WEBVTT - Boeing Woes, Tesla Reports, China Stimulus

0:00:02.400 --> 0:00:03.000
<v Speaker 1>Good morning.

0:00:03.120 --> 0:00:05.880
<v Speaker 2>I'm Brian Curtis and I'm Doug Krisner. Here are the

0:00:05.920 --> 0:00:09.600
<v Speaker 2>stories we're following today.

0:00:09.720 --> 0:00:12.440
<v Speaker 1>A lot of movement here around Boeing seven thirty seven

0:00:12.520 --> 0:00:14.880
<v Speaker 1>Max nine today. Let's get to head bax to with

0:00:14.960 --> 0:00:16.919
<v Speaker 1>that story and more from the nine to sixty news

0:00:16.960 --> 0:00:18.040
<v Speaker 1>room in San Francisco.

0:00:18.160 --> 0:00:20.919
<v Speaker 3>And yeah, so let's go through it. Brian, Number one,

0:00:21.120 --> 0:00:25.560
<v Speaker 3>FA is halting all Boeing Max production expansion, including the

0:00:25.640 --> 0:00:29.040
<v Speaker 3>seven thirty seven nine. And this while Boeing CEO Dave

0:00:29.120 --> 0:00:32.599
<v Speaker 3>Calhoun is on Capitol Hill today meeting with Senators answering

0:00:32.680 --> 0:00:36.479
<v Speaker 3>questions about or trying to answer questions about safety of

0:00:36.560 --> 0:00:40.680
<v Speaker 3>the Max. Calhoun is standing by his product, we don't

0:00:40.680 --> 0:00:42.879
<v Speaker 3>put airplanes in the air that we don't have one

0:00:42.920 --> 0:00:44.120
<v Speaker 3>hundred percent confidence in.

0:00:44.760 --> 0:00:47.200
<v Speaker 1>I'm here today in the spirit of transparencies.

0:00:47.520 --> 0:00:49.400
<v Speaker 3>Yeah, but this comes with the public knowledge of the

0:00:49.400 --> 0:00:52.360
<v Speaker 3>panel blowout on Alaska plane mid flight, as well as

0:00:52.560 --> 0:00:56.280
<v Speaker 3>Alaska's CEO saying it found multiple loose bolts on many planes.

0:00:56.760 --> 0:01:01.560
<v Speaker 3>So Bloomberg's Abigail Doolittle says, consumers and investors are trying

0:01:01.600 --> 0:01:03.480
<v Speaker 3>to make some kind of sense of all of it.

0:01:03.560 --> 0:01:05.720
<v Speaker 4>The idea that you're hearing the CEO of a major

0:01:06.160 --> 0:01:10.040
<v Speaker 4>airline manufacturer saying we fly safeplans. That's just something that

0:01:10.080 --> 0:01:12.480
<v Speaker 4>you take for granted. But after the two trategies in

0:01:12.520 --> 0:01:16.200
<v Speaker 4>twenty eighteen, twenty nineteen, the rudder issue last year, the

0:01:16.200 --> 0:01:19.040
<v Speaker 4>door plug blowing out. Last Saturday, a wheel fell off,

0:01:19.200 --> 0:01:20.800
<v Speaker 4>I mean, they really have a situations.

0:01:21.080 --> 0:01:23.640
<v Speaker 3>And again the Alaska air says it'll bring back it's

0:01:23.640 --> 0:01:27.679
<v Speaker 3>first seven thirty seven nine. On Friday, President Joe Biden

0:01:27.720 --> 0:01:30.960
<v Speaker 3>is securing the endorsement of the United Autoworkers' Union Union

0:01:31.000 --> 0:01:34.160
<v Speaker 3>president Sean Fain, saying, the issue of the president's age

0:01:34.200 --> 0:01:35.520
<v Speaker 3>is bs and.

0:01:35.600 --> 0:01:38.920
<v Speaker 5>If we're going to grow our union and organize the

0:01:39.000 --> 0:01:42.640
<v Speaker 5>unorganized and help the working class, we have to have

0:01:42.720 --> 0:01:44.080
<v Speaker 5>the right people in power.

