Crypto News: Tesla finally gets White House showcase

On the surface, a display of shiny Teslas on the White House lawn would be an obvious win for Elon Musk. But, as Businessweek senior reporter Max Chafkin writes today, what's good for the CEO hasn't been great for the car company. Plus: A wave of campus unionization prepares to meet an obstacle named Donald Trump, and a pet economy booms in China. If this email was forwarded to you, click here to sign up.

Amid a frantic Tuesday that included, among other things, a skirmish with the premier of Ontario over trade, a vote in Congress on a bill to avoid a government shutdown and a meeting with business leaders concerned about a plummeting stock market, President Donald Trump stepped out on the driveway behind the White House to record what amounted to an infomercial for Elon Musk's electric car company. "Wow, that's beautiful," Trump enthused from the driver's seat of a red Tesla sedan. "Everything is computer."

Trump said he'd organized the event as a way to say thank you to Musk, who'd seen the value of Tesla Inc. fall by more than 50% percent since mid-December amid protests at his retail outlets and factories, boycotts of his products and even scattered acts of vandalism. Tesla customers, many of whom are progressive environmentalists who bought their cars before Musk threw his wealth behind a candidate who routinely criticized electric cars, have taken to slapping anti-Musk stickers on their bumpers or disguising their Teslas as other makes to avoid derision or worse.

Sales at Musk's car company have dropped precipitously since the election in some markets, falling by 76% in Germany last month from the previous year. Shipments from its China factory fell by 49%. "They want to penalize him in an economic sense, and I just think that's very unfair," Trump said, referring to the Tesla protesters. "This man is a great patriot, and you should cherish him."

Musk and his allies, including Tesla's investors, are celebrating the South Lawn spectacle. Four years earlier, in August 2021, President Joe Biden held an electric vehicle event at the White House featuring the CEOs of Ford and GM, but not of Tesla, which was by far the largest EV manufacturer at the time. Musk took this as a grievous insult and an attack on his business from what he portrayed as a hostile and clueless administration. (The Bloomberg's podcast miniseries Citizen Elon explains how that snub radicalized Musk, sending him down a right-wing rabbit hole that caused him to buy Twitter, rename it X, and eventually become Trump's biggest donor.)

Now, installed as "first buddy," Musk was the star of the show. "Night and Day," Musk wrote Tuesday on X, posting pictures from the two White House events. Tesla's stock, which had fallen more than 15% the previous day, took back some of its losses, closing up 4% after the Trump affair. It opened way up this morning.

Trump holds notes on the pricing of Tesla vehicles during the Tuesday event on the South Lawn. Photographer: Andrew Harnik/Getty Images

By any rational measure, of course, Musk is doing well. Even after several very bad months, Tesla's market capitalization, more than $700 billion, makes it more valuable than the largest traditional automakers. He also has advantages enjoyed by none of his competitors, starting with his personal celebrity, his control of a major media platform and his near-continuous access to the most powerful person on Earth. In spite of this—or maybe, because of it—Musk's position feels shakier than it did at the beginning of the Biden administration.

For all of Musk's complaints about Biden, his administration was much more supportive of EVs than Trump's has been or promises to be. Tesla's sales soared from 2020 to 2024. Biden expanded the $7,500 EV tax credit, which makes Musk's cars cheaper to consumers and more profitable to Tesla than they otherwise would be. Before the Inflation Reduction Act, Tesla had ceased to be eligible for the subsidy. The company also padded its profits by selling regulatory credits to other automakers, via rules that Trump has suggested he may undo. In fact, even as Musk seethed about Biden, calling the president a "puppet" for organized labor, Tesla's market value soared to more than $1.54 trillion in the last full month Biden was in office. That's more than double what the company was worth Tuesday afternoon.

To be sure, Tesla's struggles may have less to do with policy than with its other failures: a stale product lineup, the relatively tepid response to its pickup truck and the shortcomings of a "full self-driving" system that is neither "full" nor "self-driving." Meanwhile, Musk is distracted, even by his own account. On Monday, he told Larry Kudlow, the Fox Business host, that he was running the rest of his business empire "with great difficulty" while also leading the White House's so-called Department of Government Efficiency.

The potential stakes of Musk's divided attention are clear, with his SpaceX losing one of its Starship rockets in an explosion last week and X going offline for parts of Monday amid an apparent cyberattack. And then there's Musk's personal popularity, which has dropped precipitously since he assumed his political role.

Musk's relationship with Trump—and Trump's sway over his supporters—could offset some of this damage. But while Musk is in a position to potentially help funnel contracts to his rocket company, it's harder to see how Tesla benefits. During the event, Trump noted that Musk had supported him despite plans to remove the $7,500 tax credit and end other pro-EV policies. "I ended the electric mandate," Trump said, referring to his EV opposition. "I figured when is this guy calling to raise hell with me? And he never called." Trump later gently mocked Tesla's forthcoming robotaxis, which Musk is effectively betting his company on. "I'm going to pass on that," he said.

