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Speaker 1: This is the Bloomberg Daybak podcast, available every morning on Apple,

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Speaker 1: Spotify or wherever you listen. It's Wednesday, the twenty fourth

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Speaker 1: of April here in London. I'm Karenine, Hepkit and.

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Speaker 2: I'm Stephen Carroll.

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Speaker 3: Coming up today, Tesla speeds up plans for budget electric

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Speaker 3: vehicles as profits and revenue miss estimates.

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Speaker 1: The US Senate passes a massive military aid package and

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Speaker 1: a boost for Ukraine, as Rishi Sunak pledges to ramp

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Speaker 1: up military spending and put the UK on a war footing.

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Speaker 3: Plus failing to find the nou vau riche, Gucci's parent

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Speaker 3: company warns profits are set to plunge amid week demand

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Speaker 3: in China.

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Speaker 1: Let's start with a roundup of our top stories.

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Speaker 3: Tesla has pledged to speed up the launch of less

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Speaker 3: expensive cars in a bid to revive sagging demand. The

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Speaker 3: electric vehicle maker says it now wants to start production

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Speaker 3: of new cheaper models this year instead of twenty twenty five.

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Speaker 3: The announcement cent shares soaring by fifteen percent postmarket, but

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Speaker 3: not everyone is convinced, including Tesla investor Ross gerber Well.

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Speaker 2: I just don't believe that statement.

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Speaker 4: I don't see how they're going to pull forward production

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Speaker 4: of this vehicle to be ready in a year after

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Speaker 4: they just laid off fifteen thousand people and a lot

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Speaker 4: of factories and a lot of high quality individuals just

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Speaker 4: lost their jobs.

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Speaker 2: So I'm kind of.

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Speaker 4: Curious to you know, we can say things, but we

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Speaker 4: know that when Elon says something, it often takes four

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Speaker 4: years after the initial comment.

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Speaker 3: Ross Gerbert is the president and CEO of gerber Kawasaki

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Speaker 3: Wealth and Investment. He says he wants much more clarity

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Speaker 3: from Elon Musk on the details of a budget Tesla

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Speaker 3: than he's overshadowed though a big shortfall in Tesla's first

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Speaker 3: quarter earnings, which saw revenue dropping by nine percent to

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Speaker 3: twenty one point three billion dollars.

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Speaker 1: The US Senate has passed a ninety five billion dollar

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Speaker 1: foreign aid package for Ukraine, Israel, and Taiwan. The long

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Speaker 1: delayed bill includes more than sixty billion dollars to support

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Speaker 1: Kiev in its ongoing war with Russia. It's understood that

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Speaker 1: arms shipments to Ukraine of artillery shells and air defence

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Speaker 1: munitions could resume within days. Senate majority leader Chuck Schumer

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Speaker 1: hailed the aid as a sign that America stands by

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Speaker 1: its allies.

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Speaker 2: Leader McConnell and I, who don't always agree, worked hand

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Speaker 2: in hand, shoulder to shoulder to get this bill done together.

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Speaker 5: We were, by partisan end persistent.

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Speaker 1: Despite Chuck Schumer's words, the bill's six month delay created

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Speaker 1: painful shortages in weapons, which pushed Ukraine's fighting forces close

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Speaker 1: to a breaking point. President Joe Biden is expected to

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Speaker 1: sign the package into law today.

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Speaker 3: Well tied into the USA bill was a motion to

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Speaker 3: ban TikTok from being Chinese owned. The measure gives nearly

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Speaker 3: a year for a Bite Dance to sell the social

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Speaker 3: media app before it gets banned in America. The company

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Speaker 3: has promised to fight the legislation in court on free

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Speaker 3: speech grounds. Likely Republican presidential nominee Donald Trump recently came

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Speaker 3: out against a TikTok by saying it could boost rival matter.

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Speaker 1: In the UK, Prime Minister Ishisunak is promising to increase

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Speaker 1: the defense spending of the country to two and a

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Speaker 1: half percent of GDP by twenty thirty. He says that

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Speaker 1: that amounts to an extra seventy five billion pounds over

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Speaker 1: the next six years. Sunak argues that the move is

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Speaker 1: necessity in an increasingly uncertain world.

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Speaker 6: The new assertiveness of these authoritarian states far from our

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Speaker 6: shores must concern us because they are increasingly acting together

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Speaker 6: against the fundamental values that we all hold in of democracy,

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Speaker 6: freedom and the rule of law.

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Speaker 1: However, the Prime Minister's promise spending increase would come after

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Speaker 1: the general election, the Labor Party says that it would

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Speaker 1: examine the detail of the Tory announcement closely before deciding

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Speaker 1: whether to match the time frame. Public Finance Day to

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Speaker 1: Publish yesterday showed the government's budget shortfall overshot for highlighting

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Speaker 1: the constraints facing the Treasury.

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Speaker 3: Carring is warning that profits will dip significantly in the

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Speaker 3: first half.

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Speaker 2: Of the year.

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Speaker 3: The owner of Gucci and Balenciaga pointed to weak demand

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Speaker 3: and China in its first quarter results. Blue Rooks Tea

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Speaker 3: at a Baio has the details.

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Speaker 7: A crisis at flagship brand Gucci and a polarized luxury

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Speaker 7: market are making for trying times at Caring Group. The

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Speaker 7: luxury house is preparing the market for a drop of

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Speaker 7: up to forty five percent in operating income over the

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Speaker 7: first half of twenty twenty four. Despite appointing a new

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Speaker 7: creative director last year. The company says a turnaround at Gucci,

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Speaker 7: responsible for over two thirds of operating profit, will take time.

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Speaker 7: Kerring CFO says the Italian brand is struggling in China

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Speaker 7: due to its mid market position, when consumers are either

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Speaker 7: geared towards high end or affordable goods, the group continues

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Speaker 7: to lag behind its luxury rivals, including LVMH and Ermez

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Speaker 7: in London. To You, added by Bloomberg.

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Speaker 1: Radio, traders are starting to bet that the Federal Reserve

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Speaker 1: won't cut interest rates this year the head of the

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Speaker 1: decision on the first of May. Some have even hedged

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Speaker 1: the possibility the Central Bank will deliver another hike in

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Speaker 1: twenty twenty four. A resilient economy could be stalling policymakers.

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Speaker 1: JP Morgan CEO says that consumers are in a good

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Speaker 1: position despite inflationary pressure.

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Speaker 8: Even we've got a recesion and the consumers in good shape.

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Speaker 8: But that doesn't mean you can fight off the effects

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Speaker 8: of stagflaci or something like that if it gets much worse,

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Speaker 8: and so I worry that it looks more like you

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Speaker 8: said these than we've seen before. If you go back

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Speaker 8: to the sevent these deficits we're half what there are today.

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Speaker 8: The debt to GDP was thirty five percent, not one

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Speaker 8: hundred percent, and so part of the reason I think

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Speaker 8: we've had the strong growth is the fiscal spending.

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Speaker 1: Jamie Diamond speaking there a total of roughly forty basis

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Speaker 1: points of FED cuts are currently priced into swaps by

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Speaker 1: the end of the year. Now in a moment, we'll

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Speaker 1: get more details on Tessa's results and ask also whether

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Speaker 1: the US aid package for Ukraine will really help Kiev

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Speaker 1: to defeat the Russian invasion. But another story is caught

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Speaker 1: Hay this morning. There's been so much chatter about this

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Speaker 1: amongst producers and us here in the Bloomberg office in London,

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Speaker 1: certainly the Wall to War commentary about Taylor Swift's latest album.

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Speaker 1: It was released on Friday, and our opinion columnist Jessica

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Speaker 1: Carl's been writing about, well, the album, but also the reviewers.

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Speaker 3: Yeah, well, I mean this isn't a review of the album,

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Speaker 3: because obviously jess Carl's point is is that actually the

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Speaker 3: fact that the speed with which reviews are produced doesn't

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Speaker 3: necessarily give anyone a chance to listen to the music,

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Speaker 3: especially given that this is thirty one songs, and it's

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Speaker 3: very difficult to understand why anyone could have listened to, digested, considered,

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Speaker 3: putting context, and then written something that was coherent.

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Speaker 2: Now there's two things at play here.

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Speaker 3: One is the appetite for a million heart takes, which

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Speaker 3: you can find online instantly on as people are going

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Speaker 3: to be fanatically for or against any album release that's

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Speaker 3: been hyped up this month. Her argument is, as we

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Speaker 3: should all switch off the commentary, take our time to

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Speaker 3: listen to something new, if it's going to be a

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Speaker 3: cultural moment, form our own opinions about it considerate, and

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Speaker 3: perhaps we should pay a little less attention to reviews

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Speaker 3: that are produced too hastily.

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Speaker 1: I mean, it does feel like she's trying to push

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Speaker 1: a bit against the tide of the internet. I mean,

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Speaker 1: that's what it's all about. But yes, it's more of

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Speaker 1: a critique around the music industry and how we digest

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Speaker 1: I mean she did call it poetry.

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Speaker 2: A tortured post department.

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Speaker 1: Yeah, exactly, Yes, true, I'm just at the beginning of

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Speaker 1: listening to the thirty one song.

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Speaker 3: We will wait several days before asking you for your

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Speaker 3: opinion the Caroline. Let's turn back to our top story then,

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Speaker 3: and that short for reported in Tesla's first quarter earnings

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Speaker 3: sales sliding margins. But Elon Musk has managed to shift

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Speaker 3: the narrative by talking about speeding up the launch of

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Speaker 3: less expensive cars, that sent the share price soaring in

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Speaker 3: postmarket trade, joining the snatch discussed Bin Brooks Asia Transport

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Speaker 3: report of Danny Lee, Danny, great to have you on.

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Speaker 3: What do we know then about this affordable Tesla car

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Speaker 3: promised by Elon Musk.

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Speaker 9: To be fair, we know very little still there is

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Speaker 9: still a lot of confusion about what Musk is trying

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Speaker 9: to do and achieve. But the basic breakdown is that

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Speaker 9: el Musk and Tesla are looking to bring forward and

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Speaker 9: accelerate the launch of less expensive vehicles less expensive evs.

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Speaker 9: This is really fundamental to Tesla reviving its kind of

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Speaker 9: sagging performance. The share price has been falling, there's been

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Speaker 9: less momentum or lower momentum in earnings, and so therefore

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Speaker 9: Tesla needs to have new products coming forward as soon

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Speaker 9: as early next year, not as late as a late

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Speaker 9: twenty twenty five, which is what their previous timeline was.

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Speaker 9: The big question is whether Tesla is going to bring

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Speaker 9: out this much anticipated twenty five thousand US dollar EV,

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Speaker 9: which is you know, one of it would be one

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Speaker 9: of its cheap yet, however, is this also going to

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Speaker 9: be something similar or related an autonomous robotaxi, for example,

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Speaker 9: which Tesla has been also touting to an announcement in August,

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Speaker 9: and Eli Musk is saying he'll give more details then.

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Speaker 9: But on the earning core there was not a lot

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Speaker 9: of clarity on some of these questions about accelerating. It's

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Speaker 9: kind of plans on this kind of multiple low affordable

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Speaker 9: evs that could come down the line later on.

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Speaker 1: Yeah, even though Musk was asked about it. Of course,

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Speaker 1: what about the earnings themselves though, especially in the key

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Speaker 1: market of China, Danny.

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Speaker 9: Yeah, earnings overall is not great, frankly, and we knew

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Speaker 9: this was going to be the case, and on many

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Speaker 9: of the line items amiss or estimates. But in some

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Speaker 9: way like China, where either Musk has been losing market share,

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Speaker 9: it's inevitable where they've been losing market share that it's

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Speaker 9: had an impact. China has had a big of an impact, frankly,

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Speaker 9: And given the start of the year in the EV

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Speaker 9: market in mainland China, it's been tough for all auto makers.

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Speaker 9: And what we have seen is a renewed price war

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Speaker 9: was something that Tesla had started a year ago, that

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Speaker 9: other competitors who are stronger, who are selling more vehicles,

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Speaker 9: have a financial firepower now to undermine Tesla. And what

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Speaker 9: we saw over the weekend was Tesla respond ahead of

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Speaker 9: these earnings with price cuts in the US and in

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Speaker 9: China in particular, substantial price cuts to a point where

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Speaker 9: Tesla is selling its models at some of the lowest

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Speaker 9: prices it has ever sold them at. So it's set

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Speaker 9: kind of the price benchmark to a new low, frankly,

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Speaker 9: clearly trying to attract more people to buy. It remains

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Speaker 9: to be seen if he can really use a price level,

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Speaker 9: because we've not really seen that in the in the

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Speaker 9: sales numbers so far.

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Speaker 3: Okay, Dannie Lee, thanks so much for joining us with

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Speaker 3: the details of Tesla's earnings. That's Bloomberg's Asia Transport reporter

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Speaker 3: Danny Lee.

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Speaker 1: Now, the Senate has approved the ninety five billion dollar

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Speaker 1: emergency aid package for Ukraine and other allies. President Joe

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Speaker 1: Biden will sign the bill into law. The sixty one

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Speaker 1: billion dollars for Ukraine will mean armed shipments to Kiev

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Speaker 1: can resume. The White House expects that to start happening

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Speaker 1: this week. Joining us now to discuss Bluebag's EMEA News

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Speaker 1: director Osley matheson Good Morning Roars. Look, many doubt Pentagon

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Speaker 1: supplies now will make a difference immediately, but do you

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Speaker 1: think it can change the course of the war with Russia.

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Speaker 1: What is the thinking about this huge sum of money

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Speaker 1: going to Kiev in weaponry.

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Speaker 10: Well, it is a lot of money and it will

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Speaker 10: help them get aid shipments in military aid, particularly the

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Speaker 10: Army Tactical Missile System, which is a surface to surface

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Speaker 10: artillery weapons system. You get that, you get artillery, you

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Speaker 10: get ammunition to the front line, and a lot of

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Speaker 10: it is actually already set up to go. It's in

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Speaker 10: Europe and they can ship it across the border. There

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Speaker 10: is a lot of aid, but as you say, it's

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Speaker 10: come many many months after Ukraine said it needed it,

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Speaker 10: and Ukraine's been running very low on things like ammunition

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Speaker 10: and artillery for many months, and also just on stuff

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Speaker 10: to deflect some of these missile attacks that we're seeing

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Speaker 10: and drone attacks we're seeing from Russia.

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Speaker 5: So it will be an asset.

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Speaker 10: But of course, once you start to lose momentum, it's

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Speaker 10: a bit hard to regain it, and Russia certainly has

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Speaker 10: the momentum, at least on the ground inside Ukraine. At

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Speaker 10: the moment, it's been regaining bit by bit some territory

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Speaker 10: that it had occupied in the early days of the war.

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Speaker 10: It's been taking fresh territory, particularly in the east and

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Speaker 10: the south, and that's going to be something very difficult

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Speaker 10: to stave off. Even with the arrival of these weapons.

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Speaker 10: Of course, Russia's cranked its warm machinery into high gear.

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Speaker 10: It's just churning out ammunition and artillery and everything else

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Speaker 10: at a rate of.

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Speaker 5: Not so is it an asset for Ukraine?

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Speaker 10: Absolutely, is it likely to change the course of the war.

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Speaker 5: That's kind of up in the air.

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Speaker 9: Ls.

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Speaker 3: What does the debate and the prolonged delay to they say,

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Speaker 3: tell us about the divisions in American politics over this

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Speaker 3: issue and where it places US leadership.

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Speaker 2: In the world.

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Speaker 10: Well, there is that split that you can see, and

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Speaker 10: it's in the Republican camp, but it's also in other

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Speaker 10: parts of politics in the US, and that's between hawks

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Speaker 10: who say the US still needs to be very much

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Speaker 10: out there in the world acting.

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Speaker 5: As a global police officer.

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Speaker 10: You know, kind of defending different countries, getting involved to

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Speaker 10: some extent in conflicts and spending money to do so.

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Speaker 5: And there's lots of other Republicans who say, no, no, no,

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Speaker 5: it's no low grat fight. What are we doing wasting this.

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Speaker 10: Money overseas when we should be spending at home in

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Speaker 10: the US and we're getting involved in fights that are

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Speaker 10: not ours to be involved in. And that's certainly a

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Speaker 10: narrative that's increasingly taking hold in US politics. Again, regardless

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Speaker 10: of what side are the oh you're on, and it's

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Speaker 10: a real issue into the US election campaign. Also, you

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Speaker 10: can see the presumptive Republican nominee or Trump, very clear

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Speaker 10: he doesn't want the US being involved in these things.

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Speaker 10: He says he would end all these various conflicts in

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Speaker 10: a day, and certainly doesn't want to continue to support

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Speaker 10: Ukraine militarily. So that is but that's also reflecting the

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Speaker 10: public mood. That's not just politicians. There is that sense

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Speaker 10: in the public that they're tired of the US getting

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Speaker 10: involved in conflicts overseas and spending money and that whoever

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Speaker 10: wins the election in November, that's not good news for Ukraine.

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Speaker 1: Yeah, a recurring theme in the US. Also in this

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Speaker 1: bill ros forcing tiktoks Chinese owners Byte Dance to sell

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Speaker 1: the platform, but not for a year. Is Beijing going

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Speaker 1: to let that happen?

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Speaker 10: Well, this is going to be a tough one, actually,

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Speaker 10: because for a start, TikTok is going to mount all

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Speaker 10: kinds of legal efforts against this. Once it passed into law,

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Speaker 10: they've got a year and they'll get underway.

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Speaker 5: Their argument will actually be using US law.

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Speaker 10: They'll say that forcing Americans off the platform will deprive

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Speaker 10: them of their First Mement rights to free speech, and

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Speaker 10: that's something that really does resonate in the American judicial system.

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Speaker 5: So they news every legal avenue.

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Speaker 10: But also selling of TikTok will probably require the approval

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Speaker 10: of the Chinese regulators, and you can't imagine they're going

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Speaker 10: to agree to this happening, in part because they don't

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Speaker 10: want TikTok's.

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Speaker 5: Algorithms or it's data and so on to be able

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Speaker 5: to be.

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Speaker 10: Bought by someone in America, and certainly that's what our

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Speaker 10: sources have been telling us here at Bloomberg.

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Speaker 5: So you've got a whole lot of steps.

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Speaker 10: That have to be done before you can actually ban

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Speaker 10: TikTok in the US or force TikTok to be divested

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Speaker 10: by ByteDance, and the political climate is one aspect of that.

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Speaker 10: The legal is another, but also the involvement of the

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Speaker 10: Chinese having to sign off on it.

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