Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is Bloomberg Business. Wait inside from the reporters and
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Speaker 2: global business, finance and tech news. The Bloomberg Business Week
Speaker 2: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 3: Hi, everyone, Welcome to the Bloomberg Business Week Weekend podcast.
Speaker 3: The countdown to election Day. It is on, and as
Speaker 3: we approach the final home stretch to November fifth, we'll
Speaker 3: hear why one outspoken billionaire Trump supporter is now the
Speaker 3: democrats new supervillain.
Speaker 4: We're talking, of course, about.
Speaker 5: Elon and speaking of Elon Musk, big tech earning season
Speaker 5: it is here. Tesla reported a solid quarter. Maybe that's
Speaker 5: an understatement. More in the company's results just a little.
Speaker 3: Later on bit of a surprise, safe to say, okay,
Speaker 3: from Tesla to its Chinese competitor that Elon Musk once mocked.
Speaker 3: We talk next hour on BYD's rise from battery maker
Speaker 3: to auto colossus.
Speaker 5: Plus she's responsible for banking, supervision, consumer protection and fintech
Speaker 5: in Italy. The Deputy Governor of the Bank of Italy
Speaker 5: stops by all.
Speaker 3: Of that to go, and we begin with US politics.
Speaker 3: We are a little over a week away from the
Speaker 3: US presidential election between Donald Trump and Kamala Harris. As
Speaker 3: the nominees enter the final stretch, both are deploying novel tactics,
Speaker 3: from podcast cameos to star studed concerts as both try
Speaker 3: to scrounge up undecided voters and basically win this election.
Speaker 5: Another tactic writing a giant million dollar check to persuade
Speaker 5: voters to turn out. That's what Elon Musk has been doing,
Speaker 5: and it's raised the question from some federal officials as
Speaker 5: to whether or not it's actually legal. The latest federal
Speaker 5: filing show that Musk has poured at least seventy five
Speaker 5: million dollars into his America pack, making him one of
Speaker 5: the top donors overall this cycle, and that.
Speaker 3: Has caught the ire of Democratic voters, who now view
Speaker 3: him as a political supervillain. Bloomberg BusinessWeek national correspondent Josh Green.
Speaker 5: Josh is also the number one New York Times bestselling
Speaker 5: author of Devil's Bargain, Steve benn and Donald Trump in
Speaker 5: the Storming of the Presidency, and more recently, The Rebels
Speaker 5: Elizabeth Warren, Bernie Sanders aoc in the rise of the
Speaker 5: New Left, but.
Speaker 6: In terms of politics, he has become so fiercely identified
Speaker 6: with MAGA and with Donald Trump. The Democrats and liberal
Speaker 6: groups have stood up and taken notice, and he's such
Speaker 6: a polarizing figure and so emblematic. I think of the
Speaker 6: kind of rich, dark money billionaires that liberals like to
Speaker 6: demonize in their political ads that Elon has been popping
Speaker 6: up in more and more ads across the country, whether
Speaker 6: it's from Kamala Harris's campaign, or congressional candidates, or unions
Speaker 6: or liberal super packs, more and more of them are
Speaker 6: featuring Elon in their political ads. A lot of them
Speaker 6: are even featuring the same footage of him in a tuxedo. So,
Speaker 6: as I write in the piece, he's kind of eclipsed
Speaker 6: the kochbra as the leading villain among Democratic ad makers,
Speaker 6: and it's clear that it's resonating with liberal voters.
Speaker 7: Without giving the full piece away, because of course, we
Speaker 7: want everyone to go read Bloomberg Business Week, you know,
Speaker 7: what are some of those tactics that the Democratic parties
Speaker 7: using when they are painting Elon Musk as the super
Speaker 7: villain here? What are they really touching on?
Speaker 6: Well, there are two themes that democratic ad makers really
Speaker 6: key in on, and Elon happens to encompass both of them.
Speaker 8: You know.
Speaker 6: The first is Democrats obviously for decades have been going
Speaker 6: after what they would call, you know, greedy corporate billionaires.
Speaker 6: Elon Musk is the world's richest man, certainly fits that billing.
Speaker 6: The other thing that I think has become more popular
Speaker 6: among liberal ad makers in the time of Trump is
Speaker 6: raising fears of kind of right wing media manipulation, and
Speaker 6: of course Musk, with his ownership of Twitter, also fills
Speaker 6: that bucket. So in a lot of way, he's kind
Speaker 6: of emerged as this cycle's perfect democratic villain. And the
Speaker 6: fact that he arouses such intense emotions and liberals causing
Speaker 6: them either to click and give money or to volunteer
Speaker 6: for democratic campaigns, I think just shows that he's really
Speaker 6: an important new player in politics the cycle in a
Speaker 6: way that most people I don't think would have anticipated
Speaker 6: even a year or two ago. Yeah, I think that's
Speaker 6: certainly fair to say, Josh, you mentioned that it's resonating
Speaker 6: with Democratic donors, with the electorate. What do we know
Speaker 6: about polling in the way that Democrats versus Republicans feel
Speaker 6: about Elon Musk well, perhaps not surprisingly, Elon Musk is
Speaker 6: very very unpopular with Democrats and especially younger liberal Democrats.
Speaker 6: And we know this because the Bloomberg News Morning Consult
Speaker 6: Swing State poll actually went last month and asked people
Speaker 6: about their favorable and unfavorable ratings on Elon Musk the
Speaker 6: same way they would with a politician like Trump or Harris.
Speaker 6: And sure enough, Elon is becoming viewed in much the
Speaker 6: same way that a partisan politician would, where Republicans their
Speaker 6: views of him have improved, a lot of them like
Speaker 6: what they hear from him, where as Democrats, who are
Speaker 6: once very positive about Musk because of his association with
Speaker 6: Tesla and electric cars and environmentalism, now have turned on
Speaker 6: him very sharply. And he's deeply underwater. I think something
Speaker 6: to the extent of seventeen percent are favorable and something
Speaker 6: like seventy nine or eighty percent unfavorable. So he's every
Speaker 6: bit as unpopular or almost as unpopular with Democrats as
Speaker 6: is Donald Trump.
Speaker 7: And what do we know so far about how effective
Speaker 7: it is for the Republican Party to be using Elon
Speaker 7: Musk in a positive light as opposed to the Democratic
Speaker 7: Party kind of using him in negative campaign advertisements.
Speaker 6: Well, it's a great question. I mean, we do have
Speaker 6: some indications that Elon is effective. That Donald Trump's campaign
Speaker 6: sends out literally daily emails offering to sell the Elon
Speaker 6: Musk Dark Mind hat, the black make America Great hat
Speaker 6: that Musk wore his rally with Trump and Butler Pennsylvania.
Speaker 6: A couple of weeks ago. I get a barrage of
Speaker 6: emails from the Trump campaign touting is association with Elon
Speaker 6: or Elon's offer to match funding. And so the Trump
Speaker 6: campaign seems to feel that he's a very effective fundraiser
Speaker 6: because they keep pumping out these emails. So, you know,
Speaker 6: as one of my Democratic sources told me in the piece,
Speaker 6: you know, Elon is basically a walking content factory you
Speaker 6: can't look away from. So I think the story here
Speaker 6: really is that whether you're a Republican campaign or a
Speaker 6: Democratic campaign, Elon Musk has become such a central figure
Speaker 6: that it's advantageous to put him in political ads, whether
Speaker 6: that's touting his association with Donald Trump or attacking his
Speaker 6: association with Donald Trump. It can raise money either way.
Speaker 5: Josh, I think what's notable about this is you know,
Speaker 5: your story comes out on the same day that The
Speaker 5: New York Times writes about how somebody like Jamie Diamond
Speaker 5: over at JP Morgan is supporting Kama Harris, but his
Speaker 5: resident reticent to come out and even say so for
Speaker 5: fear of alienating and people who work for and for
Speaker 5: fear of alienating customers and the like. Elon Musk doesn't
Speaker 5: show any of that fear, and he runs or is
Speaker 5: at the helm of several companies. And you don't often
Speaker 5: see people in positions in business take a stand such
Speaker 5: as Elon Musk is doing. And I wonder what your
Speaker 5: view is on that and what's unique about this case
Speaker 5: and unique about Elon Musk. The Koch brothers certainly had
Speaker 5: the money and they were donating the money, but they
Speaker 5: weren't out there jumping around on stage at rallies.
Speaker 6: Yeah, that's right. Look, the kind of old style democratic
Speaker 6: villain were these reclusive fossil fuel billionaires like the Koch brothers,
Speaker 6: who didn't want to be in the media, didn't want
Speaker 6: to be featured. And you know, now we have this
Speaker 6: new style villain in an Elon Musk, who seems as
Speaker 6: eager to be out there and in front of the
Speaker 6: cameras and being the center of attention as anybody's maid,
Speaker 6: the Democrats job really easy for them. As to why
Speaker 6: Musk has decided to identify himself so strongly with the
Speaker 6: MAGA movement Donald Trump, I really can't say. I mean,
Speaker 6: I know anecdotally and you can see it in the
Speaker 6: polling numbers that we have that liberal Tesla owners are
Speaker 6: very upset about this. Democrats don't like him. Presumably this
Speaker 6: is going to have some effect on the margins of
Speaker 6: his companies, but he has decided for whatever reason, maybe
Speaker 6: because he has so much money, maybe because he's such
Speaker 6: a true believer in Trump and what he stands for
Speaker 6: that he doesn't care and he's going to go out
Speaker 6: and do this anyway. And I think that's one reason
Speaker 6: why Musk has unexpectedly emerged as one of the most
Speaker 6: fascinating figures and my bead of presidential politics. He's a
Speaker 6: new character. He's out there and he's demanding that the
Speaker 6: spotlight be on him, and I think as a result,
Speaker 6: it is on him, and we're seeing all the different
Speaker 6: influences and effects that he can have on a presidential race.
Speaker 7: And of course one of those influences is the money involved.
Speaker 7: Tim had mentioned this. Latest federal filings show that Musk
Speaker 7: has poured at least seventy five million dollars into the
Speaker 7: pack that supports Donald Trump. How does that stack up
Speaker 7: with other donors and then other campaigns that we know
Speaker 7: Musk has been involved in.
