Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live
Speaker 1: from coast to coast with Caroline Hige to New York
Speaker 1: and Ed Lovelow in San Francisco.
Speaker 2: This is Bloomberg Tech. I'm Jackie Devalas here in New York.
Speaker 2: Coming up. Ed Ludlow is live in DeSoto, Kansas from
Speaker 2: Panasonic's newest EV battery plant. We'll have the live conversations
Speaker 2: with Panasonic North America CEO and Lucid CEO. Sour Plus
Speaker 2: Bitcoin soares past one hundred and twenty thousand dollars as
Speaker 2: Congress starts Crypto Week, and Musk says Tesla shareholders will
Speaker 2: vote on whether to invest in his AI startup XAI.
Speaker 2: Let's head over to DeSoto, Kansas, where Panasonic has just
Speaker 2: unveiled its latest EV battery plant. At Ludlow is standing
Speaker 2: by h What are you seeing?
Speaker 3: Ed?
Speaker 4: Yeah, this is a four point seven million square feet
Speaker 4: facility that at full capacity thirty gig or what hours,
Speaker 4: enough for five hundred thousand evs for animal powered by
Speaker 4: these little guys twenty one to seventy cells. And we're
Speaker 4: delighted to be joined by Panasonic Corporation of North America
Speaker 4: CEO Meghan beong on Lee regular contributor to the show.
Speaker 4: But this was the moment you and I talked about
Speaker 4: it earlier in the year. What does it mean for
Speaker 4: Panasonic in America and American manufacturing of battery technology?
Speaker 3: So this is more than a ten year vision.
Speaker 5: We wanted to do this and we wanted to go
Speaker 5: big in this market. So we had a commitment and
Speaker 5: we started in Reno and Nevada, and this is our
Speaker 5: factory that we're diversifying our ev strategy, and we're going
Speaker 5: to be full production this year and it's really exciting.
Speaker 5: Today's a fun and exciting day, and this is a celebration.
Speaker 4: Full production this year. The sales are already coming off
Speaker 4: the line. Could you just explain the roadmap for the ramp,
Speaker 4: because no facility is straightforward, but this is the size
Speaker 4: of two hundred American football fields.
Speaker 6: How are you going to get to full capacity this year?
Speaker 5: So we started in November twenty twenty two, two and
Speaker 5: a half years ago, and it was all flat field
Speaker 5: and it was a massive land and we started a
Speaker 5: construction and we started the production and testing last week
Speaker 5: and we're going to produce the batteries this year, and
Speaker 5: you probably saw the cars that we have in Display
Speaker 5: and Tesla, Lucid and Hexagon Truck and we're really excited
Speaker 5: to work with different suppliers and partners and clients this year.
Speaker 4: We're going to discuss in detail those customers. They're really
Speaker 4: key to this. There were media reports Friday nights that
Speaker 4: there would be a delay in reaching full capacity, and
Speaker 4: what the report stated was that was due to demand.
Speaker 4: Are you able to comment on that report? And it
Speaker 4: sounds like they were missing formed if you are going
Speaker 4: to hit full capacity this year.
Speaker 3: I do think it was misinformed.
Speaker 5: And we're very We're a Japanese company and when we
Speaker 5: say when we commit to something, we're fully committed and
Speaker 5: we want to make sure that we support all the customers.
Speaker 3: That were committed.
Speaker 5: We're not feeling the slow down yet, and we're very
Speaker 5: bollish on working with all those customers.
Speaker 4: When you say you're not feeling the slow down, that
Speaker 4: means that you're seeing consistent orders from those key customers
Speaker 4: or they're still committing to orders in advance.
Speaker 6: What do you mean by the definition of what you
Speaker 6: just said.
Speaker 5: So we have the operation in Reno and that's going
Speaker 5: very healthy and we're seeing the commitments coming in for
Speaker 5: this facility as well, so we're not feeling the slow
Speaker 5: down yet but yet again, I mean, you see this operation.
Speaker 3: This is a.
Speaker 5: Long term commitment, so there may be some pushback or
Speaker 5: moving ahead, but we're committed for a long term and
Speaker 5: we're not shying away from those from time to time challenges.
