Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jailey.
Speaker 1: We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course on the Bloomberger. Let's
Speaker 1: bring in our market guest to kick off this hour,
Speaker 1: Scott ran is with US Wells Fargo Managements UH senior
Speaker 1: global equity strategists, and he joins us here from Missouri.
Speaker 1: As he likes to remind me that I like to say, Um, Scott,
Speaker 1: good to have you here. Uh, remarkable that we're kind
Speaker 1: of at the end of this year, after what a
Speaker 1: year it's been. What do you make though of Once
Speaker 1: again we continue to see like global equity records taken
Speaker 1: out one after another. Well, Carol, it has been a
Speaker 1: crazy year and these record highs. You know, the markets
Speaker 1: are definitely higher than were where we thought it was
Speaker 1: going to be at the end of this year. But
Speaker 1: you know, Matt mentioned bets on economic recovery and whether
Speaker 1: you're looking at commodities, aluminum, um, you know what what
Speaker 1: the tenure yield is doing, what sectors are performing, industrials,
Speaker 1: you know, have been a good performer. So these economically
Speaker 1: sensitive sectors, these asset classes that are sensitive to a
Speaker 1: continuation of the economy have done well. And clearly the
Speaker 1: market has has counted on additional stimulus from Congress. Who knows,
Speaker 1: you know, whether we get two thousand dollars or stick
Speaker 1: with the six I think it's safe to say probably
Speaker 1: you're going to see even more stimulus from Congress. Um,
Speaker 1: good virus news. You know, we keep getting good virus news.
Speaker 1: The markets anticipated that for a long time, so I
Speaker 1: think it should be no surprise that we have multiple
Speaker 1: good Wait, good virus news you mean in terms of
Speaker 1: the vaccines and make good vaccine exactly. I'm sorry, Carol, Yeah,
Speaker 1: good vaccine news is. Certainly the virus news has has
Speaker 1: has not been good. But I think the market has
Speaker 1: a lot of confidence that there's a very very bright
Speaker 1: light at the end of the tunnel. Um. Certainly we
Speaker 1: feel there's a bright light at the end of the tunnel,
Speaker 1: and we're looking for let's say, eight percent return in
Speaker 1: the sp the course, absolutely, there are a lot of
Speaker 1: good virus stories. Well here at least there are stories
Speaker 1: of countries looking at different viruses so they can add
Speaker 1: more to their arsenal countries speeding up the virus rollout
Speaker 1: so they can get herd immunity done faster. Of course,
Speaker 1: we had the nova vex story yesterday, so it looks
Speaker 1: like um more companies going to be offering are joining
Speaker 1: the fight offering a virus vaccine. Here, Scott, let me
Speaker 1: ask you what you think about consumers, because Larry Summers
Speaker 1: wrote an interesting op ed for US yesterday. He's taking
Speaker 1: a lot of heat for saying he doesn't think consumers
Speaker 1: should get two thousand dollar checks. But I think, um,
Speaker 1: there are a lot of populist politicians out there that
Speaker 1: would disagree with him, and it's fairly likely. Do you
Speaker 1: think consumers are really gonna sit on that money, um
Speaker 1: and not go out and spend it? Or are they
Speaker 1: just waiting for a chance for restaurants to open, for
Speaker 1: airlines to be safe again, for the sun to come
Speaker 1: out and make motorcycling more fun. I mean, I feel
Speaker 1: like if you gave me two thousand dollars, I would
Speaker 1: have an earmark for spending pretty quick. Man. I think
Speaker 1: if I had two thousand in my pocket, I probably
Speaker 1: would spend it. I can guarantee you that my twenty
Speaker 1: nine year old daughter would, So you know, whether you know,
Speaker 1: six doesn't seem like a lot to me. Now, clearly
Speaker 1: we're borrowing a lot of money, uh, and that is
Speaker 1: an issue. But it all comes down really to consumer spending.
