Tesla’s Sales Miss, Next Stage of NASA’s Moon Mission

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0:45Bloomberg Tech is live from coast to coast. With Caroline Hyde in New York and Ed Ludlow in San Francisco.

0:56This is Bloomberg Tech. I'm Tim Stenevec in New York. Coming up, tech stocks on a roller coaster this morning, but pushing higher now as Iran's deputy foreign minister announced the country is drafting a protocol with neighboring Amman to oversee traffic through the Strait of Hormuz. Plus, Tesla posts one of its worst quarters for sales in years, disappointing Wall Street. We're going to have the details. And NASA's Artemis II successfully launched. We'll discuss what's next for the crew of four astronauts in Earth orbit right now. Well, let's take a quick look at markets. U.S. tech stocks, they are just whipsawing this morning.

1:34Well, oil prices are climbing. Bitcoin and really cryptocurrencies across the board taking a hit. Stocks moved off their lows this after Iran's deputy foreign minister announced the country is drafting a protocol with neighboring Oman to really oversee traffic through the Strait of Hormuz. This all comes after a speech from President Trump last night did little to assure investors that the war in the Middle East was coming to a swift resolution. Take a listen. We're going to hit them extremely hard over the next two to three weeks. We're going to bring them back to the Stone Ages where they belong.

2:14Let's first go now to Washington, where we find Bloomberg's Washington correspondent, Tyler Kendall. She joins us now. Tyler, it seems like at least the most recent market reaction notwithstanding, the market really wanted more from President Trump about a swift end to this conflict. Did we get anything new last night? Well, Tim, President Trump really touted tactical successes so far in the military operation, but he didn't provide new information about a timeline or how the U.S. is going to address some of these strategic setbacks, mainly the straight of Hormuz. Instead, we heard President Trump reiterate what we've heard before, including that pressure on allies to lead the way in reopening the critical waterway as the United Kingdom today convened the foreign ministers of 35 countries to discuss the issue.

3:00But we heard from the French President Macron, for example, saying that he thinks it is, quote, unrealistic that military assets would be committed in order to reopen the Strait. The prevailing sense seems to be that these assets aren't going to go to help reopen the Strait of Hormuz until there is a cease in the hostilities. Now, President Trump did maintain that the U.S. is getting close to achieving its objectives in this war. But he also previewed that we could soon see an escalation as he reiterated threats that we could have the U.S. attack Iranian energy infrastructure. That tracks with reporting from Bloomberg News yesterday that the vice president, J.D.

3:37Vance, did convey through intermediaries that there is going to be this increase in threats on Iranian strategic assets until a deal is reached. Tim, at this point, the White House maintains that it is still negotiating with Iran, that these negotiations are ongoing, though at least publicly Iran has denied that it's engaged in formal talks with the U.S. Bloomberg's Tyler Kendall at the White House. Thanks so much, Tyler. Well, let's take a look at the market reaction now. Bloomberg tech equity reporter Ryan Vestelica joins us with more. Ryan, the Nasdaq 100 was down more than 2 % earlier in the session, down only about three, four-tenths of 1 % right now.

4:12There was a swift turnaround just in the last half hour or so. What can you tell us about this whipsawed market? Well, what I would say is that this really shows how much stocks, especially tech stocks, have been so highly correlated to any of the latest headlines that come out surrounding geopolitical tensions with Iran. There is still a lot of uncertainty right now, And just having this geopolitical issue just augments some of the other concerns people have right now about tech valuations, about the state of AI, about the outlook for AI spending, AI disruption. All those things is what investors were focused on prior to the war.

4:48And now you have this new element that's coming in that is really overshadowing everything else. Yeah, I think the question a lot of investors have is like, how long does this overshadow those fundamental questions that you mentioned, Ryan? because there is a connection when it comes to higher energy prices and then, well, perhaps higher inflation for a longer period of time and then valuations for these tech firms. Yeah, absolutely. And the longer we have this sort of uncertainty, the longer the straight is closed. The more questions we have about that, the harder it is to sort of suss out what valuation should be, what fundamentals really look like right now, especially if you're looking at sort of the hardware space and chip makers, which count helium as a major component that is built into their products.

