Morning Brew Daily
Tesla's Terrible Q1 Prompts Musk Return? & Companies Face RFK Jr.'s Food Dye Ban
Wed, 23 Apr 2025
Episode 567: Neal and Toby chat about Tesla reporting a wide miss on its Q1 earnings (no surprise there), but Elon Musk says he is coming back from Washington to Tesla. Then, RFK Jr.'s move to ban food dyes in the food supply could shake up the industry. Also, Chobani and Roche are now the latest companies that have announced investments of new factories on US soil amid tariff threats. Meanwhile, Japan faces a rice shortage crisis that forces it to import rice from neighboring countries. 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. Visit https://planetoat.com/ to learn more! Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: Who are the hosts of the Morning Brew Daily Show?
Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, RFK tells food companies to get rid of artificial dyes and Mountain Dew will never be the same.
Then Elon Musk is promising to spend less time on Doge and more time on Tesla because, boy, does it need it. It's Wednesday, April 23rd. Let's ride.
Chapter 2: What is the impact of politeness on ChatGPT's cost and AI development?
Are you the kind of person who is super polite to chat GPT? Like you say please and thank you when asking a question so the bots will spare you after the uprising? You could be costing OpenAI millions of dollars.
Recently, the company's CEO, Sam Altman, suggested that people simply saying please and thank you to their chatbots cost OpenAI tens of millions of dollars because of the extra computing power required. However, Altman says that money is well spent because in his words, You never know. Wink, wink. Toby, are you overly nice to a chatbot?
Yeah, I definitely fall into that wink, wink category because, you know, as we approach this mythical threshold of AGI, artificial general intelligence, where these models think at human or beyond human level intelligence, you do never know. Maybe they do become our overlords. Maybe we do enter a Terminator scenario.
And maybe just maybe politeness is going to be the very thing that separates, you know, the survivors from the non-survivors. So I'm with Sam Altman. You do never know. And now a word from our sponsor, Planet Oat. Neil, you ever found a really good throw blanket for your couch?
Toby, my baseball days are behind me. I'm not throwing anything these days. Come on. Clash your life up a little bit.
The right throw blanket can take the same old couch, same old room, and upgrade it big time.
That's the Planet Oat effect. You pour it into coffee or over cereal, and boom, everything's cozier, creamier, just better.
It's creamy, rich, smooth as can be, like your morning got wrapped in a nice warm hug.
And the unsweetened version, zero grams of sugar, still somehow delicious, plus no dairy, no gluten, no peanuts, no problem. So if your breakfast, like your old couch, could use a little comfort. Reach for the oat milk that's basically comfort in a carton.
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Chapter 3: Why is Elon Musk returning focus to Tesla amid Q1 earnings miss?
Global deliveries fell 13% while net income sank 71% as the company contends with falling demand, increased competition, and and its CEO's political side projects. Q1 2025 was the first quarter with under $1 billion in net income for Tesla in four years, and it wasn't even close, coming in at just over $400 million.
Chapter 4: What challenges is Tesla facing in Q1 2025 and the EV market?
Since Elon Musk started working on Doge in earnest, the company's stock has fallen by about 40%, and shareholders are increasingly getting frustrated by his divided attention. Eight state treasurers, including those from California and Illinois, sent a letter to Tesla's board yesterday, raising concerns about the company's slipping performance and Elon's bifurcated focus.
And it's clear Elon is feeling the pressure. He said yesterday that the time he spends on Doge will drop, quote, significantly in the next month, which is likely the reason the stock rose in after-hours trading. Still, even if Elon was giving Tesla his 100% attention, it's not guaranteed that the company can magically turn things around.
European deliveries have fallen by double digits per cents in the first two months of the year, and the company's eye-catching Cybertrucks have sold just 50,000 units so far, prompting a quiet reposition of the futuristic vehicle's brand to cater to more of a working man F-150 crowd.
Neil, analysts knew that yesterday's earnings weren't going to paint a rosy picture, but this was a really rough quarter.
Still. investors heard exactly what they wanted to hear, those magic words. I will be working less on Doge and I will be working more on Tesla. That is exactly what they needed to hear because Tesla stock was in a free fall. Its business is hurting mightily. The fact that Elon Musk will devote more attention to this particular company in its time of need was very much music to their ears.
Yeah, and if you want to put some numbers to it of the parallels between working on Doge and working on Tesla, Doge's website claims to have cut about $160 billion from the U.S. government, $160 billion in savings. Over that same stretch, Tesla has lost roughly $600 billion in market cap.
So again, it's not an apples-to-apples comparison, but it kind of just goes to show you the value creation and the value destruction that has been happening due to this divided focus.
So where does Tesla go from here now that Elon Musk is supposedly going to be working on it more? They have two big initiatives coming down the pipeline this summer. One is this robo taxi service that they're going to launch in June in Austin, Texas. Elon Musk says we are on track for that. They're going to compete with Waymo and other autonomous taxi companies.
