WSJ What’s News - Tesla Rises as Musk Signals DOGE Work ‘Mostly Done’

Episode Date: April 23, 2025

A.M. Edition for April 23. Global markets breathe a sigh of relief as President Trump signals a softer tone on China tariffs and said he isn’t planning to fire Federal Reserve Chair Jerome Powell. Plus, as Elon Musk hints that his work with the Trump administration could be coming to an end, WSJ reporter Stephen Wilmot explains what that could mean for Tesla. And federal contractors offer billions in cost cuts to win over an administration skeptical about their contributions. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Stock markets rally as President Trump says he has no plans to fire the Fed chair. Plus Tesla stock surges after Elon Musk says his work in D.C. could be winding down. And federal contractors offer billions in cost cuts to win over an administration skeptical about their contributions. Within the consulting industry, this has been a real source of stress. Companies have thrown hundreds and hundreds of people at these reviews trying to figure out

how do we describe our work, how do we justify it. It's Wednesday, April 23rd. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. Markets around the world are breathing a sigh of relief this morning, with stocks gaining after President Trump last night signaled a softer tone on China tariffs and said he

isn't planning to fire Federal Reserve Chair Jerome Powell. Now, I have no intention of firing him. I would like to see him be a little more active in terms of his idea to lower interest rates. This is a perfect time to lower interest rates. If he doesn't, is it the end? No, it's not. Those Oval Office comments came after Trump lashed out at the Fed chair last week, writing in a social media post that Powell's termination cannot come fast enough, prompting a sell-off in

American assets like the dollar and U.S. treasuries and pushing safe-haven assets like gold to a new record high. Trump also said that the 145 percent tariff on China was too high that boosted Japanese and Korean stocks in particular, as tech companies with large exposure to the U.S. market like TSMC and Foxconn rallied on the prospect of a de-escalation in hostilities between Washington and Beijing. Shares of Tesla are up more than 5% in off-hours trading after the EV maker reported first-quarter earnings that included word of a 13% slide in vehicle deliveries and a more than 70%

decline in net income. But the headline news is that CEO Elon Musk signaled that his work with the Trump administration could be coming to an end. Stephen Wilmot is the Journal's European autos reporter. Stephen, I think the best way for us to understand Tesla's situation now is to hear from Musk himself. So I'm gonna play a few clips here from yesterday's earnings call.

Starting with Musk explaining his early work, setting up the Department of Government Efficiency was mostly done, here he was. And I think starting probably in next month, in May, my time allocation to Doge will drop significantly. Stephen, was that the answer investors were looking for that might explain Tesla's stock gaining after these results? Well, I think it almost certainly has something to do with it, with the positive share price

reaction. The worry that Musk isn't dedicating enough time to Tesla isn't new, of course, but it's been turbocharged by Doge and the fact that he's spent so much time in Washington. There's also obviously the fact, and this is new, that unlike the time he spent historically on other projects such as SpaceX, his time on Doge has been hugely politically contentious and therefore has carried a bit of a brand risk for Tesla. So I think for both reasons, investors are happy that he's going to be spending a bit less time in Washington, a bit more time on Tesla. Another factor was that the company confirmed that it was on track to produce a more affordable model in the first half. There had been some rumours that the

project was off track. So I think that also was a relief coming against the backdrop of very poor delivery numbers. The need for a kind of more affordable model has never been more obvious. Soterios Johnson About Tesla's future, Musk was speaking in quite glowing terms about its automotive business, promising that a driverless taxi service from the company would be launching this summer. And he also talked about other business units like the company's AI products, its pivot into robotics. These are things that Tesla has touted for a long time, its non-automotive work. And yet Musk did try to get more specific here putting some dates on when he thought this would all

Start to benefit the company's bottom line. Let's hear that that's probably Around the middle of next year second half of next year And then once it does stop move the move the national needle is significant way. It will really go exponentially from there What of that Stephen is the market buying that these future, this major jump up in valuation, is just around the corner? Well, to some extent, it clearly is buying it because Tesla still, even after a 40% plus share price fall this year, has a $750 billion market value, which is more than twice than other car makers like Toyota. It is valued like a tech company, not a car company, and that's because investors do give Musk some credit for these pronouncements. And the one that really moves the needle for Tesla's valuation is AI, robotics, anything he says about Optimus, the humanoid robot, and most particularly what he says about robotaxis. But

and most particularly what he says about robotaxis. But his scope for continuing to punt hopes down the road is getting a bit narrower when he's now saying that they will deliver actual functional robotaxis with unsupervised self-driving software this summer. Presumably it will be very limited, backed up by remote drivers in some way. This is deliverable. What might be less deliverable is an actual profitable, exponentially growing business line, which is also obviously just

promised. He's saying that will happen next year, next summer. So Tesla doesn't actually have that long to come up with a functional robotaxi business that actually makes profits. S2 A key spring for Tesla giving way to a key summer. Stephen Wilmot is The Journal's European Autos reporter. Thanks so much for stopping by. Thank you. Coming up, US brokered peace talks for Ukraine falter after Kiev pushes back on the proposed terms of a deal and the Trump administration moves to phase out artificial food dyes.