Speaker 1: And I think really this last round of stimulus that
Speaker 1: was out there, the direct payments to consumers, a lot
Speaker 1: of that money was saved. And so you know, what
Speaker 1: we want is people out there spending money. They need
Speaker 1: to be confident, they need to have jobs. But now
Speaker 1: you know, you see a picture of Times Square and
Speaker 1: there's not much going on there. But in most parts
Speaker 1: of the country, I mean, if you're driving around, I
Speaker 1: don't care if it's a Tuesday afternoon or Saturday afternoon. Uh,
Speaker 1: there's a ton of traffic. It seems like it's back
Speaker 1: to about a dent. And you know, the only reason
Speaker 1: you would even know that there's anything going on in
Speaker 1: terms of a pandemic as you look over and somebody's
Speaker 1: riding in their car with a mask on. So I
Speaker 1: think people want to get out, they want to spend money,
Speaker 1: they want to go to restaurants and bars. Um, they're
Speaker 1: going to certainly spend whether it's six or two thousand dollars.
Speaker 1: They're going to spend some of that money. But you know,
Speaker 1: we certainly need consumer spending to be strong to keep going,
Speaker 1: to keep this recovery moving ahead. So, okay, I'm listening
Speaker 1: to what you're saying, Scott, But there are millions of
Speaker 1: Americans who if they get two thousand dollars or if
Speaker 1: they get a few hundred dollars a week more, it's
Speaker 1: really about keeping a roof over their heads and food
Speaker 1: on the table. And I do wonder when does the
Speaker 1: equity markets, the financial markets kind of catch up with
Speaker 1: what's going on, certainly in the United States, you know,
Speaker 1: in a big swath of our country. Well, Carol, you're
Speaker 1: you're exactly right, because you know, while many people would
Speaker 1: use that six d or two thousand dollars for for
Speaker 1: discretionary things, not you know, just things they want, not
Speaker 1: things they need, there's a large number of people, as
Speaker 1: you pointed out, I mean, they're paying rent, they're making
Speaker 1: a car payment, you know, the essential uh types of things.
Speaker 1: So I think that the market is looking well down
Speaker 1: the road, not just as to what's going on here
Speaker 1: in the US, but globally as well. Now, have stocks
Speaker 1: come far uh and fast. They certainly have. We all
Speaker 1: know that. But I think that you know, if we
Speaker 1: get some improving news, we're gonna keep going a little
Speaker 1: bit higher. Here. We've got a one seventy five number
Speaker 1: for the S and P five hundred at the end
Speaker 1: of next year. And if you look at the valuation,
Speaker 1: if you look at where interest rates are, if you
Speaker 1: look up the pent up type of demand that's out there,
Speaker 1: those valuations don't look overly stretched. Certainly, They're nothing like
Speaker 1: March of two thousand. So I think I think the
Speaker 1: market is not meaningfully overvalued, but certainly anticipating quite a
Speaker 1: bit of good news. Uh, certainly on the consumer front
Speaker 1: and the vaccine front. All right, all right, Scott, thanks
Speaker 1: so much for joining us. Thanks guys, Thank Carol and
Speaker 1: I both thank you. Scott's been a long time. Glad
Speaker 1: we could talk to you today, Scott, Wealth Bargo Investment,
Speaker 1: Happy New Year's Well, it's good to see you again.
Speaker 1: Thanks so much for joining us. Let's bring in Matt
Speaker 1: Born back. He's Morgan Stanley, head of Global macro Strategy,
Speaker 1: joining us on this Tuesday. So Matt um, first of all,
Speaker 1: the Brexit news, we are seeing a play out there's
Speaker 1: enthusiasm around the globe, whether it's the Brexit news finally
Speaker 1: you know, getting resolved, whether it's another round of pandemic
Speaker 1: relief here in the United States, there's so much, it
Speaker 1: seems financial market enthusiasm. Does it make sense to you
Speaker 1: and does it carry over into twenty one in your view?
Speaker 1: Thanks Carol. Yeah, I think it does, um, you know,
Speaker 1: at least for the first several months of the year.
Speaker 1: You know, I think, um, the amount of liquidity that
Speaker 1: central banks are providing to markets, not not just in
Speaker 1: the US, of course, but but outside of the US
Speaker 1: as well, UH is going to be pretty formidable, and
Speaker 1: I think markets are going to have a hard time
Speaker 1: UH not incorporating this liquidity UH into their prices. So
Speaker 1: we we do think that risk on is the trade
Speaker 1: for them for the first couple of months of the
Speaker 1: year certainly, And then I think once the vaccine becomes
Speaker 1: more broadly distributed around the US, around the rest of
Speaker 1: the developed world kind of made year, um, then I
Speaker 1: think it becomes more difficult for markets in the second half.
