1
00:00:02,400 --> 00:00:03,000
Speaker 1: Good morning.

2
00:00:03,120 --> 00:00:05,880
Speaker 2: I'm Brian Curtis and I'm Doug Krisner. Here are the

3
00:00:05,920 --> 00:00:09,600
Speaker 2: stories we're following today.

4
00:00:09,720 --> 00:00:12,440
Speaker 1: A lot of movement here around Boeing seven thirty seven

5
00:00:12,520 --> 00:00:14,880
Speaker 1: Max nine today. Let's get to head bax to with

6
00:00:14,960 --> 00:00:16,919
Speaker 1: that story and more from the nine to sixty news

7
00:00:16,960 --> 00:00:18,040
Speaker 1: room in San Francisco.

8
00:00:18,160 --> 00:00:20,919
Speaker 3: And yeah, so let's go through it. Brian, Number one,

9
00:00:21,120 --> 00:00:25,560
Speaker 3: FA is halting all Boeing Max production expansion, including the

10
00:00:25,640 --> 00:00:29,040
Speaker 3: seven thirty seven nine. And this while Boeing CEO Dave

11
00:00:29,120 --> 00:00:32,599
Speaker 3: Calhoun is on Capitol Hill today meeting with Senators answering

12
00:00:32,680 --> 00:00:36,479
Speaker 3: questions about or trying to answer questions about safety of

13
00:00:36,560 --> 00:00:40,680
Speaker 3: the Max. Calhoun is standing by his product, we don't

14
00:00:40,680 --> 00:00:42,879
Speaker 3: put airplanes in the air that we don't have one

15
00:00:42,920 --> 00:00:44,120
Speaker 3: hundred percent confidence in.

16
00:00:44,760 --> 00:00:47,200
Speaker 1: I'm here today in the spirit of transparencies.

17
00:00:47,520 --> 00:00:49,400
Speaker 3: Yeah, but this comes with the public knowledge of the

18
00:00:49,400 --> 00:00:52,360
Speaker 3: panel blowout on Alaska plane mid flight, as well as

19
00:00:52,560 --> 00:00:56,280
Speaker 3: Alaska's CEO saying it found multiple loose bolts on many planes.

20
00:00:56,760 --> 00:01:01,560
Speaker 3: So Bloomberg's Abigail Doolittle says, consumers and investors are trying

21
00:01:01,600 --> 00:01:03,480
Speaker 3: to make some kind of sense of all of it.

22
00:01:03,560 --> 00:01:05,720
Speaker 4: The idea that you're hearing the CEO of a major

23
00:01:06,160 --> 00:01:10,040
Speaker 4: airline manufacturer saying we fly safeplans. That's just something that

24
00:01:10,080 --> 00:01:12,480
Speaker 4: you take for granted. But after the two trategies in

25
00:01:12,520 --> 00:01:16,200
Speaker 4: twenty eighteen, twenty nineteen, the rudder issue last year, the

26
00:01:16,200 --> 00:01:19,040
Speaker 4: door plug blowing out. Last Saturday, a wheel fell off,

27
00:01:19,200 --> 00:01:20,800
Speaker 4: I mean, they really have a situations.

28
00:01:21,080 --> 00:01:23,640
Speaker 3: And again the Alaska air says it'll bring back it's

29
00:01:23,640 --> 00:01:27,679
Speaker 3: first seven thirty seven nine. On Friday, President Joe Biden

30
00:01:27,720 --> 00:01:30,960
Speaker 3: is securing the endorsement of the United Autoworkers' Union Union

31
00:01:31,000 --> 00:01:34,160
Speaker 3: president Sean Fain, saying, the issue of the president's age

32
00:01:34,200 --> 00:01:35,520
Speaker 3: is bs and.

33
00:01:35,600 --> 00:01:38,920
Speaker 5: If we're going to grow our union and organize the

34
00:01:39,000 --> 00:01:42,640
Speaker 5: unorganized and help the working class, we have to have

35
00:01:42,720 --> 00:01:44,080
Speaker 5: the right people in power.

36
00:01:44,400 --> 00:01:47,600
Speaker 3: And he says the other guy, Donald Trump, is a

37
00:01:47,760 --> 00:01:53,320
Speaker 3: scab and Biden wall Street didn't go to America. The

38
00:01:53,320 --> 00:01:56,880
Speaker 3: moon class built America, and Union's built the moon class,

39
00:01:58,360 --> 00:02:01,120
Speaker 3: and Biden would have a very tough fight without a twin.