Speaker 4: Throughout the morning, there was a lot of discussion about
Speaker 4: Tesla because Tesla makes the best selling EV model in
Speaker 4: the world this specific facility. Does Tesla dominate the proportion
Speaker 4: of output or is it more evenly split across your
Speaker 4: different customers.
Speaker 5: So we're working with Tesla for sure, and we're working
Speaker 5: with Lucid and Hexagon and other clients. So it is
Speaker 5: to diversify our EV manufacturing in the United States.
Speaker 4: What do you mean by diversify move away from one
Speaker 4: sort of core customer, No, not really.
Speaker 5: We're expanding, right So we're definitely working with Tesla, but
Speaker 5: we want to work with other establish the.
Speaker 3: OEMs as well as startups. So it's part of our
Speaker 3: efforts to expand our strategy and manufacturing output as well.
Speaker 4: What signals has Tesla given you about its future orders,
Speaker 4: about the health.
Speaker 5: Of its business your guess is as good as mine.
Speaker 5: But we have a long term relationship, longer than anyone else,
Speaker 5: and there's still a very important strategic partner for us,
Speaker 5: and I believe our partnership is very strong.
Speaker 4: Throughout the morning, there was a lot of discussion of
Speaker 4: how Kansas was the absolute best candidate. What were the
Speaker 4: biggest factors in choosing this site. Were they financial? Were
Speaker 4: they simply the ability to get things done? Lack of
Speaker 4: red tape? Why were we able to move so quickly?
Speaker 5: So we talked about the available workforce and the infrastructure.
Speaker 5: I mean you saw the power lines built by the
Speaker 5: factory and as well as the.
Speaker 3: Energy of procurement that we can do.
Speaker 5: But more than anything, there was something very special about Kansas.
Speaker 5: All the officials were able to work with us, and
Speaker 5: you probably heard that Lautana Governor Toland taking some of
Speaker 5: his speech in not only Japanese but Osaka dilatet and
Speaker 5: that level of insights and.
Speaker 3: Care and support really made the difference.
Speaker 5: And it doesn't matter what party they are, they're very
Speaker 5: committed to bring.
Speaker 3: Us here but also make us feel home.
Speaker 5: So that kind of partnership not just numbers and infrastructure,
Speaker 5: but emotional partnership made the difference, and we're so happy
Speaker 5: to celebrate today.
Speaker 4: What I was going to say on the numbers is
Speaker 4: there is a job creation story. So four thousand direct jobs,
Speaker 4: I think the numbers twenty thousand indirect jobs when you
Speaker 4: take into account supply chain construction. What have you had
Speaker 4: to do to kind of bring the other infrastructure you've
Speaker 4: needed to de Soto have everything you need around you?
Speaker 5: So what was great about planning it out? Like I said,
Speaker 5: we started two and a half years ago, and at
Speaker 5: that time we worked with local schools and community colleges
Speaker 5: to create curriculums so when we start from manufacturing, they're
Speaker 5: there already already taking the course and be available to
Speaker 5: take a job.
Speaker 6: To guarantee you had the skill sets.
Speaker 5: Absolutely absolutely, So we created curriculum together and it's been
Speaker 5: a really good partnership and it helps us and it
Speaker 5: helps the community, and it's like wonderful win win.
Speaker 4: The headline figure was that Panasonic put four billion dollars.
Speaker 6: Into this to SODO facility.
Speaker 4: But you also the reported number is eligible for almost
Speaker 4: seven billion dollars from the Inflation Reduction Act.
Speaker 6: How much of that materialized.
Speaker 5: We haven't started the manufacturing here, So we have not
Speaker 5: seen the incentives YEF.
Speaker 6: They're setting against milestones.
Speaker 3: Yes, yes, so it comes with the production.
Speaker 5: So we're looking forward to it and it's definitely a
Speaker 5: big part of our investment.
Speaker 4: Do you anticipate that you will get access to the
Speaker 4: full tranche of money?
Speaker 3: We certainly hope.
Speaker 4: So things have changed, I mean things have changed even
Speaker 4: since you and I spoke in January.