Speaker 1: How difficult in the second half. So what do you
Speaker 1: are you expecting kind of official corrections at that point?
Speaker 1: Because I do wonder about like, as you say, you know,
Speaker 1: there's a point where people say, wait, wait, wait, it's
Speaker 1: time for us to look at fundamentals again. Maybe this
Speaker 1: run up isn't justified. So what does the second half
Speaker 1: look like? Is it just a coming in the financial markets?
Speaker 1: There is an actually kind of okay, let's let's reprice everything. Well,
Speaker 1: I mean I would I would say consolidation, uh is
Speaker 1: is what it would be, you know, kind of front
Speaker 1: and center for for me. I think, um, you know,
Speaker 1: correct corrections. You know, we have had a couple of
Speaker 1: ten percent corrections in in the SMP five hundred, uh,
Speaker 1: you know, over the past several months. But you know,
Speaker 1: they they just they didn't last. Um and and so
Speaker 1: it's really tough, I think to call corrections during a
Speaker 1: period of time when liquidity uh is so overwhelming. I mean,
Speaker 1: and you know, again I think bitcoin. You can kind
Speaker 1: of see it in the price of bitcoin as well. Um,
Speaker 1: there's so much money being dumped into markets by central banks.
Speaker 1: UM investors have to find a place to put it
Speaker 1: um in either you know, you find a place that
Speaker 1: has some yield, and that's hard to do these days,
Speaker 1: or you're trying to find a place where prices just
Speaker 1: keep going up and up, and you can see that's
Speaker 1: that's happening in bitcoint these days. At what point is
Speaker 1: all of this optimism for a vaccine and a V
Speaker 1: shaped recovery post COVID priced in, Matthew? And how do
Speaker 1: you you know when we see something like um, Airbnb
Speaker 1: going for a hundred billion dollars um during COVID, it
Speaker 1: was only worth thirty billion dollars before COVID, Isn't that
Speaker 1: the froth that tells you something? Uh, you know, assets
Speaker 1: are overpriced here? Well, I mean, you know, equity is
Speaker 1: really not my my value wick um. But what I
Speaker 1: would say is two things. Number one, you know, markets
Speaker 1: typically priced things in uh you know, or almost entirely
Speaker 1: priced things in before they and so you know, if
Speaker 1: the market has its eye on the demand surge that
Speaker 1: should occur in services uh post vaccine distribution, i'd expect
Speaker 1: markets to to to to you know, to price that
Speaker 1: in by and large before the vaccine is completely distributed.
Speaker 1: So that would be the first way I to think
Speaker 1: about it. The second thing I would point to as
Speaker 1: the bond market. Um, you know, one of the reasons
Speaker 1: I think that yields in the US have not risen
Speaker 1: more than they have over the past couple of months,
Speaker 1: is because of the liquidity that's being distributed around markets. Now,
Speaker 1: if all of a sudden you see yields starts to
Speaker 1: rise more quickly, that would that would suggest that liquidity
Speaker 1: is not as ample as it was earlier. Um, and
Speaker 1: that might put uh, you know, kind of risky assets
Speaker 1: in more danger. But at this point, you know, you're
Speaker 1: not really seeing that the tenure treasury yield that's still
Speaker 1: below one per cent. So UM, I don't think we're
Speaker 1: there just yet. But those you the two things, the
Speaker 1: two ways I would think about it. So I gotta say, Matt,
Speaker 1: I love lists. I'm a list maker, and you've got
Speaker 1: a list of the top ten surprises. One that I
Speaker 1: thought that really stood out for me is you said
Speaker 1: immigration causes the northern lights to shine the brightest. You're
Speaker 1: looking at Canada. Yeah, absolutely, Well, we we've been bullish
Speaker 1: on the Canadian dollar for a healthy portion of two
Speaker 1: thousand twenty one UM and in our discussions with investors,
Speaker 1: you know what we had found certainly in the middle
Speaker 1: of the year, you know, but it continued throughout the
Speaker 1: course of two Uh. Is that people just are thinking
Speaker 1: that there are some structural issues with the Canadian economy,
Speaker 1: and so you know, we saw, gosh, wouldn't it be
Speaker 1: wouldn't it be a surprise if if these structural issues
Speaker 1: never really reared their heads UM, but some other issues
Speaker 1: like immigration actually carried the Canadian dollar even further higher UM.
