Musk Gets Political, China’s EV Bloodbath, Helicopter Goodbye

Episode #1088: We’re kicking off the week with Elon Musk mixing politics and business, a brutal forecast for China’s crowded EV market, and one unforgettable funeral send-off in Detroit.

Show Notes with links:

• Elon Musk’s creation of the “America” political party is fueling investor anxiety as Tesla faces a pivotal year marked by declining sales, shifting strategy, and mounting public scrutiny.
  • Musk aims to influence key House and Senate races in 2026 via his new party, but analysts fear it could distract from Tesla’s core business and turnaround plans.
  • Tesla’s global sales fell 13% in Q2; shares are down 20% year-to-date amid shifting investor sentiment.
  • Consumer surveys show Tesla’s brand perception continuing to erode in the U.S., ranking last among 19 EV makers in a May survey.
  • Azoria Partners delayed its Tesla ETF launch, citing conflict with Musk’s CEO responsibilities.
  • “I encourage the Board to…evaluate whether [Musk’s ambitions] are compatible with his full-time obligations,” said Azoria CEO James Fishback.

• A new report by AlixPartners projects that only 15 out of 129 EV and plug-in hybrid brands in China will survive through 2030, as fierce competition and overcapacity push the market toward consolidation.
  • The surviving 15 brands are expected to control 75% of the market, each selling over 1 million units annually.
  • Most Chinese EV makers remain unprofitable with the current market driving innovation and unsustainable pricing models; only BYD and Li Auto have achieved full-year profitability.
  • Despite low profitability, regional governments may continue to support struggling brands to protect local economies.
  • “This environment has driven remarkable advances...but it has also left many companies struggling,” said Stephen Dyer of AlixPartners.
  • Meanwhile, Sony Honda Mobility’s operating loss more than doubled to ¥52B ($362M) as it pushes to launch the Afeela EV this year.

• Darrell Thomas, a beloved Detroit car wash owner and NHRA-licensed drag racer, was known for his generosity. At his funeral, his family honored that legacy in dramatic fashion—showering the community with rose petals and $5,000 in cash from a helicopter during a public celebration of his life.
  • The tribute shut down a stretch of Gratiot Avenue in front of Showroom Shine Express.
  • The family says they informed police, though DPD claims they weren’t told about the money drop.
  • The FAA has launched an investigation into the aerial drop, but no action is expected from local authorities, according to Detroit Police.
  • “This was a final expression of love from him to the community because he was a giver,” said niece Crystal Perry.

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Transcript

Paul J Daly: 0:00

Good morning, July 7, coming off, real hot off an amazing Independence Day weekend. It's Monday, July 7. It's the automotive State of the Union on Paul J Daly. It's common Sierra, and we're about to find out who saw the most fireworks.

Unknown: 0:17

Did you quantify I saw fireworks? Yep, we had right quantity.

Paul J Daly: 0:23

Is it size? Is

Unknown: 0:24

it? Yeah, volume, yeah. Like, did you go to a big single show, or lots of mini shows? I don't know our neighborhood. It's like you like, look this way, this way, this way, this way, and this way, and you just get a smattering of it, yeah, yeah. It's just all over the place, but the most fun fireworks that I got to go to this weekend, you know, I'm a big soccer fan. I got to take my tour kids the Nashville SC game. It was, that's the best one, then probably one of the most electric games that I've ever seen in that stadium. The crowd was insane. It was we had, we had only our last home game was at the end of May, so it was like, packed, and we scored. There was like, because you have, like, water breaks in these hot summer days, and there was some a lot of crazy, like fouls and injuries and stuff. There was actually eight minutes of extra time, and then, because we got a penalty kick, it was 90th plus 11 minute we scored a penalty kick to win the game. So it was like, last it was like, one of the last kicks of the match. The whole place is going bananas. And then there's fireworks, fireworks. It was nuts. Okay, yeah, so that's pretty, pretty amazing. That is fireworks on fireworks. We didn't go anywhere to see fireworks. We were at my mother in law has this little cottage right on this beautiful lake up here in upstate New York, one of the Finger Lakes. And I'll tell you what they were having around this lake on Fourth of July. They have some kind of competition, because, just like, it's a really big lake too, you just see fireworks like, you know, like, there's the one guy who, like, dude just spent 10 grand, and then there's, like, that they just got their kids sparklers, right? And everything in between, right, right? So it's funny, you see one guy launching off these big boomers, and then, like, you know, if somebody's just holding a Roman candle, like, it was a lot of fun, though. I just felt very festive in general. And a great weekend, do it? It is. Hope you all had amazing time. Hope you did some really great things over the weekend, right? Big holiday sales weekend, where maybe you still had the fourth off, but then you could come back and still crush it over the weekend. So great, great weekend