40
00:02:01,280 --> 00:02:05,440
Speaker 3: Fane says that he has earned that endorsement. Nikki Haley

41
00:02:05,440 --> 00:02:09,160
Speaker 3: reinforcing today she's still in and she's still attracting some

42
00:02:09,360 --> 00:02:12,480
Speaker 3: wealthy donors who are definitely keeping the campaign afloat.

43
00:02:12,639 --> 00:02:15,720
Speaker 4: My parents came here fifty years ago to an America

44
00:02:15,760 --> 00:02:18,880
Speaker 4: that was strong and proud and full of opportunities.

45
00:02:19,720 --> 00:02:21,480
Speaker 6: I want them to know that country again.

46
00:02:21,600 --> 00:02:24,400
Speaker 3: And Reuters reporting that Donald Trump is furious, saying she

47
00:02:24,480 --> 00:02:26,800
Speaker 3: needs to get out so he can focus on Biden,

48
00:02:26,880 --> 00:02:29,679
Speaker 3: but former House Speaker Kevin McCarthy says he should do

49
00:02:29,720 --> 00:02:32,800
Speaker 3: it anyway. He was on Bloomberg Surveillance today saying that

50
00:02:32,880 --> 00:02:35,280
Speaker 3: he doesn't think Haley will risk losing her home state

51
00:02:35,320 --> 00:02:38,240
Speaker 3: of South Carolina next month. He says Trump just needs

52
00:02:38,280 --> 00:02:40,560
Speaker 3: to go ahead and focus now on Biden.

53
00:02:40,639 --> 00:02:43,959
Speaker 6: So if I was Trump, I would start pulling Biden out.

54
00:02:44,040 --> 00:02:46,639
Speaker 6: I would make the issue. But remember, a re election

55
00:02:46,919 --> 00:02:50,680
Speaker 6: is a report card. Your first election is aspirational. What

56
00:02:50,680 --> 00:02:51,959
Speaker 6: are you going to do now? There's going to be

57
00:02:52,000 --> 00:02:53,720
Speaker 6: a report card what you did now?

58
00:02:53,760 --> 00:02:56,639
Speaker 3: The latest a Real Clear Politics polling average puts Haley

59
00:02:56,680 --> 00:03:00,919
Speaker 3: about thirty points at this point behind Donald Trump. And

60
00:03:01,360 --> 00:03:04,560
Speaker 3: let's get a lightning bolt for Jim Harbaugh, should we.

61
00:03:04,560 --> 00:03:07,640
Speaker 3: We're hearing that the Harbaugh's returning to the NFL. Washington

62
00:03:07,680 --> 00:03:12,239
Speaker 3: Post reporting that he is finalizing a deal with the

63
00:03:12,400 --> 00:03:15,240
Speaker 3: LA Chargers and that borrowing any last minut of hang

64
00:03:15,320 --> 00:03:19,280
Speaker 3: ups that he will have a deal in San Francisco.

65
00:03:19,320 --> 00:03:22,320
Speaker 3: I'm at Baxter and this is Bloomberg gar Brian all.

66
00:03:22,320 --> 00:03:24,880
Speaker 1: Right, ed, thanks very much. This is Bloomberg, Debreak, Asia,

67
00:03:24,880 --> 00:03:28,480
Speaker 1: Brian Curtis and Dead Chrisner. And we've been talking about Boeing. Well,

68
00:03:28,760 --> 00:03:33,200
Speaker 1: today we actually have another hurdle for Boeing in the

69
00:03:33,200 --> 00:03:37,200
Speaker 1: wake of the ongoing quality control issues. Today, the US

70
00:03:37,280 --> 00:03:41,520
Speaker 1: Federal Aviation Administration said it would not approve production expansions

71
00:03:41,600 --> 00:03:45,120
Speaker 1: for Boeing seven thirty seven Max. The move Race's questions

72
00:03:45,160 --> 00:03:48,200
Speaker 1: about Boeing's plan to open a fourth production line for

73
00:03:48,240 --> 00:03:51,440
Speaker 1: the seven thirty seven later this year. Bloomberg's Danny Lee

74
00:03:51,440 --> 00:03:54,600
Speaker 1: breaks down what this means for Boeing's bottom line.