0:01:44.400 --> 0:01:47.600
<v Speaker 3>And he says the other guy, Donald Trump, is a

0:01:47.760 --> 0:01:53.320
<v Speaker 3>scab and Biden wall Street didn't go to America. The

0:01:53.320 --> 0:01:56.880
<v Speaker 3>moon class built America, and Union's built the moon class,

0:01:58.360 --> 0:02:01.120
<v Speaker 3>and Biden would have a very tough fight without a twin.

0:02:01.280 --> 0:02:05.440
<v Speaker 3>Fane says that he has earned that endorsement. Nikki Haley

0:02:05.440 --> 0:02:09.160
<v Speaker 3>reinforcing today she's still in and she's still attracting some

0:02:09.360 --> 0:02:12.480
<v Speaker 3>wealthy donors who are definitely keeping the campaign afloat.

0:02:12.639 --> 0:02:15.720
<v Speaker 4>My parents came here fifty years ago to an America

0:02:15.760 --> 0:02:18.880
<v Speaker 4>that was strong and proud and full of opportunities.

0:02:19.720 --> 0:02:21.480
<v Speaker 6>I want them to know that country again.

0:02:21.600 --> 0:02:24.400
<v Speaker 3>And Reuters reporting that Donald Trump is furious, saying she

0:02:24.480 --> 0:02:26.800
<v Speaker 3>needs to get out so he can focus on Biden,

0:02:26.880 --> 0:02:29.679
<v Speaker 3>but former House Speaker Kevin McCarthy says he should do

0:02:29.720 --> 0:02:32.800
<v Speaker 3>it anyway. He was on Bloomberg Surveillance today saying that

0:02:32.880 --> 0:02:35.280
<v Speaker 3>he doesn't think Haley will risk losing her home state

0:02:35.320 --> 0:02:38.240
<v Speaker 3>of South Carolina next month. He says Trump just needs

0:02:38.280 --> 0:02:40.560
<v Speaker 3>to go ahead and focus now on Biden.

0:02:40.639 --> 0:02:43.959
<v Speaker 6>So if I was Trump, I would start pulling Biden out.

0:02:44.040 --> 0:02:46.639
<v Speaker 6>I would make the issue. But remember, a re election

0:02:46.919 --> 0:02:50.680
<v Speaker 6>is a report card. Your first election is aspirational. What

0:02:50.680 --> 0:02:51.959
<v Speaker 6>are you going to do now? There's going to be

0:02:52.000 --> 0:02:53.720
<v Speaker 6>a report card what you did now?

0:02:53.760 --> 0:02:56.639
<v Speaker 3>The latest a Real Clear Politics polling average puts Haley

0:02:56.680 --> 0:03:00.919
<v Speaker 3>about thirty points at this point behind Donald Trump. And

0:03:01.360 --> 0:03:04.560
<v Speaker 3>let's get a lightning bolt for Jim Harbaugh, should we.

0:03:04.560 --> 0:03:07.640
<v Speaker 3>We're hearing that the Harbaugh's returning to the NFL. Washington

0:03:07.680 --> 0:03:12.239
<v Speaker 3>Post reporting that he is finalizing a deal with the

0:03:12.400 --> 0:03:15.240
<v Speaker 3>LA Chargers and that borrowing any last minut of hang

0:03:15.320 --> 0:03:19.280
<v Speaker 3>ups that he will have a deal in San Francisco.

0:03:19.320 --> 0:03:22.320
<v Speaker 3>I'm at Baxter and this is Bloomberg gar Brian all.

0:03:22.320 --> 0:03:24.880
<v Speaker 1>Right, ed, thanks very much. This is Bloomberg, Debreak, Asia,

0:03:24.880 --> 0:03:28.480
<v Speaker 1>Brian Curtis and Dead Chrisner. And we've been talking about Boeing. Well,

0:03:28.760 --> 0:03:33.200
<v Speaker 1>today we actually have another hurdle for Boeing in the

0:03:33.200 --> 0:03:37.200
<v Speaker 1>wake of the ongoing quality control issues. Today, the US

0:03:37.280 --> 0:03:41.520
<v Speaker 1>Federal Aviation Administration said it would not approve production expansions

0:03:41.600 --> 0:03:45.120
<v Speaker 1>for Boeing seven thirty seven Max. The move Race's questions

0:03:45.160 --> 0:03:48.200
<v Speaker 1>about Boeing's plan to open a fourth production line for

0:03:48.240 --> 0:03:51.440
<v Speaker 1>the seven thirty seven later this year. Bloomberg's Danny Lee

0:03:51.440 --> 0:03:54.600
<v Speaker 1>breaks down what this means for Boeing's bottom line.