Speaker 6: There is some.
Speaker 4: Effort underway to reshape or or undo the Inflation Reduction Act.
Speaker 4: It seems like the seventy five hundred dollars credit which
Speaker 4: goes to the consumer on this vehicle will go, but
Speaker 4: the forty five x manufacturer credits seems intact. How have
Speaker 4: you navigated that? Is that you'll read.
Speaker 6: On the scenario as well.
Speaker 5: So we're very still a verticle fall that should remain
Speaker 5: and I think it should remain. It's not only for us,
Speaker 5: but it's for creating jobs and manufacturing and bringing technology
Speaker 5: to us. So so far it's very positive and we're
Speaker 5: hopeful that it stay is it will be a big
Speaker 5: part of our long term strategy.
Speaker 4: What's the supply chain story right now for DeSoto, Kansas?
Speaker 4: When you think about your raw material needs and everything
Speaker 4: that goes into the cell process. Are there things that
Speaker 4: are still difficult?
Speaker 6: What are they? Or has bringing this.
Speaker 4: Facility online been smoother because of policy.
Speaker 5: We have been planning for the supply chain resilience, not
Speaker 5: just for this and recent terrificuation, but from COVID.
Speaker 3: During COVID, we.
Speaker 5: Really suffered from weak supply chain. I mean, I think
Speaker 5: all the industry did, and so did we. So we've
Speaker 5: been planning for supply chain resilience and we are I
Speaker 5: mean just for our benefit too, to make sure that
Speaker 5: those supply chains stay local and within.
Speaker 3: The North America.
Speaker 5: And our goal is to complete fifty percent of our
Speaker 5: supply chain by twenty thirty to be completely local.
Speaker 4: Are any of the conditions currently associated with that forty
Speaker 4: five x manufacturer credit difficult when you think about foreign
Speaker 4: entity of concern or parts of the supply chain, which
Speaker 4: in the context of metals like China is still a factor.
Speaker 5: Yes, yes, yes, So we started partnering with China and
Speaker 5: we are for the supply chain resilience. So we are
Speaker 5: trying to diversify and make sure that supply chain.
Speaker 3: Is more resilience to make sure that we can procure
Speaker 3: and process on site.
Speaker 5: So it's not really a new change for us necessarily,
Speaker 5: we've been trying to do that.
Speaker 3: For a few years.
Speaker 6: Where are the bottlenecks right now? If any?
Speaker 3: I don't know.
Speaker 5: It's really the refining process to make sure that we
Speaker 5: can find a supplier who can make sure that quality
Speaker 5: is there. Right the refinement, the quality matters for our
Speaker 5: quality production. So that's where we pay most attention, to
Speaker 5: make sure that the raw material is ready for quality
Speaker 5: EV batteries.
Speaker 7: Right.
Speaker 3: It's good for everyone, for consumers.
Speaker 5: We want to make sure those AV batteries are tested
Speaker 5: and safe.
Speaker 4: I know this might seem far fetched. We're just bringing
Speaker 4: this facility online. Yes, but one of the questions I
Speaker 4: got from you from the audience is what happens next?
Speaker 6: You have the Vada, you now have Kansas.
Speaker 4: Does Panasonic see further sites for EV in the first instance?
Speaker 4: What is your next priority?
Speaker 3: It's TBD.
Speaker 5: Today's first day of this operation, and we're really excited
Speaker 5: to make sure that this goes smooth producing quality EV batteries.
Speaker 5: We'll focus on their first and if it goes well,
Speaker 5: who knows?
Speaker 7: Right?
Speaker 6: Demand is still a question.
Speaker 4: Yes. What I find interesting is a lot of the
Speaker 4: customer basis pure play EV. But the lesson we've learned
Speaker 4: in the last eighteen months or so is hybrid is
Speaker 4: still a big part of the market, maybe in a
Speaker 4: way that surprised many. Do you have the ability to
Speaker 4: tap into demand for hybrid from this facility or others?
Speaker 5: We don't know yet, but we're pleasantly surprised that EB
Speaker 5: sales still rows by like eleven point four percent.