Speaker 1: And so we decided to throw that into the mix
Speaker 1: for two one as as one of our top ten surprises.
Speaker 1: You know, I look through m A go, the m
Speaker 1: A go function on the Bloomberg, I see that there's
Speaker 1: a bigger premium Matthew being paid for Developed Asia assets
Speaker 1: right now. And I see one of your surprises is
Speaker 1: that developed market liquidity avoids emerging markets and drives a
Speaker 1: d M asset bubble. Why do you think we're ignoring
Speaker 1: emerging markets? I mean, they clearly come through this less
Speaker 1: scathed than everyone else. Yeah. Absolutely, Well, I mean the
Speaker 1: first thing to recognize is that, you know, the liquidity
Speaker 1: that's being provided by central banks UM is mostly occurring
Speaker 1: in developed markets. So it's the developed market central banks
Speaker 1: like the FED and the ECB and the Bank of
Speaker 1: Japan that are providing most of the liquidity that we've
Speaker 1: been talking about in our research, and so you have
Speaker 1: to recognize that the liquidity that's being provided, honestly, it
Speaker 1: doesn't have to go into risk assets. They could stay
Speaker 1: in bank deposit accounts, or it could stay in money
Speaker 1: market funds earning nothing if it wanted to. But you know,
Speaker 1: we don't think it wants to do that. We think
Speaker 1: it wants to go out in search of yield. And so,
Speaker 1: you know, this particular surprise that we wrote about just
Speaker 1: recognizes the fact that, look that the liquidity that's being
Speaker 1: produced in developed markets could in fact stay in developed markets. Um.
Speaker 1: And so we we started to think about, well, what
Speaker 1: would be a reason why the liquidity would not overflow
Speaker 1: the borders of developed markets into emerging markets, and ultimately,
Speaker 1: you know, it came down to the virus and um,
Speaker 1: the fact that you know, winter time for us in
Speaker 1: the northern hemisphere is not is not the same as
Speaker 1: winter time in the southern hemisphere. And so we just
Speaker 1: put two and two together and thought, well, maybe if
Speaker 1: if the virus has a resurgence in the southern hemisphere,
Speaker 1: that might uh, that might redirect that liquidity or eat
Speaker 1: that liquidity in developed markets, and and ultimately caused an
Speaker 1: acid bubble. Matthew, thanks so much for joining us. Matthew
Speaker 1: hornback there, Morgan Stanley, Global head of macro Strategy. Let's
Speaker 1: talk a bit about markets, if we may. Let's get
Speaker 1: to our guest, James Bevan is with us. You see
Speaker 1: c l A chief investment strategists joining us. Um James,
Speaker 1: how do you see it? How do you explain some
Speaker 1: of the trade? I do feel like we are in
Speaker 1: a market that reacts to headlines pretty quickly, whether they're
Speaker 1: negative or positive. You kind of get it out there
Speaker 1: pretty quickly. Indeed, right now, I would say that there
Speaker 1: is more appetite to perceive good news and statements made
Speaker 1: rather than worrying about bad news. And of course most
Speaker 1: news stories come with a bit of faith. So if
Speaker 1: you take the breaks as and nights than, for example,
Speaker 1: is unambiguously good news that there is no no deal,
Speaker 1: but it's certainly not good news to the services company
Speaker 1: news that's still facing our ambiguous future, and in particular
Speaker 1: financial services. Right now, in markets focusing on the good news,
Speaker 1: why do you think the pound isn't rallying more? James?
Speaker 1: I mean, I would have thought we heard so many
Speaker 1: forecasts that were bullush up to one, and especially on
Speaker 1: a day when the dollar is weaker once again, I
Speaker 1: would expect to see more than one thirty five in Sterling. Well,
Speaker 1: I certainly anticipate that we can see one forty five
Speaker 1: by the end of next year. But the plan still
Speaker 1: has really quite serious challenges ahead. So the Brexit deal
Speaker 1: is a step in the right direction, but it most
Speaker 1: certainly does not provide for the full resolution of the
Speaker 1: problems that the UK faces. So we will like to
Speaker 1: receive real growth in the UK economy of perhaps up
Speaker 1: to seven percentage points this year, but the UK is
Speaker 1: still poorly placed in terms of global free trade agreements.