0:03:54.840 --> 0:03:58.560
<v Speaker 7>What's key here is that Boeing It's critical Semphy seven

0:03:58.600 --> 0:04:03.040
<v Speaker 7>mex cash Cow plane. Ultimately it was producing thirty eight

0:04:03.040 --> 0:04:05.160
<v Speaker 7>planes a month, and it was going to add a

0:04:05.200 --> 0:04:08.400
<v Speaker 7>fourth production line in Seattle, which means could go up

0:04:08.400 --> 0:04:11.560
<v Speaker 7>to fifty planes a month. And you think about the

0:04:11.560 --> 0:04:14.840
<v Speaker 7>millions of billions of dollars it would ultimately generate once

0:04:14.880 --> 0:04:18.120
<v Speaker 7>this comes to fruition over the next couple of years.

0:04:18.320 --> 0:04:21.599
<v Speaker 1>Bloom breaks Danny Lee. The FAA says it will not

0:04:21.720 --> 0:04:24.520
<v Speaker 1>be back to business as usual for Boeing until quality

0:04:24.560 --> 0:04:28.200
<v Speaker 1>control issues are resolved. At the same time, the FAA

0:04:28.240 --> 0:04:32.080
<v Speaker 1>has approved inspection procedures that airlines must carry out in

0:04:32.160 --> 0:04:35.200
<v Speaker 1>order to resume seven thirty seven MAX flights, so there

0:04:35.279 --> 0:04:38.520
<v Speaker 1>is a path there. Alaska Airlines says that it will

0:04:38.880 --> 0:04:41.960
<v Speaker 1>bring its first Max nine back into service on January

0:04:41.960 --> 0:04:42.719
<v Speaker 1>twenty sixth.

0:04:42.839 --> 0:04:45.480
<v Speaker 2>Let's go to China next. The Central Bank saying that

0:04:45.520 --> 0:04:49.040
<v Speaker 2>it will cut the reserve requirement ratio for banks by

0:04:49.120 --> 0:04:53.400
<v Speaker 2>fifty basis points on February fifth. Story Now from Bloomberg's

0:04:53.440 --> 0:04:54.400
<v Speaker 2>Joan Wong In Hong.

0:04:54.320 --> 0:04:57.679
<v Speaker 8>Kong, PBOC Governor Pangong Chan said the cut will provide

0:04:57.720 --> 0:05:00.480
<v Speaker 8>one hundred and thirty nine billion dollars in the liquidity

0:05:00.520 --> 0:05:03.760
<v Speaker 8>to the market. Pahn also hinted at old measures to come.

0:05:04.040 --> 0:05:07.560
<v Speaker 8>After the announcement, regulators added more measures to bolster this

0:05:07.680 --> 0:05:12.080
<v Speaker 8>slumping property and stock markets. Measures include roddening the use

0:05:12.120 --> 0:05:15.120
<v Speaker 8>of commercial property loans and boost in China and Hong

0:05:15.200 --> 0:05:18.359
<v Speaker 8>Kong equities. The changes seem to show mounting urgency in

0:05:18.480 --> 0:05:21.520
<v Speaker 8>China to shore up the economy. In Hong Kong joined

0:05:21.520 --> 0:05:22.640
<v Speaker 8>Wong Bloomberg Radio.

0:05:23.720 --> 0:05:28.000
<v Speaker 1>Tesla's fourth quarter earnings fell short of expectations. Today, the

0:05:28.040 --> 0:05:31.800
<v Speaker 1>automaker spent much of last year's slashing prices around its

0:05:31.880 --> 0:05:35.080
<v Speaker 1>lineup Wloomberg. Red Brown says that that choice could have

0:05:35.120 --> 0:05:37.000
<v Speaker 1>made an impact on the bottom line.

0:05:37.120 --> 0:05:40.280
<v Speaker 9>It does raise some questions about this strategy of continuing

0:05:40.279 --> 0:05:43.320
<v Speaker 9>to lower prices. They lowered prices just last week again

0:05:43.520 --> 0:05:45.520
<v Speaker 9>in Europe, so it seems like that is going to

0:05:45.520 --> 0:05:48.320
<v Speaker 9>be the strategy going forward. But it doesn't seem to

0:05:48.320 --> 0:05:51.600
<v Speaker 9>be kind of paying dividends in the company's view going forward.

