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Speaker 1: Good morning. It's Thursday, the twenty fifth of January here

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Speaker 1: in London. This is the Blueberg Dabac podcast.

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Speaker 2: I'm Caroline Hebkit.

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Speaker 3: And I'm Stephen Carroll. Coming up today, Investors grow skeptical

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Speaker 3: of Tesla's prospects, despite Musk's upbeat outlook for the electric

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Speaker 3: car giant.

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Speaker 1: US regulators block any increase in production of Boeing's seven

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Speaker 1: to three seven Max jets, as the firm's CEO insists

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Speaker 1: that their planes are safe.

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Speaker 3: And as the UK government pushes ahead with its Rwanda

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Speaker 3: deportation plan. We have a special report on the country's

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Speaker 3: economic transformation despite human rights concerns.

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

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Speaker 3: Shares in Tesla slid postmarket after the electric vehicle maker

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Speaker 3: said it expects sales growth to be notably lower this year.

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Speaker 3: In twenty twenty three, the company slashed prices to sell

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Speaker 3: more cars, but warns that the move is unlikely to

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Speaker 3: be as effective. In twenty twenty four, CEO Elon Musk

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Speaker 3: sought to put a positive spin on the news.

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Speaker 4: There's like to look forward to. In twenty twenty four.

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Speaker 4: Telo is currently between two major growth waves. We're folks

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Speaker 4: on making sure that our next growth wave, driven by

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Speaker 4: next gen vehicle, energy storage, full self driving other products,

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Speaker 4: is executed as well as possible.

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Speaker 3: Mosk's assessment came as the company chose not to offer

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Speaker 3: a full year guidance for sales growth. Tesla has long

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Speaker 3: targeted an annual growth rate of fifty percent over multiple years,

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Speaker 3: but analysts predict the carmaker sales will rise by just

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Speaker 3: twenty percent to two point two million in twenty twenty four.

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Speaker 1: US aviation regulators have ordered Boeing to halt further production

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Speaker 1: increases for the seven to three seven Max aircraft. The

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Speaker 1: FAA decision leaves the plane maker unable to boost output

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Speaker 1: of its cash cow jetliners at a time when airlines

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Speaker 1: are clamoring for new planes. Boeing's in battled CEO Dave Calhoun,

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Speaker 1: met you with US senators on Wednesday, as the company

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Speaker 1: faces mounting questions over quality control. Before the meeting, he

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Speaker 1: was asked what message he has for concerned passengers.

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Speaker 5: We fly safe planes. We don't put airplanes in the

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Speaker 5: air that we don't have one hundred percent confidence in.

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Speaker 5: I'm here today in the spirit of transparency to number one,

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Speaker 5: recognize the seriousness of what you just asked Number two

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Speaker 5: to share everything I can with our Capitol Hill interest

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Speaker 5: and answer all their questions because they have a lot

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Speaker 5: of them.

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Speaker 1: Dave Calhoun's trip to the Capital came as the FAA

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Speaker 1: cleared the way for a version of the Boeing jet

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Speaker 1: involved in the Alaska Airlines blowout of a door panel

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Speaker 1: in January to return to the skies.

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Speaker 3: The next UK government faces the worst fiscal inheritance in

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Speaker 3: seventy years. That dining indictment comes from the Institute of

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Speaker 3: Fiscal Studies, who say any future government will have a

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Speaker 3: colossal public debt problem. Earlier this week, Chair of the

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Speaker 3: Office for Budget Responsibility, Richard Hughes criticized the lack of

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Speaker 3: detail in the Conservative government's spending forecasts.

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Speaker 6: We're required to rely on what the government tells us

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Speaker 6: is its desired path for spending on public services, so

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Speaker 6: departmental expenditure limits. At the moment it has those falling

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Speaker 6: as a share of GDP, but the government provides almost

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Speaker 6: no detail about how that is delivered. Some people have

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Speaker 6: referred to that as a work of fiction. I think

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Speaker 6: that's I think that's probably generous, given that someone's bothered

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Speaker 6: to write a work of fiction, whereas the government has

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Speaker 6: even bothered to write down what its departmental spending plans

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Speaker 6: are underpinning the plans for public public services.