75
00:03:54,840 --> 00:03:58,560
Speaker 7: What's key here is that Boeing It's critical Semphy seven

76
00:03:58,600 --> 00:04:03,040
Speaker 7: mex cash Cow plane. Ultimately it was producing thirty eight

77
00:04:03,040 --> 00:04:05,160
Speaker 7: planes a month, and it was going to add a

78
00:04:05,200 --> 00:04:08,400
Speaker 7: fourth production line in Seattle, which means could go up

79
00:04:08,400 --> 00:04:11,560
Speaker 7: to fifty planes a month. And you think about the

80
00:04:11,560 --> 00:04:14,840
Speaker 7: millions of billions of dollars it would ultimately generate once

81
00:04:14,880 --> 00:04:18,120
Speaker 7: this comes to fruition over the next couple of years.

82
00:04:18,320 --> 00:04:21,599
Speaker 1: Bloom breaks Danny Lee. The FAA says it will not

83
00:04:21,720 --> 00:04:24,520
Speaker 1: be back to business as usual for Boeing until quality

84
00:04:24,560 --> 00:04:28,200
Speaker 1: control issues are resolved. At the same time, the FAA

85
00:04:28,240 --> 00:04:32,080
Speaker 1: has approved inspection procedures that airlines must carry out in

86
00:04:32,160 --> 00:04:35,200
Speaker 1: order to resume seven thirty seven MAX flights, so there

87
00:04:35,279 --> 00:04:38,520
Speaker 1: is a path there. Alaska Airlines says that it will

88
00:04:38,880 --> 00:04:41,960
Speaker 1: bring its first Max nine back into service on January

89
00:04:41,960 --> 00:04:42,719
Speaker 1: twenty sixth.

90
00:04:42,839 --> 00:04:45,480
Speaker 2: Let's go to China next. The Central Bank saying that

91
00:04:45,520 --> 00:04:49,040
Speaker 2: it will cut the reserve requirement ratio for banks by

92
00:04:49,120 --> 00:04:53,400
Speaker 2: fifty basis points on February fifth. Story Now from Bloomberg's

93
00:04:53,440 --> 00:04:54,400
Speaker 2: Joan Wong In Hong.

94
00:04:54,320 --> 00:04:57,679
Speaker 8: Kong, PBOC Governor Pangong Chan said the cut will provide

95
00:04:57,720 --> 00:05:00,480
Speaker 8: one hundred and thirty nine billion dollars in the liquidity

96
00:05:00,520 --> 00:05:03,760
Speaker 8: to the market. Pahn also hinted at old measures to come.

97
00:05:04,040 --> 00:05:07,560
Speaker 8: After the announcement, regulators added more measures to bolster this

98
00:05:07,680 --> 00:05:12,080
Speaker 8: slumping property and stock markets. Measures include roddening the use

99
00:05:12,120 --> 00:05:15,120
Speaker 8: of commercial property loans and boost in China and Hong

100
00:05:15,200 --> 00:05:18,359
Speaker 8: Kong equities. The changes seem to show mounting urgency in

101
00:05:18,480 --> 00:05:21,520
Speaker 8: China to shore up the economy. In Hong Kong joined

102
00:05:21,520 --> 00:05:22,640
Speaker 8: Wong Bloomberg Radio.

103
00:05:23,720 --> 00:05:28,000
Speaker 1: Tesla's fourth quarter earnings fell short of expectations. Today, the

104
00:05:28,040 --> 00:05:31,800
Speaker 1: automaker spent much of last year's slashing prices around its

105
00:05:31,880 --> 00:05:35,080
Speaker 1: lineup Wloomberg. Red Brown says that that choice could have

106
00:05:35,120 --> 00:05:37,000
Speaker 1: made an impact on the bottom line.

107
00:05:37,120 --> 00:05:40,280
Speaker 9: It does raise some questions about this strategy of continuing

108
00:05:40,279 --> 00:05:43,320
Speaker 9: to lower prices. They lowered prices just last week again

109
00:05:43,520 --> 00:05:45,520
Speaker 9: in Europe, so it seems like that is going to

110
00:05:45,520 --> 00:05:48,320
Speaker 9: be the strategy going forward. But it doesn't seem to

111
00:05:48,320 --> 00:05:51,600
Speaker 9: be kind of paying dividends in the company's view going forward.