0:05:51.720 --> 0:05:53.760
<v Speaker 9>In terms of actually selling cars.

0:05:53.440 --> 0:05:58.359
<v Speaker 1>Still, Tesla told shareholders to expect weaker sales growth in

0:05:58.360 --> 0:06:01.960
<v Speaker 1>twenty twenty four as it builds its next generation vehicle.

0:06:02.279 --> 0:06:05.520
<v Speaker 1>The carmaker has yet to offer a specific delivery target

0:06:05.880 --> 0:06:10.720
<v Speaker 1>for that vehicle. Let's get to our guests. Gene Munster

0:06:10.839 --> 0:06:15.040
<v Speaker 1>joins just managing partner at Deepwater Asset Management to take

0:06:15.080 --> 0:06:17.680
<v Speaker 1>a closer look at Tesla's earnings. You should mention first,

0:06:17.839 --> 0:06:21.200
<v Speaker 1>Tesla traded down in after hours about five percent, so

0:06:21.600 --> 0:06:26.159
<v Speaker 1>investors were a little disappointed here, Gene. It leaves things

0:06:26.560 --> 0:06:29.560
<v Speaker 1>up in the air about what's coming next with Tesla's

0:06:29.560 --> 0:06:30.680
<v Speaker 1>next generation vehicle.

0:06:32.400 --> 0:06:37.800
<v Speaker 5>Indeed disappointment. I think that the disappointment will probably increase tomorrow.

0:06:37.839 --> 0:06:41.720
<v Speaker 5>I expect this stock to actually drift lower because the

0:06:41.800 --> 0:06:45.960
<v Speaker 5>guidance in the outlook was sobering and something that I

0:06:45.960 --> 0:06:48.880
<v Speaker 5>haven't seen. And I believe that this company is in

0:06:48.920 --> 0:06:51.360
<v Speaker 5>a great position longer term. I think they're making all

0:06:51.400 --> 0:06:55.080
<v Speaker 5>of the right moves by investing into the future, where

0:06:55.080 --> 0:06:58.280
<v Speaker 5>other automakers are pulling back on that investment. But that

0:06:58.320 --> 0:07:01.440
<v Speaker 5>doesn't change the reality of how investors are feeling tonight,

0:07:01.480 --> 0:07:04.680
<v Speaker 5>which is this outlook where they talked about a notable

0:07:04.800 --> 0:07:08.720
<v Speaker 5>acceleration in their growth rate, and I'm going to decode

0:07:08.720 --> 0:07:11.160
<v Speaker 5>that that means that growth is going to go from

0:07:12.160 --> 0:07:15.480
<v Speaker 5>nineteen percent in twenty twenty three to probably ten percent

0:07:16.160 --> 0:07:19.160
<v Speaker 5>this year, and maybe step up to twenty percent next

0:07:19.240 --> 0:07:21.400
<v Speaker 5>year and then really get going in twenty six and

0:07:21.440 --> 0:07:24.600
<v Speaker 5>so kind of pushing back that what a lot of

0:07:24.640 --> 0:07:27.920
<v Speaker 5>investors had hoped for was kind of a reacceleration. And

0:07:27.960 --> 0:07:30.400
<v Speaker 5>the reason for this slow down is that they made

0:07:30.400 --> 0:07:32.400
<v Speaker 5>a move that I did not expect them to make.

0:07:32.960 --> 0:07:35.920
<v Speaker 5>They announced that they are going to be coming out

0:07:36.000 --> 0:07:38.440
<v Speaker 5>with a lower price vehicle. They did not give the price,

0:07:38.520 --> 0:07:40.640
<v Speaker 5>but it's probably thirty k in line with like a

0:07:40.720 --> 0:07:43.720
<v Speaker 5>Honda Cord. They're going to move to that lower vehicle.

0:07:43.760 --> 0:07:47.280
<v Speaker 5>And when you start talking about that, immediately people who

0:07:47.360 --> 0:07:49.440
<v Speaker 5>are thinking about getting a Model three or a Model

0:07:49.600 --> 0:07:51.720
<v Speaker 5>Y are going to say, let's just hold off and

0:07:51.920 --> 0:07:55.520
<v Speaker 5>see what that compact car looks like. And so you

0:07:55.600 --> 0:07:58.840
<v Speaker 5>get this pullback and demand in the near term, and

0:07:58.880 --> 0:08:02.880
<v Speaker 5>that's what's really causing some anxiety here in the near

0:08:03.000 --> 0:08:05.080
<v Speaker 5>term related to their guidance.