Speaker 6: Well, it immediately makes him one of the single largest
Speaker 6: donors in American politics. You know, it's remarkable. Before this cycle,
Speaker 6: he wasn't known as a major donor, and in fact,
Speaker 6: he was kind of reputed among people in DC in
Speaker 6: my world to be kind of a chief skate who
Speaker 6: talked a lot but didn't write a lot of checks. Well,
Speaker 6: now he has decided that he wants to be one
Speaker 6: of the biggest donors in American politics. And I think
Speaker 6: you can see the effect that that's had. Just in
Speaker 6: the opening segment you guys showed of all the clips
Speaker 6: of Trump mentioning Elon Musk, he brings him up again
Speaker 6: and again in public and in private. And so if
Speaker 6: Trump is elected, I think that Musk stands to be
Speaker 6: a very important figure in the Trump administration and that
Speaker 6: he'll essentially have bought himself a level of influence that
Speaker 6: most people, even very very rich people are reluctant to do,
Speaker 6: to try and come out publicly and declare their association
Speaker 6: give this much money. Elon is really plowing new ground
Speaker 6: here and it'll be interesting to see what kind of
Speaker 6: effect that has if Trump makes it back into the
Speaker 6: White House.
Speaker 5: Yeah, I do wonder what he would want to see
Speaker 5: when it comes to his own influence or what he
Speaker 5: would want to do, Which brings me to my next
Speaker 5: question about unions, Josh, because they play a central role
Speaker 5: in your story, and Elon Musk has had a contentious
Speaker 5: relationship with unions given that Tesla is not a union shop,
Speaker 5: and other US automakers are talk a little bit about
Speaker 5: that and what we've heard from unions when it comes
Speaker 5: to Elon Musk.
Speaker 6: Yeah, I started noticing a few weeks ago Elon kind
Speaker 6: of popping up in these political ads, and I remember
Speaker 6: thinking to myself, like, this is not something we would
Speaker 6: have seen before this cycle. So I wound up doing
Speaker 6: a very deep dive looking at the Elon Musk political ads,
Speaker 6: and some of the earliest ones that ran were buy unions.
Speaker 6: The Service Employees International Union was one of the first.
Speaker 6: They had run ads around Elon even before his MAGA
Speaker 6: and Trump associations because he was sort of the personification
Speaker 6: of what they would consider the greedy, corporate union busting boss.
Speaker 6: He was in a big fight with Swedish unions at
Speaker 6: a time, and I think that really kind of gained momentum.
Speaker 8: You know.
Speaker 6: I found other ads from Teamsters against Trump and all
Speaker 6: sorts of local unions using Musk to kind of highlight
Speaker 6: this idea that greedy bosses are screwing union workers and
Speaker 6: Elon Musk sort of stands for everything we're fighting against.
Speaker 6: I talked to one union president for the piece who
Speaker 6: says he Musk is the personification of everything that our
Speaker 6: polling tells us middle class, ordinary workers don't like, and
Speaker 6: so it's very easy for us to feature him in
Speaker 6: our political ads because he tells the story that we're
Speaker 6: trying to tell.
Speaker 5: Hey, Josh, speaking of stories, you wrote the book on
Speaker 5: Steve Bannon, and we'd be remiss if we didn't ask
Speaker 5: you about Steve Bannon and his influence or lack thereof,
Speaker 5: on the election this time around, Given that he's been
Speaker 5: serving a one hundred and twenty day sentence in federal prison.
Speaker 5: He set to be released from that next week, what
Speaker 5: are your thoughts on how Steve Bannon's influence, who had
Speaker 5: such a big one in twenty sixteen, has loomed over
Speaker 5: this cycle.
Speaker 6: You know, it's a great question. I think if you
Speaker 6: look at how outrageous some of the Trump claims have been,
Speaker 6: some of the events, the kind of lack of inhibitions
Speaker 6: that we see in Trump's campaign visa vi what we
Speaker 6: would see from an ordinary Republican candidate. I think a
Speaker 6: lot of that goes back to Bannon and the style
Speaker 6: of politics that he pioneered. From what I understand, he's
Speaker 6: getting released from prison in a week, so he will
Speaker 6: be here for the final week of the campaign. And
Speaker 6: you know, who knows, wouldn't surprise me at all to
Speaker 6: see him out at a Trump campaign rally on stage
Speaker 6: with Donald Trump leading on the crown in the days
Speaker 6: before the election, But we'll have to wait and see.
Speaker 7: We also just gotten news that Donald Trump is expected
Speaker 7: to record an interview with Joe Rogan at his studio
Speaker 7: in Austin, Texas. That's according to Politico. What do you
Speaker 7: make of that? I mean, how effective is going on
Speaker 7: a podcast as big as Joe Rogan's. And the political
Speaker 7: report also said that Kamala Harris is also in talks
Speaker 7: to go on that podcast as well.
Speaker 6: Yeah, look, I mean I think it's smart for both
Speaker 6: candidates from the standpoint that young men in particular tend
Speaker 6: to be low propensity but Trump friendly voters, So Trump
Speaker 6: going on Joe Rogan makes a lot of sense to
Speaker 6: kind of reach these young men and try and motivate
Speaker 6: them to get up off the couch and show up
Speaker 6: at the polls on November fifth. For Harris, I think
Speaker 6: the story is very much the same, is that the
Speaker 6: reason she would go on that show would be to
Speaker 6: try and make a last bid to these young men
Speaker 6: not to go support Donald Trump, but maybe to find
Speaker 6: a reason to support her, or at the very least
Speaker 6: not be so outraged and provoked by her that they
Speaker 6: decide to go vote for Donald Trump. I think for
Speaker 6: a lot of Harris people, they would be fine having
Speaker 6: Joe Rogan's listeners just stay at home, But basically they
Speaker 6: want to fight Trump to a draw when it comes
Speaker 6: to winning the hearts and minds.
Speaker 9: Of young men.
Speaker 6: So it looks like now that Joe Rogan's podcast is
Speaker 6: kind of going to be the arena for that battle
Speaker 6: to be fought, you know, ten fifteen days before voters
Speaker 6: go to the polls.
Speaker 5: Josh, last question. I'm not going to ask you to
Speaker 5: make a prediction here, but given your reporting and what
Speaker 5: you've heard from your visits around the country as you
Speaker 5: report out your stories, is the election indeed as close
Speaker 5: as the polls are telling us?
Speaker 9: Yeah?
Speaker 6: I mean, I've been privy to a lot of private
Speaker 6: polling from Democrats, Democratic groups, and some Republicans over the
Speaker 6: last couple of weeks. Everyone that I've seen shows the
Speaker 6: race to be absolutely as close as the public polls
Speaker 6: that we're seeing. So my assumption is that those polls
Speaker 6: are largely accurate, and that we mean to not know
Speaker 6: for a day or even several days who the winner
Speaker 6: of the election actually is.
Speaker 5: All right, Josh Green, Hopefully we get him one more
Speaker 5: time before polls close two weeks from tonight. Josh, really
Speaker 5: appreciate you taking the time. Josh Green is Bloomberg Business
Speaker 5: with National Corresponding. He's the author of the number one
Speaker 5: New York Times bestseller Devil's Bargain, Steve benn and Donald
Speaker 5: Trump and the Storming of the Presidency. Also The Rebels
Speaker 5: Elizabeth Warren, Bernie Sanders, AFC and the Rise of the
Speaker 5: New Left.
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Speaker 10: I do want to give some some rough estimate, which
Speaker 10: I think twenty to thirty percent vehicle growth next year,
Speaker 10: you know, notwithstanding negative external events.
Speaker 3: That's Elon Musk from this week's Tesla earnings call, as
Speaker 3: the company reported better than expected profits in the third quarter.
Speaker 3: Now Tesla's shares surge the most in more than three
Speaker 3: years after the carmaker reported surprisingly strong earning and forecast
Speaker 3: as much as thirty percent growth in vehicle sales next year.
Speaker 3: Elon's saying that on the earnings call.
Speaker 5: The third quarter results were boosted by the cybertruk generating
Speaker 5: a profit for the first time, lower material costs and
Speaker 5: expanding energy business, and sales of regulatory credits to automakers
Speaker 5: that need help complying with emission's limits. With more on
Speaker 5: Tesla's surprisingly strong earnings, we were joined by Bloomberg News
Speaker 5: Global Autos editor Craig Trudell.
Speaker 8: Musk was in sort of rare form. I think you know,
Speaker 8: you often can sort of can count on him being
Speaker 8: quite positive, and you know, sometimes he gives people reasons
Speaker 8: to bid the stock up. Other times, you know, he's
Speaker 8: less careful. I think he wasn't necessarily careful. He at
Speaker 8: one point said something about, you know, I'm going to
Speaker 8: take a risk and offer you know, this upbeat outlook
Speaker 8: for next year. He also, you know, sort of couched
Speaker 8: this later on he talked about, you know, his forecast
Speaker 8: for how many cyber cabs they'll make, you know, a
Speaker 8: couple of years out as just his best guesses. So
Speaker 8: that being said, you know, there was a lot to
Speaker 8: like about this quarter in terms of, you know, sort
Speaker 8: of the breadth of what went well. I think expectations
Speaker 8: were quite low in terms of what revenue and earnings
Speaker 8: were going to be, and they beat expectations on a
Speaker 8: lot of metrics, and it was kind of widespread. It
Speaker 8: wasn't just the car business. They're doing well on the
Speaker 8: energy side as well.
Speaker 11: Well.
Speaker 3: That's what I wondered, you know, Craig, is this a
Speaker 3: report where we were all managed so well going into
Speaker 3: it and had very low expectations, and so when Tesla
Speaker 3: comes in stronger than forecast and above those low expectations.
Speaker 4: We were all just like, WHOA really surprised?
Speaker 3: Or is this a report where Tessa the business is
Speaker 3: actually doing well?
Speaker 8: I think it's a little bit of all the above.
Speaker 8: I mean, is it a you know, twenty one percent
Speaker 8: move up in the shares sort of report. I'm sure
Speaker 8: oct by this, but you know, what do I know,
Speaker 8: I'm just a journalist. I think uh, I think it is.
Speaker 8: It is, you know, the case that the stock has
Speaker 8: has gotten, you know, roughed up a little bit the
Speaker 8: last couple of weeks since the ROBOTAXI unveiling. I think
Speaker 8: there was really high expectations going into that because Musk,
Speaker 8: you know, had sort of spent months hyping up you know,
Speaker 8: all the work that they've done on AI and and
Speaker 8: you know years now on on self driving. Uh, and
Speaker 8: we don't actually have you know, necessarily clear indications that
Speaker 8: you know, some of the promises he's made or uh,
Speaker 8: you know predictions that he's made are close. You know,
Speaker 8: you you do. You don't have to look very far
Speaker 8: to see you know, people who use the product that
Speaker 8: the company calls full self driving, you know, acting up
Speaker 8: not working so well. You know, they recognize some revenue
Speaker 8: this past quarter from deferred revenue related to that business.
Speaker 8: And and you know, one of the features that they
Speaker 8: rolled out actually smart Summon, which is an interesting acronym.
