Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers…
— statement by Tesla, April 22, 2025.
Unlike some people with important jobs in the federal government, I’m worried about the economy.
I understand there are lots of other ordinary people also feeling worried, and who are pulling back on their spending, resulting in less profits for consumer-oriented companies. Or so we are hearing.
The Lamestream Media has focused on one particular example: Tesla. The company’s first quarter profits dropped by 71% compared to the first quarter of 2024, and their car sales dropped by 20%. The stock price is roughly half what it was in December, and we heard that four top officers at the company have offloaded over $100 million in shares since early February.
Maybe the officers know something the rest of us can only guess at? Or maybe they’re just worried, like the rest of us. Rich people have every right to be worried… and every reason.
It’s not just Tesla.
PepsiCo, Proctor & Gamble, JP Morgan, American Airlines… they, too, are worried about consumers.
“Relative to where we were three months ago, we probably aren’t feeling as good about the consumer now,” Jamie Caulfield, the CFO at PepsiCo, told Wall Street analysts and investors on an earnings call Thursday morning. PepsiCo manufactures Pepsi, of course, and Gatorade. But also Doritos and Cheetos.
Normally, when I’m feeling worried, I consume a big bag of Cheetos, and I always feel better afterwards. But it sounds like not everyone is doing the same thing.
PepsiCo cited a reduction in consumer spending as well as the impact the beverage-and-snacks company is feeling from increased global tariffs. Chipotle restaurants also reported a drop in sales. People are avoiding restaurants, apparently, to save money. Or else, they’re too sick from worry to enjoy eating out.
But it’s entirely possible that people aren’t eating out as much, because they don’t have any clean clothes to wear.
I watched an interview on Yahoo Finance, where commentator Brian Sozzi spoke with Procter & Gamble CEO Jon Moeller. P&G makes a wide range of products, but the one I’m most familiar with is Tide laundry detergent.
Mr. Moeller explained why P&G sales had dropped off slightly. He wasn’t pulling any punches.
“Consumers are facing, around the world, an unprecedented level of uncertainty. If we think about the causes of that, we’ve got immigration status… employment status.. tariffs, prices and inflation… interest rates… social and political divisiveness… wars… and significant economic pressure in some large markets…
“…Which is creating a bit of a crisis in consumer confidence.”
A bit of a crisis, is right.
Listening to the interview, I learned that this bit of a crisis is causing consumers to change their behavior, somewhat. Disturbing changes.
The commentator, Brian Sozzi, asked if consumers were ‘trading down’ as a result of the bit of a crisis in confidence. In other words, are consumers buying cheaper brands? Because Tide is about the most expensive laundry soap you can buy.
CEO Moeller maintained that consumers are not ‘trading down’. The customers who have historically bought Tide, are still buying Tide. But, he said, people are not doing as many loads of laundry. His company tracks certain households (who have no doubt agreed to be tracked) and they’ve found that households that used to wash five loads a week, are now washing 3 1/2 loads a week.
These are obviously ‘averages’ because there’s no way to wash 1/2 load of laundry. Either it’s a load, or it’s not.
I suppose this could also explain the decline in Tesla sales. Who would want to drive a $100,000 car while wearing unwashed clothes?
Hoping to entice consumers who are tightening wallets, executives at PepsiCo said it was offering less expensive, under $2, individual bags of snacks along with smaller snack packs in stores. So we should soon be seeing tiny bags of Cheetos replacing the big family-size bags I’m used to buying.
And if the tariff and the uncertainty weren’t enough, the popularity of using Ozempic and other weight-loss drugs have curbed sales for snacks, and also shifted purchases to smaller portions. In my opinion, those of us who don’t use Ozempic are getting screwed.
Maybe Tesla will notice the trends and start building smaller cars. But I suspect it will be too little. too late.
Underrated writer Louis Cannon grew up in the vast American West, although his ex-wife, given the slightest opportunity, will deny that he ever grew up at all. You can read more stories on his Substack account.