0:08:05.160 --> 0:08:07.320
<v Speaker 2>So Cheane, when you look at the demand side, is

0:08:07.400 --> 0:08:10.160
<v Speaker 2>price the biggest function? Do you think right now? And

0:08:10.200 --> 0:08:12.560
<v Speaker 2>that's what must cast to kind of deal with, which

0:08:12.600 --> 0:08:15.280
<v Speaker 2>is why this next generation vehicle will be low cost.

0:08:16.520 --> 0:08:19.200
<v Speaker 5>Price is the biggest issue. I mean, there's still a

0:08:19.240 --> 0:08:20.960
<v Speaker 5>lot of cars that are sold every year in the

0:08:21.080 --> 0:08:26.000
<v Speaker 5>US called fifteen million cars. Tesla sells will sell about

0:08:26.360 --> 0:08:29.080
<v Speaker 5>just over a million cars this year in the US,

0:08:29.120 --> 0:08:32.280
<v Speaker 5>and so price is one of the biggest inhibitors. There's

0:08:32.440 --> 0:08:35.720
<v Speaker 5>other reasons why people don't buy an EV, whether it's charging, rains,

0:08:35.720 --> 0:08:38.000
<v Speaker 5>anxiety tend to be at the top of the list,

0:08:38.000 --> 0:08:40.880
<v Speaker 5>but price is the biggest reason. Average EV is right

0:08:40.920 --> 0:08:43.240
<v Speaker 5>around fifty five thousand. The average price of a car

0:08:43.240 --> 0:08:45.520
<v Speaker 5>on the US is forty eight thousand, and if they

0:08:45.520 --> 0:08:47.640
<v Speaker 5>want to get to the sweet spot of the growth market,

0:08:47.679 --> 0:08:49.720
<v Speaker 5>they got to push more towards the Honda Cord, the

0:08:49.720 --> 0:08:53.880
<v Speaker 5>Honda Civic than some of these maybe Volvo XC ninety.

0:08:54.800 --> 0:08:58.400
<v Speaker 1>So lower prices pretty much across the board, that hurts

0:08:58.400 --> 0:09:01.880
<v Speaker 1>your margins generally. And if you're talking about I think

0:09:02.000 --> 0:09:05.240
<v Speaker 1>Musk once talked about a twenty five thousand dollars Tesla model.

0:09:05.280 --> 0:09:08.679
<v Speaker 1>You mentioned thirty thousand ers, so that probably means lower

0:09:08.760 --> 0:09:12.160
<v Speaker 1>margins as well. Does that have a big impact on Well,

0:09:12.240 --> 0:09:16.320
<v Speaker 1>let's let's ask you, Gene, what has been happening with margins.

0:09:17.679 --> 0:09:22.520
<v Speaker 5>So margins surprisingly took a step up in the December quarter.

0:09:22.640 --> 0:09:25.880
<v Speaker 5>They finished at seventeen point two percent. That was up

0:09:25.920 --> 0:09:29.000
<v Speaker 5>from sixteen point two in the previous quarter. That's the

0:09:29.040 --> 0:09:31.719
<v Speaker 5>first time in a year that they've shown some improvement.

0:09:32.240 --> 0:09:34.640
<v Speaker 5>But the commentary on the call from their CFO was

0:09:34.679 --> 0:09:40.000
<v Speaker 5>that their current their current production lines don't really support

0:09:40.080 --> 0:09:44.280
<v Speaker 5>much margin expansion here and so they've got to get

0:09:44.320 --> 0:09:46.280
<v Speaker 5>this next line up and go in this next gen

0:09:46.320 --> 0:09:48.480
<v Speaker 5>line and Elon talked a lot about how efficient that

0:09:48.600 --> 0:09:52.120
<v Speaker 5>line is, and so this what it means is that

0:09:52.240 --> 0:09:54.440
<v Speaker 5>margins are probably going to be going down in twenty

0:09:54.480 --> 0:09:58.040
<v Speaker 5>twenty four, and that's that. Traditionally is the typical caretical

0:09:58.080 --> 0:10:01.360
<v Speaker 5>metric on Tesla earnings is the margin, and it's probably

0:10:01.400 --> 0:10:04.760
<v Speaker 5>won't be until late twenty five before they start to improve.

