ELON MUSK & THE TESLA BRAND COLLAPSE

What do you get when Elon Musk torches his own brand? The US Dollar nose dives and robots start deciding who gets fired. You get a wink that makes Black Mirror look like a documentary. California just bulldozed one of the most powerful anti housing laws in the country. Finally. But will that actually make rents drop or the prices of housing drop? Meanwhile, big name companies are slamming the brakes on hiring. And if you think AI is just helping with resumes, think again. It's deciding who gets promoted and who gets booted. And the dollar. It's having its worst year since Richard Nixon was president. All that and more today on the Community. I'm TJ Walker. Thanks for joining me. First up, Elon Musk and the Tesla brand collapse. This is sad, but not expected, not entirely unexpected. Let's talk numbers. Because Tesla isn't just losing brand respect, it's losing valuation. According to Yahoo Finance, Tesla's forward pe ratio is about 76. That's compared to just 5.9 for Ford. That's a gulf usually reserved for high flying tech stocks, not automakers. Add to that a trailing pe of roughly 181 versus Ford's around 9.3. Tesla is being priced as if it had decades of growth baked in, not a traditional car company. But here's the kicker. If Tesla were valued like Ford, a PE of 9, it would fall from $1 trillion, which it is today, to about 50 or $60 billion. That's a 95% drop. Even with a generous PE of 15, that's still a loss of 85 to 90%. So while Musk politics sparked protests and headlines, the bigger threat may be what's happening in the stock market. Investors are losing faith and that's a brand crisis money alone can't fix. Okay, let's step back here for a minute and really talk about the messages being sent. Now I'm not the first one to note this. Scott Galloway has pointed this out as well. But Tesla's brand reputation has essentially been destroyed in just a few months. And it's perhaps the greatest destruction of a brand reputation than ever really when you think about it, Elon Musk aligned himself with the very people who don't like EVs in the United States. Self described Republicans, conservatives don't like electric vehicles. By and large. It's seen as not manly. It's not burning carbon, it's not that smell of gas in the morning. And it's never been that popular with that crowd. The EV folks were the liberals, the progressives, the people in San Francisco, the People in big cities, the college educated pro environmentalists were so drawn to environmental cars and the electric cars. And Elon Musk, with his not only his embrace of the current President of the United States, but giving him $300 million and then being head of his doge, cutting so many things that were near and dear to the hearts of progressives, liberals, Democrats, the very people who were the biggest fans of Tesla. So he's completely alienated them. He's not come back and figured out how to attract a whole new audience because the MAGA crowd are not huge fans of electric vehicles. They're just seen as not manly enough. Now to further stir things up, Musk has broken from Trump and the MAGA crowd. Trump saying, I wouldn't even want an electric car, although he supposedly bought one just a few months ago and was essentially doing infomercials for, for Elon Musk at the White House. That's all gone. So at the moment, it's a very odd situation that Musk has driven up his own negative ratings in the process. He's driven up the negative ratings of Tesla. But Tesla is still given an astronomical valuation. It's still valued at a trillion dollars. And at some point investors are going to realize this is not going to become a trillion dollar company when it was a new shiny company more than a decade ago. Okay? Seeing the future attached to the same guy who makes rockets and satellites and so many innovative things, okay, we buy into his vision. We're buying the future. We're valuing the company not based on its revenues and profits today, but its grand vision. Well, he's been selling the grand vision of robotic cars, autonomous cars, for more than a decade. You go back and look at the record every, every two years. He says, in two years we're going to have automated cars, autonomous cars driven by robots. It's going to revolutionize everything, will be the most profitable company in the world. He's essentially said, mark my words, in two years. Well, two years happened. Two years happened. Two years. It never happens. Yes, it is true. In the last couple of weeks, they did a test of autonomous vehicles in Austin, Texas. There was still a person in the front seat. It wasn't rolled out to the mass public. So there's some progress, but there's a lot of competition now. There's Waymo, there's other cars too. I predict that we're not that far away from Tesla getting a valuation that's comparable to other car dealers. Now, I'm not telling you to short the stock. I'm not giving you financial advice, but I'm telling you, the message that investors have been sending for the last dozen years or so is that we believe Elon Musk. We think he's a genius. We think he's capable of turning sawdust into gold no matter what he does. That has been the message investors have sent by giving it a trillion dollar valuation. Given the puny sales and puny profits, those days, I believe, are going to be over soon. It's still a rare. He's not fallen that far. Even though his ranking as a brand has plummeted, that is not yet transferred to the valuation of the company. But to put this in perspective, I'll restate what I said in the opening. If Tesla were simply valued based on its earnings the same way that perfectly fine, reputable, stable