WEBVTT - Eric Martin on CATL (Radio)

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<v Speaker 1>Let's get some more on the fall out of how

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<v Speaker 1>speaking Nancy Pelosi's a trip to Taiwan not just having

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<v Speaker 1>a political impact, but also an impact on the EV

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<v Speaker 1>market as well. China's contemporary Amperex Technology Limited. You know,

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<v Speaker 1>I know it better as c A t L or

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<v Speaker 1>Cattle is delaying an announcement on this new multibillion dollar

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<v Speaker 1>battery plant in North America joining us now to discuss

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<v Speaker 1>this more. Eric Martin, Bloomberg Trade and Economy reporter, Eric,

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<v Speaker 1>we don't have any official comment from Cattle, but how

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<v Speaker 1>confident can we be of linking these two events? Well, Uh,

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<v Speaker 1>Doug and Paul, thank you for having me on. We

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<v Speaker 1>were very confident about this. We've spoken to people familiar

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<v Speaker 1>with this, UH, and they have told us that this

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<v Speaker 1>is a move that the announcement of a plant of

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<v Speaker 1>as much as five billion dollars in investment by Cattle

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<v Speaker 1>in North America, either in the US, in Mexico or

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<v Speaker 1>split between the two. That this is an announcement that

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<v Speaker 1>they have decided to push back because of the current dynamic.

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<v Speaker 1>And you can understand how this would be such a

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<v Speaker 1>sensitive issue for a Chinese company to be looking at

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<v Speaker 1>making such a significant investment in North America. Given the

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<v Speaker 1>Chinese government's reaction to Speaker Pelosi's visit to Taipei, I'm curious, Eric,

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<v Speaker 1>do you think this raises the probability that the company

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<v Speaker 1>may select a location in Mexico rather than in the US.

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<v Speaker 1>We don't have indications of that thus far. One of

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<v Speaker 1>the keys of ermanance here is the recently announced deal

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<v Speaker 1>between Senator Mansion and Senator Schumer, and Cattle is weighing

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<v Speaker 1>the need to be in North America overall. We know

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<v Speaker 1>that at some point they have been also scouting sites,

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<v Speaker 1>uh considering sites even in Canada, but that they've really

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<v Speaker 1>narrowed it down to looking at on the Mexican side

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<v Speaker 1>South TiO in the city as well as Guarez on

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<v Speaker 1>the border with Texas, as well as sites in the US.

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<v Speaker 1>But they're incorporating the impact of the package that's been

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<v Speaker 1>brokered between Senators Schumer and Mansion because that will require

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<v Speaker 1>electric electric electronics. It's gonna be electric vehicle makers to

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<v Speaker 1>source a portion of their batter early battery minerals from

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<v Speaker 1>North America and have it be processed in a country

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<v Speaker 1>that has a free trade agreement with the U S

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<v Speaker 1>which North America, both in terms of logistically the ease

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<v Speaker 1>of exporting across the border to the US, as well

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<v Speaker 1>as meaning that free trade agreement criteria are too important

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<v Speaker 1>criteria for cattle to consider now with what looks like

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<v Speaker 1>the potential passage of the Mansion Schumer agreement. So what's

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<v Speaker 1>the impact of this decision, of this delay you're going

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<v Speaker 1>to be on t V manufacturers in the US. It's

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<v Speaker 1>not totally clear at this point. You know, if it

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<v Speaker 1>is a delay until September October, which is what we've

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<v Speaker 1>been hearing from sources is the most likely outcome, then

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<v Speaker 1>you're talking about several weeks or perhaps a couple of

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<v Speaker 1>months of impact. But these are plants to take a

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<v Speaker 1>while to build. They need several years to to construct.

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<v Speaker 1>And we know that Tesla is ramping up production in

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<v Speaker 1>the US. So if you're a company that's going to

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<v Speaker 1>be looking to supply Tesla to supply forth as cattle

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<v Speaker 1>is um you want this plant to be, you know,

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<v Speaker 1>shovel in the ground yesterday. And so any delay at

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<v Speaker 1>this point raises uh, you know, speculation and concern about

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<v Speaker 1>the ability to proceed as fast as the company would

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<v Speaker 1>want to proceed. Well, we're talking about the production of

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<v Speaker 1>these e V batteries. I'm curious when it comes to

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<v Speaker 1>the workforce, is this technologically sophisticated type work um it is,

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<v Speaker 1>But Mexico has has shown a you know, a significant

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<v Speaker 1>um ability and prowess in manufacturing in the last you know,

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<v Speaker 1>in the last number of years in both Southdeo and

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<v Speaker 1>waters They're both places they have seen a lot of

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<v Speaker 1>manufacturing assembly and have grown significantly in in recent decades.

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<v Speaker 1>And you know, really what they're looking for there is

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<v Speaker 1>a manufacturing workforce that is both talented and trained and knowledgeable,

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<v Speaker 1>but also has a wage advantage to the US and

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<v Speaker 1>to have that assembly in Mexico and export to the

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<v Speaker 1>US for incorporation in the vehicles assembled in the US.

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<v Speaker 1>You mentioned a moment ago, the lead times to get

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<v Speaker 1>these plants up and running, the lead times for e

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<v Speaker 1>V manufacturers as well to ramp up production. But when

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<v Speaker 1>you look at this decision, China's obviously found a leva

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<v Speaker 1>here that it can pull whenever it's displeased with something

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<v Speaker 1>the US has done. How likely is it that there

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<v Speaker 1>could be further delays? What sort of uncertainty does this create?

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<v Speaker 1>I think that's very hard to say at this point, Uh,

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<v Speaker 1>you know, this is such a new factor in the

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<v Speaker 1>relationship between China and the US, and speaker Polo sees

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<v Speaker 1>visit announced just in recent days, reported in recent days,

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<v Speaker 1>even on shore, and you know, not on her original

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<v Speaker 1>itinerary for the Asia trip at all. So I think

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<v Speaker 1>it's very you know, very fresh, and very hard to

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<v Speaker 1>analyze now the long term impact of this, But we

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<v Speaker 1>certainly saw an impact from investors and what they're looking

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<v Speaker 1>at in the market today. We saw Tesla shares paired

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<v Speaker 1>a an intra day high of as much as almost

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<v Speaker 1>four percent to close up just one percent and four

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<v Speaker 1>that fell into red territory negative territory after gaining mid day.

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<v Speaker 1>So we're seeing in the stock market an immediate reaction

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<v Speaker 1>from investors, not even in cattle, but in in the

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<v Speaker 1>companies that cattle is going to be supplying, trying to

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<v Speaker 1>figure out at the margin what this postponed and pushed

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<v Speaker 1>back announcement means. Good stuff, Eric, thank you so much

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<v Speaker 1>for being with us and sharing your reporting. Eric Martin

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<v Speaker 1>there he is Bloomberg's Trade and Economy reporter, joining us

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<v Speaker 1>on the story of the delay in an announcement from

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<v Speaker 1>Cattle on its new billion dollar battery plant in North America.