Morning Brew Daily - US Takeover of Venezuela’s Oil Industry & BYD Zooms Past Tesla in EV Sales

Episode Date: January 5, 2026

Episode 750: Happy New Year! Neal and Toby catch up on the latest on oil-rich Venezuela as the US captures President Maduro. Then, California proposes a wealth tax, but its tech billionaires are not happy with it. Meanwhile, 2025 was a good year for US stocks, but an even better one for international markets. Also, BYD overtakes Tesla as the world’s leading EV car seller. Finally, it’s a preview of the first full work week of 2026! Check out https://www.rubrik.com for more  Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Listen to Morning Brew Daily Here:⁠ ⁠⁠https://www.swap.fm/l/mbd-note⁠⁠⁠  Watch Morning Brew Daily Here:⁠ ⁠⁠https://www.youtube.com/@MorningBrewDailyShow⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

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pwc.com slash U.S. slash brew AI. That's pwc.com slash us slash brew AI. Good morning Brew Daily show. I'm Neil Fryman. And I'm Toby Howell. Today, why securing Venezuela's oil supply won't be

easy. Then California has a new tax up its sleeve and its billionaires are throwing a fit. It's Monday, January 5th. Let's ride. Good morning. Welcome back and happy new year. Can I say that? Either way, it's

Great to be in your ears once again after the holiday break. And Toby and I are super excited for what 2026 has in store. Before we get into the news, Toby, I'm going to need a couple of things from you to help us learn about your time off. Tell us the best thing you ate, the best thing you watched, and the best thing you read. Eight, watch, read. Okay, got it. Best thing I ate, I made these carrot cinnamon rolls from Maddie Matheson.

Absolutely delicious. Doesn't sound delicious, but carrots kind of mellow the sweetness, which is, a great thing when it comes to cinnamon rolls. The best thing I watched, I did my duty, I watched Marty Supreme, but that was not the top. I have to go with heated rivalry, which is about two hockey rivals

who become, let's say, more than friends. It is very intense. That is all I'll say, actually that is not all I'll say. Do not watch this with your parents, is my final warning. And then finally for reading, I'm hitting the classics this year.

I'm 100 pages into the brothers. Karamazov by Dotshevsky. it is thick. It is thick. So I'm doing my best there. I said I would pay you $100 if you actually finish that book. I'll go quickly. The best thing I ate while I was in Oaxaca, Mexico, and when you're there, you just have to eat mole for breakfast, lunch, and dinner. And it is so delicious. So I am 90% mole and the other 10% I am a mescal. I highly recommend people go there. Watch, I am kind of on an Alfonso Koran kick. He's a Mexican filmmaker. So I watched Etou Mamma Tambien and Children of Men to Excellent Films.

Also don't watch Itumama Tambien with your parents. After he did that movie, the next movie he did actually was the prisoner of Asgaband, kind of a different tonal shift. And the best thing I read was The Loneliness of Sonia and Sunny, which is another thick book at 670 pages, but I did finish it. It just came out in the past year, and it's an excellent book. People weigh in. Who had a more cultured break?

Me, cinnamon rolls are Neil with Moli and Wohaca. I think we both did pretty well. And now a word from our sponsor, Rubrik. Neil, AI agents are kind of like that friend who hits a golf ball like they are making a case for a spot at the U.S. Open, powerful, unpredictable, and occasionally just launching things where they don't belong. Hello, Sandtrap. And that's why Rubric Agent Cloud is such a game changer. It's the only platform that lets you monitor, govern, and rewind AI agent actions so they don't smack sensitive data into the parking lot.

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and regain me the deal, additional terms, conditions, and restrictions apply. The news cycle did not ease its way into 2026 as the new year kicked off with the U.S. attempting regime change in Venezuela, and oil is at the center of this stunning story. Early Saturday morning, U.S. military forces captured Venezuelan President Nicholas Maduro and his wife in a wide-scale raid that took months of planning. They now face drug trafficking charges while being held in the same notorious Brooklyn jail that housed Diddy and SBF. Venezuela's leftist vice president and Maduro ally, Delsi Rodriguez, is now serving as the country's de facto leader, as everyone around the world watches, with great uncertainty, what happens next? For President Trump, what comes next is a large-scale oil extraction by American companies.