They've already been giving customers rides all around the country in certain cities. They're also expected to release an affordable EV model, which has been anticipated for years because there's an increasing amount of competition, not just from legacy car makers in the United States like General Motors, but also BYD in China has now overtaken BYD. Tesla as the world's largest seller of EV.
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Chapter 5: What are Tesla’s upcoming initiatives to revive its business?
And I do think you're seeing some brands creatively get around it as well. One brand that we've talked about in this show before actually is Ruffles. They are introducing this brand called Simply Ruffles Hot and Spicy that aren't that flaming hot red that you associate with spicy stuff. They're actually just orangish and actually give off this aura of being healthier because of that.
So I do think we're trending towards healthier snacks in general. So maybe toning down the neon won't have the outsized effect that a lot of people think it might have. Let's move on.
We may not be screwing iPhones together, but check the bottom of your yogurt and prescription drugs for some Made in America stickers in the coming months because Chobani and Roche announced plans to set up factories in the good old U.S. of A. yesterday.
Chobani is opening a massive million-square-foot factory in New York State that will cost at least $1.2 billion as it looks to increase its capacity to meet growing demand. Chobani actually started in New York back in 2005, so Governor Kathy Hochul threw a bevy of tax incentives its way in order to ensure it set up shop in its hometown.
Also yesterday, the Swiss drugmaker Roche announced it will plow $50 billion into manufacturing in the U.S. over the next five years, creating 12,000 jobs in the process. Switzerland is only looking at a 10% tariff right now, but that is set to jump to 31% once Trump's 90-day pause expires.
The pharmaceutical industry at large is also on edge as Trump gears up for sector-specific import tariffs, hence the game planning from Roche to beef up its U.S.-based production centers.
So, Neil, for all the economic chaos the tariff rollout and pauses have caused, there has been a steady stream of announcements coming from companies who, one, want to dodge Trump's tariff hammer, and two, we're already planning on investing in these factories in the first place.
Let's talk... Chobani. I mean, this company is a rocket ship. They're building the biggest dairy factory in the United States in the middle of New York, Rome, New York. They're going to try to make one billion pounds of dairy products a year, which my stomach is hurting just thinking about that. This company is one of the fastest growing food companies in the entire United States.
Net sales last year rose 17 percent. Earnings are over 500 million dollars. It says it now controls about one fifth of the entire American yogurt market. They're also on this expansion spree to get into new areas. They bought La Coloma, a massive coffee company, for $900 million. So they are in growth mode. And the next stop for them after this factory is potentially an IPO.
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Chapter 6: What is Robert F. Kennedy Jr.'s proposed ban on artificial food dyes?
To learn more about how you can use Wise Business to save time, money, and stress, visit wise.com slash business. Japan is engulfed in a rice crisis, and to combat the shortage, it's done the unthinkable. Import the grain from South Korea, something it hasn't done in more than 25 years. Last month, South Korean rice hit Japanese shores for the first time since 1999.
an emergency stash Japan hopes will help alleviate soaring prices that has shaken society. Because eating non-Japanese rice in Japan is like drinking a Heineken at a 4th of July barbecue. You just don't do it when Budweiser exists.
Japanese consumers eat rice at pretty much every meal, but they've long been skeptical of foreign-grown rice, so much so that Thai rice imported during another crisis in 1993 mostly went untouched. But they may not have a choice this time around. The price of Japan-grown rice has more than doubled over the past year, leading to outrage from restaurant owners, sake brewers, and customers alike.
A few months ago, Japan was even forced to take the unprecedented step of selling hundreds of thousands of tons of rice, 2 million bowls worth, from its strategic rice reserve, a stockpile of rice only used after natural disasters. But even that didn't move the needle. Toby, what is going on? Where did all the Japanese rice go?
Yeah, there's definitely been some logistical issues with getting the rice from suppliers out to people in grocery stores as well. But also there was these record-breaking temperatures in 2023 that really affected that crop. There's also been a rise in tourists. I feel like we've talked about this so much on the show. So many tourists rushed to Japan today.
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Chapter 7: How could the food dye ban affect major food companies and consumer behavior?
putting, you know, increased demand on their dwindling supply. And then also there was a variety of natural disaster warnings that caused people to stockpile things. So it was just a combination of a lot of factors that led to, you know, these unprecedented headlines of importing foreign rice.
Those headlines are maybe a little overblown because when you put the amount into perspective, it's not a lot. Two tons of rice that is currently coming in from South Korea, not even close to the 142,000 tons that they released from the stockpile. But still, it is just showing that this is a moment of crisis for Japan right now because they are very, very particular about their rice.
And they're very particular, and they consume so much rice. The average Japanese person consumes about 110 pounds of rice per year. Compare that with 27 pounds per year consumption of rice for the average American. So this is a
big deal uh for the japanese government to get a handle on this and you have people there being like where is all this rice you mentioned the high the high temperatures in 2023 that dwindled the crop but there was a much bigger crop in 2024 so somewhere along this very complex supply chain that gets the rice from the farm to the retailer someone it someone it appears some groups of people are hoarding rice and speculating on it because the prices have have
surge so much. So maybe there is a separate black market stockpile somewhere. And that's what people are speculating because they're like, where the heck is the rice? We're growing it. It's fine.