112
00:05:51,720 --> 00:05:53,760
Speaker 9: In terms of actually selling cars.

113
00:05:53,440 --> 00:05:58,359
Speaker 1: Still, Tesla told shareholders to expect weaker sales growth in

114
00:05:58,360 --> 00:06:01,960
Speaker 1: twenty twenty four as it builds its next generation vehicle.

115
00:06:02,279 --> 00:06:05,520
Speaker 1: The carmaker has yet to offer a specific delivery target

116
00:06:05,880 --> 00:06:10,720
Speaker 1: for that vehicle. Let's get to our guests. Gene Munster

117
00:06:10,839 --> 00:06:15,040
Speaker 1: joins just managing partner at Deepwater Asset Management to take

118
00:06:15,080 --> 00:06:17,680
Speaker 1: a closer look at Tesla's earnings. You should mention first,

119
00:06:17,839 --> 00:06:21,200
Speaker 1: Tesla traded down in after hours about five percent, so

120
00:06:21,600 --> 00:06:26,159
Speaker 1: investors were a little disappointed here, Gene. It leaves things

121
00:06:26,560 --> 00:06:29,560
Speaker 1: up in the air about what's coming next with Tesla's

122
00:06:29,560 --> 00:06:30,680
Speaker 1: next generation vehicle.

123
00:06:32,400 --> 00:06:37,800
Speaker 5: Indeed disappointment. I think that the disappointment will probably increase tomorrow.

124
00:06:37,839 --> 00:06:41,720
Speaker 5: I expect this stock to actually drift lower because the

125
00:06:41,800 --> 00:06:45,960
Speaker 5: guidance in the outlook was sobering and something that I

126
00:06:45,960 --> 00:06:48,880
Speaker 5: haven't seen. And I believe that this company is in

127
00:06:48,920 --> 00:06:51,360
Speaker 5: a great position longer term. I think they're making all

128
00:06:51,400 --> 00:06:55,080
Speaker 5: of the right moves by investing into the future, where

129
00:06:55,080 --> 00:06:58,280
Speaker 5: other automakers are pulling back on that investment. But that

130
00:06:58,320 --> 00:07:01,440
Speaker 5: doesn't change the reality of how investors are feeling tonight,

131
00:07:01,480 --> 00:07:04,680
Speaker 5: which is this outlook where they talked about a notable

132
00:07:04,800 --> 00:07:08,720
Speaker 5: acceleration in their growth rate, and I'm going to decode

133
00:07:08,720 --> 00:07:11,160
Speaker 5: that that means that growth is going to go from

134
00:07:12,160 --> 00:07:15,480
Speaker 5: nineteen percent in twenty twenty three to probably ten percent

135
00:07:16,160 --> 00:07:19,160
Speaker 5: this year, and maybe step up to twenty percent next

136
00:07:19,240 --> 00:07:21,400
Speaker 5: year and then really get going in twenty six and

137
00:07:21,440 --> 00:07:24,600
Speaker 5: so kind of pushing back that what a lot of

138
00:07:24,640 --> 00:07:27,920
Speaker 5: investors had hoped for was kind of a reacceleration. And

139
00:07:27,960 --> 00:07:30,400
Speaker 5: the reason for this slow down is that they made

140
00:07:30,400 --> 00:07:32,400
Speaker 5: a move that I did not expect them to make.

141
00:07:32,960 --> 00:07:35,920
Speaker 5: They announced that they are going to be coming out

142
00:07:36,000 --> 00:07:38,440
Speaker 5: with a lower price vehicle. They did not give the price,

143
00:07:38,520 --> 00:07:40,640
Speaker 5: but it's probably thirty k in line with like a

144
00:07:40,720 --> 00:07:43,720
Speaker 5: Honda Cord. They're going to move to that lower vehicle.

145
00:07:43,760 --> 00:07:47,280
Speaker 5: And when you start talking about that, immediately people who

146
00:07:47,360 --> 00:07:49,440
Speaker 5: are thinking about getting a Model three or a Model

147
00:07:49,600 --> 00:07:51,720
Speaker 5: Y are going to say, let's just hold off and

148
00:07:51,920 --> 00:07:55,520
Speaker 5: see what that compact car looks like. And so you

149
00:07:55,600 --> 00:07:58,840
Speaker 5: get this pullback and demand in the near term, and

150
00:07:58,880 --> 00:08:02,880
Speaker 5: that's what's really causing some anxiety here in the near

151
00:08:03,000 --> 00:08:05,080
Speaker 5: term related to their guidance.