In a press conference on Saturday, Trump said, we're going to have our very large United States oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure. Venezuela's oil infrastructure is indeed badly broken. It sits on the largest proven oil reserves anywhere on the globe, 303 billion barrels worth or 17% of the world's total. However, years of neglect and mismanagement have led Venezuela to eke out just 800,000 barrels per day. Compare that to the 13.8 million barrels per day produced by the United States. Most Western oil companies, except for Chevron, do not operate in Venezuela after

waves of nationalization booted them out of the country most recently in 2007. Trump is making a bold gamble, and many say in a legal one, they'll return now that Maduro has been ousted, but tapping this gold mine will not be easy or simple. You are right, Neil. We did not ease into this news cycle at all. I remember messaging you on the weekend when this news broke that we're going to have something to talk about on Monday, so let's talk about it. Venezuela does depend on oil tankers to get their oil out into the world. And right now, there is, in addition to seizing Maduro, the U.S. is blocking 30 tankers from kind of delivering oil, which has a crippling fiscal impact on Venezuela's economy. And Marco Rubio says that is actually the lever that the U.S.

is putting pressure on Venezuela right now. His quote was that it allows us to exert tremendous leverage over what happens next in the nation. So rather than taking control of the country out, like Trump has suggested, it does look like this oil quarantine is going to be the chief way that the U.S., you know, kind of pushes Venezuela to its will. That being said, what is going to happen to the global oil market? We know this is going to affect Venezuela's oil market, but the blockade is not necessarily expected to adversely affect the global market as much as you might expect. Around 80% of Venezuela's oil is actually sold on the black market, so it's not a massive contributor to the market as a whole. China and Russia are its biggest customers,

but China can kind of replace Venezuela's barrels pretty easily. So it will devastate the Venezuelan economy, but right now, oil market experts are kind of looking at it and saying it's not going to be this massive supply hit that you might expect. But Trump has grander designs for American oil companies to go in back to Venezuela, where they operated for many decades before they were kicked out during these waves of nationalization in the 70s and 90s. companies like Exxon and mobile before they were merged and Gulf Oil and Canoco. They all had huge presences as in Venezuela when Venezuela was in a huge oil powerhouse on the global stage. It was actually one of the richest countries in the world from the 50s to the 80s

because of it was one of the biggest oil exporters on the planet. Certain governments came in and created nationalization for this industry. And that led to what years of neglect and corruption and now Venezuela just produces 1% of all global oil exports. President Trump wants American companies to go back in there and claim what they say were seized assets. A bunch of these oil companies after this nationalization actually sued Venezuela for tens of billions of dollars. They say that they were paid pennies on the dollar for what they were owed. So Trump says, let's go back in Exxon Mobil and others, and Chevron is already operating there.

let's take more of the oil, and that seems to be at least part of parcel of what this stunning raid was meant to achieve. There is some kind of ironic tension underneath this approach, though, because let's look at the state of oil prices. They felt 20% in 2025. Right now, oil is trading around, you know, $57 a barrel, which is a kind of a warning or a yellow warning light for domestic oil producers. It is not necessarily a price that they can sell oil very profitably at. And so, The market has been dealing with this supply glut. There's tankers, you know, they're just sitting full of oil with not a lot of willing buyers. And so Trump is saying, hey, we want to actually start bringing online more oil capacity.

We want to drill, baby drill in another country now. Is that necessarily what the oil market wants? That would just put more supply onto the market. So there is a little bit of a head scratching here. But I looked at how oil companies are trading this morning after the news. Valero is up 8% in pre-market. Chevron is up over 7%. So I do think there is some investor curiosity on whether they will get access to this valuable market once again.

Yeah, most experts looked at what's going on and said, I don't think that American oil companies are going to be jumping to go back into Venezuela, number one, because of where oil prices are and because of the glut of oil. The other is just the amount of capital that is going to be needed to repair this dilapolated infrastructure. Some estimates, a Rysstad Energy, a consultancy, said that $110 billion in capital expenditure in exploration and production alone would be needed to bring Venezuela's output back to where it was just 15 years ago, $110 billion. And then there's the facet of human capital.

So many of engineers and other talented people in the oil industry in Venezuela have left in recent years because this industry has gone to shambles. So you need a lot of know-how and logistics that need to be repaired in the coming years to actually make Venezuela a significant. player on the oil stage, which seems to be a far-fetch, especially at oil prices below the Mendoza line right now at $60. So a huge question mark about what is going to be happening in Venezuela. It looks like the regime is still in place because Maduro's number two is still in charge. We don't know what's going to happen, but we will keep you updated.

