Elon Musk Says Good-Bye to Tesla’s Cybertruck… and Hello to Texas Democrats

(upbeat music) - Tesla's winding down production of its Cybertruck to focus on its robotaxies. - The Cybertruck sort of became this like rolling example of Elon Musk's right wing shift into politics. The Cybertruck stands out so much. It's so just sort of brutal looking and big and in your face. And I think that what it stood for eclipsed like the vehicle itself in a lot of ways. - Plus job growth was strong last month, defying economist expectations. And President Trump named Stephen Miller, the advisor who's played a leading role on his aggressive immigration policy as his new chief of staff. It's Friday, November 6th. I'm Alex of Celeb for the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. (upbeat music) The U.S. added 165,000 jobs in October, easily topping economist expectations. For the two previous months, job numbers were also revised higher by a total of 84,000. All this is a strong indication that the job market has pulled out of its mid-year funk. WSJ Deputy Economics Editor Ashby Jones says one number in particular to look at is the unemployment rate, which fell to 4.1%. Unemployment has been below 5% in the U.S. for nearly a record stretch of months. I think the last time it was this low for this long was in the late 1960s and maybe early 1970s. At the same time, I would be remiss if I didn't talk a little bit about wages and wage growth is still stagnating. It is still behind inflation. So people's paychecks are not keeping up. So what does this report mean for the Fed? Ashby says whether or not official raise rates at their meeting next month will come down to other data points like inflation numbers and how the stock market does. - Prediction markets are still expecting a quarter point hike at the Fed's meeting next month. But this week we've seen a good deal of volatility in the market. If we get other signals that the AI build out is slowing or that some of the hyperscalers are unable to make payments or it are struggling to continue to get funding at the interest rates they want, that could signal a possible slowing in the economy. And that could trigger a pause on the Fed's plans to hike rates. - In markets today, AI stocks rebounded after yesterday's brutal sell-off. The NASDAQ added 1.1%. The S&P also gained, while the Dow fell about half a percent. The NASDAQ is still down 3.4% for the week. And the question to watch for investors and the Fed, as Ashby just told us, whether the AI decline was a temporary stumble or the start of a longer unwinding. (upbeat music) Today, President Trump announced a big staff shake-up after Republicans heavy midterm losses. His advisor, Steven Miller, a combative figure who has overseen some of the White House's most aggressive immigration strategies will be Trump's new chief of staff. He replaces Susie Wiles, whose last day is today. She'll move over to Trump's political operation. She said serving the president has been the honor of a lifetime. As W.S.J. Washington bureau chief Damian Paleta wrote in a special edition of his newsletter this afternoon, Miller's elevation is a sign that Trump plans to spend the final two years of his presidency doubling down on his core beliefs, most of which voters rejected on Tuesday and not reaching across the aisle to make deals with Democrats. We'll leave a link to Damian's newsletter in our show notes. (upbeat music) Implications for the election are rippling from the White House to Wall Street. Come January, Democrats will control Congress. That means they'll be in charge of its committees too. And one expected appointment that's raising a lot of worries in the financial industry is Elizabeth Warren. The Democrat from Massachusetts is one of the most liberal senators. lobbyists say she sees herself as a key voice in the Democratic economic leadership. And now she's set to take the reins on the powerful Senate Banking Committee. reporter Corey Drewbush covers the financial industry for the journal and joins me now with more. Corey Warren has been on the national political scene for more than 15 years and she's done a lot to be a thorn in Wall Street side. She was one of the architects of the Consumer Finance Protection Bureau. She's called for criminal probes into banking executives. And back in May, she had some choice words for private equity. It's the same story every time. Private equity marches in a few wealthy investors buy the outfit, strip out the assets, load the company up with debt, and suck the money out of it until it collapses. So looking at her track record, why is Wall Street so afraid of her now? She and her stoppers have written hundreds of letters just in the last couple of years as the highest ranking Democrat on the Senate Banking Committee, demanding answers from companies and from regulators. Now she is poised to take on the role of committee chair. And that gives her more power and that expanded power over the financial industry is something she's long sought. How can we expect this focus of her to manifest itself if she's in charge of the Senate Banking Committee? What does the position allow her to do in terms of power? Being in the party that is leading the Senate, they have subpoena powers, they can call hearings, they can start investigations. There are some areas where she's found common ground with Republicans, even the president. And that's on topics of discrimination in quote unquote debanking or cracking down on credit card fees. So it's not just about the Democrats having control. It's also about warrants priorities and how some of those overlap with people across the aisle. Yeah, what are some of the things we can expect to be at the sort of top of her to-do list if she does take on this role running the committee? We were pointed, there are sources a lot too, what she's done very recently. And some of that is really look at the private equity industry. She has called it legal looting and written a bill that could make it easier to jail executives. She sought to delay the IPO of SpaceX. And she's also raised questions about anthropics, existential