152
00:08:05,160 --> 00:08:07,320
Speaker 2: So Cheane, when you look at the demand side, is

153
00:08:07,400 --> 00:08:10,160
Speaker 2: price the biggest function? Do you think right now? And

154
00:08:10,200 --> 00:08:12,560
Speaker 2: that's what must cast to kind of deal with, which

155
00:08:12,600 --> 00:08:15,280
Speaker 2: is why this next generation vehicle will be low cost.

156
00:08:16,520 --> 00:08:19,200
Speaker 5: Price is the biggest issue. I mean, there's still a

157
00:08:19,240 --> 00:08:20,960
Speaker 5: lot of cars that are sold every year in the

158
00:08:21,080 --> 00:08:26,000
Speaker 5: US called fifteen million cars. Tesla sells will sell about

159
00:08:26,360 --> 00:08:29,080
Speaker 5: just over a million cars this year in the US,

160
00:08:29,120 --> 00:08:32,280
Speaker 5: and so price is one of the biggest inhibitors. There's

161
00:08:32,440 --> 00:08:35,720
Speaker 5: other reasons why people don't buy an EV, whether it's charging, rains,

162
00:08:35,720 --> 00:08:38,000
Speaker 5: anxiety tend to be at the top of the list,

163
00:08:38,000 --> 00:08:40,880
Speaker 5: but price is the biggest reason. Average EV is right

164
00:08:40,920 --> 00:08:43,240
Speaker 5: around fifty five thousand. The average price of a car

165
00:08:43,240 --> 00:08:45,520
Speaker 5: on the US is forty eight thousand, and if they

166
00:08:45,520 --> 00:08:47,640
Speaker 5: want to get to the sweet spot of the growth market,

167
00:08:47,679 --> 00:08:49,720
Speaker 5: they got to push more towards the Honda Cord, the

168
00:08:49,720 --> 00:08:53,880
Speaker 5: Honda Civic than some of these maybe Volvo XC ninety.

169
00:08:54,800 --> 00:08:58,400
Speaker 1: So lower prices pretty much across the board, that hurts

170
00:08:58,400 --> 00:09:01,880
Speaker 1: your margins generally. And if you're talking about I think

171
00:09:02,000 --> 00:09:05,240
Speaker 1: Musk once talked about a twenty five thousand dollars Tesla model.

172
00:09:05,280 --> 00:09:08,679
Speaker 1: You mentioned thirty thousand ers, so that probably means lower

173
00:09:08,760 --> 00:09:12,160
Speaker 1: margins as well. Does that have a big impact on Well,

174
00:09:12,240 --> 00:09:16,320
Speaker 1: let's let's ask you, Gene, what has been happening with margins.

175
00:09:17,679 --> 00:09:22,520
Speaker 5: So margins surprisingly took a step up in the December quarter.

176
00:09:22,640 --> 00:09:25,880
Speaker 5: They finished at seventeen point two percent. That was up

177
00:09:25,920 --> 00:09:29,000
Speaker 5: from sixteen point two in the previous quarter. That's the

178
00:09:29,040 --> 00:09:31,719
Speaker 5: first time in a year that they've shown some improvement.

179
00:09:32,240 --> 00:09:34,640
Speaker 5: But the commentary on the call from their CFO was

180
00:09:34,679 --> 00:09:40,000
Speaker 5: that their current their current production lines don't really support

181
00:09:40,080 --> 00:09:44,280
Speaker 5: much margin expansion here and so they've got to get

182
00:09:44,320 --> 00:09:46,280
Speaker 5: this next line up and go in this next gen

183
00:09:46,320 --> 00:09:48,480
Speaker 5: line and Elon talked a lot about how efficient that

184
00:09:48,600 --> 00:09:52,120
Speaker 5: line is, and so this what it means is that

185
00:09:52,240 --> 00:09:54,440
Speaker 5: margins are probably going to be going down in twenty

186
00:09:54,480 --> 00:09:58,040
Speaker 5: twenty four, and that's that. Traditionally is the typical caretical

187
00:09:58,080 --> 00:10:01,360
Speaker 5: metric on Tesla earnings is the margin, and it's probably

188
00:10:01,400 --> 00:10:04,760
Speaker 5: won't be until late twenty five before they start to improve.

