Tesla's Disappointing Sales | Bloomberg Technology

Tesla Sales Drop and Market Outlook

• Tesla's sales have dropped for the first time in over a decade, with fourth-quarter deliveries coming in at 495,000 vehicles, missing analyst estimates, and causing shares to drop about 5.6% (2m18s).
• Despite Tesla's disappointing sales, the Nasdaq 100 had great years back to back in 2023 and 2024, with the index up nearly 25% in 2023 and over 50% in 2024 (1m36s).
• The Nasdaq 100 is going higher today for a third day in a row, up 1.7% to the upside, reaching about $1600, although it did fall about 3% in December (1m50s).
• Elon Musk has had a remarkable few months, with some calling him the "co-president," but President-elect Donald Trump does not seem to appreciate this title (2m51s).

Trump's Return and Market Expectations

• Wall Street is focused on Trump's return to the White House and is trying to gauge what to expect from his anticipated pro-business policies, as well as his tough talk on global trade (3m5s).
• Bloomberg News has collated over 700 key calls from more than 50 million financial institutions, with the biggest words of the year being "Donald Trump," "tariffs," and "American exceptionalism" (3m46s).
• Many people are betting on America companies, despite them being cheaper, and U.S. assets are taking center stage, with J.P. Morgan saying U.S. exceptionalism is getting reinforced (4m19s).

AI Optimism and Mega Cap Tech

• There is also optimism about AI's role in the world, with many companies expected to use AI and join the AI euphoric rally, although with a cautious pause (4m50s).
• Keith Buchanan is asked if he thinks there is still room to run for mega cap tech, given the remarkable couple of years the Nasdaq 100 has had (5m22s).
• The current market stance has shifted to a more balanced approach, focusing on the value collision course set up for 2025, with growth no longer being the dominant factor (5m40s).
• The recent AI spending boom has raised concerns about valuation growth and potential costs, including wage gains that could impact consumer spending (6m8s).
• Despite stretched valuations in big tech, earnings growth is expected to back it up, but there are concerns about the fundamentals supporting these valuations (7m1s).
• It is not expected that earnings will disappoint in 2025, and a neutral stance is being taken on growth, with the market expected to price in the growth phase eventually (7m16s).
• Value stocks have been disappointing, but there is potential for earnings growth to broaden out in a higher-for-longer environment where the Fed cannot cut rates as much as hoped (8m18s).
• The market expects earnings-per-share growth of 30% over 2025, which is not as concentrated in the top seven companies as it was in 2024, and a broadening of earnings growth is expected to occur (8m33s).
• There is excitement about a balance that earnings growth would lead to performance, and growth does not necessarily have to happen in the same way as before (9m21s).

AI's Impact on Various Sectors

• AI gains are starting to benefit sectors and names outside of the top seven companies, including healthcare, where the development of drugs has accelerated (9m57s).
• The implementation of AI is expected to benefit other industries, such as consumer goods, allowing companies like Procter & Gamble to sell more products with fewer people (9m52s).

Tesla's Sales Decline and Competition

• Tesla's fourth-quarter sales outcome was disappointing to investors, with the company posting its first annual vehicle sales drop in over a decade, selling 1.79 million vehicles in 2024, and 495,570 vehicles in the fourth quarter (11m29s).
• The decline is attributed to increased competition from other electric vehicle (EV) manufacturers, including those from China, which are aided by government subsidies, as well as new vehicles from companies like Hyundai, Kia, and General Motors (11m56s).
• Despite having a lineup of four vehicles that could sell in decent numbers, Tesla's growth in the US market is expected to be limited, and the company will face tough competition in Europe and China (12m30s).
• Elon Musk has predicted 20% to 30% growth for Tesla this year, but this seems optimistic, and the sell-side is not expecting such high growth figures (13m6s).
• Tesla's potential for growth may depend on the release of a cheaper EV model, which could help the company gain market share, especially since it is not reliant on government subsidies for EVs (13m28s).
• However, the Chinese competition is expected to be tough, and Tesla's growth may be limited, with some analysts predicting that the company will not meet its growth targets (14m8s).
• Additionally, Elon Musk's close alliance with President-elect Donald Trump may pose a political risk, potentially alienating some consumers who would otherwise consider buying a Tesla (14m16s).
• This phenomenon is believed to already be having an impact, as some consumers who are interested in climate change and buy EVs for that reason may be deterred by Musk's political views (14m49s).
• Tesla's disappointing sales may be due to its left-leaning customer base not wanting to buy more Teslas, as there are a lot of expectations (15m7s).

