WEBVTT - Auto Oracle Kevin Tynan 0:00:02.520 --> 0:00:07.000 Bloomberg Audio Studios, Podcasts, radio News. 0:00:09.280 --> 0:00:11.080 I'm Hannah Elliott and I'm Matt Miller. 0:00:11.240 --> 0:00:12.680 This is Hot Pursuit. 0:00:17.079 --> 0:00:20.880 Coming up on today's podcast. We've got Kevin Tynan, the 0:00:20.960 --> 0:00:24.400 director of research for the Presidio Group. Now we know 0:00:24.600 --> 0:00:27.800 Kevin as the head of automotive intelligence for Bloomberg. That's 0:00:27.800 --> 0:00:30.040 how we have met him and known him for years. 0:00:30.080 --> 0:00:34.839 But he is such a great analyst and communicator of 0:00:34.880 --> 0:00:38.480 what's actually happening in the automotive market. So I'm very 0:00:38.479 --> 0:00:39.559 happy to have Kevin. 0:00:39.760 --> 0:00:44.239 And a massive gearhead. I mean, he has an amazing 0:00:44.400 --> 0:00:49.479 garage in New Jersey with it. So it's packed with 0:00:49.560 --> 0:00:52.480 guitars hanging from the wall. You've seen it, right, and 0:00:52.600 --> 0:00:57.240 like amplifiers everywhere. And then he's got like Mercedes. 0:00:57.600 --> 0:01:00.320 Well, we haven't seen it. I don't think I've seen it. 0:01:00.680 --> 0:01:05.959 It's insane. It is so good, it's like I don't 0:01:06.120 --> 0:01:09.120 for some reason, I think of like if Gene Simmons 0:01:09.560 --> 0:01:11.839 was a gearhead and built his own garage, it would 0:01:11.840 --> 0:01:15.199 look like this. So I'm looking forward to that conversation 0:01:15.440 --> 0:01:17.800 as well. We're going to dig into the big problems 0:01:17.800 --> 0:01:22.200 that especially German automakers are facing, in the face of 0:01:22.280 --> 0:01:27.480 Chinese competition and high cost production. But I want to 0:01:27.640 --> 0:01:30.880 focus in with you for a moment, Handah on German automakers, 0:01:30.920 --> 0:01:33.720 because you and I have both been driving a lot 0:01:33.720 --> 0:01:38.880 of BMW's. I recently bought one, and you've had specifically 0:01:38.920 --> 0:01:43.360 a string of M cars that would make you know, 0:01:43.400 --> 0:01:48.400 a teenage roadent track subscriber drool. What have you been driving? 0:01:49.040 --> 0:01:53.000 So, as you know, I was in the M two 0:01:53.000 --> 0:01:56.800 CS and the the M four, and last week, or 0:01:56.800 --> 0:01:58.880 actually this week, I should say, I've been in the 0:01:59.120 --> 0:02:02.800 M five to two, which is of course the wagon. 0:02:03.360 --> 0:02:07.960 The one I had was in this amazing green color. 0:02:08.480 --> 0:02:10.919 Somebody said it looked like a green slug, which is 0:02:11.000 --> 0:02:12.560 kind of cool. It's like this olive green. 0:02:12.840 --> 0:02:14.800 Yeah, I thought it looked like an olive pretty much. 0:02:14.880 --> 0:02:15.120 Yeah. 0:02:15.960 --> 0:02:18.800 I love the spec. Of course. It's a four point 0:02:18.800 --> 0:02:24.200 four leader V eight eight speed starts at about one 0:02:24.280 --> 0:02:26.480 hundred and twenty two thousand dollars, so kind of the 0:02:26.520 --> 0:02:31.760 same price as the M four, and I loved it. 0:02:31.840 --> 0:02:34.200 Now I know we're gonna have a little conversation about this, 0:02:34.360 --> 0:02:37.680 because coming out of the M four, going into the 0:02:37.800 --> 0:02:43.680 M five, the M five felt instantly more adult, more powerful, 0:02:44.520 --> 0:02:49.880 more uh, just more of a serious car. As you know, 0:02:49.919 --> 0:02:51.640 I thought that the M four to me is a 0:02:51.639 --> 0:02:55.960 little bit just soft. I this actually felt great to 0:02:55.960 --> 0:02:56.480 get into. 0:02:57.120 --> 0:03:00.560 I take the other side of that bent because I 0:03:00.720 --> 0:03:02.840 a couple of weeks ago. Also as driving the M 0:03:02.960 --> 0:03:08.120 five Wagon, mine was in an amazing purple, like a 0:03:08.160 --> 0:03:11.920 plum purple color. And they're nailing it in terms of 0:03:11.960 --> 0:03:17.960 their paints. And normally I'm a massive fan of the wagon, 0:03:18.120 --> 0:03:22.040 like I adore a station wagon. My first car that 0:03:22.080 --> 0:03:24.560 I ever bought myself was an Audi a four Avant, 0:03:25.200 --> 0:03:29.880 And I mean I would never option a sedan when 0:03:29.880 --> 0:03:33.960 I could have a wagon. But to me, the M 0:03:34.080 --> 0:03:37.720 five Wagon or not, I've driven both versions of this generation. 