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Speaker 3: He us his independent watchdog sets the amount of fiscal

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Speaker 3: hedo many Chancellor has to spend. He and the IFS

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Speaker 3: are among some of the groups pressuring the government to

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Speaker 3: publish detailed spending plans beyond twenty twenty five as it

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Speaker 3: prepares for a tax cutting budget.

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Speaker 1: British billionaire Joe Lewis has pled guilty to insider trading,

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Speaker 1: accused of passing stock tips to his private pilots and

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Speaker 1: former girlfriend. Lewis pled guilty to three counts of securities

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Speaker 1: forward including can Spare Prae, had a hearing in court

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Speaker 1: in Manhattan. The news comes six months after the former

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Speaker 1: Tottenham Hotspur football club owner was charged with more than

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Speaker 1: a dozen counts. Speaking to the judge, the eighty six

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Speaker 1: year old founder of the investment firm Tavistock Group said

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Speaker 1: that he quote knew at the time what he was

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Speaker 1: doing was wrong. This is expected to be sentenced in March.

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Speaker 1: The plea deal will likely drastically reduce the length of

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Speaker 1: any sentence he faces.

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Speaker 3: As the UK debates Ruwanda's safety as a destination for migrants.

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Speaker 3: For the African country, it's the latest in a series

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Speaker 3: of deals with the West. Bloomberg BusinessWeek is charting the

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Speaker 3: remarkable turnaround in a country with growth averaging seven point

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Speaker 3: two percent annually in the decade to twenty nineteen, thirty

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Speaker 3: years after its genocide. Bloomberg James Wilcock has more.

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Speaker 7: It's been called the Singapore of Africa, held up as

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Speaker 7: a model of corporate sponsorships, foreign investment and high government efficiency.

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Speaker 7: Many how longtime leader President Paul Kagame for his ruthless

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Speaker 7: focus on efficiency. He told Bloomberg last year that European

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Speaker 7: nations are seeking him out for help.

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Speaker 8: We did not head a big nabuddy to work with

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Speaker 8: us or to send migrants to Truando. In fact, we

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Speaker 8: start to do with the recitlering and receiving people from

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Speaker 8: Libya from that, learning from that, that is how the

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Speaker 8: UK and there are the actually European countries that have

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Speaker 8: been conducting us to address this.

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Speaker 7: But Kagame's prominence on the international stage comes with a

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Speaker 7: darker side. Political opposition is essentially outlawed. There are allegations

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Speaker 7: of distance ends up exiled or dead, even as Kagame

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Speaker 7: has possibly become the West's most important African ally in London,

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Speaker 7: James Wilcock Bloomberg Radio.

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Speaker 1: The European Central Bank is universally expected to leave interest

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Speaker 1: rates unchanged in its first monetary policy decision of the

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Speaker 1: year later today. Instead, the focus is on Christine the

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Speaker 1: Guard's press conference and any fresh signals on the outlook

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Speaker 1: for lowering borrowing costs. Speaking to Bloomberg at the World's

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Speaker 1: Economic Forum in Davels earlier this month, the ECB president

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Speaker 1: emphasized the dangers of cutting interest rates too quickly.

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Speaker 9: I'm confident that short off another major shock, we have

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Speaker 9: reached a peak. We have to stay restrictive for as

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Speaker 9: long as necessary to make sure that we get to

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Speaker 9: that state where we are all saying, okay, confident that

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Speaker 9: it is at two percent medium term. I know some

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Speaker 9: people argue that maybe we are overshooting, maybe we're taking risks.

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Speaker 9: I think the risk would be worse if we went

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Speaker 9: too fast and had to come back to more tightening.

