Speaker 1: Let's get some more on the fall out of how
Speaker 1: speaking Nancy Pelosi's a trip to Taiwan not just having
Speaker 1: a political impact, but also an impact on the EV
Speaker 1: market as well. China's contemporary Amperex Technology Limited. You know,
Speaker 1: I know it better as c A t L or
Speaker 1: Cattle is delaying an announcement on this new multibillion dollar
Speaker 1: battery plant in North America joining us now to discuss
Speaker 1: this more. Eric Martin, Bloomberg Trade and Economy reporter, Eric,
Speaker 1: we don't have any official comment from Cattle, but how
Speaker 1: confident can we be of linking these two events? Well, Uh,
Speaker 1: Doug and Paul, thank you for having me on. We
Speaker 1: were very confident about this. We've spoken to people familiar
Speaker 1: with this, UH, and they have told us that this
Speaker 1: is a move that the announcement of a plant of
Speaker 1: as much as five billion dollars in investment by Cattle
Speaker 1: in North America, either in the US, in Mexico or
Speaker 1: split between the two. That this is an announcement that
Speaker 1: they have decided to push back because of the current dynamic.
Speaker 1: And you can understand how this would be such a
Speaker 1: sensitive issue for a Chinese company to be looking at
Speaker 1: making such a significant investment in North America. Given the
Speaker 1: Chinese government's reaction to Speaker Pelosi's visit to Taipei, I'm curious, Eric,
Speaker 1: do you think this raises the probability that the company
Speaker 1: may select a location in Mexico rather than in the US.
Speaker 1: We don't have indications of that thus far. One of
Speaker 1: the keys of ermanance here is the recently announced deal
Speaker 1: between Senator Mansion and Senator Schumer, and Cattle is weighing
Speaker 1: the need to be in North America overall. We know
Speaker 1: that at some point they have been also scouting sites,
Speaker 1: uh considering sites even in Canada, but that they've really
Speaker 1: narrowed it down to looking at on the Mexican side
Speaker 1: South TiO in the city as well as Guarez on
Speaker 1: the border with Texas, as well as sites in the US.
Speaker 1: But they're incorporating the impact of the package that's been
Speaker 1: brokered between Senators Schumer and Mansion because that will require
Speaker 1: electric electric electronics. It's gonna be electric vehicle makers to
Speaker 1: source a portion of their batter early battery minerals from
Speaker 1: North America and have it be processed in a country
Speaker 1: that has a free trade agreement with the U S
Speaker 1: which North America, both in terms of logistically the ease
Speaker 1: of exporting across the border to the US, as well
Speaker 1: as meaning that free trade agreement criteria are too important
Speaker 1: criteria for cattle to consider now with what looks like
Speaker 1: the potential passage of the Mansion Schumer agreement. So what's
Speaker 1: the impact of this decision, of this delay you're going
Speaker 1: to be on t V manufacturers in the US. It's
Speaker 1: not totally clear at this point. You know, if it
Speaker 1: is a delay until September October, which is what we've
Speaker 1: been hearing from sources is the most likely outcome, then
Speaker 1: you're talking about several weeks or perhaps a couple of
Speaker 1: months of impact. But these are plants to take a
Speaker 1: while to build. They need several years to to construct.
Speaker 1: And we know that Tesla is ramping up production in
Speaker 1: the US. So if you're a company that's going to
Speaker 1: be looking to supply Tesla to supply forth as cattle
Speaker 1: is um you want this plant to be, you know,
Speaker 1: shovel in the ground yesterday. And so any delay at
Speaker 1: this point raises uh, you know, speculation and concern about
Speaker 1: the ability to proceed as fast as the company would
Speaker 1: want to proceed. Well, we're talking about the production of
Speaker 1: these e V batteries. I'm curious when it comes to
Speaker 1: the workforce, is this technologically sophisticated type work um it is,
Speaker 1: But Mexico has has shown a you know, a significant
Speaker 1: um ability and prowess in manufacturing in the last you know,
Speaker 1: in the last number of years in both Southdeo and
Speaker 1: waters They're both places they have seen a lot of
Speaker 1: manufacturing assembly and have grown significantly in in recent decades.
Speaker 1: And you know, really what they're looking for there is
Speaker 1: a manufacturing workforce that is both talented and trained and knowledgeable,
Speaker 1: but also has a wage advantage to the US and
Speaker 1: to have that assembly in Mexico and export to the
Speaker 1: US for incorporation in the vehicles assembled in the US.
Speaker 1: You mentioned a moment ago, the lead times to get
Speaker 1: these plants up and running, the lead times for e
Speaker 1: V manufacturers as well to ramp up production. But when
Speaker 1: you look at this decision, China's obviously found a leva
Speaker 1: here that it can pull whenever it's displeased with something
Speaker 1: the US has done. How likely is it that there
Speaker 1: could be further delays? What sort of uncertainty does this create?
Speaker 1: I think that's very hard to say at this point, Uh,
Speaker 1: you know, this is such a new factor in the
Speaker 1: relationship between China and the US, and speaker Polo sees
Speaker 1: visit announced just in recent days, reported in recent days,
Speaker 1: even on shore, and you know, not on her original
Speaker 1: itinerary for the Asia trip at all. So I think
Speaker 1: it's very you know, very fresh, and very hard to
Speaker 1: analyze now the long term impact of this, But we
Speaker 1: certainly saw an impact from investors and what they're looking
Speaker 1: at in the market today. We saw Tesla shares paired
Speaker 1: a an intra day high of as much as almost
Speaker 1: four percent to close up just one percent and four
Speaker 1: that fell into red territory negative territory after gaining mid day.
Speaker 1: So we're seeing in the stock market an immediate reaction
Speaker 1: from investors, not even in cattle, but in in the
Speaker 1: companies that cattle is going to be supplying, trying to
Speaker 1: figure out at the margin what this postponed and pushed
Speaker 1: back announcement means. Good stuff, Eric, thank you so much
Speaker 1: for being with us and sharing your reporting. Eric Martin
Speaker 1: there he is Bloomberg's Trade and Economy reporter, joining us
Speaker 1: on the story of the delay in an announcement from
Speaker 1: Cattle on its new billion dollar battery plant in North America.