Speaker 8: You know, we're seeing reports of people trying to summon
Speaker 8: their cars and parking lots and getting into scrapes, and so,
Speaker 8: you know, there's there's still you know, a lot left
Speaker 8: to be said about you know, just how much longer
Speaker 8: this company, you know, needs to work on this technology
Speaker 8: to get it to where it's safe.
Speaker 5: Hey, Craig, there were a lot of questions ahead of
Speaker 5: the earnings call you about whether or not analysts would
Speaker 5: ask any questions related to Elon Musk's political activities, the
Speaker 5: seventy five million dollars he's given to the America pack
Speaker 5: and support of foreign President Donald Trump during this election cycle.
Speaker 5: What did we hear from Musk on the call about
Speaker 5: a potential second Trump administration? How did he weigh in
Speaker 5: on politics?
Speaker 8: Yeah, it was it was interesting. I think you know,
Speaker 8: Tesla solicits investor questions, you know, going into these calls,
Speaker 8: and there were a lot of questions submitted having to
Speaker 8: do with politics and wanting to you know hear Musk
Speaker 8: address his support for Trump and just how outspoken he's been.
Speaker 8: He didn't utter Trump's name at once, which was a
Speaker 8: little surprising to me. But he did allude to this
Speaker 8: idea of, you know, maybe if he were to be
Speaker 8: appointed the head of the government efficiency department that he
Speaker 8: and Trump talked about on X a while back, and
Speaker 8: maybe he would work on you know, national rules for
Speaker 8: getting robotaxis on the road. So he sort of gave
Speaker 8: investors a little bit of a taste of how he would,
Speaker 8: you know, potentially be able to tip the scales after
Speaker 8: after becoming such a huge benefactor of Donald.
Speaker 3: Trump, investors who wanted something today got better than expected
Speaker 3: profit and guidance for growth on deliveries and deliveries that
Speaker 3: was from Gene Munster over a deep water asset management.
Speaker 3: He said, the long term investors got the golden carrot.
Speaker 3: So is the golden carrot on the delivery numbers?
Speaker 4: Is that what it is?
Speaker 8: I think that was a big one. I mean, you know,
Speaker 8: there's there's I think real legitimate concern as to whether
Speaker 8: or not the company will deliver more cars this year
Speaker 8: than it did last year. You know, through the first
Speaker 8: three quarters of the year that that the deliveries are down,
Speaker 8: and they're going to need a real substantial jump in
Speaker 8: the fourth quarter to get to where they're They're positive.
Speaker 8: I think the company surprised people by saying they do
Speaker 8: expect some slight growth for this year, so they're really
Speaker 8: going to have to finish strong and then twenty to
Speaker 8: thirty percent. I think, you know, that sounds great. I
Speaker 8: didn't necessarily get, you know, a strong sense of how
Speaker 8: exactly this company is going to pull that off, because
Speaker 8: they have not specified what sort of product is coming
Speaker 8: that that could possibly you know, paste that.
Speaker 5: What about the affordable more affordable car that was promised,
Speaker 5: and what was the first half of twenty twenty five.
Speaker 4: Didn't we kind of say something about that.
Speaker 8: He's alluded generally to new vehicles, including more affordable models,
Speaker 8: but what those models are, we have no idea. It's
Speaker 8: not going to be a twenty five thousand dollars Tesla
Speaker 8: with a steering wheel and pedals, because he was very
Speaker 8: dismissive of a question posed about that. So I, you know,
Speaker 8: I think I think it's pretty clear at this point
Speaker 8: they're going to you know, refresh the model Y and
Speaker 8: you know, maybe offer some cheaper versions of of the
Speaker 8: model y and the Model three and are counting on
Speaker 8: you know that that, you know, getting growth going again.
Speaker 5: And we know Carol that steering wheels and pedals are
Speaker 5: not the future.
Speaker 3: So I'm thinking it's a cheaper cyber truck like you
Speaker 3: get into like discounted version.
Speaker 8: I don't know, No, that's definitely coming to it's got too.
Speaker 4: Yeah, good stuff.
Speaker 3: Craig Drudale, Thank you so much, Global Autos editor at
Speaker 3: Bloomberg News. Joining us from our bureau in London.
Speaker 12: Now.
Speaker 3: One especially vocal Tesla shareholder, cyber truck owner, and frequent
Speaker 3: guest on our air is Ross Gerber. He's the co founder,
Speaker 3: president CEO Gerbert Kawasaki Wealth and investment management. Ross in
Speaker 3: recent has expressed doubts about Tesla's ability to meet its
Speaker 3: sales goals, dismissing bullish claims about the company's robotics and
Speaker 3: self driving technology. Well, he joined us right after Tesla's
Speaker 3: latest earnings release on Wednesday.
Speaker 13: You know, really Tesla runs into the problem of cannibalizing
Speaker 13: its other cars, and that I think is what's causing
Speaker 13: them to pause. Now, what I've been saying is if
Speaker 13: they would have put a steering wheel on that robocab.
Speaker 9: It would have been a much.
Speaker 13: More exciting launch for me and I think for customers
Speaker 13: knowing that this two seater, cheaper car could be something
Speaker 13: we could actually just buy and drive. The robotaxi business
Speaker 13: is not a business that I'm excited about. It's not
Speaker 13: really what I think Tesla should be doing. There already
Speaker 13: are robotaxes that exist called Weimo, and Uber is already
Speaker 13: the master of transportation. So to me, Tesla should be
Speaker 13: selling EV's focusing on making great evs with great software
Speaker 13: and not trying to pivot into being some sort of
Speaker 13: robo taxi company. But you know, once again, I think
Speaker 13: people want to buy the car, and if they worried
Speaker 13: about selling the cars, they'll do just fine.
Speaker 5: Russ elon Musk and politics. He's donated, He's one of
Speaker 5: the largest donors to the Trump candidacy, to the Trump campaign.
Speaker 5: He's got his America Political Action Committee as super Pack,
Speaker 5: He's become incredibly active. I'm wondering, from the perspective of business,
Speaker 5: if in a time when we're so divided as a nation,
Speaker 5: if taking such a clear stance and doing so much
Speaker 5: to elect one candidate is a risk to the company.
Speaker 9: Yes, of course, you know why are you laugh strategic?
Speaker 13: Well, because I think it's an absurd risk to put
Speaker 13: your company in that you could avoid. Right, So, you know,
Speaker 13: I've personally tried to stay out of this election. I
Speaker 13: don't get any positive from my clients expressing my liberal opinions,
Speaker 13: which are liberal, and you know, I think people who
Speaker 13: work at my firm know that. And but you know,
Speaker 13: as a business person, it doesn't really serve. My purpose
Speaker 13: has to espouse my liberal beliefs on everybody. And that said,
Speaker 13: Elon's extremely right wing beliefs turn.
Speaker 9: Off a lot of his core demo.
Speaker 13: Now a lot of people don't believe that's happening, but
Speaker 13: I mean, look at what the effort they have to
Speaker 13: do to sell a car today, and they still refuse
Speaker 13: to advertise.
Speaker 9: So taking this stance for Elon is kind.
Speaker 13: Of a lose lose for TESLA because if Trump wins,
Speaker 13: he doesn't give a crap about EV's. He supports oil,
Speaker 13: and Elon's gonna learn about Trump, which.
Speaker 9: Is that he's a liar. And so all this.
Speaker 13: Money Elon's putting into Trump to hopefully have some power,
Speaker 13: he's gonna learn the hard.
Speaker 9: Way about Trump. Just asked Juliani.
Speaker 13: So that's a lose, and if Trump loses, it's a
Speaker 13: disaster for Elon just personally and for his personal brand
Speaker 13: and for everything that he's been working on. And it
Speaker 13: really puts Tesla in a tough position because the administration
Speaker 13: isn't going to do anything to help them, that's for sure.
Speaker 9: So I don't I don't get it other than I guess.
Speaker 13: He thinks the America is in this horrible place, but
Speaker 13: the stock market's hitting all the time highs every day,
Speaker 13: and I think America is in a wonderful place.
Speaker 9: But it's all a matter of perception.
Speaker 2: You know.
Speaker 13: And I think this is the most political I've ever
Speaker 13: seen a CEO. And that's one of the reasons we've
Speaker 13: lowered our position in Tesla is we do think it
Speaker 13: affects sales and affects the brand and ultimately margins. And
Speaker 13: we're excited about margins going up instead of going down
Speaker 13: for a quarter, which is great news, you know. But
Speaker 13: this is coming from the fact that the car market
Speaker 13: is so difficult that the cost of goods has gone down,
Speaker 13: not because Tesla is making more margin because people are
Speaker 13: willing to pay more for a Tesla.
Speaker 14: I want to talk a little bit more about Elon Musk.
Speaker 14: Matt Levine calls it the attention auction that you know,
Speaker 14: there's just a lot of things competing for Elon Musk's attention.
Speaker 14: And this has been discussed before, but I am curious
Speaker 14: to hear your opinion on whether or not the fact
Speaker 14: that Elon is so spread thin across these different efforts,
Speaker 14: how you're thinking about that when you're taking to look
Speaker 14: at your Tesla position.
Speaker 13: Well, this is probably one of the biggest issues is
Speaker 13: he doesn't actually work at Tesla, you know, like you
Speaker 13: go to work at your company every day like you're
Speaker 13: the CEO. I don't think that's what he does. And
Speaker 13: I don't think that Elon gets more hours in a
Speaker 13: day than you or I do. So he might sleep
Speaker 13: four hours a day instead of eight. Well, you know
Speaker 13: where that's going to cost him is at the end
Speaker 13: of his life, because it's super unhealthy to live this way.
Speaker 13: You know, there's this sort of opinion that he has
Speaker 13: some superhuman ability.
Speaker 9: He doesn't.
Speaker 13: So he's spending his time working for Trump right now
Speaker 13: and doing politics, and he's not spending his time getting
Speaker 13: his full self driving to work, which it still doesn't
Speaker 13: and So this is really the issue for me as
Speaker 13: an investor is shouldn't the CEO of your company be
Speaker 13: there every day or at least pretend you know. And
Speaker 13: then the second thing is this lack of attention to
Speaker 13: what needs to be done, especially around full self driving,
Speaker 13: is really troubling to me because I s the competitors
Speaker 13: all over the place. I'm here in the heart of
Speaker 13: EVS right and Rohogue Taxis, They're everywhere. They're working in
Speaker 13: extremely difficult driving conditions that my cyber truck can't even
Speaker 13: come close to tackling.
Speaker 9: Russ.
Speaker 5: We gotta go, We gotta let you get back to work.