Speaker 1: It's simply not made the progress that it wished. People
Speaker 1: say it's game to be easy. Actually, if you look
Speaker 1: at the regulatory luggage that the UK has to take
Speaker 1: the past of the Brexit deal, this issue in terms
Speaker 1: of getting free trade of the US is going to
Speaker 1: be really tricky. The Coordinator Chicken story isn't going away.
Speaker 1: And I think that these people concerned about the outlook
Speaker 1: the UK economy. What about the city James. You know,
Speaker 1: we've been talking a lot today about what happens to
Speaker 1: financial services there, and um there still hasn't been any
Speaker 1: kind of equivalency agreement. I don't know if that's gonna
Speaker 1: come even in Q one one. Do you see a
Speaker 1: lot of your h Do you see a lot of
Speaker 1: your colleagues moving back to Paris, moving back to Frankfurt,
Speaker 1: fleeing the city for the continent. Well, I would say
Speaker 1: that we have seen a general drift of both people
Speaker 1: and business activities to the Eurozone over the last four years,
Speaker 1: since the twenties sixteen Brexit vote. That was the main
Speaker 1: when the chief executives and boards of the major financial
Speaker 1: company said, Okay, guys, we've got to get ready. We
Speaker 1: know it's doing that happen. We don't know quite when,
Speaker 1: but let's position know what inevitably will happen. So I
Speaker 1: don't think it's going to come as a major shot
Speaker 1: to anybody, but many businesses already relocated ivor to Paris
Speaker 1: or to frank First. Yeah, definitely that migration, that trend
Speaker 1: is definitely something we've seen and continues. Hey, James, we're
Speaker 1: gonna leave it there. Thank you so much. James Bevan
Speaker 1: u c c L A chief investment strategist, have a
Speaker 1: good new year. We do want to talk about something
Speaker 1: that has definitely been kind of I've been obsessed with
Speaker 1: it a little bit since those Apple headlines about really
Speaker 1: aggressively again moving into the e V market. But we
Speaker 1: want to get some perspective because there's a lot going on.
Speaker 1: There has been a lot this past year, and a
Speaker 1: lot maybe in terms of expectations for the EV market.
Speaker 1: Mark Kaufman is with us Ford Motor Global Electrification Director
Speaker 1: and he joins us Uh, but a zoom on this
Speaker 1: Tuesday market. It is so good to have you here
Speaker 1: with Matt and myself. Matt's a car guy, loves talking
Speaker 1: about all things car, but I am really interested too
Speaker 1: as well. So tell me about the Apple news. Let's
Speaker 1: start there. How significant is that in your view? And
Speaker 1: it's not something going to happen tomorrow but in a
Speaker 1: few years, well, Carol, anyone who works in a traditional manufacturer,
Speaker 1: we're essentially going to expect disruption now from anyone that
Speaker 1: might be out there. Back I know a couple of
Speaker 1: years ago when Dyson was considering getting into the e
Speaker 1: V business. At that point you realize any consumer product
Speaker 1: company could come into the space besides a an you
Speaker 1: start up. So uh, it's it's very difficult. It's very
Speaker 1: expensive to the point where you know global um globally
Speaker 1: dominant companies like Ford and Folkswagen are getting together pooling resources.
Speaker 1: Can you tell us a little bit about your work
Speaker 1: with the German carmakers over here in Wolfsburg. Sure, Matt
Speaker 1: skill is so important, especially in the auto business. UM.
Speaker 1: So in a case when we have a platform, you know,
Speaker 1: most platforms have a range of products that it can
Speaker 1: be suited off of. Uh in Then in the case
Speaker 1: of our our partnership with VW, we had the the
Speaker 1: European market skews a little bit smaller than the US market,
Speaker 1: so we found there was an equal opportunity for both
Speaker 1: of us VW to get a bit more scale off
Speaker 1: off their platform, and for Ford it gave us an
Speaker 1: opportunity to have a product that's going to be slightly
Speaker 1: smaller than the product off of our dedicated platform that
Speaker 1: we have within our company. I know, one of the
Speaker 1: big problems here Mark is there just aren't enough charging stations.
Speaker 1: And although we hear from you know, partnerships like IONI
Speaker 1: that they're building them as quick as they can, they're
Speaker 1: they're certainly not building them quick enough to be ready
Speaker 1: for the demand that's coming in the next few years.