Speaker 3: So that's a good sign.
Speaker 5: And like I said, this is a long term play,
Speaker 5: so we're not going to be happy and said with
Speaker 5: the small ups and downs, we're still bullish that EV
Speaker 5: markets should role and hybrid transition should be part of it.
Speaker 4: Have you done a sort of side by side analysis
Speaker 4: of the economics of a single cell? Bring mine back out.
Speaker 4: I have one single twenty one seventy cell here, so
Speaker 4: this will be manufactured in Kansas, not subject to tarifs.
Speaker 4: You have the Nevada facility, but Panasonic Energy also has
Speaker 4: facilities all around the world. Is it just an instant
Speaker 4: fixed that the cell on a unit basis is just
Speaker 4: a more attractive economic proposition if it's built here in
Speaker 4: Kansas for the American market versus shipping cells.
Speaker 6: In from EU. Overseas facilities.
Speaker 5: It makes a lot more economic sense to produce here, right,
Speaker 5: bring raw materials here and produce here anyware.
Speaker 2: And we're cutting in for some breaking news.
Speaker 3: Here.
Speaker 2: We have President Trump in the White House with the
Speaker 2: NATO Secretary General Tick A. Lissen. That was President Trump
Speaker 2: with the NATO Secretary General announcing that he was quote
Speaker 2: unhappy with Russia and is threatening secondary terror of one
Speaker 2: hundred percent on Russia if a deal with Ukraine is
Speaker 2: not reached. But first, let's get to some breaking news
Speaker 2: that crossed the wire. Mark Suckerberg, metas CEO, took to
Speaker 2: threads to say that the company will invest hundreds of
Speaker 2: billions of dollars in computing to build super intelligence. Shares
Speaker 2: rows off the news and let's get right to that
Speaker 2: with our very own Kurt Wagner. Kurt walk us through
Speaker 2: this latest investment in how it compares to the previous
Speaker 2: announcements the company has made.
Speaker 8: Yeah, so some of this is as you point out,
Speaker 8: you know, hundreds of billions of dollars at the very
Speaker 8: eye catching. I will say that is a number that
Speaker 8: Mark Zuckerberg has thrown around before historically. He said that
Speaker 8: this is you know this this dry for AI is
Speaker 8: going to be incredibly expensive. He's even admitted some companies,
Speaker 8: presumably his own, will overpay on AI in order not
Speaker 8: to fall behind. So hundreds of billions on infrastructure. But
Speaker 8: I think, Jackie, when you when you look at this,
Speaker 8: why it makes sense is you recall over these last
Speaker 8: couple of weeks they've been spending very aggressively to hire
Speaker 8: AI talent for this super intelligence group. And I think this,
Speaker 8: you know, commitment to these infrastructure side is meant to
Speaker 8: sort of go hand in hand with that. Okay, So
Speaker 8: we've hired the talent, we have the people in the
Speaker 8: building that we think can build this thing, and now
Speaker 8: we're putting the money behind the infrastructure to help support them.
Speaker 2: Kurt, this announcement has fresh resonance, especially as some of
Speaker 2: Meta's competitors are making their own moves to really bolster
Speaker 2: their AI ambitions. Talk to us a little bit about
Speaker 2: what XAI is hoping to do by tapping some of
Speaker 2: Tesla's coffers.
Speaker 8: Yeah, so XAI is become like this central hub of
Speaker 8: the Elon Inc. Universe. Right, we've talked about this historically
Speaker 8: on this show before, this idea that all of Elon
Speaker 8: Musk's various businesses sort of work together and help one another,
Speaker 8: and I think that's just become more and more prevalent,
Speaker 8: especially as Xai has grown. And so we learned, you
Speaker 8: know that SpaceX, for example, is now investing two billion
Speaker 8: dollars into Xai. We've seen that Elon Musk plans to
Speaker 8: put a shareholder vote to Tesla's shareholders asking if Tesla
Speaker 8: should invest in Xtai. We obviously know Xai on Twitter
Speaker 8: already merged or x already merged. So this notion that
Speaker 8: all of these different sort of businesses of Elon's are
Speaker 8: now contributing to the AI business, I think is super notable.