Speaker 5: We do appreciate you joining us. It's always a treat
Speaker 5: when you are on our air, especially post test learnings.
Speaker 5: Ros Gerber, President and CEO of at Gerber Kawasaki Wealth
Speaker 5: and Investment Management.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Listen live
Speaker 2: each weekday starting at two pm Eastern on applecar Play
Speaker 2: and Android Auto with the Bloomberg Business ad. You can
Speaker 2: also listen live on Amazon Alexa from our flagship New
Speaker 2: York station, Just say Alexa Play Bloomberg eleven thirty.
Speaker 4: The European Central.
Speaker 3: Bank recently lowered interest rates for the third time this year,
Speaker 3: as a hastier retreat in inflation allowed it to offer
Speaker 3: support to the regions stuttering economy. We got some economic
Speaker 3: news just this past week on showing how the European
Speaker 3: Zone is struggling.
Speaker 5: In an exclusive interview with Bloomberg, ECB President Christine Laguard
Speaker 5: said that the bank is quote rather satisfied with how
Speaker 5: inflation is slowed below the two percent goal, but that
Speaker 5: the central bank will remain cautious and not jump to conclusions.
Speaker 9: At the moment.
Speaker 15: We are not totally unhappy with what we see, because
Speaker 15: it looks very much that inflation is on the right
Speaker 15: track of des inflation. You know, we come from very
Speaker 15: high numbers, as high on average for the whole of
Speaker 15: the euro Area as ten point six percent, and the
Speaker 15: latest reading we had for the inflation in September was
Speaker 15: one point seven and we're looking at a lot of
Speaker 15: data to make sure that this disinflationary process continues to
Speaker 15: be well on track.
Speaker 5: That was ECB President Christine Laguard speaking exclusively on Bloomberg
Speaker 5: Television in Washington, DC.
Speaker 3: We get another view on the rate cut in Europe
Speaker 3: and more specifically the Economy of Italy with Alessandra Petzeli,
Speaker 3: Deputy Governor of the Bank of Italy, the Italian Central Bank,
Speaker 3: Tim and Bloomberg's Emily Garfao began with her take on
Speaker 3: the easy B decision to cut rates.
Speaker 1: Well, you know, this was expected and follows like a
Speaker 1: very long period of unprecedent, you know, very restricting monetary
Speaker 1: policy that has taken us in twenty two, twenty twenty
Speaker 1: three to an unprecedent situation since the Euro was introduced.
Speaker 1: So it's kind of too soon to understand how this
Speaker 1: is going to play both for the banks and for
Speaker 1: the system as a whole, for the stability of the
Speaker 1: system as a whole. What I can say is that
Speaker 1: this was expected and we will see how, you know,
Speaker 1: it goes forward in the coming in the coming months.
Speaker 1: It's clearly a situation that has been quite interesting for
Speaker 1: supervisors like myself. You know, we have been seeing banks
Speaker 1: making unprecedent you know, profitability in the last years they
Speaker 1: were rocket high, something that has of course created a
Speaker 1: number of impacts on the market and has you know,
Speaker 1: given us supervisors a little bit of a red flag
Speaker 1: on everything like credit risk and liquidity risks, and these
Speaker 1: are the issues that right now are under the limelight
Speaker 1: of the ECB, the SSM ARM which is the supervisory
Speaker 1: arm of the ECB, and of course also Bankavilly that
Speaker 1: participates to the Eurozone and in the SSM.
Speaker 16: So we know that.
Speaker 7: Spain, Portugal and Greece are among the countries helping you
Speaker 7: keep the Eurozone out of a recession. How would you
Speaker 7: describe the economy in Italy right now?
Speaker 1: Well, right now, what we've see is, you know, the
Speaker 1: economy is being growing, you know, in the last year.
Speaker 1: Predictions are you also bring in the economy steadily? I
Speaker 1: would say for the next quarters. The banking system in
Speaker 1: Italy has been strong and able to support the economy
Speaker 1: and this is due to the work that has been
Speaker 1: done you know in the last years together with the SSM.
Speaker 1: So we are looking at a you know, with some
Speaker 1: positive expectations as to the next quarter. So I would
Speaker 1: say that between Spain, Portugal and Italy we are you know,
Speaker 1: pretty much going the same direction.
Speaker 5: What about when it comes to immigration in Italy? This
Speaker 5: is a huge topic here in the US ahead of
Speaker 5: the presidential election. Our own Bloomberg News team reporting that
Speaker 5: Italian prime Minister Georgia Milleni's government is pushing through new
Speaker 5: legislation to salvage it's controversial plan to curb undocumented migration
Speaker 5: after a court blocked to project to divert asylum seekers
Speaker 5: to Albania. How do you look at the role of
Speaker 5: documented migrants and undocumented migrants in the Italian economy?
Speaker 1: Well, this is a very difficult issue. That's difficult in Italy,
Speaker 1: you know, given also the fact that we have you know,
Speaker 1: borders that can be easily sort of you know, penetrated,
Speaker 1: and this has been an issue that has been brought
Speaker 1: by a number of our governments at European and European level.
Speaker 1: We are I think that we are in the process
Speaker 1: of understanding and this issue of you know, uh, catering
Speaker 1: for external aid in order to take care of undocumented
Speaker 1: immigrants is on you know, as being very much wanted
Speaker 1: by the government. I know there right now there are
Speaker 1: some you know issues that also concern the judiciary is
Speaker 1: a ve that decision. We will see how it goes.
Speaker 1: For sure, this is something that europe needs to tackle together.
Speaker 1: I mean, there isn't something that every single country can
Speaker 1: take care of. It's a European issue. As much as
Speaker 1: an American issue.
Speaker 5: That's it's interesting, That's that's my question because here in
Speaker 5: the US, I think it's fair to say, and you know,
Speaker 5: a lot of economist would agree, there are jobs that
Speaker 5: Americans who are born in America typically will not do
Speaker 5: in the United States, jobs that traditionally go to migrants
Speaker 5: and migrant labor. Do those jobs exist in Italy?
Speaker 1: More and more I would say yes. I think that
Speaker 1: Italians are not, you know, taking those jobs that were
Speaker 1: traditionally there for maybe you know, lower income classes and
Speaker 1: lower income people. It's slowly becoming the same as it
Speaker 1: is here, maybe not with the rhythm and with the
Speaker 1: growth you know, they have seen and experienced in the
Speaker 1: United States.
Speaker 7: I want to pivot to financial regulation because Bloomberg News
Speaker 7: is Laura Nonan had written earlier in October that Germany, France,
Speaker 7: and Italy had urged the EU to show restraint in
Speaker 7: financial roommaking and instead focus on boosting the competitives competitiveness
Speaker 7: of the banking sector. That was the Treasury, and so
Speaker 7: we're wondering if the Bank of Italy kind of shares
Speaker 7: that stance when it comes to balancing competition relation.
Speaker 1: Well, I think that if we look at the last
Speaker 1: couple of years and what happened in Switzerland and what
Speaker 1: happened with the US regional banks, we clearly see that
Speaker 1: there has to be a balance between regulation and competition.
Speaker 1: But regulation is we believe, you know, the most important tool,
Speaker 1: together with supervision in order to keep you know, financial
Speaker 1: stability in the eurosystem. And you know, I think that
Speaker 1: we prove that the full implementation of Basil three has
Speaker 1: given it to supervisors a harmonized set of schemes of
Speaker 1: you know, reporting that has been extremely helpful in the
Speaker 1: years that follow the crisis of twenty oh seven twenty eight. Today,
Speaker 1: if you look at the European banking market, you see that,
Speaker 1: you know, the banks are very stable and able to
Speaker 1: support the economy, and that's exactly the job they should do.
Speaker 5: I want to talk a little bit inv and fintech
Speaker 5: in particular, because here in the United States you have
Speaker 5: regulators trying to figure out the role that fintech should
Speaker 5: play when it comes compared to big banks. For example,
Speaker 5: what do you think the priorities for the next Commission
Speaker 5: should be when it comes to the future of finance
Speaker 5: When it comes to fintech companies that I speak of.
Speaker 1: Well, in Europe, we definitely have to complete the capital
Speaker 1: market union. That is very very instrumental to you know,
Speaker 1: innovation because it creates all the you know, the financial
Speaker 1: tools to finance innovation. What we see happening in Italy
Speaker 1: right now that the competition is shifting, you know, it's
Speaker 1: not among banks anymore, but it's also between banks and
Speaker 1: those tech companies that come from other sides.
Speaker 9: Of other industry. Here in the US, it's the same.
Speaker 1: As in the US, and there's a lot also coming
Speaker 1: from the payment system industry. So if we look at
Speaker 1: the number of licenses that we've been granting in the
Speaker 1: last few years out of like say eighty seven two
Speaker 1: or for banks and eighty five for other type of
Speaker 1: financial institutions. So the thing is really how do banks
Speaker 1: cope with legacy when it comes to the it, you know,
Speaker 1: with it legacy and how also they are entering more
Speaker 1: and more into contracts with third parties, providers that come
Speaker 1: from like tech industry, and they're becoming extremely relevant also
Speaker 1: for the kind of concentration you know, in the European market.
Speaker 5: But do you think your colleagues and do you think
Speaker 5: regulators in Italy are doing the right thing when it
Speaker 5: comes to embracing this technology.
Speaker 15: I think.
Speaker 1: So we have had a lot of changes, you know,
Speaker 1: within our own institution in order to cope with this,
Speaker 1: you know, and created a way to talk to the
Speaker 1: market and understanding of what kind of regulation is needed.
Speaker 1: The European Commission has issued a number of vertical and
Speaker 1: horizontal regulation that are extremely interesting and that we are
Speaker 1: now implementing their and trying to organize sort of innovation
Speaker 1: in a way which does not create instability at the market.
Speaker 1: But at the same time, we don't want to stiffle it.
Speaker 1: We want newcomers, we want innovation, we want to create
Speaker 1: new industry.
Speaker 7: We're talking about fintech and an issue that comes up
Speaker 7: a lot is cybersecurity, and I'm wondering how the ECB
Speaker 7: plays a role in protecting both consumers and corporations, including banks,
Speaker 7: from this emerging threat.
Speaker 1: Well, there are now a couple of peace of legislation
Speaker 1: that have been put together in the EU that look
Speaker 1: after explicity, after a security of infrastructure, and that is
Speaker 1: of course, you know, an issue that concerns banks, but
Speaker 1: concerns also utilities and other important networks of the country.