Speaker 1: How do you think that issue gets solved. Man, that's
Speaker 1: a great question. And we know a combination of both
Speaker 1: range anxiety and the ability to charge your electric vehicle
Speaker 1: when you're traveling our top of mind for consumers. We
Speaker 1: believe range anxiety as a as an example, are Mustang
Speaker 1: Maki as a range just over three hundred miles is
Speaker 1: helping on range anxiety. At the same time that that
Speaker 1: charging infrastructure continues to get built out every year, especially
Speaker 1: for the high power DC fast chargers um and it
Speaker 1: depends where you're at in the world, though a lot
Speaker 1: of consumers we're finding are still charging at their residence
Speaker 1: that they have that opportunity to because that certainly adds
Speaker 1: to the convenience of owning an EV. You know what's
Speaker 1: interesting too, though, is and I do wonder, you know,
Speaker 1: Mark safe to say, I think it's it's it's fair
Speaker 1: to kind of respect what test Lady lawn Musk did
Speaker 1: that kind of woke up the auto industry and so
Speaker 1: that you can, you know, maybe move faster than everybody
Speaker 1: anticipated when it came to the e V market. And
Speaker 1: I do wonder in terms of strategy and when you
Speaker 1: look at maybe what happens next year. You know, how
Speaker 1: has kind of the timetable changed dramatically and could have
Speaker 1: changed even more so, meaning sooner rather than later. Yeah,
Speaker 1: I would say as I as I look back at
Speaker 1: I know for me the biggest surprise on the year
Speaker 1: is just how quickly the European market has moved to
Speaker 1: NEVY adoption. I would say that was a little bit
Speaker 1: higher than what we had forecasted at this time last year. Uh.
Speaker 1: And part of that is you're seeing more products come
Speaker 1: out so as that EB offering is expanding from other
Speaker 1: manufacturers both RENA and VW having products in the market
Speaker 1: and the European markets. That has accelerated the growth. Uh.
Speaker 1: And at this point, um, you know, we're seeing in
Speaker 1: both Europe and China there there's a clear race for
Speaker 1: leadership there in the e V space. Mark Kaufman is
Speaker 1: still with us for Motor Global Electrification Director, and Mark,
Speaker 1: I want to hear about some of the products. As
Speaker 1: you can tell, I'm very close to the Ford family.
Speaker 1: I've spent a lot of time um uh with your boss. Um.
Speaker 1: I've Alan Mollally is a very close personal friend of mine. UH.
Speaker 1: And I wonder what's next you know, you've got them,
Speaker 1: You've got the Mocke, and you've got this partnership with Volkswagen.
Speaker 1: What else can you come out with that's gonna blow
Speaker 1: our minds? Well, first, coming late summer in twenty one,
Speaker 1: we've got the Mustang Maki GT so that is the
Speaker 1: performance version of that product. Um so we're super enthusiastic
Speaker 1: about that. You've just got fantastic fo horsepower, six hundred
Speaker 1: and thirty four foot pounds of instant torque in that
Speaker 1: EV so that's gonna delight customers in that space. But
Speaker 1: even more importantly, with thirty five years of commercial vehicle leadership,
Speaker 1: we've got a transit full battery electric vehicle the in
Speaker 1: coming out UH and that comes in lots of configurations
Speaker 1: to meet a wide breadth of consumer needs. And that's
Speaker 1: a that's also in one. In late twenty two, we're
Speaker 1: tapping into probably our most iconic nameplate with an F
Speaker 1: one fifty full battery electric vehicle launching and a lot
Speaker 1: of people know the F one fifty is probably my
Speaker 1: favorite vehicle of all time. I had the six point
Speaker 1: two Leader Raptor version, which was amazing. I love torque
Speaker 1: if you could deliver it to me with the battery,
Speaker 1: I honestly don't care if it comes from internal combustion
Speaker 1: UM or electric. It sounds like it would work great
Speaker 1: in a transit as well, which has an amazing product.
Speaker 1: What about your partnership with Volkswagen though we talked a
Speaker 1: little bit about it in the past, Block and I'm
Speaker 1: wondering can you envision another model? Can you envision deepening
Speaker 1: that partnership because it's such an exciting transatlantic uh A
Speaker 1: joint venture? Yeah, Matt Ford Forward continues to be open
Speaker 1: to strategic partnership, so where they make good sense. Uh.