0:03:38.520 --> 0:03:41.240 It's just like too good. It's so good that it's 0:03:41.280 --> 0:03:44.720 boring a lot like a nine to eleven GTS. I 0:03:44.800 --> 0:03:48.200 just can't really feel the gear changes. It does have 0:03:48.280 --> 0:03:52.360 those like teenage pops on DCEL, which I'm very much over. 0:03:52.640 --> 0:03:55.520 And it's just so big. 0:03:56.520 --> 0:03:59.640 It's it is long. It feels long for sure, it's 0:03:59.640 --> 0:04:00.720 a slug and. 0:04:00.680 --> 0:04:03.680 I don't really love the way it looks either. Like 0:04:03.720 --> 0:04:06.800 I think the M four is more much more attractive 0:04:06.800 --> 0:04:09.880 and more resolved design. And I also recently drove the 0:04:09.960 --> 0:04:14.320 M two CS, which is much more raw and exciting 0:04:14.640 --> 0:04:17.680 and you know, a visceral experience everything that we want, 0:04:18.960 --> 0:04:22.279 even without the stick. I loved the M two CS. 0:04:23.080 --> 0:04:27.440 So for me, I'd say the M five is the 0:04:27.760 --> 0:04:29.479 is my third choice of those three. 0:04:29.640 --> 0:04:34.120 Wow, I am really really shocked. Really, I am very 0:04:34.120 --> 0:04:38.640 shocked because with this IN five, for instance, Okay, it's 0:04:38.640 --> 0:04:41.520 got that urban green the factory color is urban green. 0:04:42.040 --> 0:04:45.200 It's a five thousand dollars option, but also the it 0:04:45.279 --> 0:04:50.160 was like twenty and twenty one inch dual spoke bicolor 0:04:50.279 --> 0:04:54.000 wheels that were super cool. It's got all of it's 0:04:54.040 --> 0:04:58.400 got the glow package on the kidney grill, It's got 0:04:58.440 --> 0:05:02.559 all of these extra like black roof and shadow line 0:05:02.680 --> 0:05:06.640 lights and like obviously red red break calipers, and like 0:05:06.760 --> 0:05:10.840 all of these things that all the Beamer bros love 0:05:11.800 --> 0:05:14.960 and I kind of get it. Maybe I wouldn't buy 0:05:15.000 --> 0:05:17.279 it from my personal car if I only had one, 0:05:17.360 --> 0:05:21.559 but I'm very surprised because this to me, was more 0:05:21.880 --> 0:05:28.400 brutalist and like structurally interesting in the four, which, again, 0:05:28.560 --> 0:05:30.719 the M four to me was just like a little 0:05:30.720 --> 0:05:33.320 bit of a version of the M two with all 0:05:33.320 --> 0:05:36.120 the edge rounded and off, it just felt a little 0:05:36.120 --> 0:05:37.920 bit soft, a little bit bloated. 0:05:40.400 --> 0:05:42.320 No, you're right, I get it. I get what you're saying, 0:05:42.320 --> 0:05:44.839 and I think you're wrong. Like the M two and 0:05:44.920 --> 0:05:51.240 the M five are both much more severe designs, right, 0:05:51.279 --> 0:05:54.119 and the M four looks a lot more like every 0:05:54.160 --> 0:05:57.280 other BMW, Like you wouldn't be able to tell if 0:05:57.320 --> 0:05:59.680 that's really an M four or an M six and 0:05:59.800 --> 0:06:00.640 the when you look at it. 0:06:00.720 --> 0:06:03.479 And but that's why I'm surprised you like it. 0:06:03.680 --> 0:06:07.600 But but but uh, I think it's so the M two. 0:06:07.720 --> 0:06:10.560 I love that it's so in your face and raucous, 0:06:12.560 --> 0:06:14.960 and it drives that way as well, which is what 0:06:15.040 --> 0:06:18.560 I love. The M four, I just think is a 0:06:18.560 --> 0:06:25.360 more