We've got those stories and more after the break. Hey, we're so excited for tonight. Before we come over though, may I ask if there are any unlocked guns in your home? Our guns are stored securely, locked in a safe that the kids can't access. Awesome. Learn how to have the conversation at AgreeToAgree.org, brought to you by the Ad Council. Three federal judges criticized the Trump administration yesterday over its immigration crackdown throwing up new legal roadblocks to the White House's no-holds-barred approach. Two judges in Colorado and New York sharply questioned the legality of the administration's use of wartime measures to speed up deportations of alleged gang members and criticized the

lack of legal protections for individuals who've been detained and are slated for removal. At the same time, a judge in Maryland accused the administration of bad faith in the case of Kilmar Abrego-Garcia, a man mistakenly deported to El Salvador. On Monday, the administration declined to answer questions posed by Abrego-Garcia's lawyers following a judge's order to facilitate his return, with government lawyers citing attorney-client privilege, state secrets, and diplomatic concerns, and telling the court that questions about his whereabouts and the administration's

legal basis for his continued detention are an absurdity. U.S. District Judge Paula Zinnes has ordered the government to provide full responses by 6 p.m. today. District Judge Paula Zinnis has ordered the government to provide full responses by 6 pm today. President Trump's efforts to bring an end to the war in Ukraine are on shaky ground after Ukrainian President Volodymyr Zelensky pushed back on a U.S. proposal to recognize Russia's control of Crimea as part of a ceasefire agreement. American officials had presented a series of ideas for ending the war to Ukrainian officials

last week and expected an answer today as Ukrainian, U.S. and European officials gather for a summit in London. Speaking in Kiev, Zelenskyy said the Crimea proposal was a non-starter. Ukraine does not legally recognize the occupation of Crimea. There is nothing to talk about. It is outside of our constitution. This is our territory, the territory of the people of Ukraine." Zelensky added that Ukrainian officials in London today would have a mandate to discuss

a partial or full ceasefire, which Ukraine agreed to last month, but Moscow rejected. Secretary of State Marco Rubio has announced a major plan to reorganize the State Department and shrink what he called a bloated bureaucracy and bring it in line with President Trump's America First priorities. The overhaul will result in the elimination of 700 positions and the closure of 132 of the agency's offices. However, this restructuring doesn't cover the network of U.S. diplomatic missions abroad. Seven of the ten largest consulting firms to the U.S. government are offering to cut

up to $20 billion from their federal contracts after being pushed by the Trump administration to locate deeper price concessions or face consequences. We exclusively report that the proposed cuts include terminating existing contracts and reducing the scope of their work within federal agencies, with some firms offering discounts on their labor costs, credits towards their work, or AI services free of charge. Journal reporter Chip Cutter said that if the proposed cuts satisfy the government, it would lift some pressure off the likes of Booz Allen Hamilton, which makes nearly all of its 11 billion dollars in annual revenue from contracts tied to the government, but

that the industry isn't in the clear just yet. There's been a lot of anti-consultant rhetoric throughout the Trump administration. You've heard some Trump administration officials say that they saw consultants as just pushing power points and creating decks and spreadsheets and not offering much value the industry of course would say that that's false and they do a lot to sort of Modernize the government and roll out new technology and all of that But you've seen the Department of Government Efficiency Regularly announced new cancellations of consulting contracts the Department of Defense earlier this month said it planned to cut 5.1 billion dollars in consulting contracts that affected firms like Accenture, Deloitte, and

Booz Allen. So you really just see it across the government right now. This real crackdown on the consulting industry is still a little unclear where it all goes from here. Accenture and Deloitte didn't immediately comment while a Booz Allen spokesman said the company was working productively with the government, quote, for the benefit of the American taxpayer. And Robert F. Kennedy Jr. has unveiled plans to strip artificial food dyes from the American diet by the end of 2026. The Health and Human Services Department and Food and Drug Administration will work with the food industry to eliminate petroleum-based synthetic dyes, which Kennedy

has blamed for a litany of health problems. Industry groups say the dyes used in their food products have been deemed safe, but are nevertheless going along with the order. Journal food reporter Jessie Newman has more. These dyes are pretty ubiquitous in American grocery stores. There's products that you sort of expect to see them in, like candies and cake frosting, but then they're in tons of other categories and products. So this is a pretty huge deal for food companies

and for consumers who are used to seeing a lot of products look a certain way. If dyes are in fact gonna come out, then our food is going to start to look different. And that's it for What's News for this Wednesday morning. Today's show was produced by Kate Bulevent and Daniel Bach. Our supervising producer is Sandra Kilhoff. And I'm Luke Vargas for The Wall Street Journal.

We will be back tonight with a new show. Until then, thanks for listening.