Tesla, Trump, and Autonomous Vehicles

• The Trump administration's priority of setting up a federal framework for autonomous vehicles could benefit Tesla, as it would enable the company to put vehicles on the road with no steering wheel, no brake, and no accelerator pedals (15m24s).
• The Trump administration's efforts to help write the federal framework for autonomous vehicles could help Tesla, and the company may not need federal subsidies to sell its electric vehicles (16m2s).
• Getting rid of federal subsidies for electric vehicles could help Tesla sell more EVs, but it remains to be seen, and Tesla may have to offer discounts to sell its vehicles (16m19s).
• Any kind of tax policy on electric vehicles could benefit Elon Musk if he has an outsized voice in crafting it to help his company (16m53s).
• Tesla shares are currently down almost 6% (17m6s).

Cybertruck Explosion Investigation

• Elon Musk has stated that the explosion of a Tesla Cybertruck outside the Trump Las Vegas hotel was probably an act of terrorism (17m14s).
• The driver of the Cybertruck was killed, and seven people suffered minor injuries in the explosion (17m18s).
• The vehicle was rented via the Turo app, and the company maintains that there is no connection between the suspect and the man who rented the Cybertruck (17m38s).
• The man who rented the Cybertruck has been identified as an Army reservist who was on leave from the service temporarily (18m3s).
• The cause of the explosion in Las Vegas is still unknown, and Elon Musk has suggested that it may have been related to fireworks or a bomb in the bed or back of the truck rather than a malfunction by the batteries (18m24s).
• Authorities, including the Las Vegas Fire Department and the FBI, are still investigating the incident, and a full accounting of what happened has not been released (19m26s).
• Authorities are investigating the similarities between two incidents, one in New Orleans and the other in Las Vegas, where vehicles rented on an app were involved, and both perpetrators were former members of the U.S. Armed Forces, but authorities note that these similarities may be coincidental (20m2s).
• The use of an app to rent vehicles is not uncommon, and many people use such services, making it difficult to determine if there is a connection between the incidents (20m34s).
• Prior military service has been a common factor in some mass casualty events, such as the 1995 Oklahoma City bombing, but it is unclear if there is a valid connection in this case (20m48s).