5:31If you have uncertainty about supply for that, all these other kinds of questions just right now, just like I said, add to the growing level of uncertainty about what the outlook is overall. Love that we're talking helium right now. Bloomberg's Ryan Vestelica, always great with an update. Thanks, Ryan. Appreciate it. Well, coming up, Tesla deliveries, they disappoint and Tesla shares are lower. More on the EV maker next as Tesla down 3.7 % right now. This is Bloomberg Tech.

6:11Shares of Tesla under pressure this morning, down about 3.7%. The EV maker posting one of its worst sales quarters in years, delivering 358 ,000 vehicles. Wall Street had anticipated 372 ,000. For more, we go back to Bloomberg's global business editor, Craig Trudell, with the details. Craig, you did a great job setting us up for this print yesterday when we spoke to you. And we talked about how the idea that even though a lot of analysts value this company not necessarily as a company that sells cars, cars are still really important. So a disappointing quarter when it comes to, or a disappointing month when it comes to sales, that still has an effect on Tesla's business, even if it has big ambitions beyond autos.

6:55Yeah, I mean, this is still what pays the bills, right? Everyone is excited about robo-taxis. They're excited about humanoid robots. But those are still really concepts. And we don't have a robot, actually, that Tesla is selling. And it doesn't sound like they're particularly close if you're following Musk's, you know, sort of daily missives. on X. The expectations here weren't all that high and they were trending lower. And so to see them miss by a fairly substantial margin is a big disappointment. And when you compare what some of the peak quarters have been for Tesla, where they've come close a couple of times to half a million vehicles in a quarter, this is a really big letdown relative to those sort of loftier levels.

7:37The company facing a lot of headwinds here in the U.S. regarding EV tax credits and policy changes and not excitement from this White House when it comes to EVs, but also challenges outside the U.S. where Elon Musk is not viewed necessarily favorably and with growing competition from China. How does Tesla turn itself around before it gets to that point where it doesn't rely on autos to generate cash? Yeah, it's a really good question. I mean, I think there is some hope that this cyber cab that is supposed to start production this quarter will be helpful and that it at least is a new product. I think this is a company that has a bit of a tired lineup.

8:15They've changed over the Model 3 and Model Y, but they're not all that different from the way they looked when they first came out. And so this two-door, smaller car could be interesting to people, but is it actually ready to be put on roads without a steering wheel or pedals? I think a lot of regulators are going to have some doubts given the challenges that the company has had with what it markets as full self-driving. And so there are, again, all of these hopes as well that the humanoid robot business has a lot of promise. But this is still very much a case of approve it in terms of whether or not that's actually going to be a business that analysts can sort of wrap their heads around anytime soon.

9:02Bloomberg's Craig Trudell from London. Craig, thanks so much. Well, today on Tesla, Ben Callow is Baird's senior research analyst. He joins us now for more. Ben, you've got an outperformed rating on the stock. A new price target, though, of$538 per share. That's down from$548 per share. That's a far cry from where Tesla is right now at$367. How does it get there in the next 12 months? Well, thanks for having me on. It was a great commentary that you guys just had about the vehicle miss and numbers did come in. I think more importantly on the miss was on the energy side of the business. And as Craig said, you know, what pays the bills is auto sales and battery sales for energy.

9:48And so that was disappointing, more disappointing than the auto miss. And with CapEx and their capital expenditures, with all the investment they're doing for RoboTaxi, taxi for Optimus and for the cyber cab as well as doing data center and the semi truck. They're going to spend$20 billion this year and so they're going to have to pay for it and the auto business and the energy business is where the cash comes from. You know, they have$40 billion plus in cash. They're probably going to be a$2 billion cash drawdown this quarter. and you know as show me story uh i i you know i i i agree with that uh there's also so much going on right now uh with spacex with xai uh and you know the possibility that they're going to come together at some point uh and so there's a lot a lot we can talk about yeah let's still let's talk about that that possibility that these two companies do come together let's say spacex goes public in june so we're gonna have to sort of you know play this out a little bit we don't know exactly what's going to happen.

