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Elon Musk On Losing Chairman Title, $20 Million Over a Tweet: 'I Do Not Respect the SEC'

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Elon Musk trash-talking the SEC on national television, Ghosn and Nissan indicted, China’s car sales are still slipping, and more in The Morning Shift for Monday, Dec. 10, 2018.

1st Gear: Elon Musk Just Aired Out His Beef With the SEC

Elon Musk went all in on his interview with 60 Minutes last night, telling Lesley Stahl, “I want to be clear. I do not respect the SEC.” At least he’s being honest.


The confession came in the part of the segment concerning Musk’s infamous tweet claiming he was considering “taking Tesla private at $420,” which eventually led to the Tesla boss stepping down as Tesla Chairman over the SEC investigating him for alleged securities fraud.


In the interview last night, according to Bloomberg, Musk said he only agreed to the terms of the SEC settlement, which forced him to pay a $20 million fine and appoint Robyn Denholm as Tesla Chairwoman, because of his respect for the justice system.

Here’s the excerpt from the interview via CBS:

Lesley Stahl: Have you had any of your tweets censored since the settlement?

Elon Musk: No.

Lesley Stahl: None? Does someone have to read them before they go out?

Elon Musk: No.

Lesley Stahl: So your tweets are not supervised?

Elon Musk: The only tweets that would have to be say reviewed would be if a tweet had a probability of causing a movement in the stock.

Lesley Stahl: And that’s it?

Elon Musk: Yeah, I mean otherwise it’s, “Hello, First Amendment.” Like Freedom of Speech is fundamental.

Lesley Stahl: But how do they know if it’s going to move the market if they’re not reading all of them before you send them?

Elon Musk: Well, I guess we might make some mistakes. Who knows?

Lesley Stahl: Are you serious?

Elon Musk: Nobody’s perfect.

Lesley Stahl: Look at you.

Elon Musk: I want to be clear. I do not respect the SEC. I do not respect them.

Lesley Stahl: But you’re abiding by the settlement, aren’t you?

Elon Musk: Because I respect the justice system.

The rest of the interview focused on the “life or death” ramp up of Model 3 production, which led to Musk bragging about the unorthodox addition of a third assembly line under a tent in the company parking lot.

Musk also claimed that he doesn’t smoke pot, and that it’s clear from the infamous podcast video where he, uh, did smoke pot, that he doesn’t even know how.

Now here are seven GIFs of Elon Musk having a normal one on the program.


2nd Gear: Ghosn and Nissan Formerly Indicted, Brazil Houses Seized

Nissan’s former CEO and Chairman Carlos Ghosn is still in custody and has now been indicted in Japan over allegations of understating income and financial misconduct for up to $88 million from 2010, according to a Bloomberg newswire received by Jalopnik.


Here’s more from Bloomberg on the current state of Ghosn’s arrest:

Under the Japanese system, indictment allows prosecutors to lay formal charges. While a detainee may be able to apply for bail, Ghosn — who was ousted as Nissan’s chairman shortly after his Nov. 19 arrest — will likely remain behind bars because he was also re-arrested on new allegations of understating income that pertain to a different time period, prosecutors said in Tokyo Monday.

In the first sign of blowback from the scandal for Nissan, the company was also indicted for breaching Japan’s financial instruments and exchange law by under-reporting Ghosn’s compensation, prosecutors said. The carmaker now finds itself ensnared in the scandal enveloping Ghosn, after it accused the 64-year-old of the income-reporting violations and misusing company assets — including Nissan-owned houses — following an internal probe.


Along with Nissan Motor Co. and Ghosn, the automaker’s former representative director Greg Kelly was also indicted. Last year, fewer than 1 percent of cases in Japan’s lower courts resulted in a verdict of not guilty according to Bloomberg, so it isn’t looking great for Ghosn and his gang.

Houses in Rio de Janeiro and Beirut have also now been seized as part of a separate internal investigation within Nissan, which suspects evidence of Ghosn using the residencies and company funds for personal use to be found in the houses, according to the Financial Times. Here’s more:

The Japanese carmaker believes a safe in the apartment contains evidence that funds from a Nissan subsidiary in the Netherlands, called Zi-A Capital, were used to purchase the residence, a person with knowledge of the dispute claimed.