Speaker 1: The one thing that you know, it's very important. The
Speaker 1: kind of risk that we're looking at is how interconnected
Speaker 1: the platforms are becoming and how this role of third
Speaker 1: party providers are are is you know, increasingly important when
Speaker 1: it comes to create you know, new ability for companies,
Speaker 1: for banks to provide these services. So I think this
Speaker 1: is main top issue on the U legislator agenda and
Speaker 1: on ours.
Speaker 5: We have a story by our team here at Bloomberg
Speaker 5: News about central makers losing sleep over europe souring economies.
Speaker 5: Have another worry looming large, how much more damage Donald
Speaker 5: Trump could cause if he returns to.
Speaker 9: The White House.
Speaker 5: We're two weeks away from the election here in the US.
Speaker 5: How are you watching it?
Speaker 1: Well, you know, we concern like everybody else. And I
Speaker 1: think that you know, one of the issues for US
Speaker 1: regulators is that you know, deregulation will see what happened
Speaker 1: with the US regional banks. You know, there are huge
Speaker 1: banks compared to European size, and you know, the the
Speaker 1: lack of application of Basil three, the sort of like
Speaker 1: the light touch supervision. I think it's something that worries
Speaker 1: the international markets. You know, the you don't need to
Speaker 1: be a non internationally active bank in order to create
Speaker 1: a wave that touches and other countries and other industries.
Speaker 5: So your concern is mostly about regulation when it comes
Speaker 5: to smaller banks in in.
Speaker 1: You know, I would say so, yes, definitely, that is
Speaker 1: an area that has been clearly, you know, something that
Speaker 1: has created concern in last year when you know, Silicon
Speaker 1: Valley Bank and the other regional banks that didn't hit
Speaker 1: the press too much, but we knew about it, and
Speaker 1: this is of course something that we don't know whether
Speaker 1: there can be a contagent, you know, and how that's
Speaker 1: going to work. Also going towards Europe.
Speaker 5: Alessandro Petzzlli, Wuty Governor of the Bank of Italy, the
Speaker 5: Italian Central Bank, Joining us here in the Bloomberg BusinessWeek Studio.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern Listen
Speaker 2: on Apple car Play and then brought auto with a
Speaker 2: Bloomberg Business act or watch us live on YouTube.
Speaker 3: Plenty ahead in our second hour of the weekend edition
Speaker 3: of Bloomberg Business Week, including the high schooler who kind
Speaker 3: of schooled us. He created a method to detect pesticide
Speaker 3: residue on produce using a handheld detector with some AI
Speaker 3: thrown in. We're just kind of liked Tim and I like, wait.
Speaker 4: What how old are you and what did you do?
Speaker 3: I truly every time I wash fruit or eat fruit,
Speaker 3: I think about his device and I want one.
Speaker 9: Plus.
Speaker 5: The CEO of Lifewave Foods on tapping into the dairy
Speaker 5: resurgence among American consumers Kafir anyone.
Speaker 4: I know, we're still trying to figure it out, right, it.
Speaker 5: Doesn't matter how you say it, it tastes good.
Speaker 4: Ah, nice to know.
Speaker 3: First up this hour, what started as a battery company
Speaker 3: in the nineteen nineties in Shenzhen, China has now become
Speaker 3: one of the best selling EV brands in the world.
Speaker 3: And now the company's startling growth has made it a
Speaker 3: global player, and that has sparked tariffs from the United
Speaker 3: States and the EU.
Speaker 5: We're talking about Chinese automaker BYD it stands for build
Speaker 5: your Dreams. They've seem to figure out something that the
Speaker 5: rest of the auto industry has not, and that is
Speaker 5: build an affordable EV for the masses.
Speaker 7: Yeah.
Speaker 4: I feel like that's the holy grail in the EV world.
Speaker 1: All right.
Speaker 3: This story is the cover of the upcoming new issue
Speaker 3: of Bloomberg Business Week and is by Bloomberg News auto
Speaker 3: reporter Gabby Coppola, who joined us to talk about China's
Speaker 3: EV offensive.
Speaker 12: BYD was founded in nineteen ninety five by a Chinese
Speaker 12: battery scientist named Wan Chuanfu. And he was basically a
Speaker 12: government researcher who saw that, you know, the Chinese economy
Speaker 12: was opening up, and he decided to move to Shenzen
Speaker 12: in the south of China, which is today kind of
Speaker 12: one of the like a Silicon valley of China. And
Speaker 12: he started out making batteries for mobile phones, but his
Speaker 12: dream was to.
Speaker 4: Electrify the auto industry.
Speaker 12: He always thought that you could make you know, battery
Speaker 12: powered vehicles, and it took a really long time from
Speaker 12: nineteen ninety five to up until about twenty twenty for
Speaker 12: him to make that a reality. But the story is
Speaker 12: really about how he did that. And you know buid
Speaker 12: because they are kind of the poster child for China's
Speaker 12: EV offensive around the world. I mean, they're not the
Speaker 12: only one by any means. There's lots of Chinese EV
Speaker 12: companies that are now trying to export around the world.
Speaker 12: You know, we see a lot in Europe but also
Speaker 12: in Southeast Asia, the BID is kind of the strongest
Speaker 12: and the biggest, and you know, they're the biggest EV
Speaker 12: seller in China. And I think because we're in this
Speaker 12: moment of trade war and talking about tariffs and tension
Speaker 12: with China, there's a tendency by people in the West
Speaker 12: to kind of think that, oh, this is all because
Speaker 12: of Chinese subsidies. And I'm not at all saying that
Speaker 12: there aren't Chinese subsidies involved. I mean, the Chinese economy
Speaker 12: is not a free market economy. There's a lot of protectionism,
Speaker 12: and the scale of subsidies that they use is much
Speaker 12: higher than what other, you know, free market democratic countries do.
Speaker 12: But if they were just subsidies, there would be twenty
Speaker 12: byds and there's really just one. And you know that
Speaker 12: is the due to the innovation and the sort of
Speaker 12: long term vision of Tuan Fu and the other key
Speaker 12: people in the company.
Speaker 3: Well, Gabby, get to it, because it does feel like
Speaker 3: the thing, the nut that they figured out how to crack,
Speaker 3: the holy grail, if you will, is to build an
Speaker 3: affordable EV for the masses, which we keep getting promises
Speaker 3: from the likes of Elon Musk and others, and yet
Speaker 3: it hasn't happened. BYD though figured it out.
Speaker 4: How is that? Is it just getting the cost of
Speaker 4: batteries down? What was it?
Speaker 12: You know, it's not just one things. I think it's
Speaker 12: a confluence of things. But you know, one thing I
Speaker 12: learned in researching this story, Carol, is that you know,
Speaker 12: we look at the US now and we say, oh,
Speaker 12: evs aren't taking off. Look at this, sales are down.
Speaker 12: China went through that too for like ten years. Like
Speaker 12: China also was engineering incentives. But the thing is BYD
Speaker 12: never stopped. I mean they had a vision to do
Speaker 12: this and they kept doing it when it was not popular,
Speaker 12: when they weren't selling. One thing that's really key is
Speaker 12: they also sell hybrids, so they're not like Tesla, where
Speaker 12: if EV demand drops, that's all they got. You know,
Speaker 12: if you got range anxiety, BYD's got to plug in
Speaker 12: hybrid for you. But I think the key, the key
Speaker 12: to what they've achieved is a lot of it has
Speaker 12: to do with vertical integration. You know, UBS did a
Speaker 12: report that their vehicles are twenty five percent cheaper to
Speaker 12: make than basically the rest of the auto industry, and
Speaker 12: a lot of that is because they make so many
Speaker 12: things themselves in the house. This is not just a battery,
Speaker 12: This is not just a car company. They make semiconductor chips,
Speaker 12: they make solar panels, they make components for consumer electronics
Speaker 12: for companies like Apple. I mean, they're manufacturing Titan really
Speaker 12: in China. But the other part of it is they
Speaker 12: had a battery breakthrough. Like I said, Wan Chuanfu is
Speaker 12: a battery scientist. And I think China gives a lot
Speaker 12: of subsidies for research and investment, you know, R and
Speaker 12: D and investment. That's a big part of their economy.
Speaker 12: And so I mean he I visited. I did visit
Speaker 12: their headquarters in chen Jin, and I felt like I
Speaker 12: was at an academic campus or like a national lab,
Speaker 12: because there was just the museum of what all the
Speaker 12: things they've invented and researched is.
Speaker 4: There's a lot there.
Speaker 5: What's the give us an idea of what's there apart
Speaker 5: from vehicles that we've seen pictures of because we know
Speaker 5: we're not driving these things here in the US. We'll
Speaker 5: get to that in just a minute.
Speaker 12: Right well, And keep in mind, like they're not letting
Speaker 12: an American journalist in to see behind the wall and
Speaker 12: see all their secrets. But I mean, one thing that
Speaker 12: Wan Chuanfu is very proud of is they always do
Speaker 12: this nail test where they have you go in the
Speaker 12: museum lobby area and there's this glass wall, and there's
Speaker 12: a lithium ion battery with nickel, and then there's the
Speaker 12: BID battery, which uses LFP or lithium iron phosphate. That's
Speaker 12: kind of a key part of their success is they
Speaker 12: decided early on to work with this battery chemistry LFP,
Speaker 12: which is more stable and less fire prone than the
Speaker 12: nickel based batteries we've seen the Koreans and everybody in
Speaker 12: the West using. So when you go into this museum,
Speaker 12: they have this like robot arm that comes down and
Speaker 12: sticks and nail right through the battery, and on the
Speaker 12: nickel side you see the thing explode, and on the
Speaker 12: bid LFP battery nothing happens. So that's like probably one
Speaker 12: of Wangwan Fu's greatest achievements is who's saying, look, I
Speaker 12: made this battery that you know can actually be used
Speaker 12: for long range vehicles, but it could and I and
Speaker 12: I look, they call it. They branded as the safe
Speaker 12: Thing No batteries A hundred percent you know, zero fire risk,
Speaker 12: and I think if you were to google you'd find
Speaker 12: that's true for BID two. But you know that is
Speaker 12: a key part of it. But the you know of
Speaker 12: suspension systems, you know, research on materials, polymers, so many things,
Speaker 12: I mean, the engineering, you know, all these things. But
Speaker 12: another thing I should mention in my story. You know
Speaker 12: what a scoop that we uncovered myself and our our
Speaker 12: you know star Apple or reporter Mark German, is that
Speaker 12: actually BID and Apple worked together, uh for a battery
Speaker 12: system for the Apple car when that project was still going.