189
00:10:04,800 --> 00:10:07,240
Speaker 5: I do believe that they will improve. I think that

190
00:10:07,280 --> 00:10:10,520
Speaker 5: Tessa does have a long term cost advantage. But that's

191
00:10:10,559 --> 00:10:12,760
Speaker 5: what's going on with margins, is that they showed a

192
00:10:12,760 --> 00:10:16,000
Speaker 5: little bit of improvement, but the commentary is to expect

193
00:10:16,040 --> 00:10:17,840
Speaker 5: them to decline in the next year.

194
00:10:17,920 --> 00:10:20,080
Speaker 2: One of the most interesting things that I read about

195
00:10:20,080 --> 00:10:22,760
Speaker 2: what happened on the call was Musk addressing the size

196
00:10:22,760 --> 00:10:25,040
Speaker 2: of his stake in the company, which as I understand

197
00:10:25,080 --> 00:10:28,200
Speaker 2: it is about thirteen percent. He's obviously the biggest and

198
00:10:28,280 --> 00:10:32,520
Speaker 2: most influential shareholder, but he said that he doesn't want

199
00:10:32,520 --> 00:10:36,040
Speaker 2: to control the company, but he has so little influence

200
00:10:36,600 --> 00:10:40,400
Speaker 2: that he risk being voted out. Is that even a

201
00:10:40,440 --> 00:10:44,800
Speaker 2: possibility to imagine an activist investor coming in and pushing

202
00:10:45,320 --> 00:10:47,559
Speaker 2: Musk out of the C suite.

203
00:10:48,559 --> 00:10:52,040
Speaker 5: As long as it's mathematically possible, which it is right now.

204
00:10:52,200 --> 00:10:55,480
Speaker 5: Elon doesn't want that risk on the table, and what

205
00:10:55,520 --> 00:10:58,040
Speaker 5: he's asking for is something that's unprecedent, and he's going

206
00:10:58,120 --> 00:11:02,199
Speaker 5: to get because investors know, whether you're part of the

207
00:11:02,320 --> 00:11:05,760
Speaker 5: religious investors around this or part of the more level headed,

208
00:11:06,160 --> 00:11:08,200
Speaker 5: know that Elon is critical to the success of the

209
00:11:08,200 --> 00:11:12,440
Speaker 5: company and that he has been successful at generating wealth

210
00:11:12,520 --> 00:11:15,120
Speaker 5: in the past, and they should give him that leverage

211
00:11:15,120 --> 00:11:18,640
Speaker 5: to have an outsized impact on the decisions and the

212
00:11:18,679 --> 00:11:24,000
Speaker 5: strategy of the company. And so I think that it's unprecedented.

213
00:11:24,000 --> 00:11:25,920
Speaker 5: I think he's going to get it, and I think

214
00:11:25,920 --> 00:11:28,199
Speaker 5: he probably should get it, just given what he's done

215
00:11:28,200 --> 00:11:30,600
Speaker 5: for the company over the past decade.

216
00:11:31,120 --> 00:11:34,200
Speaker 1: And we know that Tesla has been somewhat challenged in China,

217
00:11:34,280 --> 00:11:37,839
Speaker 1: particularly with the rapid ascent of BYD. Did you hear

218
00:11:37,880 --> 00:11:41,000
Speaker 1: much today about how the future looks for Tesla in China?

219
00:11:42,160 --> 00:11:45,000
Speaker 5: They talked about the China market. There was a question

220
00:11:45,040 --> 00:11:46,520
Speaker 5: that came up related to you, do they want to

221
00:11:46,559 --> 00:11:49,320
Speaker 5: kind of double down in China, And the answer was

222
00:11:49,440 --> 00:11:52,520
Speaker 5: not really. They want to build Giga Mexico, expand the

223
00:11:52,520 --> 00:11:55,240
Speaker 5: production line in Austin, and do some more things in Europe.

224
00:11:55,679 --> 00:11:59,680
Speaker 5: And so I think that Tesla sees China as an opportunity.