Speaker 8: And you can see there are some, you know, to
Speaker 8: use the terrible cliche synergies between these companies, right the
Speaker 8: idea that groc might be distributed through Tesla's is one
Speaker 8: example of that. But it does feel like Elon is saying, Okay,
Speaker 8: I have these other businesses that are doing well financially,
Speaker 8: I'm going to take some of that cash and try
Speaker 8: to use that as jet fuel on my AI startup, Kurt.
Speaker 2: It really depends on the outcome of this shareholder vote.
Speaker 2: What is the case that Elon needs to make two
Speaker 2: shareholders about what it stands to benefit from this move.
Speaker 9: Yeah.
Speaker 8: Well, I think if you're an Elon, first of all,
Speaker 8: you have a ton of loyal shareholders already, people who
Speaker 8: want this thing to happen simply because Elon Musk wants
Speaker 8: it to happen, right, So you have a pretty strong
Speaker 8: base of people. But for those who are on the fence,
Speaker 8: I think what you would sit here and say is, look,
Speaker 8: this technology, this AI technology is going to be world changing,
Speaker 8: transforming if it hasn't you know, already been the case
Speaker 8: with self driving for example, being maybe the core Tesla example.
Speaker 8: And so I think if you're Eline, you just say, look,
Speaker 8: you're putting in money now into a technology that's going
Speaker 8: to be worth ten, one hundred times more down the line.
Speaker 8: But also you're going to get you know, all of
Speaker 8: this data, this infrastructure that I'm building at XAI, and
Speaker 8: it could potentially benefit Tesla as well. Again as you
Speaker 8: improve self driving, as you know, take Grock for example,
Speaker 8: put it into the cars. So if I'm him, I
Speaker 8: paint this as very much like a rosy marriage between
Speaker 8: the future technology and putting all of that into an automobile,
Speaker 8: which I think they're already doing so. I think it's
Speaker 8: easy for people to wrap their heads around, but it's
Speaker 8: something he's going to have to really hammer home for
Speaker 8: those who are skeptical.
Speaker 2: Kurt, we know that Bloomberg has reported that Xai is
Speaker 2: burning over a billion dollars a month on its AI efforts.
Speaker 2: What do we know about how much the company is
Speaker 2: bringing in and how that compares to its competitors.
Speaker 8: Yeah, we don't know much about the revenue of Xai
Speaker 8: because at this point they're not really as far as
Speaker 8: I know, making much money outside of you know, Grock is,
Speaker 8: for example, available to subscribers on x there's probably some
Speaker 8: kind of financial arrangement, at least there was before the merger,
Speaker 8: where you know, each subscriber sort of pays for a
Speaker 8: little bit of Grock. But I do think this is
Speaker 8: going to be the key, Right you're spending a ton
Speaker 8: of money on here. Does this payoff into a real
Speaker 8: legitimate business moving forward?
Speaker 2: That's Bloomberg's Kurt Wagner, thanks for joining us. Coming up,
Speaker 2: Lucid interim CEO Mark Winterhof joins us from the Panasonic
Speaker 2: EV battery plan in Kansas. More Next, this is Bloomberg.
Speaker 10: Tech Welcome back. To Bloomberg Tech.
Speaker 4: We're live in DeSoto, Kansas at Panasonic's brand new EV
Speaker 4: battery plants four point seven million square feet at full capacity,
Speaker 4: which will happen later this year. So news we broke
Speaker 4: with Panasonics North America CEO making the Young one.
Speaker 6: Lee thirty gig or hours of capacity.
Speaker 4: That's enough cells for five hundred thousand evs perannum. One
Speaker 4: of the key customers Lucid, and Lucid CEO Mark went
Speaker 4: Off Interim CEO Mark winter Off is with us. Now
Speaker 4: this is a significant moment for you as well, because
Speaker 4: your first domestic supply of cells reflect on that.
Speaker 11: That is true. Yeah, So currently we're getting our battery
Speaker 11: supplies either from Japan or from Korea, depending on the supplier,
Speaker 11: and Panasonic is a great partner for us. We decided
Speaker 11: two and a half years ago to make together this
Speaker 11: investment here and to localize the production that's held production
Speaker 11: here to county.