Speaker 1: And clearly you know that that first relationship with VWS
Speaker 1: the start. We also have an equity interest in Ribbans,
Speaker 1: so we've shown that where it makes sense for Ford,
Speaker 1: we're certainly going to be open to those partnerships. Hey.
Speaker 1: You know, Mark, I just want to follow up on
Speaker 1: what you said about the Machi and I do wonder
Speaker 1: if you guys are going to allocate more to Europe
Speaker 1: next year to meet um some of the and comply
Speaker 1: with some of the tougher COOT standards, because I and
Speaker 1: I'd love to also get your thoughts about e V
Speaker 1: and Europe. Does it kind of is it a breakthrough
Speaker 1: year next year? Yeah, let's start with uh. I mentioned
Speaker 1: the growth in Europe this year, especially in markets. You've
Speaker 1: got your big three core markets between Germany, UK and
Speaker 1: France that have really accelerated this year. So when we
Speaker 1: start thinking about that technology adoption curve, you know, there's
Speaker 1: usually a breakpoint from two and a half percent is
Speaker 1: usually where you start moving into early adopters. And as
Speaker 1: we're finishing up twenty one, all three of those markets
Speaker 1: now have tipped up to about five percent EV share
Speaker 1: of industry, So we're gonna expect continued growth in in
Speaker 1: those markets. Does that mean allocating more makis? So we're
Speaker 1: we're always we're always, we're always looking to to get
Speaker 1: product to customers. UH. And obviously having having demand for
Speaker 1: those products and pool is going to be fantastic for us.
Speaker 1: So I once I one think I want to ask
Speaker 1: you too. And going back to Tesla for a moment,
Speaker 1: because they really, like I said, you know, I think
Speaker 1: everyone would agree that they really shook up the EV market,
Speaker 1: But I do wonder some of the problems that they've
Speaker 1: had quality issues. Does that provide openings? Do you think
Speaker 1: for some of the established auto players. I don't think,
Speaker 1: you know, for anyone who's coming new into the auto space,
Speaker 1: I think you should underestimate the essentially the value of
Speaker 1: a good distribution network and the ability to take care
Speaker 1: of customers. So just maybe to give you some quick
Speaker 1: U S numbers, we have twenty one d e V
Speaker 1: certified dealers in the US UH, and we have ten
Speaker 1: thousand training service technicians who are capable of dropping batteries
Speaker 1: off of cars. Unfortunately, accidents happen within the world, and
Speaker 1: you know, for the ability to get cars into our
Speaker 1: service base at forward and back out, we think is
Speaker 1: going to be a continued advantage for us. Yeah. I
Speaker 1: wonder about service bays. I mean, how necessary will they
Speaker 1: be when you have electric cars? UM, I assume if
Speaker 1: you do a better job than some rivals at quality,
Speaker 1: you're gonna need fewer repairs. You're also gonna need actually
Speaker 1: fewer people to build them. Right. Is it just going
Speaker 1: to be a less people intensive business car making? Yeah,
Speaker 1: it gives us I think a little bit of room
Speaker 1: to to have more what we would call top hats
Speaker 1: or more product configurations off of a platform and a plant.
Speaker 1: So the line length for an electric vehicle, UH, is
Speaker 1: about thirty shorter than a traditional line, so it is
Speaker 1: a little bit more efficient. So in a case where
Speaker 1: before we might have, you know, just one product at
Speaker 1: a plant, we might be able to get two products
Speaker 1: in off of the same platform. So there are some
Speaker 1: efficiencies that will have and while service patterns certainly change
Speaker 1: with that, we we still think there's there's going to
Speaker 1: be good ongoing throughput. As I said, unfortunately, accidents to happen,
Speaker 1: so getting customers in and out quickly, UH is going
Speaker 1: to be important for us. All Right, really fun discussion.
Speaker 1: Matt's all in on cars, but I just want for
Speaker 1: the record Mark, I also am into torque. I'm just
Speaker 1: gonna put it out there. Okay, Um, Mark, thank you
Speaker 1: so much. Have a great new year. We look forward
Speaker 1: to talking to you next year. Mark Kaufman, he's Global
Speaker 1: Electrification director over at Ford Motor. Thanks for listening to
Speaker 1: the Bloomberg Surveillance podcast. Subscribe and listen to interviews on
Speaker 1: Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm
Speaker 1: on Twitter at Tom Keane before the podcast. You can
Speaker 1: always catch us worldwide. I'm Bloomberg Radio