0:10:04.800 --> 0:10:07.240
<v Speaker 5>I do believe that they will improve. I think that

0:10:07.280 --> 0:10:10.520
<v Speaker 5>Tessa does have a long term cost advantage. But that's

0:10:10.559 --> 0:10:12.760
<v Speaker 5>what's going on with margins, is that they showed a

0:10:12.760 --> 0:10:16.000
<v Speaker 5>little bit of improvement, but the commentary is to expect

0:10:16.040 --> 0:10:17.840
<v Speaker 5>them to decline in the next year.

0:10:17.920 --> 0:10:20.080
<v Speaker 2>One of the most interesting things that I read about

0:10:20.080 --> 0:10:22.760
<v Speaker 2>what happened on the call was Musk addressing the size

0:10:22.760 --> 0:10:25.040
<v Speaker 2>of his stake in the company, which as I understand

0:10:25.080 --> 0:10:28.200
<v Speaker 2>it is about thirteen percent. He's obviously the biggest and

0:10:28.280 --> 0:10:32.520
<v Speaker 2>most influential shareholder, but he said that he doesn't want

0:10:32.520 --> 0:10:36.040
<v Speaker 2>to control the company, but he has so little influence

0:10:36.600 --> 0:10:40.400
<v Speaker 2>that he risk being voted out. Is that even a

0:10:40.440 --> 0:10:44.800
<v Speaker 2>possibility to imagine an activist investor coming in and pushing

0:10:45.320 --> 0:10:47.559
<v Speaker 2>Musk out of the C suite.

0:10:48.559 --> 0:10:52.040
<v Speaker 5>As long as it's mathematically possible, which it is right now.

0:10:52.200 --> 0:10:55.480
<v Speaker 5>Elon doesn't want that risk on the table, and what

0:10:55.520 --> 0:10:58.040
<v Speaker 5>he's asking for is something that's unprecedent, and he's going

0:10:58.120 --> 0:11:02.199
<v Speaker 5>to get because investors know, whether you're part of the

0:11:02.320 --> 0:11:05.760
<v Speaker 5>religious investors around this or part of the more level headed,

0:11:06.160 --> 0:11:08.200
<v Speaker 5>know that Elon is critical to the success of the

0:11:08.200 --> 0:11:12.440
<v Speaker 5>company and that he has been successful at generating wealth

0:11:12.520 --> 0:11:15.120
<v Speaker 5>in the past, and they should give him that leverage

0:11:15.120 --> 0:11:18.640
<v Speaker 5>to have an outsized impact on the decisions and the

0:11:18.679 --> 0:11:24.000
<v Speaker 5>strategy of the company. And so I think that it's unprecedented.

0:11:24.000 --> 0:11:25.920
<v Speaker 5>I think he's going to get it, and I think

0:11:25.920 --> 0:11:28.199
<v Speaker 5>he probably should get it, just given what he's done

0:11:28.200 --> 0:11:30.600
<v Speaker 5>for the company over the past decade.

0:11:31.120 --> 0:11:34.200
<v Speaker 1>And we know that Tesla has been somewhat challenged in China,

0:11:34.280 --> 0:11:37.839
<v Speaker 1>particularly with the rapid ascent of BYD. Did you hear

0:11:37.880 --> 0:11:41.000
<v Speaker 1>much today about how the future looks for Tesla in China?

0:11:42.160 --> 0:11:45.000
<v Speaker 5>They talked about the China market. There was a question

0:11:45.040 --> 0:11:46.520
<v Speaker 5>that came up related to you, do they want to

0:11:46.559 --> 0:11:49.320
<v Speaker 5>kind of double down in China, And the answer was

0:11:49.440 --> 0:11:52.520
<v Speaker 5>not really. They want to build Giga Mexico, expand the

0:11:52.520 --> 0:11:55.240
<v Speaker 5>production line in Austin, and do some more things in Europe.

0:11:55.679 --> 0:11:59.680
<v Speaker 5>And so I think that Tesla sees China as an opportunity.