10:54If that does happen, Ben, do you think that Tesla will become part of that Elon Musk company? I think that it's better if they're both public companies to merge them together just from an accounting standpoint, from both being public and having valuations. But they've already started going way back when, there were some shared employees between SpaceX and Tesla. But now you're starting to do the TerraFab. You're doing this macro hard project. They're linking more and more together. I think one big thing with Elon wanting to have ownership of over 25 % or some kind of control that he said in the past with Tesla, that that would also help him because he has a bigger share of SpaceX and XAI, that that would also get him to that point as well.

12:06And it just makes sense from a scale perspective, too, because this is a big arms race that we're in for AI. And speed to market capital, very important right now. And so he knows that and he knows that they're doing everything they can as fast as they can to do that race. Ben, Craig also mentioned the idea of the cyber cabin. That could bring some excitement to people. But I'm also wondering about other parts of the portfolio and what's in the pipeline, namely maybe a new SUV that has been banded about a little bit. Is that something that moves the needle? and what can you tell us about the timeline there and what that would do to the top line and the bottom line for the company?

12:48Sure. Well, you know, one thing that Craig said, and Craig said a lot of great things, but about just kind of like a tired brand of models and, you know, the Model Y refresh, you know, if you ride in it, it's a lot better than the original Model Y. And so there's not big changes. And the fact that they, you know, they have just, you know, the Model Y and the Model 3, really main sellers versus other auto OEMs. They're more profitable on that. And they sell a lot of them because people like them. They're very good cars. And so it's good to expand if they have an SUV. Look, I have six-year-old twins.

13:31I'd like to have an SUV as well. But I think that the real growth is winning this robotaxi war. And I don't know if it's a winner take all. I don't think so. I think that, but, you know, Tesla has, you know, the data, they have the scale, they have the service centers and the strategy. And it's going to be hard for others to compete in scale. Ben Callow of Baird. Ben, always good to check in with you. Appreciate you taking the time and joining us this morning on Bloomberg Tech. Well, coming up, NASA's Artemis II successfully launched. Now the crew's attention turns to firing off towards the moon.

14:13Details on that with Ed Ludlow next. This is Bloomberg Tech. The right technology can strengthen human judgment. That's why Deloitte brings together AI and data analytics with multidisciplinary teams. People with deep industry experience who can challenge assumptions and help you connect the dots across your enterprise. From risk signals to operational pressure points to shifting customer needs, Deloitte helps you see what's coming sooner. So opportunities don't slip by and surprises don't spread. It's not just dashboards. It's real clarity in the moments your decisions are made. When models reveal patterns, people can ask better questions.

14:54When data and people are connected, leaders can move faster with confidence. And when your teams are aligned, smart choices can scale from the front line to the C-suite. Because the smarter your systems, the sharper your instincts. That's how technology makes people better at what they do best. Deloitte. Together makes progress. Learn more at Deloitte.com slash together makes progress.

15:25NASA's Artemis, two astronauts, are in Earth orbit. and they're prepping for the next crucial step in their historic journey to the moon. They're going to fire the engines tonight to send them toward lunar orbit. With us now is Bloomberg Tech's own Ed Ludlow. Ed, just give us the latest when it comes to the mission status and what happens before tonight's big move. Yeah, so the crew inside the Orion spacecraft are essentially in safe orbit. They conducted a burn this morning that took them from low-Earth orbit to higher-Earth orbit and in a sort of elliptical fashion are going around the Earth until about 7 or 8 p.m.

16:00Eastern time. That's when the mission directors and flight directors have to decide if they are a go for the translunar injection, the burn that you described, which propels Orion the 250 ,000 miles or so to the far side or dark side of the moon. And that's why we're all here. That's the big part. And so there is risk, but there are testing systems. At some point, the crew has to sleep. But that's what we're tracking toward. The dark side of the moon, the far side of the moon. What's back there?