Speaker 12: And our reporting showed that that work that Apple and
Speaker 12: BYD did together did influence and you know, impact somewhat
Speaker 12: of BID's own blade development, cause at one point both
Speaker 12: companies had access to this very similar technology. Apple decided
Speaker 12: to shelve it cause who wants to get into the
Speaker 12: car business these days, I guess, and BID was all
Speaker 12: went ran with it, you know. And to be clear,
Speaker 12: you know BYD developed the blade battery by themselves. There's
Speaker 12: no Apple ip in that blade battery. But the two
Speaker 12: companies work together. You had some of the best and
Speaker 12: brightest minds in this field working together, and BYD is
Speaker 12: the one that commercialized it, and now they're, you know,
Speaker 12: the biggest carmaker in China thanks in part to that
Speaker 12: battery breakthrough.
Speaker 3: I well, listen, you know, I my husband and I've
Speaker 3: been looking at EV's for a while and they're just
Speaker 3: crazy expensive and it's just hard to get it and
Speaker 3: I kind of want to do the right thing for
Speaker 3: the environment.
Speaker 5: Well, you're not going to get a bid.
Speaker 4: I'm not going to get a byd Listen.
Speaker 3: We only have about forty five seconds left hair Gabby
Speaker 3: and I highly recommend everybody check out the magazine because
Speaker 3: there's so much detail in this and it's a company
Speaker 3: that we talk about so much. Thirty forty seconds, so
Speaker 3: take away before we have to say goodbye.
Speaker 12: If the West, if US and Europe European companies want
Speaker 12: to compete with China, they have to be honest about
Speaker 12: what they're up against. And it's not just subsidies. It's
Speaker 12: a very competitive company. You know, we're down a few points,
Speaker 12: quite a few points in the fourth quarter, but the
Speaker 12: game's not over. There's still a chance. But you know,
Speaker 12: companies need to get honest with themselves about the kind
Speaker 12: of cultural change and technological change that needs to happen
Speaker 12: for them to compete with BID.
Speaker 4: I wonder how many automakers are somehow, you.
Speaker 3: Know, seruptitiously like getting a BYD car and pulling it
Speaker 3: apart and like understanding everything that's in it and trying
Speaker 3: to figure out what they need to do right.
Speaker 4: Gab Business and do it in teardowns.
Speaker 12: Yes, that's happening.
Speaker 3: Great reporting the Apple scoop too as well. Unbelievable Bloomberg
Speaker 3: News Auto reporter Gabby Copola. She's of course got the
Speaker 3: cover story of Bloomberg Business Week.
Speaker 2: You're listening to the Bloomberg Business Week Podcast. Listen live
Speaker 2: each weekday starting at two pm Eastern on Apple car
Speaker 2: Play and Androyd Auto with the Bloomberg Business App. You
Speaker 2: can also listen live on Amazon Alexa from our flagship
Speaker 2: New York station Just Say Alexa, playing Bloomberg eleven thirty.
Speaker 3: Sticking with the automotive space, General Motors had its best
Speaker 3: day in four years this past week after it signaled
Speaker 3: colid us demand for its highest margin vehicles. Even as
Speaker 3: a broader auto market softens.
Speaker 5: Well, some rival automakers are cutting prices and boosting incentives
Speaker 5: to reduce inventory. GM has been able to hold the
Speaker 5: line on high demand vehicles like it's old school gas
Speaker 5: powered GMC Yukon suv and the Chevy Silverado pickup. For
Speaker 5: more on GM's success, Eligrafey and I spoke to Bloomberg
Speaker 5: News auto reporter Keith Notten.
Speaker 17: Well, they're making a lot of money in the home
Speaker 17: market with their traditional vehicles, with gas fueled pickup trucks
Speaker 17: and sport utility vehicles, and that's helping to offset losses
Speaker 17: that they have in electric vehicles, and losses that they
Speaker 17: have in China, and losses that they have with their
Speaker 17: autonomous unit crews. So they're selling a lot of traditional
Speaker 17: vehicles at high prices and high margins.
Speaker 5: Who's buying these vehicles? These are these cars? I mean,
Speaker 5: they're not as expensive as the evs, but these are
Speaker 5: expensive cars now.
Speaker 17: Well for sure. I mean, you know, cars average almost
Speaker 17: fifty thousand dollars these days in price and interest rates
Speaker 17: still remain sort of stubbornly high, though the FED has
Speaker 17: begun to lower rates that will hopefully pull down car
Speaker 17: loan rates. But you know, the American consumer, at least
Speaker 17: in GM's experiences, remaining incredibly resilient and continues to buy
Speaker 17: really well outfitted cars, which is, you know, driving profits
Speaker 17: up for them. And you know they, as you said,
Speaker 17: they raised their guidance. It's the third time this year
Speaker 17: that they've raised guidance. They've beat earnings estimates for seven
Speaker 17: quarters in a row, so consumers have not stopped buying cars.
Speaker 7: So is this more a story about the resiliency of
Speaker 7: the US consumer in general or is this a GM
Speaker 7: specific kind of I guess optimism.
Speaker 17: Well, GM is definitely out gunning its Troit rivals Ford
Speaker 17: and Stilantis. Neither of them have beat estimate seven quarters
Speaker 17: in a row and are not raising guidance. So you know,
Speaker 17: GM is doing especially well. But what new car buyers
Speaker 17: are buying these days are more well outfitted cars and
Speaker 17: larger cars that have higher sticker prices, and that has
Speaker 17: driven up margins. You know, everybody is expecting pricing to
Speaker 17: soften because inventories are finally replenished after you know the
Speaker 17: shortages of the pandemic era. But still consumers are paying
Speaker 17: up for new wheels.
Speaker 5: Hey, we got thirty seconds left, Keith. You know I'm
Speaker 5: going to go there. Evs How ugly is it for GM?
Speaker 17: Well, you know it's interesting with GM, Tim because they
Speaker 17: are coming out with lower priced evs like the Equinox,
Speaker 17: and those are really resonating because you know, they're not
Speaker 17: too expensive. So GM is having some success with its evs,
Speaker 17: and Mary Barrow, the CEO, said they're going to reduce
Speaker 17: those losses on ev substantially next year.
Speaker 5: Keith Notton, Bloomberg News Auto reporter, joining us from Detroit, Michigan. Keith,
Speaker 5: thanks for joining us. Always good to see you. General
Speaker 5: Motor shares hire by ten point three percent as we speak.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern. Listen
Speaker 2: on Apple car Play and and Brout Auto with a
Speaker 2: Bloomberg Business app, or watch us live on YouTube.
Speaker 5: Well, you can find our next guest products in the
Speaker 5: dairy section of your local supermarket LifeWay known for its kaffir.
Speaker 5: You know what it's like that yogurt like drink compikable
Speaker 5: yogurts movie.
Speaker 4: Oh okay, it's kind of yeah, drinkable gotten.
Speaker 5: Sorry, maybe because you don't have critics young critters.
Speaker 4: Right, I have older critters older.
Speaker 5: It's a bubbly traded company about Foydard million dollar market
Speaker 5: cap but Julius and Lanski is the second generation of
Speaker 5: her family to run the company after her father started
Speaker 5: it and took it pup like a couple years later
Speaker 5: on the Nasdaq. Julia is chairman, president and CEO of LifeWay.
Speaker 5: She joins us from Los Angeles. Julie, how are you welcome?
Speaker 16: Good?
Speaker 18: Thank you so much for having me.
Speaker 5: Yeah, thanks for joining us. You've got a really cool
Speaker 5: story and the company is a really interesting one because
Speaker 5: it's not often that you find publicly traded firms that
Speaker 5: have such a narrow focus in terms of products. Give
Speaker 5: us an idea of how business is right now and
Speaker 5: where areas of growth are for you.
Speaker 18: Sure, well, it's an exciting time to be at LifeWay.
Speaker 18: Our category is the probiotic dairy functional food space and
Speaker 18: we are seeing just a booming explosion of business. Just
Speaker 18: the last nineteen quarters have been year over year consecutive
Speaker 18: growth years for us, and that trend is not slowing
Speaker 18: down anytime soon.
Speaker 5: Is that because of what's happening in terms of of
Speaker 5: the way people think about products such as yours or
Speaker 5: are you doing things internally when it comes to product development,
Speaker 5: when it comes to placement, distribution and the like, what
Speaker 5: are you attributing that to.
Speaker 18: Yeah, I mean, I think it's both. I think, first
Speaker 18: of all, to just step back a little bit, I
Speaker 18: think people really want to know where their products are
Speaker 18: coming from, where the brands originate from. And I think
Speaker 18: LifeWay is really the embodiment of the American dream. It's
Speaker 18: just a remarkable story. As you mentioned, my dad came
Speaker 18: from the We all came from the former Soviet Union,
Speaker 18: and we were the first of forty eight families that
Speaker 18: were settled in Chicago. And you know, this idea of
Speaker 18: living the American dream was something my father aspired to.
Speaker 18: And when he walked the grocery stores in America, he
Speaker 18: noticed that there was no Kiffeir, which was a staple
Speaker 18: product for two thousand years, for two thousand years, something
Speaker 18: that my ancestors, my grandmother's passed down generation to generation,
Speaker 18: and it was simply non existent in the United States.
Speaker 18: And I think that, you know, and so that's how
Speaker 18: LifeWay was started, and then he took it public two
Speaker 18: years later. But I think consumers really love that heritage story.
Speaker 18: They want to know that their brand came from someplace
Speaker 18: authentic and real, not just out of an ai private
Speaker 18: equity office or something like that. And so I think
Speaker 18: that thirty eight years of legacy that LifeWay has been
Speaker 18: bringing to American consumers and consumers globally is part of
Speaker 18: the reason. Additionally, you know, with this really wonderful, storied product,
Speaker 18: past of my ancestors, knowing intuitively that kafir improved their
Speaker 18: well being, their health, they attributed their centurion you know,
Speaker 18: living to one hundred years of age based on their
Speaker 18: consumption of keyfer And it wasn't until nineteen oh eight
Speaker 18: when Elie Mechnipoff, doctor Ellie Mechnikoff, did the first round
Speaker 18: of science and research on kaffir and probiotics and fermented
Speaker 18: dairies like Kiffer, and he found that it did indeed
Speaker 18: help improve the body's health. And today modern science is
Speaker 18: only just catching up on the microbiome friendly bacteria, probiotics
Speaker 18: and kafir specifically, and so there's so much exciting medical
Speaker 18: research and we're LifeWay is a brand that meets the moment.
Speaker 18: We are on every grocerysource shelf across the United States,
Speaker 18: from Whole foods and ultra premium markets to Walmart and Costco.