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Speaker 1: Christine Legarde speaking. Some ECB officials expressed concern at December's

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Speaker 1: policy meeting that rate cuts already priced in by the

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Speaker 1: market could quote derail the disinflationary process. Dutch Central Bank

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Speaker 1: governor class not echoed those sentiments.

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Speaker 3: Last week, pay for senior investment bankers in Asia has

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Speaker 3: fallen to its lowest level and decades. Bloomberg has learned

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Speaker 3: the compensation at some of All Street's biggest names in

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Speaker 3: the region has dropped well below the one million dollar

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Speaker 3: mark typically earned since the turn of the millennium. One

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Speaker 3: in five managing directors at banks including Morgan Stanley and

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Speaker 3: UBS and ASA received no bonus whatsoever. Pay is crumbling

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Speaker 3: as firms seek to cut expensesmid one of the worst

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Speaker 3: deal droughts ever seen, fueled by rising political tension and

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Speaker 3: a crackdown on private enterprise in China. In a moment,

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Speaker 3: we'll dig into the details of those results from Tesla.

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Speaker 3: But first a headline that caught my eye. If you're

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Speaker 3: following the US election this year, familiar face returning, It's

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Speaker 3: not Donald Trump, It's John Stewart is coming back to

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Speaker 3: do the Daily Show after a nine year absence. Is

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Speaker 3: going to do one show week Monday Night shows. Interesting

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Speaker 3: fact in this piece on the terminal on Bloomberg dot

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Speaker 3: Com is that Monday Night's the period where They get

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Speaker 3: the highest audiences for these sort of programs because people

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Speaker 3: catch up on all the news that happened over the weekend.

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Speaker 1: The thing is, the great thing about the Daily Show

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Speaker 1: is that it was daily. So wonder how how the

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Speaker 1: transformation to once a week will be. But yeah, starting

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Speaker 1: in February apparently.

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Speaker 3: Yeah, exactly, And part of John Stewart's role in coming

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Speaker 3: back to the show is going to be developed to

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Speaker 3: develop new talent as well, because of course Trevor Noah

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Speaker 3: who took over, has also stepped down from the show too,

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Speaker 3: so they're looking They've been using a rotating series of

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Speaker 3: guests hosts in the meantime, so he'll be out there

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Speaker 3: to spot new talent. So if I disappear, Caroline, you'll

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Speaker 3: know what.

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Speaker 1: Oh yes, if you get the chap on the shoulder,

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Speaker 1: absolutely I'd be there in the green room. The other

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Speaker 1: thing to say, though, is I've read around this story.

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Speaker 1: This is the announcement. Haven't quite nailed down how you're

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Speaker 1: going to be able to watch the program in the UK.

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Speaker 1: It's always a bit difficult online to find it. But

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Speaker 1: there we are.

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Speaker 3: Indeed. Okay, well, look, let's turn back to those results

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Speaker 3: that we talked about from Tesla, the company delivering more

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Speaker 3: vehicles than expected in the fourth quarter, but falling behind

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Speaker 3: China's BYD and global electric car sales. Elon Musk says

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Speaker 3: he expects a major growth wave from new low cost

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Speaker 3: cars later next year. Shares fell six percent in extended

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Speaker 3: trading on Wall Street. Joining US Now with the details

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Speaker 3: Boomberg's Oliver Oliver, good morning to you. Elon Musk says

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Speaker 3: that growth is coming, but shareholders are concerned.

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Speaker 1: Why Yeah.

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Speaker 10: He also said, and I think this is probably going

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Speaker 10: to be the top line that everyone runs with from

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Speaker 10: the earnings, that sales growth will be quote notably lower, right,

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Speaker 10: And this is sort of a company that is used

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Speaker 10: to sort of face ripping speed in terms of growth.