attractive vehicle, Like objectively, it's it's finished the way 0:06:25.400 --> 0:06:27.960 you would expect the M five. To me, it's just 0:06:28.320 --> 0:06:31.039 nothing can hide how big and heavy it is. It's 0:06:31.120 --> 0:06:35.159 just and I and I just for some reason don't 0:06:35.800 --> 0:06:38.760 dig the way it looks. I yes, the wheels are cool, 0:06:39.880 --> 0:06:42.599 black roof. I've never understood why you would want unless 0:06:42.640 --> 0:06:45.400 it's you know, just the carbon fiber look like, why 0:06:45.400 --> 0:06:48.039 do you want a heat sink? On your roof and 0:06:48.080 --> 0:06:50.279 on your hood. I've never understood why people do black 0:06:50.360 --> 0:06:52.960 roof and hood. If you're gonna do anything different than 0:06:53.000 --> 0:06:56.760 do white roof and hood, you know there's a look well, 0:06:56.760 --> 0:06:58.680 but not not for the look, right, but so that 0:06:58.760 --> 0:07:01.760 you don't have the sun boiling you on the inside. 0:07:01.839 --> 0:07:02.760 I don't know. 0:07:03.120 --> 0:07:05.760 To me, let me ask you this so fast. 0:07:05.480 --> 0:07:07.919 And it's so and it's so good that it's like boring, 0:07:08.040 --> 0:07:11.040 and it still has the big sharp screen on the 0:07:11.040 --> 0:07:13.560 inside that I can't get along. 0:07:13.600 --> 0:07:16.040 Find that screen that I know we've talked about this 0:07:16.280 --> 0:07:19.480 for some reason that didn't get me. Let me ask 0:07:19.520 --> 0:07:23.080 you this, how much does your seventh series way? 0:07:24.280 --> 0:07:29.000 The seventh series must weigh more? I don't actually know 0:07:30.880 --> 0:07:32.920 the M five. I wouldn't be I wouldn't be surprised 0:07:32.920 --> 0:07:35.400 if they're about the same. But the thing is so 0:07:35.440 --> 0:07:39.440 I had the M five wagon the same week that 0:07:39.480 --> 0:07:42.360 I got the seven series or a week later. Yes, 0:07:42.600 --> 0:07:44.400 And one of the problems for me with the M 0:07:44.480 --> 0:07:47.120 five is I would walk out to my driveway look 0:07:47.160 --> 0:07:51.480 at this new fangled high tech M five and it's 0:07:51.520 --> 0:07:54.200 fast and it's precise, and then I would look at 0:07:54.200 --> 0:07:57.760 my big boat of a seven sixty and it's like 0:07:58.440 --> 0:08:03.160 driving a diesel locomotive. I chose the seven sixty more 0:08:03.160 --> 0:08:06.360 often than I chose the M five. Part of that 0:08:06.800 --> 0:08:08.640 is probably because I just got it. It's mine and 0:08:08.680 --> 0:08:09.840 it's new, new to me. 0:08:09.920 --> 0:08:12.400 Well, that's totally fair, that's totally fair. 0:08:12.400 --> 0:08:15.680 But I just if I were going to order M cars, 0:08:15.800 --> 0:08:17.920 I think I would put the M five Like last, 0:08:18.440 --> 0:08:20.360 I would rather have an M two. I would rather 0:08:20.440 --> 0:08:24.640 have the new M three cs Hans Shelter. I would 0:08:24.720 --> 0:08:27.120 rather have an M four. I would rather have They 0:08:27.120 --> 0:08:28.720 don't make the M six anymore, I don't think. But 0:08:28.720 --> 0:08:36.000 I'd rather have the M eight even as you know, like, yeah, 0:08:36.040 --> 0:08:40.200 so all of those for me would would trump the 0:08:40.240 --> 0:08:42.640 big wagon, which is interesting because I'm such a wagon guy. 0:08:43.120 --> 0:08:47.679 Yeah, I'm surprised. It's good to know. Yeah, I mean, 0:08:47.720 --> 0:08:51.360 I'm not. Does a wagon fit a child seat in 0:08:51.400 --> 0:08:51.959 the in the. 0:08:52.200 --> 0:08:54.920 None of those cars, except for the seven series, will 0:08:54.920 --> 0:08:59.840 fit a large rear facing child seat behind a driver 0:09:00.200 --> 0:09:03.360 who is pushed all the way back like that doesn't 0:09:03.400 --> 0:09:06.680 work in a range rover unless it's the long wheelbase. 