Elon Musk looks to raid his empire for billions
It gets more complicated when the company that has the cash is listed and the one that needs it isn't, which is why Elon Musk says that he will seek shareholder approval for his privately-owned artificial intelligence business, xAI, to access to $US37 billion ($56 billion) of cash and near-cash sitting within his listed electric vehicle and humanoid robot entity, Tesla.
How much of that cash does he have his eye one? Last year Musk asked the users on his social media platform, X (which merged with xAI earlier this year), whether Tesla should invest $US5 billion in xAI. About two-thirds of the respondents were in favour of investing.
Whether Tesla's investors would share that view is another question.
Their company has its own issues, notably plunging sales due partly to Musk's politicisation of the Tesla brand after his stint heading the controversial Department of Government Efficiency in the Trump administration and his subsequent falling out with Donald Trump, but also because Tesla's vehicles are being challenged by cheaper and more sophisticated EVs from China and Europe and even other US manufacturers.
Tesla's sales in the June quarter slumped 13 per cent – it produced about 60,000 fewer vehicles in the quarter than for the same period last year.
Loading
The company is also facing the withdrawal by the Trump administration of tax credits for EVs, worth up to $US75000 per vehicle, that have helped support Tesla's sales in US, while also withdrawing carbon credits whose sale to other companies to help them meet emissions requirements has been a very significant source of revenue for Tesla.
Musk seems unconcerned about the downturn in sales, although he's more than antsy about the withdrawals of tax incentives. He's adamant that the future of Tesla is in robotaxis and robots, although Tesla has only recently started on-road, heavily controlled, trials of its robotaxis.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Age
an hour ago
- The Age
Trump's misguided wars are starting to hurt the American people
The US sharemarket, which fell 0.4 per cent, and US bond yields, which rose, say that investors understood the data better than Bessent or his president. The odds on an early rate cut from the Fed have been lengthened, not shortened, by the data. Bessent should know better than to claim victory at this point in the rollout of Trump's tariffs, given his central role in that process. While some tariffs were announced in February and Trump's 'Liberation Day' baseline and 'reciprocal' tariffs on April 2, most of those tariffs were deferred for 90 days until July 9 and then, again, until August 1. They're not even in place yet and, given Trump's history – what Wall Street has dubbed the 'TACO' trade, or 'Trump Always Chicken out' – there is no certainty that they will be on August 1. Given that US importers started front-loading their inventories in anticipation of the tariffs and continue to do so – they'll have had at least four or five months to build their stocks before the bulk of the more punitive tariffs cut in next month, assuming they aren't deferred again – the full impact of Trump's trade war on the rest of the world won't be known until, at the earliest, late this year. Apart from the stockpiling, it can take a month from the point importers are ordered to ship goods from Asia to the US, and goods shipped before the tariffs come into effect are exempt from them. There are a lot of lags, some of them now considerable, before tariffs announced in April actually flow through to consumer prices and the inflation rate. Separate to the reciprocal tariffs, the 30 per cent rate Trump has threatened to impose on imports from the European Union and Mexico, the 50 per cent tariff on Brazil, the 50 per cent tariff on copper and more sectoral tariffs on pharmaceuticals, timber and semiconductors are also yet to come. The Yale Budget Lab says that, once those tariffs announced so far are implemented, including the tariffs on the EU and Mexico, the overall effective average tariff rate will be 20.6 per cent, the highest since 1910. Prices would rise by 2.1 per cent in the near term, equivalent to an average per-household loss of income of $US2800 (about $4300). The Yale researchers also say that the tariffs announced to date will raise $US2.5 trillion through to 2035. While Trump repeatedly (and falsely) claims that the revenue is coming from the exporting countries, Goldman Sachs economists says US consumers will end up paying about 70 per cent of the increased costs to importers. Loading The exporters might shave their margins, as might the importing companies who actually pay the increased customs duties when the goods pass through the US border, but the overwhelming majority of the cost of Trump's tariffs will be a tax on US households' consumption. That's why Trump's claim that his tariffs will raise billions of revenue (which they will), while having no impact on inflation or the economy (they will have an impact) only makes sense if you believe him when he says the exporters will pay the tariffs (which they won't). The Yale Budget Lab says the tariffs to date will reduce US GDP by 0.9 percentage points initially and 0.5 percentage points thereafter, or about $US135 billion a year in 2025 dollars. Higher inflation rates and lower economic growth equates to stagflation, which would be the Fed's worst nightmare. It would be forced to either target the inflation rate with higher interest rates or rising unemployment with lower rates but even higher inflation. That's why, despite Trump's verbal assaults on the Fed and its chair, Jerome Powell, the Fed is sitting on its hands and will continue to do so until there is a clearer picture of the likely effects of the tariffs. Trump and the Republicans have been stepping up their attacks on Powell, with the director of Trump's national economic advisers, Kevin Hassett, saying this week that the administration is still looking for the grounds to fire him. Trump really wants a rate cut. Republicans have seized on costs blowouts in the renovation of the Fed's ageing and asbestos-riddled Washington headquarters to target Powell and to try to develop the grounds to fire him 'for cause,' the only legitimate way a Fed chair can be removed. Bessent, who says the administration has started a formal process to identify Powell's successor when his term as chair expires next May, also says Powell should step down as a Fed governor at that point. His term as a board member doesn't end until 2028. The administration's current strategy appears to be that it will appoint a chair-elect in January, when term of another governor, Adriana Kugler, ends. That would undermine Powell's authority before he vacates the chair, although it might also see the incoming chair isolated by the rest of the board. Those sectors that are most tariff-exposed – fresh fruit and vegetables, household appliances and furniture, toys, clothing and sporting goods – all experienced prices increases. Trump has made it clear that a precondition of the new chair's appointment will be their willingness to lower rates, with the most likely candidates – Hassett, Bessent, former governor Kevin Warsh and current governor Christopher Waller – all currently auditioning for the role by trying to demonstrate their rate-cutting credentials. If, as the new chair takes Powell's seat at the Fed's board table, inflation is spiking because of Trump's tariffs, the Fed will be in an invidious position, with its independence and credibility – and the stability of America's bond and sharemarkets and its currency – at risk if it doesn't respond with higher rates.