225
00:11:59,720 --> 00:12:02,960
Speaker 5: It's obviously the largest EV market in the world, but

226
00:12:03,120 --> 00:12:07,480
Speaker 5: I think they see their growth prospects in the US

227
00:12:07,520 --> 00:12:13,240
Speaker 5: and potentially building some of these cheaper vehicles in Mexico

228
00:12:13,320 --> 00:12:14,920
Speaker 5: and even exporting them to China.

229
00:12:15,480 --> 00:12:18,079
Speaker 2: What's your take on the cyber truck. I think it

230
00:12:18,200 --> 00:12:20,880
Speaker 2: debuted back in November. It's still in the process of

231
00:12:20,960 --> 00:12:23,800
Speaker 2: rolling out. I think the pace has been described as measured.

232
00:12:24,040 --> 00:12:25,640
Speaker 2: Are you impressed at all by this?

233
00:12:26,640 --> 00:12:29,520
Speaker 5: It's I mean just from a peer specs of a vehicle,

234
00:12:29,600 --> 00:12:33,080
Speaker 5: it's it is impressive. I made a reservation when I

235
00:12:33,240 --> 00:12:35,679
Speaker 5: first saw the car back whenever that was twenty nineteen.

236
00:12:36,880 --> 00:12:38,560
Speaker 5: I'm not going to at the current price. So there's

237
00:12:38,920 --> 00:12:40,200
Speaker 5: I'm not going to buy the car. I mean, it's

238
00:12:40,200 --> 00:12:42,720
Speaker 5: close to one hundred thousand dollars. I want a fifty

239
00:12:42,760 --> 00:12:45,280
Speaker 5: thousand ARCR on one hundred thousand our car, And so

240
00:12:45,640 --> 00:12:48,280
Speaker 5: I think that I'm impressed by the car, I'm not

241
00:12:48,320 --> 00:12:52,559
Speaker 5: impressed by the price. And he said to expect around

242
00:12:52,559 --> 00:12:55,800
Speaker 5: two hundred and fifty thousand units plus. I think that's

243
00:12:55,800 --> 00:12:57,680
Speaker 5: probably in twenty twenty six. But when you kind of

244
00:12:57,720 --> 00:12:59,800
Speaker 5: added up this, this is going to be a car

245
00:12:59,840 --> 00:13:04,000
Speaker 5: that call it ten percent of their overall overall vehicle

246
00:13:04,120 --> 00:13:07,880
Speaker 5: sales and is just still it's going to be more

247
00:13:07,920 --> 00:13:10,640
Speaker 5: of a you know, that ten percent type of a car,

248
00:13:10,760 --> 00:13:14,080
Speaker 5: not what model wire model three are at forty five

249
00:13:14,120 --> 00:13:15,920
Speaker 5: percent of sales. It's not going to reach that kind

250
00:13:15,960 --> 00:13:16,520
Speaker 5: of scale.

251
00:13:17,440 --> 00:13:20,280
Speaker 1: Geene, you said you're pretty confident about the company's prospects

252
00:13:20,320 --> 00:13:22,360
Speaker 1: longer term. But if we look at the stock price

253
00:13:22,400 --> 00:13:25,280
Speaker 1: over the past two years, it's down pretty significantly from

254
00:13:25,320 --> 00:13:27,960
Speaker 1: more than four hundred dollars down to right now about

255
00:13:28,000 --> 00:13:30,800
Speaker 1: two hundred dollars. And if what we heard from Elon

256
00:13:30,920 --> 00:13:34,800
Speaker 1: Musk is true and also from the CFO about lower

257
00:13:34,840 --> 00:13:37,920
Speaker 1: margins going forward and worse performance in the coming year,

258
00:13:38,559 --> 00:13:40,520
Speaker 1: the stock price, I mean, what's your target for the

259
00:13:40,559 --> 00:13:41,800
Speaker 1: stock at the moment.