0:09:06.960 --> 0:09:10.240 That's why I like these big German limousines, because it 0:09:10.240 --> 0:09:12.400 does work in the A eight to L. It does 0:09:12.440 --> 0:09:15.679 work in the seven series, the L versions, which almost 0:09:15.679 --> 0:09:18.080 all Americans ones are, and it does work in the 0:09:18.160 --> 0:09:21.840 S class. That's for a dad, that's a huge bonus. 0:09:21.920 --> 0:09:25.240 By the way, I want to just pivot to Mercedes 0:09:25.280 --> 0:09:27.040 before we get to Kevin, and we'll talk with him 0:09:27.040 --> 0:09:29.120 about Mercedes a lot because he owns so many and 0:09:29.160 --> 0:09:30.679 he's a big fan, and we're going to focus on 0:09:30.760 --> 0:09:35.400 German cars. But there has been so much hate for 0:09:36.280 --> 0:09:40.280 AMG online and there's always I mean, online is where 0:09:40.280 --> 0:09:43.720 hate lives, so I guess that's to be expected. But Callari, 0:09:44.120 --> 0:09:48.720 I've been driving the AMG GT sixty three that you 0:09:48.760 --> 0:09:50.360 and I both love. You picked it for your Car 0:09:50.400 --> 0:09:53.520 of the Year last year of it, but I've been 0:09:53.559 --> 0:09:57.000 driving like the pro version. So they make this big 0:09:57.040 --> 0:10:02.160 beefy hybrid, the s E Performance version with eight hundred 0:10:02.200 --> 0:10:04.920 horsepower a thousand pounds feet of torque. That's to me, 0:10:05.080 --> 0:10:10.120 the AMGGT version of the nine to eleven turbos, right, 0:10:10.840 --> 0:10:15.480 And they make now this GT sixty three pro version, 0:10:15.800 --> 0:10:19.480 which I'm gonna call their GT three touring. It's like 0:10:19.520 --> 0:10:22.560 a nine to eleven GT three touring because it's it 0:10:22.640 --> 0:10:26.000 takes away the hybrid components, so it's just the motor. Okay, 0:10:26.000 --> 0:10:29.120 it's not naturally aspirated, but it's a big V eight 0:10:29.400 --> 0:10:35.040 with turbos. And you can't get a stick with the 0:10:35.080 --> 0:10:40.640 AMGGT either in any form or even a DCET. They 0:10:40.679 --> 0:10:45.880 have their own transmission, but it's like lighter, five hundred 0:10:45.920 --> 0:10:50.440 pounds lighter. It's a lot more nimble as a result, 0:10:50.640 --> 0:10:56.040 and some of the luxury like sound deadening is stripped out. 0:10:57.160 --> 0:11:00.440 But it's just an amazing car. And for all of 0:11:00.480 --> 0:11:04.679 the for all of the shade that AMG gets, for 0:11:04.840 --> 0:11:08.960 going down to four cylinders or even no cylinders, I 0:11:09.000 --> 0:11:16.280 think these amggts are just amazing vehicles. Granted they cost 0:11:16.360 --> 0:11:17.160 a ton of money. 0:11:17.559 --> 0:11:21.000 They cost a ton of money, but I have to say, 0:11:21.040 --> 0:11:24.400 and I was just with Mercedes earlier this week in 0:11:24.600 --> 0:11:27.120 Beverly Hills. They had an opening for their new my 0:11:27.280 --> 0:11:33.200 Boch Attilia and they unveiled a new Mercedes my Boch SUV, 0:11:33.400 --> 0:11:37.520 the GLS six't eighty. And I had some time talking 0:11:37.520 --> 0:11:41.120 with some of their board members and executives this week, 0:11:41.400 --> 0:11:46.959 and this is going to sound very oversimplified, but they 0:11:46.960 --> 0:11:50.120 are so smart and they are so good they know 0:11:50.200 --> 0:11:55.319 what they're doing, and they are able to articulate exactly 0:11:55.520 --> 0:11:59.040 why they're doing things in a way that is not 0:11:59.679 --> 0:12:06.600 calm among every other automaker. And I always say, the 0:12:06.679 --> 0:12:09.760 products indicate what's happening in the company. Again, maybe this 0:12:09.840 --> 0:12:13.920 is an oversimplified thing, but it remains true. The products 0:12:14.000 --> 0:12:16.240 indicate what is really going on, and there is a 0:12:16.320 --> 0:12:19.440 lag time between product and where the company is. But 0:12:20.320 --> 0:12:23.280 