think about it right now.