260
00:13:43,440 --> 00:13:47,160
Speaker 5: So we don't do the kind of traditional sale side

261
00:13:47,280 --> 00:13:53,120
Speaker 5: targets or investors. And in terms of where this plays out,

262
00:13:53,280 --> 00:13:56,040
Speaker 5: is that I think that this year can be potentially

263
00:13:56,040 --> 00:13:57,679
Speaker 5: be a difficult year. The first part of this year

264
00:13:57,679 --> 00:13:59,480
Speaker 5: a difficult year for Tesla shares. I think tomorrow is

265
00:13:59,480 --> 00:14:03,160
Speaker 5: going to be difficul But my question, I think the

266
00:14:03,240 --> 00:14:06,360
Speaker 5: question about is this going to be more a higher

267
00:14:06,400 --> 00:14:09,480
Speaker 5: value company in the future or a lower value comes

268
00:14:09,480 --> 00:14:12,560
Speaker 5: down to a basic question is do you believe that

269
00:14:13,280 --> 00:14:16,280
Speaker 5: electrification is going to impact automotive in the sense that

270
00:14:16,440 --> 00:14:19,240
Speaker 5: in twenty years we're going to have more than sixty

271
00:14:19,280 --> 00:14:21,560
Speaker 5: percent share of cars are electric. If you think we

272
00:14:21,640 --> 00:14:24,080
Speaker 5: will be there in twenty years, we're at about four percent,

273
00:14:24,160 --> 00:14:25,040
Speaker 5: five six percent.

274
00:14:25,120 --> 00:14:25,400
Speaker 7: Now.

275
00:14:25,760 --> 00:14:27,400
Speaker 5: If you think we're going to be above that sixty

276
00:14:27,480 --> 00:14:31,600
Speaker 5: percent market mark in twenty years, then Tesla's doing all

277
00:14:31,640 --> 00:14:34,560
Speaker 5: the right things to put traditional auto in a tight spot.

278
00:14:34,960 --> 00:14:36,800
Speaker 5: And if you believe gas is just going to kind

279
00:14:36,800 --> 00:14:39,760
Speaker 5: of hold on longer than most people think, then it's

280
00:14:39,800 --> 00:14:43,800
Speaker 5: not going higher. And my sense is that cars are

281
00:14:43,880 --> 00:14:48,040
Speaker 5: still stuck in a paradigm that's one hundred years old,

282
00:14:48,120 --> 00:14:50,120
Speaker 5: and I think there's a massive opportunity for them to

283
00:14:50,600 --> 00:14:53,200
Speaker 5: not only electrify them, but automate them on a lot

284
00:14:53,240 --> 00:14:54,600
Speaker 5: of levels. I think that's important.

285
00:14:55,120 --> 00:14:57,120
Speaker 1: All right, Gene, thanks very much for joining us here

286
00:14:57,160 --> 00:15:01,840
Speaker 1: on Bloomberg Daybreak Asia. Gene Munster, Managing partner, Deepwater Asset Management.

287
00:15:04,040 --> 00:15:06,880
Speaker 1: This is Bloomberg Daybreak Asia, your morning brief on this

288
00:15:06,960 --> 00:15:10,680
Speaker 1: story's making news from Hong Kong to Singapore and Wall Street.

289
00:15:10,840 --> 00:15:14,880
Speaker 2: Look for us on your podcast feed every day on Apple, Spotify,

290
00:15:15,120 --> 00:15:17,119
Speaker 2: and anywhere else you get your podcast.

291
00:15:17,360 --> 00:15:20,000
Speaker 1: You can also listen live each day on Bloomberg eleven

292
00:15:20,040 --> 00:15:22,400
Speaker 1: three to zero in New York, Bloomberg ninety nine to

293
00:15:22,440 --> 00:15:25,640
Speaker 1: one in Washington, Bloomberg one oh sixty one in Boston,

294
00:15:25,920 --> 00:15:28,480
Speaker 1: and Bloomberg nine sixty in San Francisco.

295
00:15:28,680 --> 00:15:31,600
Speaker 2: Our flagship New York station is also available on your

296
00:15:31,640 --> 00:15:37,280
Speaker 2: Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty plus.

297
00:15:37,440 --> 00:15:41,240
Speaker 1: Listen coast to coast on the Bloomberg Business app, Sirius XM,

298
00:15:41,600 --> 00:15:46,480
Speaker 1: the iHeartRadio app, and on Bloomberg dot Com. I'm Brian Curtis.

299
00:15:46,200 --> 00:15:48,640
Speaker 2: And I'm Doug Krisner. Join us again tomorrow for all

300
00:15:48,640 --> 00:15:51,160
Speaker 2: the news you need to start your day right here

301
00:15:51,240 --> 00:15:55,840
Speaker 2: on Bloomberg Daybreak Asia