The report claims Nissan could try to block Ghosn’s family from entering the homes, though the family claims it’s open to doing so under supervision to retrieve personal possessions and family documents.

3rd Gear: China Car Sales Continue to Drop

The year’s trend of slipping car sales growth in China continues, pretty much guaranteeing a first year of decline for the country’s automotive industry in over two decades, Bloomberg reports via wire service:

Retail sales of sedans, multipurpose vehicles and sport utility vehicles plummeted 18 percent to 2.05 million units in November, the China Passenger Car Association said on Monday. That brought the drop in the first 11 months of the year to 4.3 percent, all but ensuring the market will have its first annual decline in at least two decades.


The decline in growth is blamed on the ongoing trade disputes between the U.S. and China, which has forced some automakers like BMW to lower their projected profits for the year and caused Jaguar Land Rover to temporarily shut down one of its factories.

It doesn’t help that ride-sharing services, which currently make up 13 percent of China’s passenger cars, is expected to grow to nearly 30 percent by 2025, according to the report.


A decline in China joins declining demand in Europe and the U.S., leaving automakers very little room for market growth. I wonder what will happen now?

4th Gear: Big Oil Is Concerned There’s Too Much Oil

OPEC and the other major oil industries are worried about the price of oil dropping too low from too much inventory, so they’re now actively taking measures to fight over who gets to produce less, Reuters reports:

“They had one thing in common - none of them wanted to see inventories rise further. They could disagree on prices and upon the size of the cuts, but to really see inventories moving higher? No one wanted that,” SEB commodities strategist Bjarne Schieldrop said.

“Firstly, we’ll get some (price) stability, even if oil is weighed down by bearish equities. That really took the glow off oil,” he said.

OPEC has agreed to cut by 800,000 bpd, led mainly by Saudi Arabia, while non-members will cut by 400,000 bpd, with most of that decrease shouldered by Russia.


The oil produces don’t want oil inventory to rise if there’s no demand for it because then they risk losing money from the lowered prices, which have already fallen sharply since October.

5th Gear: Skyrocketing Parking Rates Are Making Moscow Turn to Car Sharing

Moscow’s recent efforts to cut parking spaces and hike up parking prices to discourage driving and encourage its population of 12.5 million people to find alternative methods of transportation has instead pushed a lot of them to turn to car-sharing, Reuters reports:

Authorities in the city of 12.5 million have cut the number of parking spaces to encourage residents to walk while increasing parking fees to raise revenue and ease traffic in one of the world’s most congested cities.

Those are among the factors that have seen the number of car-sharing journeys leap to at least 30,000 per day, or 9.1 million, between January and September this year, according to Moscow’s city authority. JP Morgan put the number of daily car journeys at 60,000 this autumn.

That’s a big increase — in 2016, there were just 45,000 car-sharing journeys in the entire year.


According to the report, one former car owner determined he would save $50 a month by selling his car and instead take a taxi, and car-sharing is approximately $100 cheaper.

The war against parking in Moscow has turned it into one of the most developed car-sharing hubs, with one car per 1,082 residents in the city which is down from one car per 500 residents just last year.


It’s interesting to see such a significant shift so quickly, as is the significant cost savings for commuters to switch to ride-sharing. Here’s another interesting figure from the Reuters report:

Goldman Sachs research suggests that the car-sharing boom is not expected to undermine new vehicle sales because the service life of shared cars is 3.5 times shorter than privately-held ones.


It seems a cultural shift to ride-sharing will just turn into an automotive meat grinder.

Reverse: A Million Fords by 1915


Neutral: Would You Give Up Your Car For Ride-Sharing?

As somebody who lives in NYC, I really only use car-sharing services, usually Lyft, when I’m hammered and just want to get home as soon as possible, or when it’s raining outside. Otherwise I’m on a bus or the subway.


But if it was financially feasible for me to grab a ride to work everyday, I don’t really see why, in my circumstances, I wouldn’t go for it. Would you?