Let's move on. California wants to take some of its wealthiest residence lunch money, and they are not happy. A one-time 5% wealth tax has been proposed on California's estimated 255 billionaires. Notice I said wealth, not income. That means the tax, which still doesn't have the necessary signatures yet to appear on the November ballot, doesn't just apply to the bacon that the ultra-rich are bringing home, but also the worth of their businesses, stocks, bonds, art, collectibles, and intellectual property. How many Gita is what a tax like this raise? While it's difficult to determine exact revenue, the health care union that crafted the measure estimates that it would raise up to $100 billion.

But that's a big if because billionaires may change their behavior to reduce exposure and much of their wealth is tied to stock prices, which fluctuate, making it hard to pin down an exact number. The idea behind the one-time ding is to reallocate some of the billions to areas where people are struggling, namely health care. 90% of the revenue generated by the tax would go towards health care, with the remaining 10% spread to food assistance and education. The policy is being framed as,

a response to Republicans' big, beautiful bill tax and spending law, which includes around $1 trillion in Medicaid cuts over the next 10 years. Neil, there is a big debate here, though. Are billionaires just going to leave if you hit them with a tax like this? Well, what's interesting about this thing is that it would retroactively apply to billionaires living in California on January 1st, 2026, even if it is approved on the ballot in November 2006. So you had all of these billionaires, according to reports, trying to establish residency outside of California in the last few days of December. Peter Tiel, who has a lot of, a lot of

things going on in Los Angeles, said he opened, or reports show that he opened an office in Miami. David Sachs, who is now in the Trump administration, also an investor, opened an office in Texas. Larry Page, the Google co-founder, is another one of those big billionaire names that is trying to diversify their assets. so they're not hit with this one-time tax in California if this ballot measure is approved in November. So you saw a huge scramble by billionaires to try to mitigate their tax incidents if this ballot measure would be approved later this year. And there was an equal number of billionaires upset online going after California legislators, especially Roe Kana, who is the

representative of Silicon Valley. They got into a huge spat on X over this particular bill. And there is a huge question of whether billionaires will actually leave as they say they will because of this tax. Yeah, let's dive in the core debate. Supporters of the tax say that, hey, billionaire wealth has nearly tripled in the last six years. They can afford the 5% hit to their top line. It's not going to affect their lifestyle. It's not going to affect their consumption or spending. It really is a small amount when you think about how much their wealth has grown in recent times.

But critics' arguments say that, hey, you're a risk. losing your highest tax base if you start pushing these people to other states because wealthy residents could hypothetically just pack up and leave as you explained with a lot of Silicon Valley high profile people. Gavin Newsom, the governor has said he's previously opposed wealth taxes for much of those same reasons. But if you actually dig into some policies that have happened in other states, maybe they wouldn't abscond like a lot of people are fearing. Prior studies have showed that millionaires don't typically relocate just for tax cuts. Massachusetts introduced a 4% tax on millionaires in 2023.

The millionaire population rose nearly 39% in the two years after it was enacted. So just plain and simple, there are a long list of reasons why you live in the place that you live. I mean... And California is nicer weather than Massachusetts. It is a lot nicer weather. It's got better sports teams, too, actually. But the bottom line is high wealth individuals are less likely to move for tax reasons than maybe you would expect. Welcome to winner of the weekend, the segment where Toby and I pick two things that are having more fun than Hollander and Rosenoff in the locker room.

I win the pre-show contest of who has more chapped lips, so I get to go first. And my winner is the stock market, which swatted away tariffs, bubble fears, and economic gloom to record another fantastic year. With 2025 now in the books, the S&P rose 16%, the NASDAQ 20%, and the Dow 13%, setting more record highs along the way. That makes three consecutive years of double-digit gains for stocks, and the sixth year out of seven that the S&P has climbed at least 15%. This long, extended rally, continues to be fueled by AI companies, which investors believe are ushering in the next industrial revolution. By one estimate, more than 90% of U.S. economic growth in the first, half of 2025 was accounted for by investments in computer equipment and software tied to AI in data centers. And that lined the pockets of shareholders in those firms. Seven of the 10

best performing S&P stocks last year were tied to the euphoria around AI. What will 2026 bring? Even more gains analysts predict. The average S&P 500 target for the year is about 7600 points, implying a jump of 11%. That's a reflection of more AI advances, as well as the Fed can continuing to cut rates two to three times next year, lowering borrowing costs across the economy. Toby, it's a bull's market. We're just living in it. Let's rewind to ourselves at this point last year. Analysts were actually expecting pretty steady market gains. They were expecting interest rates cuts and they were expecting a business-friendly environment under President Trump.