New Orleans Attack Investigation

• An investigation is ongoing into the Bourbon Street attack that occurred on New Year's Day, with over a thousand law enforcement agents and officers pouring over data, videos, and interviews to track down leads (22m40s).
• An emergency declaration was issued to streamline resources and communications between state, local, and federal partners, and the results are being seen (23m20s).
• The city is being secured in preparation for the Sugar Bowl, with the Louisiana State Police, Louisiana National Guard, and other state agencies providing support (23m50s).
• Multiple state agencies, including the Department of Corrections, Fisheries, and Veterans Affairs, are working together to secure the city (24m40s).
• The investigation is ongoing, and authorities are working to determine the cause of the incidents and any potential connections (21m48s).
• The FBI's Deputy Assistant Director, Christopher Wray, is discussing the latest investigative information regarding a horrific attack in New Orleans, where 14 innocent victims were killed and at least 35 were injured (25m37s).
• The FBI is focusing all its resources on tracking down every piece of evidence, every lead, and every potential lead to uncover the truth behind the attack (26m10s).
• The attack is considered an act of terrorism, premeditated and evil, and the FBI is aggressively running down tips and information from law enforcement, first responders, and the public (26m38s).
• The investigation is only a little more than 24 hours old, and the FBI is surging people and assets to the area from across the region and the nation (27m5s).
• Currently, the FBI does not assess that anyone else is involved in the attack, except for the subject already briefed on (27m18s).
• The FBI has deployed special agents, professional staff, and victim specialists to assist with the investigation and provide support to the victims and their families (27m47s).
• The FBI has received over 400 tips from the public, which are being followed up on both in New Orleans and across the country (28m30s).
• The FBI team is reviewing hundreds of hours of surveillance and video from the French Quarter and other locations (28m52s).
• Investigators believe the suspect, Jabar, picked up a rented F-150 in Houston, Texas on December 30, drove to New Orleans on the evening of the 31st, and posted several videos to an online platform proclaiming his support for ISIS (29m8s).
• The videos, which are time-stamped, show Jabar explaining that he originally planned to harm his family and friends but was concerned the news headlines would not focus on him (29m38s).
• An individual named Jabbar, a US military veteran born in the United States, carried out an attack on New Year's morning in New Orleans by ramming a truck through a blocked-off area of Bourbon Street and opening fire, and also used the truck as a weapon to run over victims (30m42s).
• Jabbar had joined ISIS before the summer and provided a will and testament, and FBI and ATF agents have secured a house at a Mandeville address linked to him, which is being searched for potential evidence (30m34s).
• Three phones linked to Jabbar have been recovered, and digital media exploitation is a priority to see what is on the devices and determine if there are any other potential leads (31m10s).
• Two laptops were recovered at the Mandeville address and are currently being reviewed for any potential leads (31m21s).
• Evidence technicians will also be going over the F-150 truck Jabbar was driving, from which an ISIS flag was recovered (31m34s).
• FBI bomb technicians recovered two IUDs in coolers, one from the cross-section of Bourbon and New Orleans Street, and the second at an intersection approximately two blocks away, and both devices were rendered safe on scene (31m54s).
• Surveillance footage showed Jabbar placing the devices where they were found (32m25s).
• The FBI is looking at every aspect of Jabbar's life and has interviewed many people who know him, but still needs to talk to others, including those who may have seen him in New Orleans or Texas (32m44s).
• The FBI wants to talk to anyone who was in the French Quarter at New Year's Eve or early on New Year's Day, including people spotted near one of the two IEDs on Bourbon Street (33m18s).
• Anyone with information can call the FBI at 1-800-CALL-FBI or send digital tips to FBI.gov/BourbonStreetAttack (34m4s).
• The FBI is also investigating a potential link to an attack in Las Vegas, but at this point, there is no definitive link between the two attacks (34m36s).

Official Statements and Agency Responses (New Orleans)

• A news conference was held with local officials and the FBI following a deadly attack in the New Orleans French Quarter on New Year's Eve that injured dozens (39m9s).
• The suspect in question is a man named Shamsud-Din Jabbar, who claimed to have joined ISIS in the summer in Houston (39m37s).
• There is no definitive link between the attack in New Orleans and the severe truck Las Vegas attack that also occurred in the past couple of days (39m49s).
• The ATF has brought various resources to the city, including a team of certified fire investigators, certified explosive specialists, fire engineers, and electrical engineers to investigate the scene (36m11s).
• The ATF's Special Response Team, a tactical team capable of handling any sort of enforcement operation, has been deployed and is ready to assist with any efforts during the Sugar Bowl and Mardi Gras (36m38s).
• Additional resources, including explosive detection canines, have been brought to the city to safely sweep the area in preparation for the Sugar Bowl and Super Bowl (37m8s).
• The ATF's Victim Resource Coordinators are providing resources to victims and family members who have suffered greatly during the tragedy (37m35s).
• The ATF will continue to work with the FBI, the city of New Orleans, and other partners to move the investigation forward and provide support to those affected (38m11s).
• Local officials, including the Mayor of New Orleans, expressed their gratitude to law enforcement partners and the residents and visitors of the city for their support and prayers (38m30s).
• An investigation is underway regarding a recent attack, with officials stating it is still in the early stages and they have a lot to learn about what drove the suspect to commit the act (41m31s).
• The FBI has designated the attack as an act of terrorism that was premeditated and evil, which enables them to mobilize more resources and brings a certain urgency to the investigation (41m58s).
• The FBI has recovered mobile phones and laptops belonging to the suspect and will be scouring through them for evidence (41m13s).
• The investigation is an interagency effort, with as many as 1000 law enforcement personnel involved, sifting through data, video recordings, and forensic evidence to obtain a better picture of what happened and why (42m25s).
• The FBI has employed the public for help in the investigation and is looking ahead to events in Washington, with officials including the Metropolitan Police Department also looking into the matter (42m44s).