Speaker 5: Yeah, that's what I wanted to talk about because I
Speaker 5: was talking to somebody recently who has a startup ish
Speaker 5: food company. They've raised quite a bit of money and
Speaker 5: they're pretty prominent, but she was telling me how difficult
Speaker 5: it is to get shelf space at some of these
Speaker 5: prominent retailers. How do you do it? As you know,
Speaker 5: you're not independent in the sense of a startup, You're
Speaker 5: far from it. You're a publicly traded company, but you're
Speaker 5: you know, you're not Danin by any means. You know,
Speaker 5: you're not like Talless. So so how do you do it?
Speaker 5: How do you compete with the big players?
Speaker 18: Well, I think they compete with us. I think they
Speaker 18: aspire to be relevant like LifeWay is. You know, we
Speaker 18: have been very passionate and trend setting from day one,
Speaker 18: and we still operate very nimble, and we are trend setting.
Speaker 18: We aren't just following trends, but we're creating the trends.
Speaker 18: We have been, you know, dedicated to putting a bottle
Speaker 18: of LifeWay Keeper in everybody's hand, every consumer's hand, from
Speaker 18: cradle to grave, generation to generation, and you know, building trial,
Speaker 18: showing up at culturally relevant events, yoga. You know, we
Speaker 18: were one of the first brands to partner with yoga
Speaker 18: studios across the country. You can try our samples, our
Speaker 18: products at Lallapalooza at Austin City Limits, all different, you know,
Speaker 18: really amazing cultural moments that are relevant for concers. And
Speaker 18: the way that we show up to our consumers, educating
Speaker 18: them on the importance of gut health is one of
Speaker 18: the reasons why we have had such tremendous success.
Speaker 3: So so okay, so really interesting story, family story. Publicly
Speaker 3: held company, small market cap about three hundred and ninety
Speaker 3: million dollars. Stocks almost doubled year to date, Julia, I
Speaker 3: am curious, so tuck us through some of the metrics,
Speaker 3: the type of growth that you're seeing, revenue, top line growth,
Speaker 3: earnings growth, cash coming in. What do you do to
Speaker 3: kind of keep growing the company?
Speaker 18: Yeah, I mean, you know, we have had the most
Speaker 18: incredible historic quarters. The last five quarters were record breaking quarters.
Speaker 18: Like I mentioned, nineteenth consecutive quarters of year over year
Speaker 18: top line growth. We just hit our the second quarter
Speaker 18: this year, we almost hit fifty million dollars, which has
Speaker 18: been a number we've had long circled in our aspirations.
Speaker 18: Up more than twenty five percent this year. Our twenty
Speaker 18: twenty nineteen, revenue went from about ninety three million to
Speaker 18: almost two hundred million right now two hundred million run rates,
Speaker 18: So we've doubled our revenue. While I don't obsess about
Speaker 18: the share price at all, I am very proud of
Speaker 18: the fact that in the last five years our share
Speaker 18: price is up over almost over twelve hundred percent. So
Speaker 18: you know, these are some remarkable numbers. Our gross profit
Speaker 18: improved to a ninety two percent increase. You know, our
Speaker 18: gross margin was up two hundred and ninety basis points.
Speaker 18: So the metrics that prove that, you know, consumers are
Speaker 18: looking for Lifewaykeeper. We are taking market share away from
Speaker 18: other brands of other types of functional beverages or other
Speaker 18: kind of old stale products like yoga.
Speaker 16: I think we're the.
Speaker 18: More trendier, fashionable, healthier cousin of yogurt.
Speaker 3: Hey, one thing we wanted to ask you is you
Speaker 3: know nifty function on the Bloomberg where you can look
Speaker 3: at you know, your top shareholders and denote North America
Speaker 3: has about what about a twenty twenty three twenty I
Speaker 3: guess yeah reported that back in September, and they, you guys,
Speaker 3: confirmed a receipt of a proposal from denote they offered twenty.
Speaker 4: Five dollars a share.
Speaker 3: You guys right now change trade at twenty six dollars
Speaker 3: forty cents a share.
Speaker 4: Is there an offer?
Speaker 16: Is like?
Speaker 3: Is there is that the future that you ultimately will
Speaker 3: maybe connect with this company danone will own you?
Speaker 4: Or is the plan to kind of keep going alone?
Speaker 18: Well, while I can't comment on that, I would like
Speaker 18: to point to the incredible success that we're having at LifeWay.
Speaker 18: We're on a really strong growth trajectory with a really
Speaker 18: long runway, and in terms of growing both our flagship
Speaker 18: product of but also an incredible exciting emerging category which
Speaker 18: is not new for us, but new for the American people,
Speaker 18: which is farmers cheese and farmer sheees. Is so exciting
Speaker 18: because maybe you've noticed that last year cottage She's went
Speaker 18: viral on TikTok and it's all over everyone's making blended cottage.
Speaker 18: She's in various recipes like that on social media. And
Speaker 18: our farmer sheeese is one of our legacy products that
Speaker 18: we've been making for over thirty eight years. It's something
Speaker 18: my grandmother's made. Like I mentioned footwog in my language,
Speaker 18: it's called footwog and Farmers Cheese is exploding and we're
Speaker 18: really excited to be growing that category where the largest
Speaker 18: manufacturer of Farmers She's today and it's going to be
Speaker 18: really exciting to scale that into all of our locations
Speaker 18: where our Kifer is currently sold and bring this new
Speaker 18: new category in the dairy space. You know, bioavailable, high
Speaker 18: quality protein is something that consumers are really looking for
Speaker 18: in their craving and that's something that Lifeboys really has
Speaker 18: been pioneering and paving for a long time in the
Speaker 18: natural food space, organic food space, which is now mas market.
Speaker 18: So that's a really exciting time for us.
Speaker 5: We only have about a minute left, but what's your
Speaker 5: product pipeline look like expansion beyond Farmer Cheese and Keifer.
Speaker 18: Yeah, well, we are scaling our pro Bugs, which is
Speaker 18: a pouched product for kids, Pouchkifer product for kids that
Speaker 18: we innovated over ten years ago, and we've really invested
Speaker 18: in some equipment and machinery to really scale that. You know,
Speaker 18: we disrupted the entire baby food packaging space by launching
Speaker 18: the first ever pouch in the United States for kids,
Speaker 18: so we're excited to scale that into mass market right now.
Speaker 18: It's a whole foods nationwide. We also just announced the
Speaker 18: expansion of ten exciting new trendy flavors lactose free. That's
Speaker 18: another big concern in the dairy space. People are looking
Speaker 18: for lactose free products, which Lifewi offers, but they're really
Speaker 18: exciting flavors like taro ube, Macha, latte, leachy, you know,
Speaker 18: really on trend, snackaball easy, instagrammable types of new products
Speaker 18: that we're exciting to scale. Excited to scale that nationwide
Speaker 18: as well. And then we have just like a long
Speaker 18: long trajectory of new products in the pipeline which I
Speaker 18: can't discuss us yet, but look for more things connected
Speaker 18: to skin gut access. We know that abiotics work really
Speaker 18: well on the skin or inside out, so some kind
Speaker 18: of skin and friendly products good Brain's okay.
Speaker 3: We'll come back and tell us more when you can
Speaker 3: give us some of the specifics, because that's super interesting.
Speaker 4: Julie Smolanski, CEO at LifeWay Foods, joining us from LA.
Speaker 2: You're listening to the Bloomberg Business Week Podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern Listen
Speaker 2: on Apple car Play the Android auto with a Bloomberg
Speaker 2: Business app or want us live on YouTube.
Speaker 5: It is Bloomberg Business Week, And I want to know,
Speaker 5: Carrol Masser, Yes, what you were doing when you were
Speaker 5: in ninth grade?
Speaker 2: For sure?
Speaker 4: High school?
Speaker 15: Yeah, I don't know.
Speaker 3: Just trying to gymnastics, gymnastics, cheerleading, trying to get a's,
Speaker 3: getting a's.
Speaker 5: You were you anywhere close to creating an AI based
Speaker 5: handheld pesticide detector?
Speaker 4: That would be a no, okay.
Speaker 5: That's what sirrich Subash has been up to. He's in
Speaker 5: ninth grade and that creation helped crown him the winner
Speaker 5: of the twenty twenty four to three M Young Scientists Challenge.
Speaker 5: Also includes a nice twenty five thousand dollars cash prize,
Speaker 5: a trip here to New York, YEP to Ring the
Speaker 5: Belt in New York Stock Exchange, and yes, gets to
Speaker 5: hang out with us, which I think is just the
Speaker 5: biggest prize.
Speaker 9: That's their round.
Speaker 3: Siries Shabash is the winner of the twenty twenty fourth
Speaker 3: REEM Young Scientists Challenge and Aditya Banerjee is Senior Research
Speaker 3: Energy of the Corporate Research Process Lab. Over at three am,
Speaker 3: they both join us in our Bloomberg Interactive Broker Studio.
Speaker 3: Very cool to have you both here. Congratulations Soris. First,
Speaker 3: I want to ask you aditya tell us about this challenge,
Speaker 3: how long you've been doing it, how it came about,
Speaker 3: and why you're doing it.
Speaker 19: So the Three and Young Scientist Challenge has been around
Speaker 19: for seventeen years. This is my first year doing this mentorship.
Speaker 19: So I'm just awfully lucky to be paired with Series
Speaker 19: and it has been an awesome experience. Our goal as
Speaker 19: part of the Three and Young Scientist Challenge is to
Speaker 19: nurture and just work with such young, bright, young minds
Speaker 19: and just help them bring their imagination their creations to life.
Speaker 19: So I mean we live by science applied to life,
Speaker 19: so they have all the science innovations in their mind.
Speaker 19: We have some experience in getting the science to people's hands,
Speaker 19: so we hope that we can breach the gap for
Speaker 19: them to take his concepts to hands off consumers and
Speaker 19: help them in any way possible to make that journey smooth.
Speaker 5: Well, Series, tell us about what you have sitting in
Speaker 5: front of you, because it looks like an iPhone attached
Speaker 5: to some sort of gizmo. Here, what's going on?
Speaker 11: So my device, my project, it's called PESTI scanned and
Speaker 11: so what it is is at home people can scan
Speaker 11: for pesticide residues on their produce items. That's the real
Speaker 11: core concept here because there's a lot of contaminants like
Speaker 11: pest side residues they can stick around on produce after
Speaker 11: washing where they've been linked to health issues like certain
Speaker 11: cancers and Alzheimer's, Parkinson's, near degenerative diseases along those lines.
Speaker 5: You can pick that up and you can there's a
Speaker 5: camera right there in front of you for those watching
Speaker 5: on YouTube, Elizabeth's going to get a shot of this thing.
Speaker 9: It's pretty cool. So there's an app.
Speaker 5: That goes with it. There's also some hardware there. It
Speaker 5: uses a type of technology I practice so many times
Speaker 5: saying this type of technology say it? Can you say it.