that has that has always been true in my experience, 0:12:23.880 --> 0:12:28.120 and the products at Mercedes continue to be good, some 0:12:28.360 --> 0:12:33.840 better than others. But to your point, Matt, they understand 0:12:33.920 --> 0:12:39.160 that that there is a very strong appetite among certain 0:12:39.520 --> 0:12:43.920 people like us who are appreciate and love that car 0:12:44.040 --> 0:12:47.200 and really need that car who to exist. I mean, 0:12:47.240 --> 0:12:48.480 they get they understand that. 0:12:49.000 --> 0:12:51.719 I just wish it was making sense thing too. I mean, 0:12:52.200 --> 0:12:54.280 I just wish it wasn't so expensive like this one 0:12:54.360 --> 0:12:56.800 starts at I think two hundred and fifteen or two 0:12:56.840 --> 0:12:59.960 hundred and twenty thousand. If you want the se performance, 0:13:00.120 --> 0:13:04.760 you're paying you know that. Plus it's like it's unaffordable 0:13:04.840 --> 0:13:08.040 for almost anyone. Right, Yeah, let's get to SpaceX. Let's 0:13:08.080 --> 0:13:08.920 get SpaceX shares. 0:13:09.280 --> 0:13:15.720 And that reflects the fact that these things are becoming scarce, 0:13:15.920 --> 0:13:19.640 which makes them luxury objects. 0:13:19.200 --> 0:13:21.760 But I also think that it can hold its own 0:13:21.800 --> 0:13:25.160 against Obviously a nine to eleven is a slightly different 0:13:25.240 --> 0:13:28.880 use case, but definitely they're priced that way too. When 0:13:28.880 --> 0:13:31.240 you get to the Turbo and the GT three, it 0:13:31.280 --> 0:13:34.480 can hold its own in my opinion, against the Lamborghini Temorio, 0:13:34.559 --> 0:13:40.480 which I drove last week, and although it took me 0:13:40.520 --> 0:13:42.680 a while to fall in love with it, I did. 0:13:43.040 --> 0:13:45.960 It feels like more of an Audi than a Lamborghini. 0:13:46.360 --> 0:13:51.199 But it's twice the price of this GT sixty AMGGT 0:13:51.400 --> 0:13:57.240 sixty three Pro, and the AMG sounds better. The AMG 0:13:57.440 --> 0:14:01.600 is more comfortable and maybe in some circles, also more 0:14:01.760 --> 0:14:06.839 socially acceptable. I feel like it's a supercar. It's a 0:14:06.920 --> 0:14:12.239 legit supercar. These amggtas car, for sure, they're so powerful. 0:14:13.280 --> 0:14:16.360 I'd rather have a Corvette than either one. But oh wow, 0:14:16.800 --> 0:14:19.560 well because I save so much money that way, right, Yeah, 0:14:19.600 --> 0:14:24.600 The Corvette has a six point eight liter naturally aspirated 0:14:24.680 --> 0:14:28.160 V eight and it starts at like seventy five thousand dollars. 0:14:28.720 --> 0:14:30.800 That's insane, I know. 0:14:31.440 --> 0:14:34.840 I think you lose something on the fit and finish 0:14:35.120 --> 0:14:37.080 components inside, but. 0:14:37.560 --> 0:14:41.160 Maybe but something that an extra you know, one hundred 0:14:41.160 --> 0:14:44.800 and fifty to three hundred thousand dollars would make up 0:14:44.840 --> 0:14:46.280 for maybe. 0:14:46.520 --> 0:14:48.360 Yeah, good bye two of them. 0:14:49.120 --> 0:14:51.320 By the way, quick, just my quick take on the 0:14:51.400 --> 0:14:55.280 GLS right my box or not? And Mercedes are not 0:14:55.560 --> 0:14:58.840 in my opinion, any three to row suv that it's 0:14:58.880 --> 0:15:04.640 not body on frame truck. Forget about it. Like we 0:15:04.680 --> 0:15:07.680 have a GLS, I know you do, and I wish 0:15:07.760 --> 0:15:09.840 I had a Tahoe. You know a friend of mine 0:15:09.920 --> 0:15:13.400 has an X seven. Uh, he wishes he had a Yukon. 0:15:14.080 --> 0:15:15.560 The same is true when Audi comes out of the 0:15:15.640 --> 0:15:18.000 Q nine, like if it's not a body on frame 0:15:18.120 --> 0:15:24.280 truck and it's not like Kia EV nine, like it's 0:15:24.320 --> 0:15:27.400 for me, it's a miss that is too big for 0:15:27.440 --> 0:15:28.800 a unibody vehicle. 