16:34Yeah, I mean, the point of the mission in part is observation of what's on the surface of the far side of the moon, right? This is a resources story. Water, minerals, oxygen. The value of the moon is in part strategic from that resources standpoint. there's also an important moment where the orion capsule and spacecraft is going to lose contact with houston and control and you're you're all thinking watching bloomberg tech what the crew then they're going to lose contact on the fast yeah obviously the moon's in the way but that is also important and they planned for that and prepared for that and uh you know it's going to be a really significant moment when through a what's called a free return trajectory the the Moon's gravitational field and Earth's gravitational pull swings the Orion spacecraft back around in a figure eight and send it back to Earth.

17:24So there's risk here, but it is record breaking in terms of what they're trying to achieve. Well, we're talking about space, Ed. We've got to ask you a different question about orbit. And that has to do with the shares of Globalstar. They're rallying today up about 9 percent. This is after we learned that Amazon is in talks for a buyout. Now, Apple owns about 20 percent of this company. What would this do for Amazon and its, you know, quote unquote competition for providing satellite service, web-based satellite service or satellite web-based service for, you know, really competing with SpaceX?

17:57It's interesting because the financial terms and what they're kind of agreeing to buy isn't disclosed. But what Global Star has is very valuable licensed spectrum. You know, that having Constellation in orbit is not really about the hardware that's up there, but the spectrum that it occupies. That's part one. The other part is that it's a kind of go-to-market story, right, where Global Star is authorized and regulated in markets around the world. It has ground infrastructure corresponding to the constellation-based infrastructure. That would help Amazon with its own space-based internet ambitions get into those markets, even if the satellites that are up there are about cell connectivity in places where terrestrial cell signal doesn't reach.

18:41That's all a big part of it. And you're right, the history of Global Star is that right now, that's how you get emergency messages on your iPhone or make emergency calls. But the bigger picture is just access to the space that's up there. Bloomberg's Ed Ludlow, live at Kennedy Space Center in Florida. Thanks, Ed. Well, the fintech company Chime is launching new checking accounts that offer cash back and other benefits as it steps up its challenge to traditional banks. Let's talk through it with Chime CEO Chris Britt. Chris, so-called Chime Prime, it seems like a departure from the core Chime product that appeals to people who don't necessarily care about priority pass or luxury hotels.

19:18Explain the strategic shift. Well, we think it's a natural evolution for our company. And by the way, thanks for having me today, Tim. It's great to see you. We've already come of age as America's choice for banking. And you've seen that in the data. J.D. Power for multiple quarters in a row now have reported that Chime's opened up more checking accounts than any brand in America, including some of these, you know, the biggest incumbent banks in the world. So we think that the addition of Chime Prime is a natural addition for us. We've always done a really good job of cultivating primary direct deposit relationships with our members, people that are getting direct deposit and using Chime for their everyday transactions.

20:00What we realized is that we weren't doing enough to reward members who either had the capacity to or were already awarding us with large amounts of deposits. So with Chime Prime, if you give Chime a$3 ,000 total direct deposit over the course of a month, we unlock 5 % cash back on the Chime card, which is a secured credit card. And you can choose the category that you get the 5 % cash back in. So it could be groceries, restaurants, your monthly bills, you name it. But it's pretty powerful. If you think about a consumer who spends, say,$1 ,500 a month on groceries, we're talking about$75 of cash back in the month with this new product.

20:45So we're pretty excited about it. And we think it actually is a natural extension of our product suite. Well, Chris, one of the reasons we like talking to you is because you have this great real-time view of what the consumer is doing and how the consumer is feeling. And I'm wondering, with higher energy prices and with savings not really there for a lot of Americans right now, how did they weather the last month? Well, as we've reported the past few quarters, there's been certainly a lot of, understandably, uncertainty and some would say some doom and gloom as it relates to the state of the consumer.

21:16But as we've reported the past few quarters, we're seeing a steady, resilient consumer that continues to increase their spend across the categories of both discretionary and non-discretionary spend. We see saving account balances continue to stay at a high rate, and we haven't seen any uptick in unemployment. So I think across all of those areas, we see a healthy consumer. I would note that from February to March, we did see, not surprisingly, a pretty significant uptick in the amount that consumers are spending on their fuel purchases. So up over 25 percent actually month over month. So, yeah, that is definitely something that consumers are feeling a real pinch in.

