1 00:00:00,040 --> 00:00:01,920 Speaker 1: Let's get some more on the fall out of how 2 00:00:01,920 --> 00:00:05,480 Speaker 1: speaking Nancy Pelosi's a trip to Taiwan not just having 3 00:00:05,480 --> 00:00:08,560 Speaker 1: a political impact, but also an impact on the EV 4 00:00:08,720 --> 00:00:12,760 Speaker 1: market as well. China's contemporary Amperex Technology Limited. You know, 5 00:00:12,800 --> 00:00:14,640 Speaker 1: I know it better as c A t L or 6 00:00:14,680 --> 00:00:18,360 Speaker 1: Cattle is delaying an announcement on this new multibillion dollar 7 00:00:18,360 --> 00:00:21,840 Speaker 1: battery plant in North America joining us now to discuss 8 00:00:21,920 --> 00:00:26,320 Speaker 1: this more. Eric Martin, Bloomberg Trade and Economy reporter, Eric, 9 00:00:26,360 --> 00:00:30,200 Speaker 1: we don't have any official comment from Cattle, but how 10 00:00:30,240 --> 00:00:34,959 Speaker 1: confident can we be of linking these two events? Well, Uh, 11 00:00:35,520 --> 00:00:37,239 Speaker 1: Doug and Paul, thank you for having me on. We 12 00:00:37,240 --> 00:00:40,760 Speaker 1: were very confident about this. We've spoken to people familiar 13 00:00:40,800 --> 00:00:44,160 Speaker 1: with this, UH, and they have told us that this 14 00:00:44,440 --> 00:00:48,800 Speaker 1: is a move that the announcement of a plant of 15 00:00:48,880 --> 00:00:52,760 Speaker 1: as much as five billion dollars in investment by Cattle 16 00:00:52,840 --> 00:00:55,760 Speaker 1: in North America, either in the US, in Mexico or 17 00:00:55,800 --> 00:00:58,280 Speaker 1: split between the two. That this is an announcement that 18 00:00:58,440 --> 00:01:03,360 Speaker 1: they have decided to push back because of the current dynamic. 19 00:01:03,920 --> 00:01:05,640 Speaker 1: And you can understand how this would be such a 20 00:01:05,680 --> 00:01:09,360 Speaker 1: sensitive issue for a Chinese company to be looking at 21 00:01:09,400 --> 00:01:13,840 Speaker 1: making such a significant investment in North America. Given the 22 00:01:13,959 --> 00:01:19,840 Speaker 1: Chinese government's reaction to Speaker Pelosi's visit to Taipei, I'm curious, Eric, 23 00:01:19,880 --> 00:01:22,440 Speaker 1: do you think this raises the probability that the company 24 00:01:22,480 --> 00:01:26,200 Speaker 1: may select a location in Mexico rather than in the US. 25 00:01:27,240 --> 00:01:30,600 Speaker 1: We don't have indications of that thus far. One of 26 00:01:30,600 --> 00:01:34,360 Speaker 1: the keys of ermanance here is the recently announced deal 27 00:01:34,520 --> 00:01:39,520 Speaker 1: between Senator Mansion and Senator Schumer, and Cattle is weighing 28 00:01:39,560 --> 00:01:43,280 Speaker 1: the need to be in North America overall. We know 29 00:01:43,360 --> 00:01:45,959 Speaker 1: that at some point they have been also scouting sites, 30 00:01:46,240 --> 00:01:49,919 Speaker 1: uh considering sites even in Canada, but that they've really 31 00:01:50,600 --> 00:01:53,000 Speaker 1: narrowed it down to looking at on the Mexican side 32 00:01:53,880 --> 00:01:56,760 Speaker 1: South TiO in the city as well as Guarez on 33 00:01:56,800 --> 00:01:59,520 Speaker 1: the border with Texas, as well as sites in the US. 34 00:01:59,600 --> 00:02:04,440 Speaker 1: But they're incorporating the impact of the package that's been 35 00:02:04,520 --> 00:02:09,400 Speaker 1: brokered between Senators Schumer and Mansion because that will require 36 00:02:09,600 --> 00:02:13,880 Speaker 1: electric electric electronics. It's gonna be electric vehicle makers to 37 00:02:14,080 --> 00:02:18,120 Speaker 1: source a portion of their batter early battery minerals from 38 00:02:18,280 --> 00:02:21,920 Speaker 1: North America and have it be processed in a country 39 00:02:21,919 --> 00:02:23,959 Speaker 1: that has a free trade agreement with the U S 40 00:02:24,000 --> 00:02:27,760 Speaker 1: which North America, both in terms of logistically the ease 41 00:02:27,880 --> 00:02:31,799 Speaker 1: of exporting across the border to the US, as well 42 00:02:31,840 --> 00:02:35,920 Speaker 1: as meaning that free trade agreement criteria are too important 43 00:02:35,960 --> 00:02:39,760 Speaker 1: criteria for cattle to consider now with what looks like 44 00:02:39,800 --> 00:02:44,200 Speaker 1: the potential passage of the Mansion Schumer agreement. So what's 45 00:02:44,240 --> 00:02:46,760 Speaker 1: the impact of this decision, of this delay you're going 46 00:02:46,800 --> 00:02:50,480 Speaker 1: to be on t V manufacturers in the US. It's 47 00:02:50,480 --> 00:02:53,120 Speaker 1: not totally clear at this point. You know, if it 48 00:02:53,200 --> 00:02:56,919 Speaker 1: is a delay until September October, which is what we've 49 00:02:56,919 --> 00:03:00,959 Speaker 1: been hearing from sources is the most likely outcome, then 50 00:03:01,000 --> 00:03:04,160 Speaker 1: you're talking about several weeks or perhaps a couple of 51 00:03:04,200 --> 00:03:07,200 Speaker 1: months of impact. But these are plants to take a 52 00:03:07,240 --> 00:03:11,239 Speaker 1: while to build. They need several years to to construct. 