0:15:29.400 --> 0:15:32.280 And you're saying that because of oh, sorry you can 0:15:32.360 --> 0:15:33.800 I don't know if you can hear that horn or not. 0:15:34.240 --> 0:15:37.400 You're saying that because of the way the car behaves 0:15:37.520 --> 0:15:37.960 in motion. 0:15:38.520 --> 0:15:43.120 No, because a hell on American roads and the suspension 0:15:43.240 --> 0:15:45.960 just cannot handle it. They're just not heavy duty enough 0:15:46.000 --> 0:15:50.560 to drive around the northeast of the decrepit United States 0:15:50.600 --> 0:15:54.360 of America Highway system and that for that you need 0:15:54.680 --> 0:15:58.560 a Tahoe or a Yukon or an expedition if you're 0:15:58.560 --> 0:16:01.320 willing to forego a v which I don't know why 0:16:01.320 --> 0:16:04.400 you would be in that size vehicle, although you know 0:16:04.440 --> 0:16:06.680 I love the Nissan Armada. By the way, quick note 0:16:06.680 --> 0:16:11.480 on audio. Throughout this interview with Kevin Tynan, you're gonna 0:16:11.520 --> 0:16:16.000 hear some grunting, maybe some whining a little. 0:16:17.360 --> 0:16:18.960 It's not are you saying that? Wasn't you? 0:16:19.960 --> 0:16:20.160 Yeah? 0:16:20.200 --> 0:16:24.400 No, I'm holding my twenty seven day old baby because 0:16:25.480 --> 0:16:27.640 my wife, who's been up all night feeding him, is 0:16:27.680 --> 0:16:30.480 now recovering some sleep, and I am on daddy duty. 0:16:30.760 --> 0:16:33.960 I'm actually on paternity leave for the next like five months. 0:16:34.400 --> 0:16:36.880 So we're so happy for you. 0:16:37.360 --> 0:16:39.880 As Freddy is joining the conversation today. 0:16:39.720 --> 0:16:42.960 Yeah, this is Freddy's first appearance appearance, not his last 0:16:43.000 --> 0:16:47.400 by any means, and he's been he's added some wonderful 0:16:47.520 --> 0:16:48.600 grunts and. 0:16:48.760 --> 0:16:52.240 He's cooing a little bit. All right, Without any further ado, 0:16:52.440 --> 0:16:57.640 let's get to Kevin Tynan, formerly of Bloomberg Intelligence, now 0:16:57.760 --> 0:17:01.960 at the Presidio Group. That the reason, Kevin, that that 0:17:02.000 --> 0:17:04.639 Hannah and I both were thinking about having you is 0:17:04.680 --> 0:17:09.240 because we're hearing about so much upheaval in the automotive industry, 0:17:09.240 --> 0:17:12.040 and specifically because I've lived in Germany for ten years, 0:17:12.119 --> 0:17:15.040 I'm getting so many messages from friends who are terrified 0:17:15.119 --> 0:17:18.200 about the state of the industry and the economy there. 0:17:18.600 --> 0:17:21.720 Folkswagen wanted to fire fifty thousand people, now maybe it's 0:17:21.720 --> 0:17:24.400 one hundred thousand people that they want to fire. They're 0:17:24.400 --> 0:17:27.399 talking about closing down factories all over the country. And 0:17:27.400 --> 0:17:29.560 it's harder for them, obviously because they have so much 0:17:29.640 --> 0:17:33.600 union control and so much government control. But how bad 0:17:33.880 --> 0:17:35.880 is it especially for Folkswagen. 0:17:36.520 --> 0:17:40.200 Well, look, you know, if you ask me, I think 0:17:40.240 --> 0:17:45.199 Europe has a China problem. Right. If you're gonna just 0:17:45.480 --> 0:17:51.520 import Chinese vehicles, this is what you get, right. It's 0:17:51.560 --> 0:17:55.560 for manufacturers, that's a zero sum game. And not only 0:17:55.760 --> 0:18:00.760 are you now unable to sell right like that, that's 0:18:00.960 --> 0:18:05.560 jobs specifically, And when you look at how quickly Chinese 0:18:05.600 --> 0:18:11.480 manufacturers have taken market share in Europe, it's amazing, it's 0:18:11.480 --> 0:18:17.280 actually terrifying. So you understand that what we're facing here 0:18:17.280 --> 0:18:20.080 in the US is a similar story. Right, It's like, well, 0:18:20.320 --> 0:18:25.560 cheap appliances or jobs because we're not just like Europe. 