It's hard not to feel like the author of the Art of the Deal has gotten the better end of the relationship with Musk so far. Musk put $300 million into the 2024 election and campaigned furiously for Trump, helping the campaign reach a new fan base of disaffected young men. Musk's main reward so far has been good seats at Mar-a-Lago, while becoming a political lightning rod for some of Trump's most unpopular moves. And the money has continued to flow in Trump's direction. After the White House event, the New York Times and Axios reported that Musk had talked to Trump about putting $100 million into Trump's own political operation on top of his donations to Musk's own pro-Trump super PAC.

Trump began Tuesday's event by promising to personally buy a Tesla, but the famously stingy negotiator seemed to almost forget to follow through. As Trump started to walk out, reporters stopped him, asking which car he had bought. Trump wheeled around and, seemingly off the cuff, pointed at a red Model S. "Uh, the one I like is that one." He said he'd give Musk a personal check. Meanwhile, more protests are planned for today.

On the latest Elon, Inc.: This was the week that everything went wrong for Musk. Listen and subscribe to the podcast on Apple, Spotify, iHeart and the Bloomberg Terminal.

In Brief

The EU is targeting up to €26 billion ($28.3 billion) worth of American goods with tariffs to counter US metals duties.
Russia is gearing up to respond to President Donald Trump's call to accept a ceasefire after Ukraine agreed to a 30-day truce.
Former Philippines President Rodrigo Duterte was arrested Tuesday by police acting upon a warrant from Interpol. Here's a primer on Duterte's bloody drug war, and what's next after his arrest.

Undergraduate Workers Forming Unions

Illustration: Antoine Cossé for Bloomberg Businessweek

In November 2023, in the basement of a campus building at the University of Illinois at Chicago (UIC), student workers gathered to share their grievances about their on-campus jobs—low pay, inadequate training, unpaid overtime. Among them was Madison Peon, a junior and resident assistant. Peon had become an RA because she needed housing, which she couldn't afford without the job.

When she started, she was excited to work with fellow students and grateful to have a place to sleep. But her feelings soon soured: During training, which lasted three weeks, Peon and her peers worked 40 hours a week despite being paid for only 20.

"Most of us actually really enjoy doing the job. It's just, one, we're underpaid. Two, we're overworked. And three, we're not given the resources to be successful at the job," Peon says. "For those three weeks of training, the bulk of us are living off of credit cards, taking loans out and borrowing money from people."

About 10 students showed up to that first meeting in the basement. Within a year, they had the support of about 85% of campus housing student workers. In an open letter to the university, the undergraduates asked for better compensation, training and mental health resources. In January the students took it a step further. They filed a petition for union representation with Illinois' state labor relations board. (As students at a public university, they file with the state. The National Labor Relations Board has jurisdiction over employees in the private sector.)

Nibras Suliman and Jo Constantz write about how Peon's experience is just part of a wave of organization on campus: College Students Have Begun to Unionize, Very Carefully

China Embraces Its Fur Babies

Shoppers at the Pet&Fresh store in Shanghai. Photographer: Ka Xiaoxi for Bloomberg Businessweek

When China relaxed its one-child policy a decade ago, makers of baby food and infant formula began plowing billions of yuan into new brands, products and factories, with investment in the industry surging by almost a third in 2016. But any hope of a baby boom proved fleeting as young Chinese these days appear to prefer dogs and cats to kids. "Pets can fill emotional needs that people don't," says Hu Weihua, owner of an animal hospital in Shenzhen, just north of Hong Kong. "Younger generations see them as family, unlike the traditional notion that dogs and cats are just beasts."

China's population has fallen for three straight years, and the marriage rate plunged by a fifth in 2024, reaching its lowest level in almost a half-century. With fewer babies, China's formula market dropped 21% from 2021 to 2024. Pets, meanwhile, are on track to outnumber toddlers almost 2 to 1 by 2030, Goldman Sachs Group Inc. predicts. Infant formula companies, says Macquarie Group Ltd. analyst Linda Huang, "need a way out."

For many formula and baby food producers, the escape hatch has been a shift to pet products. Yili Group, China's biggest dairy company (and a leader in formula), added a pet food brand 18 months ago. China Mengniu Dairy Co., the No. 2 dairy producer, has invested in an operator of veterinary clinics. Beingmate Co., after watching its formula sales drop in three of the past five years, established a subsidiary in 2024 selling pet food "that meets the standard for babies."

Karoline Kan writes about what's become a $49 billion economy (and don't miss the photos!): As China's Birth Rate Drops, Pampered Pets Reap the Benefits

Grain Mystery

230,000 tons

That's how much rice is missing from Japan's harvest, and consumers are paying record prices for the food staple. The agricultural ministry, which is tasked with keeping track of Japan's most important crop, can't account for the shortfall.

Trade War Perspective

"Be nationalistic, be protectionist, be militaristic. That's the way these things operate."

Ray Dalio

Founder, Bridgewater Associates

The billionaire investor invoked 1930s Germany to illustrate his concerns about the global implications of the current trade war, while highlighting how countries that are neutral will fare well during such conflicts.