0:11:59.720 --> 0:12:02.960
<v Speaker 5>It's obviously the largest EV market in the world, but

0:12:03.120 --> 0:12:07.480
<v Speaker 5>I think they see their growth prospects in the US

0:12:07.520 --> 0:12:13.240
<v Speaker 5>and potentially building some of these cheaper vehicles in Mexico

0:12:13.320 --> 0:12:14.920
<v Speaker 5>and even exporting them to China.

0:12:15.480 --> 0:12:18.079
<v Speaker 2>What's your take on the cyber truck. I think it

0:12:18.200 --> 0:12:20.880
<v Speaker 2>debuted back in November. It's still in the process of

0:12:20.960 --> 0:12:23.800
<v Speaker 2>rolling out. I think the pace has been described as measured.

0:12:24.040 --> 0:12:25.640
<v Speaker 2>Are you impressed at all by this?

0:12:26.640 --> 0:12:29.520
<v Speaker 5>It's I mean just from a peer specs of a vehicle,

0:12:29.600 --> 0:12:33.080
<v Speaker 5>it's it is impressive. I made a reservation when I

0:12:33.240 --> 0:12:35.679
<v Speaker 5>first saw the car back whenever that was twenty nineteen.

0:12:36.880 --> 0:12:38.560
<v Speaker 5>I'm not going to at the current price. So there's

0:12:38.920 --> 0:12:40.200
<v Speaker 5>I'm not going to buy the car. I mean, it's

0:12:40.200 --> 0:12:42.720
<v Speaker 5>close to one hundred thousand dollars. I want a fifty

0:12:42.760 --> 0:12:45.280
<v Speaker 5>thousand ARCR on one hundred thousand our car, And so

0:12:45.640 --> 0:12:48.280
<v Speaker 5>I think that I'm impressed by the car, I'm not

0:12:48.320 --> 0:12:52.559
<v Speaker 5>impressed by the price. And he said to expect around

0:12:52.559 --> 0:12:55.800
<v Speaker 5>two hundred and fifty thousand units plus. I think that's

0:12:55.800 --> 0:12:57.680
<v Speaker 5>probably in twenty twenty six. But when you kind of

0:12:57.720 --> 0:12:59.800
<v Speaker 5>added up this, this is going to be a car

0:12:59.840 --> 0:13:04.000
<v Speaker 5>that call it ten percent of their overall overall vehicle

0:13:04.120 --> 0:13:07.880
<v Speaker 5>sales and is just still it's going to be more

0:13:07.920 --> 0:13:10.640
<v Speaker 5>of a you know, that ten percent type of a car,

0:13:10.760 --> 0:13:14.080
<v Speaker 5>not what model wire model three are at forty five

0:13:14.120 --> 0:13:15.920
<v Speaker 5>percent of sales. It's not going to reach that kind

0:13:15.960 --> 0:13:16.520
<v Speaker 5>of scale.

0:13:17.440 --> 0:13:20.280
<v Speaker 1>Geene, you said you're pretty confident about the company's prospects

0:13:20.320 --> 0:13:22.360
<v Speaker 1>longer term. But if we look at the stock price

0:13:22.400 --> 0:13:25.280
<v Speaker 1>over the past two years, it's down pretty significantly from

0:13:25.320 --> 0:13:27.960
<v Speaker 1>more than four hundred dollars down to right now about

0:13:28.000 --> 0:13:30.800
<v Speaker 1>two hundred dollars. And if what we heard from Elon

0:13:30.920 --> 0:13:34.800
<v Speaker 1>Musk is true and also from the CFO about lower

0:13:34.840 --> 0:13:37.920
<v Speaker 1>margins going forward and worse performance in the coming year,

0:13:38.559 --> 0:13:40.520
<v Speaker 1>the stock price, I mean, what's your target for the

0:13:40.559 --> 0:13:41.800
<v Speaker 1>stock at the moment.