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Speaker 10: Things are slowing down a bit for Tesla. But it's

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Speaker 10: not really necessarily a Tesla's story, right, This is an

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Speaker 10: EV story. This is a car industry story. So he's

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Speaker 10: contending with the number of different things that are across

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Speaker 10: the sector. There's the EV slowdown that seems to be

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Speaker 10: sort of real and going to materialize in twenty twenty four.

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Speaker 10: He also mentioned interest rates on the call, quote directly,

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Speaker 10: if interest rates come down quickly, margins will be good

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Speaker 10: and if they don't, they won't be good. Pretty simple there.

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Speaker 10: And there's also the competition from China, as you mentioned

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Speaker 10: byd overtaking and really wrapping up in the EV competition.

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Speaker 10: But this is also a market that is immature, the

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Speaker 10: EV market, and is gaining maturity, and the reality of

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Speaker 10: that is going to take some time. And there's also

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Speaker 10: a slowdown, not just in the EV market, but there's

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Speaker 10: questions about the broader auto mark at Bernstein out saying

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Speaker 10: that basically the auto market's been in goldilocks for three

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Speaker 10: years because supply has been constrained and that is going

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Speaker 10: away in all three major markets. And yes, six percent

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Speaker 10: is down, but guys, I was looking at this in

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Speaker 10: the last five years, Tesla's up one thousand percent. Literally,

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Speaker 10: it's the fourth best performer on the SMP and it

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Speaker 10: has a market cap of more than six hundred and

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Speaker 10: fifty billion dollars.

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Speaker 1: So yeah, context it's very important, isn't it, And over

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Speaker 1: what time frame you're looking at things speaking? Which did

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Speaker 1: aggressive price cuts work then for Tesla's vehicles, because that

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Speaker 1: also seemed to be the big headline out of last year.

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Speaker 10: Yeah, and I think it did work for them. And

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Speaker 10: they were in a position where they had these great

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Speaker 10: margins on evs when other companies were just hemorrhaging cash

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Speaker 10: when it came to selling their new vehicles. And the

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Speaker 10: reality on that is sort of is sort of changing now.

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Speaker 10: A lot of the traditional automakers are going to probably

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Speaker 10: be selling ices for a bit longer and continuing to

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Speaker 10: make money off of that. But again, Tesla's in a

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Speaker 10: great position from this. What's interesting is with the teasing

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Speaker 10: of this new car is hanging some new hopes on

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Speaker 10: that and some more growth there. And that's you know,

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Speaker 10: because their entry level car in the US is something

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Speaker 10: like forty five thousand dollars. With BYD coming in with

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Speaker 10: much cheaper cars, you know, they're starting to look at

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Speaker 10: how they're going to be able to sell cheaper cars.

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Speaker 10: And you know, another thing that Elin was talking about

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Speaker 10: on the call was that the production is going to

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Speaker 10: be a challenge. But we also need to remember that

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Speaker 10: Tesla's breakthroughs has not just been in electric vehicles. It

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Speaker 10: has been in vehicle manufacturing and breakthrough technologies with their

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Speaker 10: gigapresses printing larger parts of the car. And he says

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Speaker 10: that they're sort of looking at things like this for

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Speaker 10: their new car. It's going to be a challenge, but

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Speaker 10: you know, in challenging circumstances when they make those massive breakthroughs.

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Speaker 3: Okay, Oliver Crook, thank you very much for bringing us

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Speaker 3: up to date in the details of those latest earnings

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Speaker 3: from Tesla.

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Speaker 1: Yeah, very interesting on Tesla. Let's turn our attention though

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Speaker 1: to a big story that we have out this morning. Rwanda.

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Speaker 1: Is it the center of a political fa storm here

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Speaker 1: in the UK, which has struck a deal with the

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Speaker 1: tiny African country to take in foreign migrants in exchange

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Speaker 1: for hundreds of millions of pounds. Bloomberg's Africa editor Neil

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Speaker 1: Munschi has a story out today in Business Week about

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Speaker 1: how Rwanda's President Paul Kagame has turned the country into

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Speaker 1: perhaps the West's most important African ally, even as his

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Speaker 1: government quashes descent and critics decry his human rights record.