Speaker 6: It's not just volume supply. This is twenty one to seven.
Speaker 4: My understanding is there were some co engineering to make
Speaker 4: this as good as it can possibly be.
Speaker 6: Explain how that worked.
Speaker 11: It's a great collaboration between our engineering departments and their
Speaker 11: engineering department. We bring in a lot of experience on
Speaker 11: what this cell is supposed to do in real life,
Speaker 11: and they make it happen with chemistry and with all
Speaker 11: of the parameters of the cell. So what was really
Speaker 11: really great collaboration, and that we also then are able
Speaker 11: now to produce us here locally obviously in the current climate,
Speaker 11: helps us a lot.
Speaker 4: How did the economics of the DeSoto Candice May twenty one,
Speaker 4: seventy stack. I know that you love charts and spreadsheets
Speaker 4: as much as I do, but you must have done
Speaker 4: that analysis.
Speaker 11: Yeah, absolutely, I mean, like I would say, we wouldn't
Speaker 11: have done it if it wouldn't be economically feasible or beneficial.
Speaker 11: As I mentioned before, we made that decision, not just recently,
Speaker 11: so terrists were not on the radar screen at that time.
Speaker 11: We did that decision two and a half years ago,
Speaker 11: and at that time, together with the forty five X
Speaker 11: incentive a text credit, the economics make sense. I still
Speaker 11: have to say, and I hope the Panasic Sonic hears
Speaker 11: that that you know, there's some room of improvement. But
Speaker 11: also right now obviously with the tariffs, this is a
Speaker 11: very good move for.
Speaker 4: Us because the same cell that would otherwise have come
Speaker 4: from Japan or career is subject to tariffs.
Speaker 11: It is.
Speaker 6: That's a part of the equation that is correct.
Speaker 11: And the other thing that we are currently working on
Speaker 11: together with Panasonic is obviously further localizing the supply chain
Speaker 11: for the cell because it doesn't do you a lot
Speaker 11: of good if your manufacturer here, but you still import
Speaker 11: the raw material which is then subject to terriffs. So
Speaker 11: we're already doing a lot of investments in that. You
Speaker 11: heard about our graphite one investments on the graphite and
Speaker 11: other materials, So we're working with them on making that
Speaker 11: happen as well.
Speaker 6: Mark, I've come Lucid for a number of years.
Speaker 4: This is the first time you and I have spoken,
Speaker 4: and I'm grateful for your time. Your predecesssessor, Peter Rodinson
Speaker 4: had a very simple argument. Lucid had the best technology
Speaker 4: on the hardware side and software battery management system. And
Speaker 4: even though your journey started in the premium segments, that
Speaker 4: you would scale to volume because you would just say
Speaker 4: this performance and range in this pack, we can just
Speaker 4: scale it down make a more affordable version.
Speaker 6: Have we hit that inflection point yet.
Speaker 11: Well, I mean we're about to you know everybody knows
Speaker 11: by now that follows loser that you know, we are
Speaker 11: very very strongly working on our mid sized platform, right,
Speaker 11: which is a you know, smaller platform also from a
Speaker 11: price point perspective, more in the round, in the fifty
Speaker 11: thousand dollars range and not where we are right now,
Speaker 11: and that's when we really hit that inflection point. But
Speaker 11: mister gravity, that we are ramping up right now, we
Speaker 11: are already expecting to have much higher numbers we had
Speaker 11: in the.
Speaker 4: Past, right, I think you know, there's a lot of
Speaker 4: work to do in the second half of the year
Speaker 4: to reach twenty thousand. What role does the DeSoto plan't play?
Speaker 4: Will you be able to get hold of sales from
Speaker 4: here for vehicles sold or delivered.
Speaker 6: In this calendar year?
Speaker 11: No, not yet, Okay, So it's just something that is
Speaker 11: something for next year. And again with our partners with Panasonic,
Speaker 11: we are working on opportunities to further bring this in
Speaker 11: because obviously, in the current climate, that is very important
Speaker 11: for us to localize.