risks to humanity, and also probing consumer protections for cryptocurrency companies. So how have leaders on Wall Street been reacting to the prospect of warrants leadership? This doesn't speak to all of Wall Street. But from analysts we spoke to and people we spoke to. They admit she is a contentious relationship with a lot of the largest banks, with a lot of the largest financial firms. And they expect that to continue. That was journal reporter Corey Dribusch. Coming up, Will Elon Musk keep his businesses in Texas after his blue wave, more after the break? (upbeat music) Some news from Tesla today, it's Cybertruck, which CEO Elon Musk once described as the company's best product ever, will wind down production next year. In a post on X, Musk said the move is to quote, "Make room for increased production "of its self-driving cyber cap." I'm joined now by journal Detroit Bureau Chief, Patrick George. Patrick, when Tesla unveiled the Cybertruck in 2019, there was all this hype around it. - Trucks have been the same for a very long time. Like a hundred years. Trucks have been basically the same. We want to try something different. But since it officially went on sale three years ago, sales have not lived up to Musk's expectations. That's despite the Cybertruck's I see in my neighborhood. Why is that? - You know, a few months into when the Cybertruck's on sale, we were starting to see the sales figures taper off a bit. And in recent months, the sales numbers have been pretty dismal. There's a multitude of reasons that it probably ends up being one of Tesla's biggest flops. The design obviously is deeply polarizing. It is a true love it or hate it design. There is also been a big downturn in the broader electric truck space. It turns out that just the battery-powered trucks are a lot more limited on towing and hauling compared to gas-powered counterparts. And I think a third major reason is the fact that the Cybertruck sort of became this like rolling example of Elon Musk's right wing shift into politics. - So Tesla is stopping production on its Cybertruck in order to produce more of its Cybert cab that's fully autonomous Robotaxi. What does that tell us about how Tesla's core business is changing? - For a long time, now Tesla has been saying its future is in robotics, in artificial intelligence, in fully autonomous vehicles. It's not in being a traditional seller of cars. And this is yet another point in favor of that thesis. Earlier this year, Tesla canceled the Model S sedan and the Model X SUV. So Tesla's really pinning its hopes and its revenue on the Model Y in particular, continuing to be a major success. And in the meantime, it says it's going to be rolling out Robotaxis, these Cybertcabs that don't have a steering wheeler pedals as an autonomous taxi service. - Musk's empire has a number of facilities across Texas. He's sort of made it the center of his operations. Now, of course, Democrats have broken Republicans hold on state government, and they're signaling that the state's relationship with Musk is about to change. Here's Texas Governor-elect Gina Hinojosa speaking to CNN's Jake Tapper last night. We can have a strong working relationship with Elon Musk and his companies, but it has to be in our terms. It cannot be just running over the people of Texas, and that's what changes now that I will be governor. So, Patrick, I mean, what have Democrats said that could affect the prospects of Musk and his companies in Texas? I have been talking to Texas Democrats all week. I think they're still figuring out, okay, we're in power. What does that look like? What does that mean for us? What can we do? Musk was deeply unpopular in that state. He poured, you know, about $225 million into supporting Republican candidates in Texas alone. A lot of Democrats are very unhappy about that. A lot of voters were very unhappy about that. So, the question now is, what could these state leaders do to the state's vast business relationships with Elon Musk? Until now, he's gotten some real white glove deals, you know, infrastructure deals, incentives, tax breaks, the state rewrote some laws to make it more difficult to sue his companies. They protected some of his communications or open records laws. A lot of Dems, we've spoke to this. We just say like the rubber stamp era is over for Elon Musk. However, this is a group of people that say they want to still be seen as very business-friendly. They want to keep the state growing. So, I don't think they're going to be in a rush to completely alienate Musk. They may end up doing things like attempting to tax him more, perhaps, or giving more incentives to his competitors. Everything I've just said is still very hypothetical, but I don't think that this group of people coming in wants to let him do whatever he wants. So, if locals are not super happy with Musk, and then the sort of government wins, also shift away, I mean, will he stick it out in Texas? At this point, he's so deeply entrenched. I'd be kind of shocked if he doesn't. The Tesla plant in Austin is vast. It's where he intends to mass-produce humanoid robots someday. SpaceX, footprint is all over Central Texas and South Texas. It's not just like moving a car factory there as he did in 2020. His empire is very tied to the Lone Star state. That was WSJ Detroit Bureau Chief Patrick George. Thanks Patrick. Thanks so much. And that's what's news for this week. Tomorrow you can look out for our weekly markets wrap up what's news and markets. Then on Sunday we'll be discussing what Democrats can realistically deliver in a divided Washington to address voter frustration over the high cost of living. That's in what's news Sunday. And we'll be back with our regular show on Monday morning. Today's show is produced by Danny Lewis and Anthony Bancy with supervising producer Tali Arbel. Michael LaValle wrote our theme music. Aisha L. Muslin is our development producer. Chris Sinsley is our deputy editor. Lee Tal Malad is our senior director of shows and Samantha Henig is the Wall Street Journal Head of Multimedia. I'm Alex Osola. Have a great weekend and thanks for listening.