Sydney Morning Herald
an hour ago
- Sydney Morning Herald
Life's a breech
'The spectacular photo in the Herald of two humpback whales simultaneously breeching made me think that there should be a name for it,' muses Richard Volzke of North Ryde. 'Maybe a 'camel breech'?' Nice one, and while we're considering this, big props to our photographic editor Danielle Smith, who captured pair in full flight. Janice Creenaune of Austinmer is well aware of the politician/pet dynamic (C8): 'My youngest son, living in Brooklyn during Trump's initial term, owned a small stuffed Trump doll. Unfortunately, his rescue dog (a Nova Scotia Duck Tolling Retriever called Murray) nearly destroyed it. While visiting, I dutifully and carefully sewed up the doll and continued to stuff it. It was the only toy Murray 'went for' but it kept me busy while visiting (over and over again). I'm not sure of its status during the current presidential term.' 'With the federal government now having an anti-Islamophobia envoy and an anti-Semitic envoy, is it time we also had an anti-Septic envoy?' asks Mark Pearce of Springwood. 'As I have noticed an increasing dislike of Yanks since Donald Trump started attacking the rest of the world.' Noted sideshow tragic, David Prest of Thrumster, feels the need to correct fellow salt, Andrew McCarthy (C8): 'To redress and end the misconceptions by 'sprog' McCarthy (1973 entry into HMAS Nirimba) about my 'rat-like' ability to climb drainpipes and to maintain the dubious honour of those fellow climbers from the Nirimba, I was a late developer in that 'gymnastic' ability.' James White of Beveridge thinks the phrase requires more of a nautical vibe: 'Like a rat up a hawser more precisely, or a rat up a backspring?' More on the folly of the European car (C8), this time, from Kerrie Wehbe of Blacktown. 'Last week, while driving our old Toyota to drop it off for repairs, I followed my husband, who drove ahead in our new MG so he could bring me home. I didn't know the route, but I knew when he was going to turn, as the wipers came on every time. He reported later that the sight of me laughing in his rearview mirror didn't help matters.' 'My late father also confused Aldi and Audi,' says William Galton of Hurstville Grove. 'He would also enjoy a roast of the day at his club's Calvary and when my daughter completed Year 12, asked her how she went in her HCF.'
The Age
an hour ago
- The Age
Life's a breech
'The spectacular photo in the Herald of two humpback whales simultaneously breeching made me think that there should be a name for it,' muses Richard Volzke of North Ryde. 'Maybe a 'camel breech'?' Nice one, and while we're considering this, big props to our photographic editor Danielle Smith, who captured pair in full flight. Janice Creenaune of Austinmer is well aware of the politician/pet dynamic (C8): 'My youngest son, living in Brooklyn during Trump's initial term, owned a small stuffed Trump doll. Unfortunately, his rescue dog (a Nova Scotia Duck Tolling Retriever called Murray) nearly destroyed it. While visiting, I dutifully and carefully sewed up the doll and continued to stuff it. It was the only toy Murray 'went for' but it kept me busy while visiting (over and over again). I'm not sure of its status during the current presidential term.' 'With the federal government now having an anti-Islamophobia envoy and an anti-Semitic envoy, is it time we also had an anti-Septic envoy?' asks Mark Pearce of Springwood. 'As I have noticed an increasing dislike of Yanks since Donald Trump started attacking the rest of the world.' Noted sideshow tragic, David Prest of Thrumster, feels the need to correct fellow salt, Andrew McCarthy (C8): 'To redress and end the misconceptions by 'sprog' McCarthy (1973 entry into HMAS Nirimba) about my 'rat-like' ability to climb drainpipes and to maintain the dubious honour of those fellow climbers from the Nirimba, I was a late developer in that 'gymnastic' ability.' James White of Beveridge thinks the phrase requires more of a nautical vibe: 'Like a rat up a hawser more precisely, or a rat up a backspring?' More on the folly of the European car (C8), this time, from Kerrie Wehbe of Blacktown. 'Last week, while driving our old Toyota to drop it off for repairs, I followed my husband, who drove ahead in our new MG so he could bring me home. I didn't know the route, but I knew when he was going to turn, as the wipers came on every time. He reported later that the sight of me laughing in his rearview mirror didn't help matters.' 'My late father also confused Aldi and Audi,' says William Galton of Hurstville Grove. 'He would also enjoy a roast of the day at his club's Calvary and when my daughter completed Year 12, asked her how she went in her HCF.'