Speaker 16: For me please? Spectro photometry.
Speaker 5: Spectro photometry, Yeah, and what does that do?
Speaker 11: So the idea is different materials reflect and absorb different
Speaker 11: wavelengths of light. So PESTA scan can look for those
Speaker 11: wavelengths that are reflected and absorbed by pest said residues.
Speaker 3: So okay, so we are very lucky that we have
Speaker 3: a lot of food here at Bloomberg and a lot
Speaker 3: of fresh fruit and we all tap into it. I've
Speaker 3: just had a banana and often tap an apple or
Speaker 3: some other things.
Speaker 4: We had some grape fruit this morning.
Speaker 3: You picked up an apple in our food court up
Speaker 3: in the link on the sixth floor, and so tell
Speaker 3: us show us how it works and what you do
Speaker 3: and then what you found out.
Speaker 11: So for using the actual device, you just connect the
Speaker 11: app to the device.
Speaker 16: You just turn both on.
Speaker 11: You point the device at the protocetem and then you
Speaker 11: tap scan and then a couple of seconds the results
Speaker 11: are back. And this apple had no pested residues on
Speaker 11: it at all.
Speaker 5: Score, which amazing because I don't know if these are
Speaker 5: organic apples.
Speaker 4: I don't know that they are either.
Speaker 5: But that's good to know it does. There is a
Speaker 5: sign upstairs that says please wash fruit before eating it.
Speaker 9: But that's what least do.
Speaker 5: Sometimes, you know, people go and like check the peaches
Speaker 5: to make sure they're soft.
Speaker 4: I check out a few things. It's really fascinating.
Speaker 3: So how did you how did you kind of come
Speaker 3: up with the idea, how did you pull it together?
Speaker 3: And how did you use your mentor to help you.
Speaker 11: So the whole concept really started when I was having
Speaker 11: a conversation with my mom so she was insisting that
Speaker 11: I washed my produce before consuming it, right, And yeah.
Speaker 4: Okay, mom, you gotta wash your produce, so go ahead.
Speaker 11: And my question was why and how effective is it?
Speaker 11: So looking into that, I saw that there were a
Speaker 11: bunch of caeminists like Pesta residues that can be on produce,
Speaker 11: but washing isn't necessarily completely effective, like the residues do
Speaker 11: stay on afterward. So the idea is if we could
Speaker 11: detect them, we could make sure that we weren't consuming them.
Speaker 11: And that's really where the idea for Pestis came from.
Speaker 11: So after I started building the device and I joined
Speaker 11: the three Mek Scientist Challenge, my mentoralitya has been really
Speaker 11: helpful with this, especially when I've gotten stuck. One big
Speaker 11: time was when I was designing my machine learning models,
Speaker 11: and these are what take the actual data from the
Speaker 11: sensor and then turn that into results. What you'd see
Speaker 11: on the screen whether the device has pest said residues,
Speaker 11: whether the predecess pest said residues or not. And he's
Speaker 11: helped me when I get stuck, He's helped me get unstuck.
Speaker 4: Did you I want to ask you, So, what's the.
Speaker 3: Balance of here's how you do it and solving the
Speaker 3: problem and helping him to say, you've got this problem,
Speaker 3: let me steer you so that you figure it out yourself.
Speaker 19: You got that exactly right. Like I said, our goal
Speaker 19: is to help nurture them. So I would pose it
Speaker 19: as le a, have you thought about this? Have you
Speaker 19: thought about that? And he, being a very meticulous and
Speaker 19: very energetic person, he would do his homework and he
Speaker 19: would make sure he follows up on that and next
Speaker 19: next week when we chat, he would inevitably come up
Speaker 19: with a solution.
Speaker 5: So, Sirish is in uh is in Georgia, Snellville, Georgia.
Speaker 5: You're in Minneapolis.
Speaker 16: Yep?
Speaker 5: Were you guys meeting like on zoom once a week?
Speaker 2: How was it?
Speaker 9: How did this work?
Speaker 16: Yep?
Speaker 19: We would meet after his school's done once a week
Speaker 19: and have a conversation about what he has been up
Speaker 19: to last week, anything he wanted to discuss with me,
Speaker 19: any next steps and stuff like that.
Speaker 5: Can you talk a little bit, Sish about how you
Speaker 5: got introduced to this program, because it's my understanding that
Speaker 5: you've known about the Young Scientists Challenge from three AM
Speaker 5: since you were in second grade.
Speaker 16: Yes, this is I had.
Speaker 11: I learned about the Third Big Scientist Challenge when gitan
Speaker 11: Lei Rau got nominated as Time Scard of the Year,
Speaker 11: and when I learned about it and what the challenge
Speaker 11: really stood for what it was doing, I thought that
Speaker 11: this would be a great place for me to submit
Speaker 11: my inventions. That was really because I wanted I've always
Speaker 11: wanted to have to leave an impact on the world
Speaker 11: nice and a good way to leave society a better place,
Speaker 11: and that was I thought three at the Cremning Science
Speaker 11: Challenge would be a great place for me to start
Speaker 11: with that. So I skipped fifth grade, so I wasn't
Speaker 11: able to put it in then sixth grade, our family
Speaker 11: was in India and we weren't able to get things
Speaker 11: figured out. Seventh grade I did apply, but it didn't
Speaker 11: quite work out. And this year I was able to
Speaker 11: get it in and everything worked out.
Speaker 16: Yeah.
Speaker 4: Did I hear you say inventions plural?
Speaker 16: Yeah? So I've worked on a couple of things before.
Speaker 11: Okay, PESTI Scan maybe the one single project that I've
Speaker 11: put my most time into.
Speaker 16: So I've built a couple things before.
Speaker 11: I made one robot to deliver books that that was
Speaker 11: probably the runner up to this and how much time
Speaker 11: I put into it that took. I've spent four or
Speaker 11: five months on that. I've spent about a year on
Speaker 11: this latest version.
Speaker 4: So what's the commercialization of this?
Speaker 3: Because I think I could see I would love to
Speaker 3: have one in my home and I'm sure.
Speaker 5: You would, or even just an app that could do
Speaker 5: this using technology that exists inside a phone already, right, Like,
Speaker 5: so you're at the grocery store, You're like, oh, this
Speaker 5: is good to.
Speaker 3: Go exactly right, Like we do barcodes of things to
Speaker 3: find out pricing or whatever or information.
Speaker 4: So did you how do you guys.
Speaker 3: Think about like just three AM, who's known for like
Speaker 3: all their different products and it's not just posted, it's
Speaker 3: a lot of different things. So I'm just curious, do
Speaker 3: you see something like this and say, okay, there's commercial applications?
Speaker 9: Well for sure.
Speaker 19: I mean part of our conversations was how do you
Speaker 19: simplify the prototype? That was one of the driving questions
Speaker 19: that he seek to answer during the summer. He started
Speaker 19: off with making the module simpler, something that you can
Speaker 19: just clip onto your phone, right so that it can
Speaker 19: be used for consumer He did a lot of work
Speaker 19: in driving down the unit cost of each of the modules,
Speaker 19: and he already has plans to drive it down even lower,
Speaker 19: so he is already on it.
Speaker 4: Well, what do you guys do next?
Speaker 3: I mean, these guys know I'm like super obsessed with
Speaker 3: shark Tank and when people pitch their ideas.
Speaker 4: But what do you do to help him?
Speaker 1: Maybe?
Speaker 3: Is it on his own or do you guys work
Speaker 3: with him to kind of get it to the next step.
Speaker 19: So he would be driving a lot on his own,
Speaker 19: but we are always there to support him whenever there's
Speaker 19: anything that we can help out. Me personally, three AM
Speaker 19: as a company, we would definitely be more than happy
Speaker 19: to help him out. And also the three and Young
Speaker 19: Scientists Challenged Alumnize. They have a grant program that has
Speaker 19: been set up, so there are a lot of alumnizs
Speaker 19: who leverage that to fund their programs in the future
Speaker 19: as well. So that is something that's all set up
Speaker 19: that can be used.
Speaker 5: So what do you want to do?
Speaker 3: Like our venture capitalist knocking on your door, You've got.
Speaker 5: A few more years, I imagine you want to continue
Speaker 5: your education? What's the plan here?
Speaker 11: So the big big next steps are I'm trying to
Speaker 11: scale shrink this quite a bit to where it would
Speaker 11: be far more portable and easier for a consumer to
Speaker 11: carry around. And then from there also just dropping the
Speaker 11: cost to where it could easily go into people's homes.
Speaker 11: That was that's those are my key plans for this device.
Speaker 5: In particular, how much what's the cost associated with this prototype?
Speaker 5: Like how much would this device cost as is now?
Speaker 11: So as of now for this setup if I were
Speaker 11: to make a hundred of them, that would be seventy
Speaker 11: five dollars?
Speaker 4: Is that that?
Speaker 11: But for I have a plan laid out to where
Speaker 11: there's there's a solution I can put this onto a
Speaker 11: printed circuit board, which would make this all one singular piece,
Speaker 11: and that would bring the price down to roughly thirty
Speaker 11: five dollars. But I'm looking forward to in the future
Speaker 11: reach your price, Stager, maybe twenty dollars.
Speaker 3: Cool, right, Like I don't yeah, I just think about, Oh,
Speaker 3: do you have it in the supermarket where people can
Speaker 3: I don't know, or does everybody have their own and
Speaker 3: check it out?
Speaker 4: Really really cool?
Speaker 3: One thing I want to ask you. We often talk
Speaker 3: with folks about the importance of STEM education and companies,
Speaker 3: whether it's they're out in Silicon Valley, or thinking about
Speaker 3: the next generation of workers that they need. Is this
Speaker 3: part of why three M is looking.
Speaker 4: To do this?
Speaker 19: Yes, yes, absolutely. I mean we have a we if
Speaker 19: we seek to educate or reach out to folks about
Speaker 19: science and how it's integral part of our life. We
Speaker 19: have a great science advocacy team if within three them
Speaker 19: as well. And that's also one of the reasons why
Speaker 19: during this program we get to meet young brilliant minds
Speaker 19: like him, and we try our best to, like I said,
Speaker 19: nurture and mold him and inspire them to do something
Speaker 19: like he said, like science is part of it. Merging
Speaker 19: with the society. That's another huge thing that we see.
Speaker 19: So what he's doing pretty close to society. Bigger, Yeah,
Speaker 19: y better, that's what we hope.
Speaker 4: For, the bigger impact.
Speaker 3: Srich congratulations, sabash Aditya Banerjee of three AM.
Speaker 4: Guys, thank you so much. This is Bloomberg.
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