22:04Real quick, what were they spending less on as a result of spending more on fuel? Well, we have not seen any sort of downdraft in spend at all. So we're continuing to see an uplift across all the regular sort of everyday categories. About 70 % of our spend is on non-discretionary. So that's one of the sort of really positive things about our business models that whether the economy is sort of up or down, people are still buying groceries and paying their monthly bills and paying their mobile bill and all those sorts of things. So nothing's changed on that front. I think it's fair to say that a lot of CEOs see this environment as a much friendlier regulatory environment in different industries.

22:44Why would you, a non-bank, still believe that not pursuing a bank charter is the best move in this environment? Well, you know, there's no question that the regulatory environment has loosened up a bit, and you can see it in quite a few number of applications to become a bank charter. We've certainly, you know, that's something that we evaluate every year, and it's certainly something that, an option that's on the table for us. But, you know, historically, when we've looked at how we've constructed this business, we think it's really been a win-win for Chime and our community bank partners that hold the deposits of our members in these FDIC-insured accounts.

23:26It gives us the benefits of being a fintech that can move fast and innovate and really focus on our member needs and have our bank, you know, provide our members with all the security and protections of having your money safe in a bank account. You know, certainly as the market changes, we will reevaluate that, but we don't have any plans to announce in the short term on that front. Chris, always good to see you. Chime CEO Chris Britt. Thanks so much. Well, coming up next, a conversation with Stephanie Valdez-Streetie of Cox Automotive as Tesla posts one of its worst sales quarters in years. That's next on Bloomberg Tech.

24:15Welcome back to Bloomberg Tech. I'm Tim Stanovic in New York. Let's take a look at markets with Bloomberg Stocks reporter Natalia Kunijevich here in New York. Natalia, the NASDAQ 100 was down more than 2 % earlier in the session. It's kind of flat right now. There was about an hour ago some news about potentially some discussions with Oman and Iran about the Strait of Hormuz. Is that what's driving markets right now? It looks like yes. So we do see that major indexes are basically flat right now, but it's still a pretty defensive move. If we look at the sectors right now, real estate, utilities, consumer staples, so these are sectors that are moving higher today.

24:53So we got some headlines, yes, from Iran that is working on a draft of a protocol with Oman to oversee the Strait of Hormuz. However, when we look at the stock market, of course, we do see that the playbook is still really familiar. We see that stocks, since the beginning of the war in Iran, stocks are flat or up from Monday to Wednesday, and they are down on average from Thursday to Friday by about 9%. It tells us that investors don't want to hold positions going into a weekend because a lot can happen. And when I spoke with many traders or analysts, like what exactly you guys are doing, they said, yes, get rid of positions, go long on energy or oil, gas or energy related, commodities related stocks, and of course, sell economically sensitive stocks.

25:41Especially out of a three-day weekend where the equity market isn't even open tomorrow on a day where we are getting some jobs numbers for the month of March. You mentioned commodities. Let's talk oil real quick because it does seem like the equity market is buying this, but it doesn't seem like the oil market is buying this with Brent still up 6 % and look at that, WTI up 10%. Yes, 10%. So in terms of headlines, yes, Iran is working with Oman in terms of a protocol to oversee the Strait of Hormuz. Deputy foreign minister said that vessel traffic through the state should take place under Iran and Oman supervision and coordination.

26:21But of course, we also look at all global supplies in terms of oil and commodities. So for example, when we checked inventories in Egypt, which is also super important in terms of deliveries of Saudi Arabia crude to Europe, and now we see that those inventories are down by about 1 million barrels per day in the past two weeks. Just to compare, this is the equivalent of the growth in global oil demand that we projected before the war in Iran began. Okay. Natalia Kunijevich of Bloomberg News with a markets and oil update. Let's get to another big mover today. Tesla shares under pressure, down more than 4%.