car company like Ford is valued, it wouldn't be worth a trillion dollars. It would be worth 50 to 60 billion dollars. That's a 95% drop. That means if it does go there and you own $100,000 of Tesla stock, your stocks can be worth $5,000. You will have lost 95%. Full disclosure to any regulators out there. I'm not giving you financial advice and I'm not a stockbroker and I'm not soliciting investment funds and I'm not telling you what to do. So make your own decisions there. I am saying that this entire company is based on the belief that Elon Musk is essentially a God. And people are sending the message. They have faith in them. He can't keep spinning around, going crazy. There can't continue to be stories in reputable newspapers like the Wall Street Journal, in the New York Times saying he's got a ketamine addiction problem. This cannot continue. And investors continue to send the message that, hey, we think you're the greatest thing ever. I'm not predicting ill will on Elon Musk, although just this past week, a reporter asked Donald Trump, are you thinking about deporting Elon Musk back to his home country of South Africa or Canada or wherever? He certainly didn't rule it out. He will have to look into that. He does seem to fit the category of a Michael Jackson, a prince, someone who's in a bubble, surrounded by enablers, who suffers an early demise. I'm not hoping that. I wish him and everyone else good health. But he does seem like someone who's out of control. His attention spit, spinning around, tweeting 10,000 times a day about every issue under the planet, talking about creating a political how do you create a political party to battle with the most powerful politician on earth? The president simultaneously run five other companies, invest in a million things and run a trillion dollar automobile company? A lot of people are starting to realize that he may be talented, he may be the most talented business person in the world, but he isn't a God. He can't do all of these things well at the same time. And more and more people are starting to realize it. So I think that this is only the beginning of the fall of Tesla. And look, they make some good cars, but a lot of other people make good electric cars these days as well. Other people are making good autonomous vehicles, other people are making robots. He no longer has a huge first mover advantage in these because he's splintering his time, he's splintering his resources. How many new products did Tesla come up with or SpaceX come up with when he was off in Washington every day running around with baseball caps and his kid in the White House? It's just hard to be innovative. Steve Jobs, someone that he admires, most tech people admire, was known for focus. He focused on one product at a time, sometimes for years he focused on one company at a time. Apple, then for a while Pixar, then Apple. He didn't try to run 3, 4, 5, 10 companies at once. And the United States government. So a little bit of difference there. So thank you so much for joining me today on the communiverse. This is the show about business, tech and culture decoded through the lens of communication to boost your personal success. That's what we're about here. So we look at the top stories of the day. This is sort of an early prototype of the show we're going to be launching officially September 2nd. And it'll be on all podcast platforms, all video platforms. But I appreciate you joining me here live today. If you can see this or hear this, feel free to leave a comment. If you're watching, let me know where you are today. I would love to hear from you. Okay, next big story. This one coming out of California. California, always an interesting place, things going on. California is change laws regarding their housing. California just bulldozed one of its biggest housing barriers, known as the CEQA. For decades, NIMBY's those are the not in my backyards. And unions used this environmental law to block everything from dorms to apartments, claiming noise, traffic, even students were pollution. But this week, Governor Gavin Newsom signed two bills gutting the CEQA for most urban housing. No more environmental reviews, no more union only carve outs, even daycare centers and manufacturing plants are now exempt. It's a huge win for Yembis, if you're not familiar with that word. That's yes. In my backyard, a big shift from labor and maybe the start of an actual housing boom. The rules that strangled housing in California finally getting hauled off in a dump truck. At least that's the hope. That's the hope. Okay, what's the real message going on here? Governor Newsom has listened to a lot of his constituents. He's also listened to Fox News and his opponents around the country, saying housing prices in California are crazy. Now, a little more background. Gavin Newsom, popular governor of California, wants to be the President of the United States, is doing a lot of maneuvers to position himself as the president of or the likely Democratic nominee. He hopes to be the likely Democratic nominee for president, but he's got one, one big problem, and that is California is insanely expensive for people to live in, primarily because of housing costs these days. You can get what looks like a shack that would be, you know, $20,000 in Mississippi, and in California, it's a million dollars. Now, I'm exaggerating that only a tiny little bit. It's because there's so many people there. And even though they're not thousands and thousands of new people immigrating every day to California, there's still a vast, huge shortage because so few homes are ever built. So when new people come, new students, people