Technically, we did get to that end result, you know, a great year for stocks. but along the way it was anything but smooth. I do just want to go kind of Spotify, wrapped the stock market, and relive the year that was. Inflation pressures were still kind of mingling around in early 2025. Then Deep Seek happened, which was this moment where Chinese AI company developed technology at a much lower cost in U.S. firms. That caused a massive panic.

Then there was the tariff shocks that happened in April. The S.P 500 plunged more than 12%. in one week. Like it is crazy saying that sentence now after ending the year up over 16%. And then throughout the year or two, there was just corporate profit damage. There was consumer harm that happened from these tariffs.

All these policies were very unpredictable. And then May through October kind of started to heat up a little bit. Tariff were delayed a little bit. The Federal Reserve did come through with those rate cuts that a lot of people are expecting. and then obviously the AI trade just powered the market through it all. And the S&P 500 hit record highs every month from May through October, while it just ignored all the previous fears that surface in the beginning of the year.

So yes, we got there in the end, but along the way, it was a bumpy ride for sure. All right, we're going to take a quick break and come back with my winner of the weekend. It's time to refresh your yard during spring backyard days at the Home Depot. Get low prices guaranteed on propane grills, starting at $10,000. $79, like the next grill three-burner gas grill, or get $50 off the select Weber Spirit grill and bring big flavor to your

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Book on Hilton.com or the Hilton app and save up to 20% to get the stay you expected. When you want savings, not surprises. It matters where you stay. Hilton for the stay. My winner of the weekend is eating your words because Elon Musk is sitting down to an all-you-can-eat buffet. now that Chinese EV maker, BYD, has overtaken Tesla as the world's largest seller of electric vehicles.

Let's rewind to 2011. Elon publicly dismissed BYD as a serious competitor, saying, have you seen their car? I don't think it's particularly attractive. The technology is not very strong. Well, like Neil Post High School, it's had a bit of a glow-up sense and customers have taken notice. 2025 was the year that Tesla fully lost its EV crown for the first time selling few. fewer EVs over a full year than BYD. Tesla delivered 1.64 million vehicles in 2025, down from nearly 1.8 million in

2024. That's a 9% year-over-year decline for a company that used to put up 50% growth. Meanwhile, BYD sold 2.26 million electric cars globally in 2025, up 28% from the year prior. Even more impressive, BYD has done this without you likely haven't driven or even seen one on U.S. roads. Chinese EVs remain effectively banned from the U.S. due to high tariffs, which means it's been beating Tesla with one red, white, and blue hand behind its back. Ironically, given Elon's talk back in 2011, BID could probably lob much of the same criticism back at Tesla these days. Tesla has not substantially updated its lineup in years, and the only major new model it did unveil

the cyber truck has sold poorly. Throw in Musk's politics that have damaged Tesla's brand among core EV consumers and you have a recipe for losing your throne. Neil, BYD was a big winner of 2025. Let's talk about where Tesla and BYD do go head to head, which is Battleground Europe. And that's where you can see this changing of the guard really take place. Tesla's European registrations last year fell 39% while BYD's registrations rose 240%. In Europe, Tesla now sells fewer electric cars than Volkswagen. So we know that BID can't really sell cars in the United States. So that is kind of where the two, the red white and blue and the red and white, or just the red, do meet and they clash in Europe. And it looks like BID is winning that war there as it is around the world. The story every time we

talk about Tesla, as we have to say, like, well, they're not actually an electric vehicle company anymore. Wall Street doesn't value it like in an AV company anymore. They're very much focused on this Robotaxy enabled future about their optimist robots. It's very much an AI and robotics company, but it still does have a hefty electric vehicle business, and it is not just symbolic that BID trounce it. It wasn't even close, by the way. BID had beat Tesla over some quarters when it comes to electric vehicle sales, but seeing it put year against year and seeing BID just absolutely lap it, the core business of Tesla is no longer, you know, the behemoth that many expected it be. I remember back in the day, you know, Elon was talking about selling 20 million EVs a year,

which is, you know, more than Toyota did. Now that is far from the top of mind. It's all about robotics and AI. Yeah, they peaked out 1.8 million vehicles sold. And then for the past two years, that's actually declined. Yes, three quarters of Tesla's revenue does come from their EV business, but shareholders are looking way past that into this robotics and autonomous vehicle future. Now, Elon Musk and Tesla do have a robo. Tosso Service operating in Austin, Texas and in the Bay Area. And they're hoping to expand that in this new year. And Tesla stock will absolutely be riding on how that goes.