AI, TikTok Ban, and Market Implications

• was deemed the year of artificial intelligence, but many are waiting to see if Wall Street will grow impatient with the AI movement (43m26s).
• Some investors are excited that AI will come good this year and revenues will start bringing in, but others are skeptical, citing the "brain rot economy" and the use of AI to fill social media with nonsensical content (43m48s).
• There is a prediction that people will eventually become disillusioned with AI-generated content and that this will spell trouble for companies like Meta (44m20s).
• The Supreme Court will hear arguments on January 10 regarding the ban on TikTok, but many legal observers say it is unlikely the court will overturn the lower court ruling, which is that the ban is constitutional (44m37s).
• The next wildcard is what President Trump will do, as he has already asked for the ban to be paused, but it is unclear whether this will happen (44m50s).
• It is suggested that TikTok users should be prepared to move to another platform, as it is unlikely that the ban will be stopped (45m4s).
• The Supreme Court is set to hear arguments on January 10 regarding the TikTok ban, which would take effect on January 19, marking a quick possible turnaround (45m22s).
• There is skepticism that the Supreme Court will overturn the lower court ruling, and it's uncertain whether President-elect Donald Trump can change the outcome through Congress or executive action (45m49s).
• The Supreme Court is unlikely to grant President-elect Trump's call for a stay due to a lack of precedent (46m29s).
• Support for TikTok from a legal perspective stems from the law being targeted explicitly at the company, with concerns over national security that have not been made public (46m44s).
• An amicus brief was signed arguing that the law creates fundamental enforcement problems not supported by Supreme Court precedent (47m16s).
• A potential TikTok ban could pave the way for YouTube Shorts to fill an entertainment void and gain from online advertising (47m39s).
• Data from an e-commerce platform shows a 200% year-over-year growth, with a 65% decline in Alphabet (paid search, YouTube) as brands shift to TikTok (48m15s).
• A TikTok ban could result in Alphabet seeing big gains in brand advertising traffic, with Amazon, Walmart, and eBay potentially gaining from marketplace sales (48m31s).
• While YouTube Shorts and Meta Reels could benefit from a TikTok ban, they lack the same infrastructure and ease of use as TikTok Shop for e-commerce (49m4s).
• TikTok has the power of television with the backbone of direct response advertising, but Alphabet and Meta are still the best places for driving sales advertising (49m14s).
• Companies that are clients of the discussed firm should prepare for a possible TikTok ban by being ready to reallocate their spend, as big brands have done in the past when faced with similar situations, such as when Elon Musk took control of Twitter and saw X traffic go to zero (49m56s).
• The ban would likely have a more significant impact on small and medium-sized businesses that are heavily dependent on TikTok, as well as creators who rely on the platform for their income (50m26s).
• In the event of a TikTok ban, there would be a shift back to seeing sales in places like eBay, Etsy, and Teemu, but Walmart and Amazon are expected to see significant gains due to their large market presence (50m56s).