0:18:25.560 --> 0:18:30.720 We're not low cost manufacturing countries or regions, so we 0:18:30.800 --> 0:18:33.320 can't compete on price for a lot of those things. 0:18:33.320 --> 0:18:36.640 And I think once that gets in the consumer's mind 0:18:37.000 --> 0:18:40.200 of oh, look at this, you know, they don't care 0:18:40.240 --> 0:18:45.159 that it's a subsidized vehicle and that it's half the price. 0:18:45.480 --> 0:18:49.520 Right to them, it's a better value. And that's costing 0:18:49.600 --> 0:18:52.640 your jobs. That's market share, that's just flying out the window. 0:18:53.240 --> 0:18:58.200 And it's very difficult to stop it. But Luna, come on. 0:18:59.560 --> 0:19:02.520 But know, I mean to me that part of the 0:19:02.560 --> 0:19:06.639 problem is Folkswagen was relying on sales in China, so 0:19:06.680 --> 0:19:08.920 it's not just about losing markets here in Europe, right, 0:19:09.240 --> 0:19:14.080 And for for years or decades they agreed to minority 0:19:14.400 --> 0:19:18.040 stakes in jvs where they willingly gave their IP and 0:19:18.080 --> 0:19:22.080 their tech to the Chinese. You know, they were essentially 0:19:22.119 --> 0:19:25.960 trading control for access. And now it's time to pay 0:19:25.960 --> 0:19:31.040 the piper. Like they they they have as much responsibility 0:19:31.080 --> 0:19:33.520 in this as the Chinese. 0:19:33.760 --> 0:19:35.879 And you know what too, And that's one of the 0:19:35.920 --> 0:19:40.880 things that that as you know, a watcher of this space, 0:19:40.960 --> 0:19:44.280 and albeit from a different perspective, you know, in this 0:19:44.400 --> 0:19:48.480 role that's one of the things about China that is 0:19:48.760 --> 0:19:52.560 scary is China two point oh China three point zero, 0:19:52.640 --> 0:19:55.760 which is to say, come on in, take a minority 0:19:55.800 --> 0:20:00.000 stake in this venture. You have access as a manufacturer 0:20:00.240 --> 0:20:05.000 to a what twenty five to thirty million unit market, Right, 0:20:05.080 --> 0:20:08.880 so when you think about that globally and absorbing costs 0:20:08.880 --> 0:20:11.240 like this is great. You just you can just run 0:20:11.240 --> 0:20:16.240 the factories here. Meanwhile, once they're ready, and they say, 0:20:16.320 --> 0:20:18.920 you know, we can sort of turn off that demand, 0:20:19.960 --> 0:20:23.320 row you out whatever rules you want to change, and 0:20:23.880 --> 0:20:28.000 you're right. I mean, and I can't believe. And there's 0:20:28.000 --> 0:20:29.880 a lot of things that I say, or I say 0:20:29.880 --> 0:20:32.000 this a lot about a lot of things. I can't 0:20:32.000 --> 0:20:37.520 believe auto manufacturers didn't see that coming, you know, just 0:20:38.119 --> 0:20:42.399 like electrification. You know, you can't tell me, well, you 0:20:42.520 --> 0:20:45.600 know that Toyota did the math, but you can't tell 0:20:45.640 --> 0:20:49.320 me that everybody did the math, and says, China owns 0:20:49.320 --> 0:20:54.040 the entire supply chain here, how does this ever become profitable? Right? 0:20:54.160 --> 0:20:57.760 If it's not profitable on day one or even close, right, 0:20:57.800 --> 0:21:00.960 look at Ford model eve the law loss is there 0:21:01.440 --> 0:21:05.240 five billion dollars a years? How does it get profitable 0:21:05.280 --> 0:21:08.960 when China controls that supply chain, which is which is 0:21:08.960 --> 0:21:11.639 a strategy that's been in place for decades, you know, 0:21:11.720 --> 0:21:16.560 controlling the mind, controlling the processing. So I agree with you, 0:21:16.560 --> 0:21:18.040 you had to see this coming. 0:21:18.320 --> 0:21:21.199 We're here with Kevin Tynan, the head of research for 0:21:21.280 --> 0:21:31.440 the Presidio Group. More with Kevin Tynan. After this, we. 0:21:31.440 --> 0:21:34.840 Are back with Kevin Tynan of the Presidio Group, formerly 0:21:34.840 --> 0:21:37.760 of Bloomberg Intelligence. Let's get back to our conversation. 