Kyle Mountsier: 2:24

for the auto industry. I've heard a few reports of sales going really well to start, to start July. So let's go that

Paul J Daly: 2:30

too. Heard that too. This week, we have at a soda edge webinar on Wednesday. Two days from now, we're going to be talking about smart customer transportation with our friend Steven Chapman from Uber for business. So you can register for this by going to asotu.com just scroll down, or maybe not even scroll down if it's probably right there top of the fold. Get the recording or be there live. Going to talk about how to move things in and out of your business without spending a single dollar in infrastructure investment. How's that sound? Whoa. Happy. Come on. Happy. Maybe that should be the headline. We'll take it. Should that be the headline of the show? I don't know. All right. Let's talk about let's talk about the news. I mean, I don't know what's more America to talk about than starting a new political party. Elon Musk's creation of the America political party is fueling investor anxiety as Tesla faces a pivotal year marked by declining sales, shifting strategy and mounting public scrutiny, basically as if you just think he couldn't outdo himself. He aims to influence key House and Senate races in 2026 by forming a new political party after his dissatisfaction with the big, beautiful bill and he and Donald Trump, their lovers quarrel, but analysts are fearing this could distract, distract, distract from Tesla core business and turnaround plans. I think everybody was just excited. They were getting Elon back, and now they're like, Oh no, it's worse than we thought. Tesla's global sales fell 13% in q2. Shares are down 20% year over year. Consumer Surveys show Tesla's brand perception is continuing to erode in the US ranking last now among 19 EV makers in a May survey. That's a thing. Azoria partners delayed its Tesla ETF launch over the weekend, citing conflict with Musk's CEO responsibilities. Here is Arias CEO, James fishbeck, says, I encourage the board to evaluate whether Musk's ambitions are compatible with his full time obligations.

Kyle Mountsier: 4:17

Look, I can't speak to the party, but what I can speak to is the fact that last year, we already saw the model Y take second seat after having the first seat in the global sales to the Toyota rav4 so you see that, then you see the declining perception as a board, as as Tesla, as an automaker. You got to start to make some decisions on whether or not that's a leadership capacity. Maybe he moves to something like a chairman of the board, brings in a new CEO, someone to run the day to day operations of the business, because they're also failing, from a global perspective, to BYD as they're advancing sales across the globe. So as an EV automaker specifically, this has to be concerning. You already saw kind of dips around the Twitter. Or x deal you've got grok out there. SpaceX. How many things can this man actually do with, like real legitimacy over time, at the size and capacity that it is, we'll see well, with

Paul J Daly: 5:13

the spells out. You know, with the good old capitalism hat on, is like Tesla's having a hard time white space in the market, right? You've seen now very clearly that the giant can bleed, and now it really does open up those spaces for a new number one, two and three, perhaps So,

Unknown: 5:31

speaking of the giant bleeding, Oh, good

Paul J Daly: 5:37

one. Oh, a new report by Alex partners projects that only 15, one five out of 129 EV brands and plug in hybrids in China will survive through 2030 we haven't said 2030 in a while on this show, as fierce competition over capacity are pushing the market towards consolidation, the surviving 15 brands are expected to control 75% of The market, each selling over a million units annually. Most Chinese EV makers remain unprofitable, with their current market driving innovation and unsustainable pricing models only BYD and Lee auto have achieved full year profitability. That's two out of 129 despite low profitability, regional governments are continuing to support struggling brands to protect their local economies. Here's Steven Dyer of Alex partner says the environment has been has driven remarkable advances, but it has also left many companies struggling. Meanwhile, in Japan, Sony, Honda mobility, is operating loss more than doubled year over year, to 360 2 million as it pushes to launch its afila EV later this year. So it's a tough stretch. That is a tough business to be in. My friend,