Speaker 4: We've focused this morning a lot on policy. You've brought
Speaker 4: up the forty five x credit, but the consumer credit
Speaker 4: of seven thousand, five hundred dollars likely no, more.
Speaker 6: What can you do in that environment with the vehicle.
Speaker 4: Are you able to pull forward lower price point variant
Speaker 4: are you looking to just appeal to the premium.
Speaker 6: Segment on an ongoing basis.
Speaker 11: Well, first of all, when it comes to our current
Speaker 11: vehicles with the EAR, it might not be widely known,
Speaker 11: but we are the best selling vehicle in our segment,
Speaker 11: the best selling EV and we also were in the
Speaker 11: second half of last year. Actually in the beginning of
Speaker 11: this year, we were the best selling vehicle in the
Speaker 11: whole segment, including ice vehicles. So the air is actually
Speaker 11: doing well, although the numbers are obviously when you look
Speaker 11: at the broader scheme of things, are not that high yet,
Speaker 11: but that's because of the size of the segment. With gravity, obviously,
Speaker 11: we're now reaching a different scale and we're still ramping
Speaker 11: up the production and as you said, we have to
Speaker 11: do quite a lot in order to get to our
Speaker 11: target for this year, but it's going well. We're unclocking
Speaker 11: some of the blockages that we had in the supply chain,
Speaker 11: and our plant really got into the groove to create
Speaker 11: the vehicle. So I would say the inflection point of
Speaker 11: having really economics of scale is still a little bit out.
Speaker 11: We're still more appealing to the higher price segment. That's
Speaker 11: what we have. And I mean automotive. You cannot just decide, oh,
Speaker 11: let's put out a new cheaper variant next week. It
Speaker 11: takes planneers to implement, to plan, to engineer, to validate.
Speaker 11: So that's sometimes you know, not well understood that manufacturing
Speaker 11: and then building great cars is a long term game
Speaker 11: and you have to build also economics of scale over time.
Speaker 11: It's not something that happens from one day to the other.
Speaker 6: I'll hold you to it.
Speaker 4: Twenty thousand is realistic this year with the time left
Speaker 4: to you.
Speaker 11: We're in a quiet period right now, so I cannot
Speaker 11: really talk about it. I suggest you tune in in
Speaker 11: our earnings call on August fifth. I will do, and
Speaker 11: we will definitely hear about it.
Speaker 6: And the mid sized platform is on track for next year, and.
Speaker 11: The same applies to that as well. We're working very hard,
Speaker 11: but on August fifth there will be news on them.
Speaker 4: The other part of Lucid's history was idea of partnerships,
Speaker 4: manufacturing partnerships licensing technology. Has that idea change given the
Speaker 4: political environment?
Speaker 11: No, actually no it hasn't. So as a matter of fact,
Speaker 11: and I said that in the last couple of months,
Speaker 11: and everybody honestly understandably asked me, Okay, where is it,
Speaker 11: where is it beginning? Those things take time, and particularly
Speaker 11: in the last couple of months, with the uncertainty of
Speaker 11: the terrorists, I have to say, many of the people
Speaker 11: we had conversations with to have other issues, you know,
Speaker 11: they have pressing things to solve right now. In the
Speaker 11: last quarter we also, on top of that, had you know,
Speaker 11: the magnet shortage which actually halted production for several players.
Speaker 11: So those discussions still happen on our EV core technology,
Speaker 11: but also beyond that, stay tuned, there will be other
Speaker 11: news also.
Speaker 4: Those potential partners, though motivated by the environment, the effort
Speaker 4: to onshore.
Speaker 6: Industry in this country exactly to work with America.
Speaker 11: Yeah, they're different, they're different things. First of all, Right now,
Speaker 11: with let's say perceived slow down of EV adoption, especially
Speaker 11: companies that have both ice vehicles and EV, they can
Speaker 11: only invest the dollar once. So right now we see
Speaker 11: let's say, drift back to ice vehicles and therefore, but
Speaker 11: they still need to come out with new models and
Speaker 11: therefore we have increased interest in Hey, can we do
Speaker 11: things together. So and I expect this to continue.