0:21:38.840 --> 0:21:41.439 When we go back and look at the history of 0:21:41.440 --> 0:21:44.679 of this and how this all unfolded. What are what 0:21:44.760 --> 0:21:47.280 are historians going to point at and say was the 0:21:47.280 --> 0:21:51.320 fatal flaw which led to them not seeing this coming? 0:21:53.359 --> 0:21:54.720 How how could they miss this? 0:21:55.720 --> 0:22:00.880 So, yeah, this probably would be and out unpopular way 0:22:00.920 --> 0:22:04.399 to put it. But right, so you go back to 0:22:04.640 --> 0:22:12.440 the diesel cheating scandal. Right, and as a global manufacturer, 0:22:12.480 --> 0:22:16.600 which a lot of those German companies are and were 0:22:16.720 --> 0:22:19.760 and will continue to be, right, you want to share 0:22:19.800 --> 0:22:25.720 as much technology platforms parts as possible. Right, That's the 0:22:25.800 --> 0:22:29.360 point of being global. But when you understand that the 0:22:29.400 --> 0:22:32.520 demand profile and all these regions is very different. Right, 0:22:32.560 --> 0:22:35.200 we drive big trucks here that just doesn't work in Europe, 0:22:35.200 --> 0:22:36.920 it doesn't work in a lot of parts of the world, 0:22:36.960 --> 0:22:39.920 probably other than here. So when you think about the 0:22:40.320 --> 0:22:44.359 diesel scandal, I think there's this sort of light bulb 0:22:44.480 --> 0:22:49.240 that goes off for European manufacturers, German especially, that says, Okay, 0:22:49.240 --> 0:22:52.720 maybe diesel's not the way forward, and if it's not 0:22:52.800 --> 0:22:56.199 the way forward in Europe, well then it's not going 0:22:56.280 --> 0:22:58.000 to be the way forward in the US. And we 0:22:58.119 --> 0:23:00.679 always sort of push back on dieseline. I know, people 0:23:00.720 --> 0:23:03.680 love diesel, but it was never it was never a 0:23:03.920 --> 0:23:04.879 high volume. It was a. 0:23:07.480 --> 0:23:09.680 Diesel, you know, right, it. 0:23:09.520 --> 0:23:12.760 Wasn't you know, it was it was niche. Right, So 0:23:12.840 --> 0:23:16.119 now you say, okay, like, let's face the reality that 0:23:16.119 --> 0:23:18.200 that diesel is not going to be our way forward. 0:23:18.720 --> 0:23:22.200 And then you get the cheating scandal, and then it's like, okay, 0:23:22.240 --> 0:23:26.480 now we have to be environmentally responsible and you know, 0:23:27.640 --> 0:23:29.479 and do what we need to do. So now you 0:23:29.560 --> 0:23:33.160 sort of invite electrification and you say, hey, look we're 0:23:33.200 --> 0:23:37.280 going one hundred percent EV and then there's China waiting 0:23:37.400 --> 0:23:39.480 by the phone, going, you know, funny that you should 0:23:39.520 --> 0:23:43.399 mention that because we've accumulated all the assets and and 0:23:43.440 --> 0:23:46.199 the and created the supply chain, and we can do 0:23:46.280 --> 0:23:49.240 it cheaper than anybody. We can get you EV's you know, 0:23:50.000 --> 0:23:53.560 all day, every day. And when you just let them 0:23:53.680 --> 0:23:56.920 export to you and you import those products again, that's 0:23:57.480 --> 0:24:00.720 that's zero sum. That's one proble. What you bring in 0:24:00.840 --> 0:24:03.200 is one you don't build and sell in your own country. 0:24:03.320 --> 0:24:07.440 And then that snowballs. Once that Pandora's box is open, 0:24:07.480 --> 0:24:10.240 that foot is in the door, it's hard to reverse it. 0:24:10.320 --> 0:24:14.120 And I think that's exactly what in hindsight it will 0:24:14.160 --> 0:24:16.199 look like, is that. 0:24:16.280 --> 0:24:20.240 Is that then, I mean, no problem for US manufacturers 0:24:20.320 --> 0:24:24.359 in the sense that Americans for the most part aren't 0:24:24.400 --> 0:24:27.800