Kyle Mountsier: 6:46

that's a tough business to be in. I will relate this. I just did a quick search, because I've heard this data before. By 1908 in the US, there are 253, auto manufacturers that's in the US. Remember when, when we, like, everything was auto here in the US first, that's right. In 1921 there were 88 in 1927 there were 44 we know that the global EV transition is a lot heavier pace than anywhere else, but this is not unseen when you see a whole new market segment come into a country that is flooded with people like everything's gonna try, and there's gonna be a lot fail, and there's gonna be a lot left over. It might be a little bit heftier of a final result there, maybe in the 20s to 30s. But, you know, this is something that you you you see anytime this kind of cycle repeats itself. But, man, I can't imagine being one of those 100 and so that may be left holding the bag over the next like that's only five years

Paul J Daly: 7:47

away. I know Todd Gilbert chimes in on the comments. Nothing against Elon, but I just purchased a Lucid Air touring. Love it. Yes, I can't believe I went Eevee after being against it for so many years. I told you you've been in that. I'm sure I've never been in the Lucid Air, but I just EV platform overall, I towed, I towed the pontoon boat with the f1 50 lightning over the weekend freeze. Oh my gosh, man, I will. I never want to pull anything with a gas powered vehicle again. Really, dude, it was unbelievable. All the torque you actually need full control of that vehicle, and it's also more maneuverable. It was amazing, truly amazing. Wow, interesting. I know it. I mean, granted, my range cut in half. So unfortunately it was like, fortunately, we only had to go like, 11 miles. Yeah, when it was like, range 283, I put in like, because you can load up the trailer specs and the weight and all that is like adjusted range. You know what I mean, 93 miles. Oh, something like that. I don't know it was intense. I'm sure that all Justin changed. But you know how I want, I want a good segue to this last story. There's no good segue except for this is a good story. It's a good story. This is a great story. Actually, I love it. I mean, it's auto related, not retail, auto industry, but close enough we usually cover

Kyle Mountsier: 8:59

retail thing. We just know that auto all all rolls this way. Darrell Thomas, a beloved Detroit Car Wash owner and NHRA licensed drag racer, was known for his generosity. So at his funeral, his family honored that legacy in dramatic fashion, showering the community with rose petals mixed with$5,000 in cash from a helicopter during a public celebration of life, the tribute shut down a stretch of Gratiot Avenue in front of showroom shine Express, one of his car washes. The family says they informed police, though, DPD claims they weren't told about the money drop. So it got a little, got a little spicy. You got money everywhere. Drop. Some stuff out of there. Here's, here's. What's crazy. The FAA is launching an investigation into the thing. No no action expected, obviously, from local authorities to do it. This was a final expression of love from him to the community, because he was a giver, said his niece, Crystal Perry. This is just fun. I mean,

Paul J Daly: 9:53

this is the kind of I mean, when I read this story, I was like, I think show the

Unknown: 9:57

video. Here we go. Look at this. You just got. Um, just money sounds like mayhem. So to see what

Paul J Daly: 10:06

it looks like, yeah, so you have a helicopter, it's probably like, oh, it's probably like, 100 feet, 150 years, not too high, yeah, it's not too high. But they're just people around this car. It's, what a beautiful moment. I love the way to honor somebody, obviously, he was a generous person, and then his family is like, how do we go out in big fashion? I can actually see a lot of car dealers, we know, pulling off a stunt like this, just because, yeah, yeah. I mean, they kind of do a reason. Well, if you actually look at the books and you like, look at the numbers, you realize retail auto dealers are doing this kind of every day, but just not, just not from a helicopter, yep, you know? Yeah. Well, actually, well, more than this

Kyle Mountsier: 10:43

every day, a lot more than this. If you if you don't listen to our Saturday podcast, you should definitely start to take a look. Last week, we did it on July 4. But we get to hang out with Chris, our head writer, who scours the internet every single week to see what the what dealers are doing all across the country, and it's really, you know, what's crazy. Three and a half years ago, when we started really diving into these dealer stories at the end of every email, or somewhere in the email, it was, it was almost difficult to find the stories. The stories are far and wide. They're everywhere. Now people are talking about it. It is something that is being ingrained into culture, and so like what we're seeing here is replicated in auto so many places.

Paul J Daly: 11:29

Sounds like a great way to start a week, doesn't it? Let's go full weekend, full week. In July, coming up, people are out buying you're out there to serve. Go get some and listen amazing week. Let's do it just starting out. We'll see you here tomorrow morning.

Unknown: 11:53

You.