0:13:43.440 --> 0:13:47.160
<v Speaker 5>So we don't do the kind of traditional sale side

0:13:47.280 --> 0:13:53.120
<v Speaker 5>targets or investors. And in terms of where this plays out,

0:13:53.280 --> 0:13:56.040
<v Speaker 5>is that I think that this year can be potentially

0:13:56.040 --> 0:13:57.679
<v Speaker 5>be a difficult year. The first part of this year

0:13:57.679 --> 0:13:59.480
<v Speaker 5>a difficult year for Tesla shares. I think tomorrow is

0:13:59.480 --> 0:14:03.160
<v Speaker 5>going to be difficul But my question, I think the

0:14:03.240 --> 0:14:06.360
<v Speaker 5>question about is this going to be more a higher

0:14:06.400 --> 0:14:09.480
<v Speaker 5>value company in the future or a lower value comes

0:14:09.480 --> 0:14:12.560
<v Speaker 5>down to a basic question is do you believe that

0:14:13.280 --> 0:14:16.280
<v Speaker 5>electrification is going to impact automotive in the sense that

0:14:16.440 --> 0:14:19.240
<v Speaker 5>in twenty years we're going to have more than sixty

0:14:19.280 --> 0:14:21.560
<v Speaker 5>percent share of cars are electric. If you think we

0:14:21.640 --> 0:14:24.080
<v Speaker 5>will be there in twenty years, we're at about four percent,

0:14:24.160 --> 0:14:25.040
<v Speaker 5>five six percent.

0:14:25.120 --> 0:14:25.400
<v Speaker 7>Now.

0:14:25.760 --> 0:14:27.400
<v Speaker 5>If you think we're going to be above that sixty

0:14:27.480 --> 0:14:31.600
<v Speaker 5>percent market mark in twenty years, then Tesla's doing all

0:14:31.640 --> 0:14:34.560
<v Speaker 5>the right things to put traditional auto in a tight spot.

0:14:34.960 --> 0:14:36.800
<v Speaker 5>And if you believe gas is just going to kind

0:14:36.800 --> 0:14:39.760
<v Speaker 5>of hold on longer than most people think, then it's

0:14:39.800 --> 0:14:43.800
<v Speaker 5>not going higher. And my sense is that cars are

0:14:43.880 --> 0:14:48.040
<v Speaker 5>still stuck in a paradigm that's one hundred years old,

0:14:48.120 --> 0:14:50.120
<v Speaker 5>and I think there's a massive opportunity for them to

0:14:50.600 --> 0:14:53.200
<v Speaker 5>not only electrify them, but automate them on a lot

0:14:53.240 --> 0:14:54.600
<v Speaker 5>of levels. I think that's important.

0:14:55.120 --> 0:14:57.120
<v Speaker 1>All right, Gene, thanks very much for joining us here

0:14:57.160 --> 0:15:01.840
<v Speaker 1>on Bloomberg Daybreak Asia. Gene Munster, Managing partner, Deepwater Asset Management.

0:15:04.040 --> 0:15:06.880
<v Speaker 1>This is Bloomberg Daybreak Asia, your morning brief on this

0:15:06.960 --> 0:15:10.680
<v Speaker 1>story's making news from Hong Kong to Singapore and Wall Street.

0:15:10.840 --> 0:15:14.880
<v Speaker 2>Look for us on your podcast feed every day on Apple, Spotify,

0:15:15.120 --> 0:15:17.119
<v Speaker 2>and anywhere else you get your podcast.

0:15:17.360 --> 0:15:20.000
<v Speaker 1>You can also listen live each day on Bloomberg eleven

0:15:20.040 --> 0:15:22.400
<v Speaker 1>three to zero in New York, Bloomberg ninety nine to

0:15:22.440 --> 0:15:25.640
<v Speaker 1>one in Washington, Bloomberg one oh sixty one in Boston,

0:15:25.920 --> 0:15:28.480
<v Speaker 1>and Bloomberg nine sixty in San Francisco.

0:15:28.680 --> 0:15:31.600
<v Speaker 2>Our flagship New York station is also available on your

0:15:31.640 --> 0:15:37.280
<v Speaker 2>Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty plus.

0:15:37.440 --> 0:15:41.240
<v Speaker 1>Listen coast to coast on the Bloomberg Business app, Sirius XM,

0:15:41.600 --> 0:15:46.480
<v Speaker 1>the iHeartRadio app, and on Bloomberg dot Com. I'm Brian Curtis.

0:15:46.200 --> 0:15:48.640
<v Speaker 2>And I'm Doug Krisner. Join us again tomorrow for all

0:15:48.640 --> 0:15:51.160
<v Speaker 2>the news you need to start your day right here

0:15:51.240 --> 0:15:55.840
<v Speaker 2>on Bloomberg Daybreak Asia