All right, folks, it's here. Your preview of the first week of the year. Wish I didn't have to do this. But let's dive in. Silicon Valley is in Sin City for the world's biggest consumer electronic show, CES, held in Las Vegas every January. CES gives companies the opportunity to show off futures to gadgets. that infuse the latest technology, even if it may not be totally ready for prime time.

The main theme of this year's event, robots from pool cleaners to lawnmowers to humanoids that will fold your laundry. Invidia's Jensen Huang and AMD's Lisa Sue will kick off the festivities with big speeches today. I was looking at some of the robots teased so far, and one from LG gives me hope that our laundry folding days actually could be coming to an end. It sinks with your smart appliances that do have to be LG. to load in start cycles and then fold when they're done.

So I do think that kind of cohesive ecosystem could work. I also saw a bunch of really bad folding laundry robots. So it really depends. The bar too clear is very low. I think an abacus could fold laundry better than I, Dan. I need it, though. I'm so over. I came back from our travels, and it took so long to all this laundry.

I just am looking at these robots going, come on. You can do it, LG. I believe in you. All right, we'll definitely bring you updates from CES about those laundry folding robots. Economic data releases have returned mostly back to normal after the disruptions from the shutdown, which means this Friday will get the jobs report for December, presenting the employment situation not only for that month, but for the entire year of 2025. Casey forgot what happened in November.

The U.S. added 64,000 jobs better than expected, but the unemployment rate rose to 4.6% the highest in over four years. I don't even really remember what it's like. having regular jobs reports coming in after the end of last year with the government shut down. So it's good to have you back, friend. That's all I'll say. Mr. Beast is coming back to television for the second season of Beast Games, his hit game show for Amazon. In 2024, the world's biggest YouTuber made a highly successful transition to traditional entertainment with the first season becoming prime videos most watched

unscripted show of all time, reaching 50 million viewers in the first 25 days it streamed. North Carolina Governor Josh Stein was so impressed that he even gave Beast Games a $15 million grant to film the second season in the state. I watched the first season. A lot of people did. Yeah, 50 million people did. I would say it's a cross between the wire and the soprano in terms of plot and just drama and quality. It is entertaining. And if you're literally looking for just an injection of sheer mindless entertainment, you know, turn on beast games, I guess.

All right, college football's marathon of a playoff. take two steps closer to handing out the trophy with semi-final games determining the national championship matchup. This year has seen a stunning changing of the guard with a new crop of gridiron empires vanquishing the old. Indiana and Oregon, who play each other on Friday, have never won a national title, while it's been decades for Ole Miss and Miami who square off on Thursday. My fun fact here is that every coach remaining is one who was on Nick Sabin's staff at one point or another. That is a fruitful coaching tree. That is a coaching redwood. I want to imagine Nick Saban goes into a group chat with all four of them. He goes, you know who my favorite is.

Like, I'm rooting for you and you just don't say anything like that. You could do some mind games, which I assume, you know, Coach Saban would do. And then finally, this week's also the first full one for dry January, an increasingly popular tradition where people lay off the booze for the entire month. In 2024, according to a poll from civic science, a quarter of a Americans reported that they successfully completed dry January, and it might be getting even easier, given the decline in drinking rates. Gallup found that just 54% of Americans said they drink alcohol last year, an all-time low dating back to 1939. Toby, you go and dry this month? I am dry as a bone. I just have a lot going on, Neil. I'm trying to read Brother Carr,

whatever. I can't even pronounce it right now. I'm trying to get back in marathon shape, maintain the golf game. We're on the road to 225 on bench. So no time for drinking this January. I am. I want to support local bars. They're going to have a rough go out of it this month. So I'm going to go pop my head and say hi. Support local. I'm not sure.

I'm not sure anybody else is going to be there. A lot of people do try January and good luck with it if you are doing it. All right, that is all the time we have. Thanks for starting your morning with us and have a wonderful start to the week. If you want to get in touch, you can send a note to Morningbrewdaily at Morningbrew.com Or DM us on Instagram at MB Daily Show. Let's roll the credits. Emily Milliron is our executive producer.

Raymond Lute is our producer. Our associate producers are Olivia Graham and Olivia Lake. Hair and makeup still has the Sunday Scaries. Devin Emery is our president and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow.