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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jailey.

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Speaker 1: We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberger. Let's

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Speaker 1: bring in our market guest to kick off this hour,

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Speaker 1: Scott ran is with US Wells Fargo Managements UH senior

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Speaker 1: global equity strategists, and he joins us here from Missouri.

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Speaker 1: As he likes to remind me that I like to say, Um, Scott,

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Speaker 1: good to have you here. Uh, remarkable that we're kind

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Speaker 1: of at the end of this year, after what a

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Speaker 1: year it's been. What do you make though of Once

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Speaker 1: again we continue to see like global equity records taken

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Speaker 1: out one after another. Well, Carol, it has been a

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Speaker 1: crazy year and these record highs. You know, the markets

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Speaker 1: are definitely higher than were where we thought it was

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Speaker 1: going to be at the end of this year. But

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Speaker 1: you know, Matt mentioned bets on economic recovery and whether

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Speaker 1: you're looking at commodities, aluminum, um, you know what what

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Speaker 1: the tenure yield is doing, what sectors are performing, industrials,

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Speaker 1: you know, have been a good performer. So these economically

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Speaker 1: sensitive sectors, these asset classes that are sensitive to a

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Speaker 1: continuation of the economy have done well. And clearly the

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Speaker 1: market has has counted on additional stimulus from Congress. Who knows,

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Speaker 1: you know, whether we get two thousand dollars or stick

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Speaker 1: with the six I think it's safe to say probably

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Speaker 1: you're going to see even more stimulus from Congress. Um,

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Speaker 1: good virus news. You know, we keep getting good virus news.

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Speaker 1: The markets anticipated that for a long time, so I

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Speaker 1: think it should be no surprise that we have multiple

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Speaker 1: good Wait, good virus news you mean in terms of

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Speaker 1: the vaccines and make good vaccine exactly. I'm sorry, Carol, Yeah,

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Speaker 1: good vaccine news is. Certainly the virus news has has

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Speaker 1: has not been good. But I think the market has

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Speaker 1: a lot of confidence that there's a very very bright

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Speaker 1: light at the end of the tunnel. Um. Certainly we

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Speaker 1: feel there's a bright light at the end of the tunnel,

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Speaker 1: and we're looking for let's say, eight percent return in

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Speaker 1: the sp the course, absolutely, there are a lot of

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Speaker 1: good virus stories. Well here at least there are stories

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Speaker 1: of countries looking at different viruses so they can add

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Speaker 1: more to their arsenal countries speeding up the virus rollout

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Speaker 1: so they can get herd immunity done faster. Of course,

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Speaker 1: we had the nova vex story yesterday, so it looks

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Speaker 1: like um more companies going to be offering are joining

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Speaker 1: the fight offering a virus vaccine. Here, Scott, let me

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Speaker 1: ask you what you think about consumers, because Larry Summers

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Speaker 1: wrote an interesting op ed for US yesterday. He's taking

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Speaker 1: a lot of heat for saying he doesn't think consumers

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Speaker 1: should get two thousand dollar checks. But I think, um,

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Speaker 1: there are a lot of populist politicians out there that

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Speaker 1: would disagree with him, and it's fairly likely. Do you

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Speaker 1: think consumers are really gonna sit on that money, um

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Speaker 1: and not go out and spend it? Or are they

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Speaker 1: just waiting for a chance for restaurants to open, for

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Speaker 1: airlines to be safe again, for the sun to come

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Speaker 1: out and make motorcycling more fun. I mean, I feel

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Speaker 1: like if you gave me two thousand dollars, I would

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Speaker 1: have an earmark for spending pretty quick. Man. I think

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Speaker 1: if I had two thousand in my pocket, I probably

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Speaker 1: would spend it. I can guarantee you that my twenty

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Speaker 1: nine year old daughter would, So you know, whether you know,

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Speaker 1: six doesn't seem like a lot to me. Now, clearly

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Speaker 1: we're borrowing a lot of money, uh, and that is

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Speaker 1: an issue. But it all comes down really to consumer spending.

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Speaker 1: And I think really this last round of stimulus that

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Speaker 1: was out there, the direct payments to consumers, a lot

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Speaker 1: of that money was saved. And so you know, what

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Speaker 1: we want is people out there spending money. They need

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Speaker 1: to be confident, they need to have jobs. But now

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Speaker 1: you know, you see a picture of Times Square and

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Speaker 1: there's not much going on there. But in most parts

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Speaker 1: of the country, I mean, if you're driving around, I

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Speaker 1: don't care if it's a Tuesday afternoon or Saturday afternoon. Uh,

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Speaker 1: there's a ton of traffic. It seems like it's back

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Speaker 1: to about a dent. And you know, the only reason

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Speaker 1: you would even know that there's anything going on in

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Speaker 1: terms of a pandemic as you look over and somebody's

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Speaker 1: riding in their car with a mask on. So I

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Speaker 1: think people want to get out, they want to spend money,

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Speaker 1: they want to go to restaurants and bars. Um, they're

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Speaker 1: going to certainly spend whether it's six or two thousand dollars.

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Speaker 1: They're going to spend some of that money. But you know,

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Speaker 1: we certainly need consumer spending to be strong to keep going,

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Speaker 1: to keep this recovery moving ahead. So, okay, I'm listening

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Speaker 1: to what you're saying, Scott, But there are millions of

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Speaker 1: Americans who if they get two thousand dollars or if

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Speaker 1: they get a few hundred dollars a week more, it's

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Speaker 1: really about keeping a roof over their heads and food

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Speaker 1: on the table. And I do wonder when does the

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Speaker 1: equity markets, the financial markets kind of catch up with

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Speaker 1: what's going on, certainly in the United States, you know,

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Speaker 1: in a big swath of our country. Well, Carol, you're

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Speaker 1: you're exactly right, because you know, while many people would

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Speaker 1: use that six d or two thousand dollars for for

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Speaker 1: discretionary things, not you know, just things they want, not

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Speaker 1: things they need, there's a large number of people, as

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Speaker 1: you pointed out, I mean, they're paying rent, they're making

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Speaker 1: a car payment, you know, the essential uh types of things.

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Speaker 1: So I think that the market is looking well down

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Speaker 1: the road, not just as to what's going on here

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Speaker 1: in the US, but globally as well. Now, have stocks

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Speaker 1: come far uh and fast. They certainly have. We all

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Speaker 1: know that. But I think that you know, if we

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Speaker 1: get some improving news, we're gonna keep going a little

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Speaker 1: bit higher. Here. We've got a one seventy five number

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Speaker 1: for the S and P five hundred at the end

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Speaker 1: of next year. And if you look at the valuation,

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Speaker 1: if you look at where interest rates are, if you

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Speaker 1: look up the pent up type of demand that's out there,

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Speaker 1: those valuations don't look overly stretched. Certainly, They're nothing like

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Speaker 1: March of two thousand. So I think I think the

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Speaker 1: market is not meaningfully overvalued, but certainly anticipating quite a

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Speaker 1: bit of good news. Uh, certainly on the consumer front

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Speaker 1: and the vaccine front. All right, all right, Scott, thanks

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Speaker 1: so much for joining us. Thanks guys, Thank Carol and

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Speaker 1: I both thank you. Scott's been a long time. Glad

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Speaker 1: we could talk to you today, Scott, Wealth Bargo Investment,

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Speaker 1: Happy New Year's Well, it's good to see you again.

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Speaker 1: Thanks so much for joining us. Let's bring in Matt

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Speaker 1: Born back. He's Morgan Stanley, head of Global macro Strategy,

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Speaker 1: joining us on this Tuesday. So Matt um, first of all,

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Speaker 1: the Brexit news, we are seeing a play out there's

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Speaker 1: enthusiasm around the globe, whether it's the Brexit news finally

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Speaker 1: you know, getting resolved, whether it's another round of pandemic

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Speaker 1: relief here in the United States, there's so much, it

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Speaker 1: seems financial market enthusiasm. Does it make sense to you

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Speaker 1: and does it carry over into twenty one in your view?

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Speaker 1: Thanks Carol. Yeah, I think it does, um, you know,

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Speaker 1: at least for the first several months of the year.

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Speaker 1: You know, I think, um, the amount of liquidity that

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Speaker 1: central banks are providing to markets, not not just in

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Speaker 1: the US, of course, but but outside of the US

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Speaker 1: as well, UH is going to be pretty formidable, and

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Speaker 1: I think markets are going to have a hard time

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Speaker 1: UH not incorporating this liquidity UH into their prices. So

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Speaker 1: we we do think that risk on is the trade

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Speaker 1: for them for the first couple of months of the

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Speaker 1: year certainly, And then I think once the vaccine becomes

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Speaker 1: more broadly distributed around the US, around the rest of

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Speaker 1: the developed world kind of made year, um, then I

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Speaker 1: think it becomes more difficult for markets in the second half.

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Speaker 1: How difficult in the second half. So what do you

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Speaker 1: are you expecting kind of official corrections at that point?

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Speaker 1: Because I do wonder about like, as you say, you know,

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Speaker 1: there's a point where people say, wait, wait, wait, it's

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Speaker 1: time for us to look at fundamentals again. Maybe this

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Speaker 1: run up isn't justified. So what does the second half

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Speaker 1: look like? Is it just a coming in the financial markets?

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Speaker 1: There is an actually kind of okay, let's let's reprice everything. Well,

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Speaker 1: I mean I would I would say consolidation, uh is

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Speaker 1: is what it would be, you know, kind of front

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Speaker 1: and center for for me. I think, um, you know,

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Speaker 1: correct corrections. You know, we have had a couple of

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Speaker 1: ten percent corrections in in the SMP five hundred, uh,

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Speaker 1: you know, over the past several months. But you know,

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Speaker 1: they they just they didn't last. Um and and so

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Speaker 1: it's really tough, I think to call corrections during a

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Speaker 1: period of time when liquidity uh is so overwhelming. I mean,

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Speaker 1: and you know, again I think bitcoin. You can kind

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Speaker 1: of see it in the price of bitcoin as well. Um,

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Speaker 1: there's so much money being dumped into markets by central banks.

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Speaker 1: UM investors have to find a place to put it

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Speaker 1: um in either you know, you find a place that

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Speaker 1: has some yield, and that's hard to do these days,

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Speaker 1: or you're trying to find a place where prices just

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Speaker 1: keep going up and up, and you can see that's

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Speaker 1: that's happening in bitcoint these days. At what point is

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Speaker 1: all of this optimism for a vaccine and a V

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Speaker 1: shaped recovery post COVID priced in, Matthew? And how do

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Speaker 1: you you know when we see something like um, Airbnb

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Speaker 1: going for a hundred billion dollars um during COVID, it

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Speaker 1: was only worth thirty billion dollars before COVID, Isn't that

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Speaker 1: the froth that tells you something? Uh, you know, assets

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Speaker 1: are overpriced here? Well, I mean, you know, equity is

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Speaker 1: really not my my value wick um. But what I

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Speaker 1: would say is two things. Number one, you know, markets

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Speaker 1: typically priced things in uh you know, or almost entirely

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Speaker 1: priced things in before they and so you know, if

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Speaker 1: the market has its eye on the demand surge that

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Speaker 1: should occur in services uh post vaccine distribution, i'd expect

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Speaker 1: markets to to to to you know, to price that

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Speaker 1: in by and large before the vaccine is completely distributed.

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Speaker 1: So that would be the first way I to think

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Speaker 1: about it. The second thing I would point to as

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Speaker 1: the bond market. Um, you know, one of the reasons

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Speaker 1: I think that yields in the US have not risen

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Speaker 1: more than they have over the past couple of months,

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Speaker 1: is because of the liquidity that's being distributed around markets. Now,

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Speaker 1: if all of a sudden you see yields starts to

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Speaker 1: rise more quickly, that would that would suggest that liquidity

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Speaker 1: is not as ample as it was earlier. Um, and

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Speaker 1: that might put uh, you know, kind of risky assets

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Speaker 1: in more danger. But at this point, you know, you're

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Speaker 1: not really seeing that the tenure treasury yield that's still

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Speaker 1: below one per cent. So UM, I don't think we're

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Speaker 1: there just yet. But those you the two things, the

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Speaker 1: two ways I would think about it. So I gotta say, Matt,

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Speaker 1: I love lists. I'm a list maker, and you've got

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Speaker 1: a list of the top ten surprises. One that I

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Speaker 1: thought that really stood out for me is you said

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Speaker 1: immigration causes the northern lights to shine the brightest. You're

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Speaker 1: looking at Canada. Yeah, absolutely, Well, we we've been bullish

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Speaker 1: on the Canadian dollar for a healthy portion of two

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Speaker 1: thousand twenty one UM and in our discussions with investors,

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Speaker 1: you know what we had found certainly in the middle

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Speaker 1: of the year, you know, but it continued throughout the

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Speaker 1: course of two Uh. Is that people just are thinking

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Speaker 1: that there are some structural issues with the Canadian economy,

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Speaker 1: and so you know, we saw, gosh, wouldn't it be

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Speaker 1: wouldn't it be a surprise if if these structural issues

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Speaker 1: never really reared their heads UM, but some other issues

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Speaker 1: like immigration actually carried the Canadian dollar even further higher UM.

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Speaker 1: And so we decided to throw that into the mix

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Speaker 1: for two one as as one of our top ten surprises.

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Speaker 1: You know, I look through m A go, the m

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Speaker 1: A go function on the Bloomberg, I see that there's

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Speaker 1: a bigger premium Matthew being paid for Developed Asia assets

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Speaker 1: right now. And I see one of your surprises is

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Speaker 1: that developed market liquidity avoids emerging markets and drives a

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Speaker 1: d M asset bubble. Why do you think we're ignoring

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Speaker 1: emerging markets? I mean, they clearly come through this less

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Speaker 1: scathed than everyone else. Yeah. Absolutely, Well, I mean the

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Speaker 1: first thing to recognize is that, you know, the liquidity

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Speaker 1: that's being provided by central banks UM is mostly occurring

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Speaker 1: in developed markets. So it's the developed market central banks

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Speaker 1: like the FED and the ECB and the Bank of

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Speaker 1: Japan that are providing most of the liquidity that we've

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Speaker 1: been talking about in our research, and so you have

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Speaker 1: to recognize that the liquidity that's being provided, honestly, it

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Speaker 1: doesn't have to go into risk assets. They could stay

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Speaker 1: in bank deposit accounts, or it could stay in money

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Speaker 1: market funds earning nothing if it wanted to. But you know,

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Speaker 1: we don't think it wants to do that. We think

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Speaker 1: it wants to go out in search of yield. And so,

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Speaker 1: you know, this particular surprise that we wrote about just

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Speaker 1: recognizes the fact that, look that the liquidity that's being

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Speaker 1: produced in developed markets could in fact stay in developed markets. Um.

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Speaker 1: And so we we started to think about, well, what

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Speaker 1: would be a reason why the liquidity would not overflow

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Speaker 1: the borders of developed markets into emerging markets, and ultimately,

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Speaker 1: you know, it came down to the virus and um,

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Speaker 1: the fact that you know, winter time for us in

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Speaker 1: the northern hemisphere is not is not the same as

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Speaker 1: winter time in the southern hemisphere. And so we just

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Speaker 1: put two and two together and thought, well, maybe if

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Speaker 1: if the virus has a resurgence in the southern hemisphere,

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Speaker 1: that might uh, that might redirect that liquidity or eat

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Speaker 1: that liquidity in developed markets, and and ultimately caused an

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Speaker 1: acid bubble. Matthew, thanks so much for joining us. Matthew

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Speaker 1: hornback there, Morgan Stanley, Global head of macro Strategy. Let's

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Speaker 1: talk a bit about markets, if we may. Let's get

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Speaker 1: to our guest, James Bevan is with us. You see

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Speaker 1: c l A chief investment strategists joining us. Um James,

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Speaker 1: how do you see it? How do you explain some

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Speaker 1: of the trade? I do feel like we are in

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Speaker 1: a market that reacts to headlines pretty quickly, whether they're

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Speaker 1: negative or positive. You kind of get it out there

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Speaker 1: pretty quickly. Indeed, right now, I would say that there

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Speaker 1: is more appetite to perceive good news and statements made

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Speaker 1: rather than worrying about bad news. And of course most

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Speaker 1: news stories come with a bit of faith. So if

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Speaker 1: you take the breaks as and nights than, for example,

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Speaker 1: is unambiguously good news that there is no no deal,

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Speaker 1: but it's certainly not good news to the services company

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Speaker 1: news that's still facing our ambiguous future, and in particular

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Speaker 1: financial services. Right now, in markets focusing on the good news,

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Speaker 1: why do you think the pound isn't rallying more? James?

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Speaker 1: I mean, I would have thought we heard so many

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Speaker 1: forecasts that were bullush up to one, and especially on

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Speaker 1: a day when the dollar is weaker once again, I

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Speaker 1: would expect to see more than one thirty five in Sterling. Well,

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Speaker 1: I certainly anticipate that we can see one forty five

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Speaker 1: by the end of next year. But the plan still

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Speaker 1: has really quite serious challenges ahead. So the Brexit deal

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Speaker 1: is a step in the right direction, but it most

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Speaker 1: certainly does not provide for the full resolution of the

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Speaker 1: problems that the UK faces. So we will like to

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Speaker 1: receive real growth in the UK economy of perhaps up

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Speaker 1: to seven percentage points this year, but the UK is

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Speaker 1: still poorly placed in terms of global free trade agreements.

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Speaker 1: It's simply not made the progress that it wished. People

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Speaker 1: say it's game to be easy. Actually, if you look

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Speaker 1: at the regulatory luggage that the UK has to take

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Speaker 1: the past of the Brexit deal, this issue in terms

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Speaker 1: of getting free trade of the US is going to

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Speaker 1: be really tricky. The Coordinator Chicken story isn't going away.

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Speaker 1: And I think that these people concerned about the outlook

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Speaker 1: the UK economy. What about the city James. You know,

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Speaker 1: we've been talking a lot today about what happens to

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Speaker 1: financial services there, and um there still hasn't been any

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Speaker 1: kind of equivalency agreement. I don't know if that's gonna

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Speaker 1: come even in Q one one. Do you see a

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Speaker 1: lot of your h Do you see a lot of

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Speaker 1: your colleagues moving back to Paris, moving back to Frankfurt,

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Speaker 1: fleeing the city for the continent. Well, I would say

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Speaker 1: that we have seen a general drift of both people

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Speaker 1: and business activities to the Eurozone over the last four years,

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Speaker 1: since the twenties sixteen Brexit vote. That was the main

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Speaker 1: when the chief executives and boards of the major financial

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Speaker 1: company said, Okay, guys, we've got to get ready. We

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Speaker 1: know it's doing that happen. We don't know quite when,

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Speaker 1: but let's position know what inevitably will happen. So I

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Speaker 1: don't think it's going to come as a major shot

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Speaker 1: to anybody, but many businesses already relocated ivor to Paris

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Speaker 1: or to frank First. Yeah, definitely that migration, that trend

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Speaker 1: is definitely something we've seen and continues. Hey, James, we're

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Speaker 1: gonna leave it there. Thank you so much. James Bevan

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Speaker 1: u c c L A chief investment strategist, have a

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Speaker 1: good new year. We do want to talk about something

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Speaker 1: that has definitely been kind of I've been obsessed with

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Speaker 1: it a little bit since those Apple headlines about really

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Speaker 1: aggressively again moving into the e V market. But we

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Speaker 1: want to get some perspective because there's a lot going on.

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Speaker 1: There has been a lot this past year, and a

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Speaker 1: lot maybe in terms of expectations for the EV market.

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Speaker 1: Mark Kaufman is with us Ford Motor Global Electrification Director

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Speaker 1: and he joins us Uh, but a zoom on this

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Speaker 1: Tuesday market. It is so good to have you here

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Speaker 1: with Matt and myself. Matt's a car guy, loves talking

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Speaker 1: about all things car, but I am really interested too

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Speaker 1: as well. So tell me about the Apple news. Let's

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Speaker 1: start there. How significant is that in your view? And

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Speaker 1: it's not something going to happen tomorrow but in a

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Speaker 1: few years, well, Carol, anyone who works in a traditional manufacturer,

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Speaker 1: we're essentially going to expect disruption now from anyone that

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Speaker 1: might be out there. Back I know a couple of

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Speaker 1: years ago when Dyson was considering getting into the e

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Speaker 1: V business. At that point you realize any consumer product

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Speaker 1: company could come into the space besides a an you

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Speaker 1: start up. So uh, it's it's very difficult. It's very

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Speaker 1: expensive to the point where you know global um globally

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Speaker 1: dominant companies like Ford and Folkswagen are getting together pooling resources.

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Speaker 1: Can you tell us a little bit about your work

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Speaker 1: with the German carmakers over here in Wolfsburg. Sure, Matt

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Speaker 1: skill is so important, especially in the auto business. UM.

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Speaker 1: So in a case when we have a platform, you know,

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Speaker 1: most platforms have a range of products that it can

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Speaker 1: be suited off of. Uh in Then in the case

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Speaker 1: of our our partnership with VW, we had the the

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Speaker 1: European market skews a little bit smaller than the US market,

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Speaker 1: so we found there was an equal opportunity for both

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Speaker 1: of us VW to get a bit more scale off

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Speaker 1: off their platform, and for Ford it gave us an

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Speaker 1: opportunity to have a product that's going to be slightly

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Speaker 1: smaller than the product off of our dedicated platform that

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Speaker 1: we have within our company. I know, one of the

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Speaker 1: big problems here Mark is there just aren't enough charging stations.

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Speaker 1: And although we hear from you know, partnerships like IONI

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Speaker 1: that they're building them as quick as they can, they're

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Speaker 1: they're certainly not building them quick enough to be ready

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Speaker 1: for the demand that's coming in the next few years.

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Speaker 1: How do you think that issue gets solved. Man, that's

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Speaker 1: a great question. And we know a combination of both

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Speaker 1: range anxiety and the ability to charge your electric vehicle

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Speaker 1: when you're traveling our top of mind for consumers. We

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Speaker 1: believe range anxiety as a as an example, are Mustang

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Speaker 1: Maki as a range just over three hundred miles is

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Speaker 1: helping on range anxiety. At the same time that that

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Speaker 1: charging infrastructure continues to get built out every year, especially

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Speaker 1: for the high power DC fast chargers um and it

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Speaker 1: depends where you're at in the world, though a lot

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Speaker 1: of consumers we're finding are still charging at their residence

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Speaker 1: that they have that opportunity to because that certainly adds

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Speaker 1: to the convenience of owning an EV. You know what's

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Speaker 1: interesting too, though, is and I do wonder, you know,

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Speaker 1: Mark safe to say, I think it's it's it's fair

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Speaker 1: to kind of respect what test Lady lawn Musk did

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Speaker 1: that kind of woke up the auto industry and so

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Speaker 1: that you can, you know, maybe move faster than everybody

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Speaker 1: anticipated when it came to the e V market. And

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Speaker 1: I do wonder in terms of strategy and when you

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Speaker 1: look at maybe what happens next year. You know, how

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Speaker 1: has kind of the timetable changed dramatically and could have

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Speaker 1: changed even more so, meaning sooner rather than later. Yeah,

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Speaker 1: I would say as I as I look back at

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Speaker 1: I know for me the biggest surprise on the year

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Speaker 1: is just how quickly the European market has moved to

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Speaker 1: NEVY adoption. I would say that was a little bit

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Speaker 1: higher than what we had forecasted at this time last year. Uh.

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Speaker 1: And part of that is you're seeing more products come

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Speaker 1: out so as that EB offering is expanding from other

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Speaker 1: manufacturers both RENA and VW having products in the market

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Speaker 1: and the European markets. That has accelerated the growth. Uh.

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Speaker 1: And at this point, um, you know, we're seeing in

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Speaker 1: both Europe and China there there's a clear race for

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Speaker 1: leadership there in the e V space. Mark Kaufman is

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Speaker 1: still with us for Motor Global Electrification Director, and Mark,

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Speaker 1: I want to hear about some of the products. As

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Speaker 1: you can tell, I'm very close to the Ford family.

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Speaker 1: I've spent a lot of time um uh with your boss. Um.

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Speaker 1: I've Alan Mollally is a very close personal friend of mine. UH.

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Speaker 1: And I wonder what's next you know, you've got them,

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Speaker 1: You've got the Mocke, and you've got this partnership with Volkswagen.

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Speaker 1: What else can you come out with that's gonna blow

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Speaker 1: our minds? Well, first, coming late summer in twenty one,

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Speaker 1: we've got the Mustang Maki GT so that is the

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Speaker 1: performance version of that product. Um so we're super enthusiastic

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Speaker 1: about that. You've just got fantastic fo horsepower, six hundred

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Speaker 1: and thirty four foot pounds of instant torque in that

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Speaker 1: EV so that's gonna delight customers in that space. But

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Speaker 1: even more importantly, with thirty five years of commercial vehicle leadership,

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Speaker 1: we've got a transit full battery electric vehicle the in

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Speaker 1: coming out UH and that comes in lots of configurations

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Speaker 1: to meet a wide breadth of consumer needs. And that's

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Speaker 1: a that's also in one. In late twenty two, we're

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Speaker 1: tapping into probably our most iconic nameplate with an F

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Speaker 1: one fifty full battery electric vehicle launching and a lot

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Speaker 1: of people know the F one fifty is probably my

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Speaker 1: favorite vehicle of all time. I had the six point

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Speaker 1: two Leader Raptor version, which was amazing. I love torque

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Speaker 1: if you could deliver it to me with the battery,

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Speaker 1: I honestly don't care if it comes from internal combustion

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Speaker 1: UM or electric. It sounds like it would work great

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Speaker 1: in a transit as well, which has an amazing product.

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Speaker 1: What about your partnership with Volkswagen though we talked a

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Speaker 1: little bit about it in the past, Block and I'm

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Speaker 1: wondering can you envision another model? Can you envision deepening

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Speaker 1: that partnership because it's such an exciting transatlantic uh A

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Speaker 1: joint venture? Yeah, Matt Ford Forward continues to be open

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Speaker 1: to strategic partnership, so where they make good sense. Uh.

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Speaker 1: And clearly you know that that first relationship with VWS

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Speaker 1: the start. We also have an equity interest in Ribbans,

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Speaker 1: so we've shown that where it makes sense for Ford,

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Speaker 1: we're certainly going to be open to those partnerships. Hey.

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Speaker 1: You know, Mark, I just want to follow up on

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Speaker 1: what you said about the Machi and I do wonder

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Speaker 1: if you guys are going to allocate more to Europe

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Speaker 1: next year to meet um some of the and comply

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Speaker 1: with some of the tougher COOT standards, because I and

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Speaker 1: I'd love to also get your thoughts about e V

431
00:24:20,160 --> 00:24:22,040
Speaker 1: and Europe. Does it kind of is it a breakthrough

432
00:24:22,119 --> 00:24:27,200
Speaker 1: year next year? Yeah, let's start with uh. I mentioned

433
00:24:27,240 --> 00:24:30,640
Speaker 1: the growth in Europe this year, especially in markets. You've

434
00:24:30,680 --> 00:24:34,159
Speaker 1: got your big three core markets between Germany, UK and

435
00:24:34,200 --> 00:24:37,200
Speaker 1: France that have really accelerated this year. So when we

436
00:24:37,320 --> 00:24:40,640
Speaker 1: start thinking about that technology adoption curve, you know, there's

437
00:24:40,720 --> 00:24:43,560
Speaker 1: usually a breakpoint from two and a half percent is

438
00:24:43,640 --> 00:24:47,000
Speaker 1: usually where you start moving into early adopters. And as

439
00:24:47,000 --> 00:24:50,359
Speaker 1: we're finishing up twenty one, all three of those markets

440
00:24:50,400 --> 00:24:52,840
Speaker 1: now have tipped up to about five percent EV share

441
00:24:52,880 --> 00:24:56,320
Speaker 1: of industry, So we're gonna expect continued growth in in

442
00:24:56,359 --> 00:25:00,920
Speaker 1: those markets. Does that mean allocating more makis? So we're

443
00:25:00,920 --> 00:25:03,400
Speaker 1: we're always we're always, we're always looking to to get

444
00:25:03,400 --> 00:25:07,359
Speaker 1: product to customers. UH. And obviously having having demand for

445
00:25:07,400 --> 00:25:09,640
Speaker 1: those products and pool is going to be fantastic for us.

446
00:25:09,960 --> 00:25:11,760
Speaker 1: So I once I one think I want to ask

447
00:25:11,760 --> 00:25:13,480
Speaker 1: you too. And going back to Tesla for a moment,

448
00:25:13,480 --> 00:25:15,240
Speaker 1: because they really, like I said, you know, I think

449
00:25:15,240 --> 00:25:17,480
Speaker 1: everyone would agree that they really shook up the EV market,

450
00:25:17,520 --> 00:25:21,000
Speaker 1: But I do wonder some of the problems that they've

451
00:25:21,040 --> 00:25:24,400
Speaker 1: had quality issues. Does that provide openings? Do you think

452
00:25:24,440 --> 00:25:28,840
Speaker 1: for some of the established auto players. I don't think,

453
00:25:28,880 --> 00:25:31,480
Speaker 1: you know, for anyone who's coming new into the auto space,

454
00:25:31,520 --> 00:25:35,280
Speaker 1: I think you should underestimate the essentially the value of

455
00:25:35,320 --> 00:25:37,760
Speaker 1: a good distribution network and the ability to take care

456
00:25:37,760 --> 00:25:40,200
Speaker 1: of customers. So just maybe to give you some quick

457
00:25:40,320 --> 00:25:42,600
Speaker 1: U S numbers, we have twenty one d e V

458
00:25:42,720 --> 00:25:45,960
Speaker 1: certified dealers in the US UH, and we have ten

459
00:25:46,040 --> 00:25:49,640
Speaker 1: thousand training service technicians who are capable of dropping batteries

460
00:25:49,680 --> 00:25:54,000
Speaker 1: off of cars. Unfortunately, accidents happen within the world, and

461
00:25:54,080 --> 00:25:55,959
Speaker 1: you know, for the ability to get cars into our

462
00:25:56,000 --> 00:25:59,040
Speaker 1: service base at forward and back out, we think is

463
00:25:59,040 --> 00:26:03,639
Speaker 1: going to be a continued advantage for us. Yeah. I

464
00:26:03,680 --> 00:26:07,960
Speaker 1: wonder about service bays. I mean, how necessary will they

465
00:26:08,040 --> 00:26:12,400
Speaker 1: be when you have electric cars? UM, I assume if

466
00:26:12,400 --> 00:26:15,240
Speaker 1: you do a better job than some rivals at quality,

467
00:26:15,520 --> 00:26:18,440
Speaker 1: you're gonna need fewer repairs. You're also gonna need actually

468
00:26:18,520 --> 00:26:20,600
Speaker 1: fewer people to build them. Right. Is it just going

469
00:26:20,640 --> 00:26:25,000
Speaker 1: to be a less people intensive business car making? Yeah,

470
00:26:25,400 --> 00:26:27,040
Speaker 1: it gives us I think a little bit of room

471
00:26:27,119 --> 00:26:29,359
Speaker 1: to to have more what we would call top hats

472
00:26:29,440 --> 00:26:32,240
Speaker 1: or more product configurations off of a platform and a plant.

473
00:26:32,280 --> 00:26:35,480
Speaker 1: So the line length for an electric vehicle, UH, is

474
00:26:35,520 --> 00:26:39,520
Speaker 1: about thirty shorter than a traditional line, so it is

475
00:26:39,560 --> 00:26:42,040
Speaker 1: a little bit more efficient. So in a case where

476
00:26:42,080 --> 00:26:44,679
Speaker 1: before we might have, you know, just one product at

477
00:26:44,680 --> 00:26:47,400
Speaker 1: a plant, we might be able to get two products

478
00:26:47,440 --> 00:26:49,520
Speaker 1: in off of the same platform. So there are some

479
00:26:49,560 --> 00:26:55,280
Speaker 1: efficiencies that will have and while service patterns certainly change

480
00:26:55,840 --> 00:26:58,320
Speaker 1: with that, we we still think there's there's going to

481
00:26:58,359 --> 00:27:03,000
Speaker 1: be good ongoing throughput. As I said, unfortunately, accidents to happen,

482
00:27:03,119 --> 00:27:06,119
Speaker 1: so getting customers in and out quickly, UH is going

483
00:27:06,200 --> 00:27:08,879
Speaker 1: to be important for us. All Right, really fun discussion.

484
00:27:09,160 --> 00:27:11,040
Speaker 1: Matt's all in on cars, but I just want for

485
00:27:11,080 --> 00:27:13,280
Speaker 1: the record Mark, I also am into torque. I'm just

486
00:27:13,280 --> 00:27:16,119
Speaker 1: gonna put it out there. Okay, Um, Mark, thank you

487
00:27:16,200 --> 00:27:18,480
Speaker 1: so much. Have a great new year. We look forward

488
00:27:18,520 --> 00:27:20,760
Speaker 1: to talking to you next year. Mark Kaufman, he's Global

489
00:27:20,800 --> 00:27:25,560
Speaker 1: Electrification director over at Ford Motor. Thanks for listening to

490
00:27:25,600 --> 00:27:30,159
Speaker 1: the Bloomberg Surveillance podcast. Subscribe and listen to interviews on

491
00:27:30,200 --> 00:27:36,040
Speaker 1: Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm

492
00:27:36,080 --> 00:27:39,360
Speaker 1: on Twitter at Tom Keane before the podcast. You can

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00:27:39,440 --> 00:27:42,600
Speaker 1: always catch us worldwide. I'm Bloomberg Radio