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Speaker 1: And Neil Munschi joins us now for more. Good to

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Speaker 1: have you with us on the program. Neil, good morning.

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Speaker 1: What makes Rwanda such an important ally to the West.

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Speaker 2: It's really this kind of reputation they have for efficiency

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Speaker 2: and kind of cleanliness of governance. So there's the UK deal,

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Speaker 2: but there's also on the security side. Their army is

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Speaker 2: sort of the most well respected, well trained army on

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Speaker 2: the continent. So when Totel, the big French spoiled giant,

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Speaker 2: had a problem with their twenty billion dollars LNG project

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Speaker 2: in Mozambique, the Rwandans came in and routed the Jihades

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Speaker 2: that had kind of taken over the area. And because

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Speaker 2: of that, the US now wants Rwanda to kind of

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Speaker 2: take more of a piece of the security business on

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Speaker 2: the continent that's been kind of dominated by the Wagner

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Speaker 2: group from Russia for the last while and foreign donors.

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Speaker 2: When they show up in Keagali, the capital of Rwanda,

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Speaker 2: they see you paid roads, nice infrastructure. They see what

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Speaker 2: they see is their dollars being spent on building the

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Speaker 2: state rather than in some other countries it would go

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Speaker 2: into the minister's pockets.

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Speaker 3: How big a role does the President Paul Kagame play

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Speaker 3: in all of this.

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Speaker 2: He's really at the center of everything. He's essentially been

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Speaker 2: in charge of the country since nineteen ninety four when

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Speaker 2: he led this rebel army through the bush to liberate

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Speaker 2: the country from the genocide that it killed nearly a

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Speaker 2: million people. In one hundred days.

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Speaker 3: Since then, he's won more than.

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Speaker 2: Ninety percent in every election. Really kind of every decision

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Speaker 2: kind of comes back to him, and he's revered within

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Speaker 2: the country by many as a kind of saint for

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Speaker 2: saving the country, ensuring nothing like the genocide has happened

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Speaker 2: again and overseeing this really kind of remarkable economic transformation.

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Speaker 1: Tell us a bit more about the transformation then and

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Speaker 1: what that has entailed.

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Speaker 2: You know, after the genocide, Rwanda was really a country

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Speaker 2: that was kind of left for dead, and thirty years

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Speaker 2: later it's one of the most developed countries in Africa.

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Speaker 2: You know, in Kigali you see more conferences and major

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Speaker 2: events from likes of Beef, the Commonwealth, the NBA than

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Speaker 2: far bigger, richer cities like Nairobi or Cape Town. GDP

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Speaker 2: for Capita has risen dramatically, along with all the scores

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Speaker 2: on sort of development indexes for the country. If you

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Speaker 2: talk to Africans and other countries, they talk openly about

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Speaker 2: how they wish they had what Rwanda has.

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Speaker 3: Is it a dark side to all this as well, Neil, Yeah,

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Speaker 3: and that's.

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Speaker 2: Kind of that the heart of this political furor in

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Speaker 2: the UK. You know, this isn't a liberal democracy. There's

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Speaker 2: no free expression or real political opposition in the country,

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Speaker 2: and there's a long line of dissidents, including officials who

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Speaker 2: are very close to the president, who've ended up exiled

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Speaker 2: or dead. With allegations from critics and from governments including

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Speaker 2: South Africa and the US State Department that Rwanda was involved.

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Speaker 2: The Rwandan government denies these allegations, but it's all kind

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Speaker 2: of part of this tension of Rwanda around Rwanda that

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Speaker 2: makes it so polarizing, this kind of undeniable economic transformation

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Speaker 2: on the one hand, and on the other hand, the

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Speaker 2: means that the government's alleged to have used to achieve it.

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Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 3: stories making news from London to Wall Street and beyond.

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Speaker 1: I'm Caroline Hepka and.

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