just moving from one town to another, even from within the state, are trying to buy a house. What they're finding is there's 2, 3, 4, 5, 10 possible purchasers of the house. For every one house available, basic supply and demand prices skyrocket. So this is a huge problem for any politician in California who wants to run for national office, because all the other party has to do is run nationwide ads and say, hey, if you vote for this guy or this woman, you'll never be able to afford a house. Your children will never be able to afford a house. You'll be living in a tent somewhere. And a little bit of hyperbole perhaps, but there's an element of truth there. Housing has skyrocketed to far, far, far beyond the ability of someone with a median income to pay for in California. Now, if you're low income, forget it. You're probably going to be living in your car. And I say that as someone who loves California. I almost moved there. I almost went to law school in California. I love visiting there, but there's simply no getting around the fact that housing costs are out of control. Crazy. In part because many, many years ago, environmental rules were written into law because people in California love their environment. They care about the environment. It is one of the most beautiful environment of any state, any place in the world. But they were written in such a way that it became really easy to stop anyone from building a new house or building an apartment building. So if you have a nice house on your street and everyone else has an acre and someone wants to build an apartment building, you're thinking, this is going to lower the price of the value of my house. I don't want an apartment building. In theory. I love humanity and I want people to have housing, but not on my street, because my house already cost a million dollars. It's now worth 1.5 million. Let's say I want it to be worth 2 or 3 million in a few years. And if there's an apartment building or a condo building where people can buy something for 200,000, it's going to make everything look less valuable. So what do I do? I know I'll file a lawsuit with the city or the state saying we have to do an environmental impact statement and we got to look at what's this going to do. The noise pollution and population and traffic and this and that. Is there a dodo bird somewhere, a condor that might catch a cold because of this? Individually, any one of these concerns, completely legitimate concern. Collectively, it has the effect of helping incumbents. Old people already have houses, see their value go up. Young people, people who've just moved to the state, immigrants, they are totally screwed. That's been the situation now for several decades, which is why, although new people move in and new tech entrepreneurs move into the state every day, middle class, lower middle class people have been fleeing California to Texas, places like where I live in Florida, because the cost of living for housing is so much lower. So this is a smart move by Governor Newsom and the Democrats. The other backdrop, you need to know is California is completely, completely dominated by one political party, the party that Newsom is a member of. So they cannot say, oh, it's the other party's fault. They can't say, oh, it's because of gridlock. This is a state owned by the Democrats. The success of the state, arguably they should get credit for. It's got an economy as big as the fourth largest country in the world. They got more billionaires than any place in the world. You've got six of the 10 largest companies in the world based there. So there's a lot that California has done right to create a vibrant capitalistic system that has had a positive impact on the entire world. But there's some things that's done wrong and housing clearly is something they're doing wrong when you cannot build new housing. So this is an attempt to fix that. We will see if it has the impact that the governor wants and how soon it takes, because here we are in the middle of 2025. If Newsom's planning on running for president in 2028, means it really has to start in 2027. End of 2027, we're only talking about two and a half years. So will this change have an impact fast enough to people for people to actually get permits, build homes, sell them, and people move in? I don't know if they'll be able to move that quickly. But it is something he can point to as making some progress. So we'll keep you updated on that. He's an interesting character, this Gavin Newsom. Whether he becomes a Democratic nominee, I'm not about to make that prediction. I'm not about to predict there's even going to be another election, but we'll debate that another day. Meanwhile, moving on to the next issue. Boy, this is a loud, loud message being sent, and I want to go into it a little more. Details regarding the United States dollar. Crashing. That's right, it's crashing. Worst year since 1973. The US dollar is crashing. And that's a big red flag. The US Dollar is on track for its worst year in modern history, down over 7%. And Morgan Stanley says it could fall another 10%. So why does this matter? Because the dollar is the world's default currency. If it drops hard, it rattles markets and makes everything we in the United States import, from electronics to coffee, more expensive. But here's the deeper issue. Investors are sending a warning to Washington. A falling dollar says we're losing confidence. It's a reaction to rising debt, political chaos and trade wars. They're saying the US Might not be the safe bet debt it once was. Think of it this way. If your PayCheck suddenly lost 10% of its value but your bills didn't, you'd pay.