53 00:03:11,720 --> 00:03:14,520 Speaker 1: And we know that Tesla is ramping up production in 54 00:03:14,560 --> 00:03:16,799 Speaker 1: the US. So if you're a company that's going to 55 00:03:16,880 --> 00:03:20,160 Speaker 1: be looking to supply Tesla to supply forth as cattle 56 00:03:20,360 --> 00:03:22,640 Speaker 1: is um you want this plant to be, you know, 57 00:03:22,760 --> 00:03:26,200 Speaker 1: shovel in the ground yesterday. And so any delay at 58 00:03:26,200 --> 00:03:30,320 Speaker 1: this point raises uh, you know, speculation and concern about 59 00:03:30,360 --> 00:03:32,800 Speaker 1: the ability to proceed as fast as the company would 60 00:03:32,800 --> 00:03:35,520 Speaker 1: want to proceed. Well, we're talking about the production of 61 00:03:35,560 --> 00:03:38,120 Speaker 1: these e V batteries. I'm curious when it comes to 62 00:03:38,160 --> 00:03:45,400 Speaker 1: the workforce, is this technologically sophisticated type work um it is, 63 00:03:45,960 --> 00:03:50,000 Speaker 1: But Mexico has has shown a you know, a significant 64 00:03:50,480 --> 00:03:55,320 Speaker 1: um ability and prowess in manufacturing in the last you know, 65 00:03:55,360 --> 00:03:58,120 Speaker 1: in the last number of years in both Southdeo and 66 00:03:58,240 --> 00:04:01,080 Speaker 1: waters They're both places they have seen a lot of 67 00:04:01,200 --> 00:04:07,960 Speaker 1: manufacturing assembly and have grown significantly in in recent decades. 68 00:04:08,240 --> 00:04:11,480 Speaker 1: And you know, really what they're looking for there is 69 00:04:11,640 --> 00:04:16,560 Speaker 1: a manufacturing workforce that is both talented and trained and knowledgeable, 70 00:04:16,880 --> 00:04:20,279 Speaker 1: but also has a wage advantage to the US and 71 00:04:20,320 --> 00:04:23,719 Speaker 1: to have that assembly in Mexico and export to the 72 00:04:23,760 --> 00:04:27,760 Speaker 1: US for incorporation in the vehicles assembled in the US. 73 00:04:28,040 --> 00:04:29,880 Speaker 1: You mentioned a moment ago, the lead times to get 74 00:04:29,880 --> 00:04:32,120 Speaker 1: these plants up and running, the lead times for e 75 00:04:32,240 --> 00:04:35,719 Speaker 1: V manufacturers as well to ramp up production. But when 76 00:04:35,720 --> 00:04:38,680 Speaker 1: you look at this decision, China's obviously found a leva 77 00:04:38,760 --> 00:04:41,359 Speaker 1: here that it can pull whenever it's displeased with something 78 00:04:41,360 --> 00:04:44,640 Speaker 1: the US has done. How likely is it that there 79 00:04:44,640 --> 00:04:47,480 Speaker 1: could be further delays? What sort of uncertainty does this create? 80 00:04:48,279 --> 00:04:51,080 Speaker 1: I think that's very hard to say at this point, Uh, 81 00:04:51,200 --> 00:04:55,159 Speaker 1: you know, this is such a new factor in the 82 00:04:55,240 --> 00:05:00,359 Speaker 1: relationship between China and the US, and speaker Polo sees 83 00:05:00,640 --> 00:05:03,960 Speaker 1: visit announced just in recent days, reported in recent days, 84 00:05:04,160 --> 00:05:07,160 Speaker 1: even on shore, and you know, not on her original 85 00:05:07,200 --> 00:05:10,719 Speaker 1: itinerary for the Asia trip at all. So I think 86 00:05:10,720 --> 00:05:14,279 Speaker 1: it's very you know, very fresh, and very hard to 87 00:05:14,320 --> 00:05:17,200 Speaker 1: analyze now the long term impact of this, But we 88 00:05:17,279 --> 00:05:20,760 Speaker 1: certainly saw an impact from investors and what they're looking 89 00:05:20,760 --> 00:05:24,480 Speaker 1: at in the market today. We saw Tesla shares paired 90 00:05:24,600 --> 00:05:27,360 Speaker 1: a an intra day high of as much as almost 91 00:05:27,400 --> 00:05:30,560 Speaker 1: four percent to close up just one percent and four 92 00:05:30,680 --> 00:05:36,680 Speaker 1: that fell into red territory negative territory after gaining mid day. 93 00:05:36,760 --> 00:05:39,800 Speaker 1: So we're seeing in the stock market an immediate reaction 94 00:05:39,920 --> 00:05:43,120 Speaker 1: from investors, not even in cattle, but in in the 95 00:05:43,160 --> 00:05:45,839 Speaker 1: companies that cattle is going to be supplying, trying to 96 00:05:45,880 --> 00:05:50,720 Speaker 1: figure out at the margin what this postponed and pushed 97 00:05:50,760 --> 00:05:53,800 Speaker 1: back announcement means. Good stuff, Eric, thank you so much 98 00:05:53,839 --> 00:05:56,200 Speaker 1: for being with us and sharing your reporting. Eric Martin 99 00:05:56,240 --> 00:05:59,600 Speaker 1: there he is Bloomberg's Trade and Economy reporter, joining us 100 00:05:59,800 --> 00:06:02,720 Speaker 1: on the story of the delay in an announcement from 101 00:06:02,839 --> 00:06:07,360 Speaker 1: Cattle on its new billion dollar battery plant in North America.