Although I do just want to give a one shout out to American rice, because this is just one data point, but the guardian talked to a restaurant owner who has said, listen, Japanese rice is too expensive for me. I switched to California rice to import. And they talked to some diners that frequent in the restaurant. And they were like, honestly, no qualms about eating it.
Prices have gone up, so I'm looking for cheaper ones. And this was actually pretty good, so maybe don't knock it until you try it, especially when it comes to California-made rice.
All right, let's sprint to the finish with some final headlines. Stocks ripped higher yesterday and kept on soaring in futures trading after the Trump administration gave a series of signals they would ratchet down the trade war with China and play nicer with investors.
Last night, President Trump said he was not planning to fire Fed Chair Jerome Powell and that 145 percent tariffs on China are very high. and would come down substantially. Those remarks came after Treasury Secretary Scott Bassett told investors at a conference that the current trade war with China was, quote, unsustainable and that he expected a resolution to come at some point.
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Chapter 8: Which companies are investing in new US factories amid tariff threats?
That's down 0.9 percentage points from its January forecast. And then meanwhile, cut its global forecast down by 0.5 percentage points as well. So it's not calling for a recession in the US. It's not calling for anything crazy, but it is downgrading those forecasts. And then just one final, I feel like I'm being Debbie Downer here, but
Bessette did express optimism that a deal with China would be reached, but also went on to clarify that there were no current diplomatic negotiations going on between the two countries to end the trade war. So even though we got a little bit of that optimism, it's nothing super concrete at this point.
But it's enough for investors, and that's why we're seeing stocks ripping. They're looking for literally any shred of evidence that those 145% tariffs will come down, and they're sending stocks soaring again this morning.
Bill Owens, the executive producer of CBS's News 60 Minutes, resigned yesterday, citing a loss of journalistic independence in the recent month. Owens stated in a memo that he could no longer make independent decisions in the best interest of the show and its audience.
The backstory here is that the network is currently in the middle of a $20 billion lawsuit filed by President Trump against CBS's parent company, alleging deceptive editing of an interview with then-Vice President Kamala Harris.
Neil Owens is just the third person to lead 60 Minutes in its 57-year history, so this was not a spur-of-the-moment decision, but clearly he felt that this was the right thing to do for 60 Minutes and its audience.
Yeah, that's why this is so shocking, because this...
position doesn't get turned over that much but you're right there are a lot of political headwinds facing cbs news they have this 20 billion lawsuit that they're facing and then at the same time paramount global which is its parent is trying to merge with skydance media for that it needs approval from the fcc so you take those both together and sherry redstone who controls that company
is being accused by rank and file employees like Owens. You know, he didn't explicitly say of maybe cozying up to the Trump administration to settle that lawsuit and get approval for the sale. So 60 Minutes is looking for a new leader. Heads up to freeloading fans of Last of Us, your days of mooching off your ex's family's account could soon be coming to an end.
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Chapter 9: What is the current rice shortage situation in Japan?
So the Academy finally implemented a new rule yesterday requiring voters to actually watch all the nominated films in a category before casting a ballot. If you want to scream, wait, they weren't doing that already, you have every right to do so now. One other aspect of this is enforcement.
Can't exactly force a voter's eyelids open to watch Dune II like they're in a clockwork orange, but the Academy thought of this and will monitor viewing activity through its members-only Academy screening room streaming platform, according to Variety. For films viewed outside the platform, You have to submit a form indicating when and where you watched.
Neil, I for one think they should have to take a little test too.
They might. I mean, this is truly shocking. And we know now why Dune 2 didn't get Best Picture because at a 2 hour and 46 run time, maybe voters were like, I already saw, you know, a Nora and that was pretty good. So maybe I'll just vote for that. So I think, you know, this is what BAFTA did this this rule in the UK last year. And it's just truly surprising.
I stand with everyone, including you, who are like, what the heck? Like you didn't need to watch all of the movies before casting your vote. You know, what are we doing here?
And then finally, this is slightly rated, but just since everyone's been talking about Conclave recently, I remember during this last Oscar cycle, a lot of people kind of anonymously quoted themselves as saying, I didn't give Ralph Fiennes the lead in Conclave in Oscar because he's already won one for his role in Schindler's List. So they didn't vote for him.
Even though he never won for Schindler's List, people just assumed that. And so... Those headlines combined with the fact that some people weren't watching movies were like, what is the Academy even doing here?
If you were already skeptical of the Oscars, I mean, there's even reason to not take it even more seriously now. Let's wrap it up there. Thanks so much for starting your morning with us and have a wonderful Wednesday. For any questions, comments, or feedback, send an email to morningbrewdaily at morningbrew.com. Let's roll the credits. Emily Milliron is our executive producer.
Raymond Liu is our producer. Our associate producers are Olivia Graham and Olivia Lake. Uchenua Ogu is our technical director. Scoops Dardaris is on audio. Hair and Makeup watched all of the Oscar nominees. Devin Emery is our president, and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow. Grabbing a quick meal is easy.
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