Speaker 4: Actually, you talked to a moment ago about being dominant
Speaker 4: in your segment, the lead seller in that segment. But
Speaker 4: everyone always asks me if somebody is put off buying
Speaker 4: a testa vehicle.
Speaker 6: I drive a tested vehicle or model why But there.
Speaker 4: Are many out there that say I don't want to
Speaker 4: buy a testa vehicle. Have you any data that says
Speaker 4: those buyers turn to Lucid in the pure play categories
Speaker 4: that you operate at.
Speaker 11: Yeah. Absolutely, I mean, as I just said, we're now
Speaker 11: the best selling vehicle in the United States, it's in
Speaker 11: our segment that includes still model, our segment. I mean,
Speaker 11: I don't compare right now the gravity because we're still
Speaker 11: ramping up. We're in the phase of ramping up. I
Speaker 11: guess let's talk again by the end of this year
Speaker 11: where we stand on the gravity. But the ear Yes,
Speaker 11: we see a lot of incoming. We always actually, by
Speaker 11: the way, had a lot of interest Prompter's love yo.
Speaker 11: So it's not really new, but it has increased. Absolutely.
Speaker 4: This administration is fascinating in Lucid's contexts. Maybe the pro
Speaker 4: EV policy is not there, but supporting US manufacturers is
Speaker 4: you also have the relationship with Saudi Arabia, and the
Speaker 4: administration in the context of GPUs for example, has been
Speaker 4: supportive in those trade deals. What has the experience been
Speaker 4: like leading this company under the Trump administration in net,
Speaker 4: how do you think you've come out so far?
Speaker 11: Well, I mean, obviously things became more complicated. I mean
Speaker 11: the teriff situation. I mean, there's no doubt it increases
Speaker 11: our cost and it also creates a lot of additional
Speaker 11: headache because you now have to completely rethink the supply chain.
Speaker 11: Are you continuing certain things or are you localizing Again,
Speaker 11: that's nothing that happens from one day to the other.
Speaker 11: We are doing okay when you compare to other players
Speaker 11: in the industry. Also from the cost increases, particularly because
Speaker 11: we build everything right now in the United States, and
Speaker 11: we build all of the vehicles, our key components, we're
Speaker 11: all built here in the United States. Having said that,
Speaker 11: we are hit by obviously raw materials or let's say
Speaker 11: Tier two suppliers that we have to import and we
Speaker 11: have to pay teriffs on that. So it's not that
Speaker 11: we are not impacted, but we are less so than others.
Speaker 11: So yeah, I mean it's something we have to do
Speaker 11: to work with and for us, it's also because we
Speaker 11: are a pure ev manufacturer. We believe in the future
Speaker 11: of electrical propulsion. We're not wavering. We're not saying, oh,
Speaker 11: let's do I don't know a rain extent or something
Speaker 11: that is not going to happen with lewisid this is
Speaker 11: part of our vision. You know that this is the
Speaker 11: future and actually important to save our planet, so we
Speaker 11: will find a way through this.
Speaker 5: Well.
Speaker 11: Also have to say, for the American consumers, vehicles are
Speaker 11: going to be more expensive under the terriff region. There's
Speaker 11: no other way around it.
Speaker 10: There is.
Speaker 11: Yes, you can say, oh, you just need to localize. Well, yes,
Speaker 11: but that still increases the costs because there's a reason
Speaker 11: why the supply chain is so global, because certain things
Speaker 11: are either not available here in the US or are
Speaker 11: just very expensive, so you import them. And if you
Speaker 11: change that, you still have higher cost in the United States,
Speaker 11: which means manufacturers like US are actually any manufacturer has
Speaker 11: to increase prices. There's no other way unless you want
Speaker 11: everybody to be nonprofit organizations, which then would lead to
Speaker 11: no innovation and no technology leadership. And I think that's
Speaker 11: in the current climate globally. It's the last thing we want.
Speaker 6: The cost of doing business in America.
Speaker 4: Mark winter Off, Lucid's interim CEO, one of the core
Speaker 4: customers at this Panasonic De Soto, Kansas plant that is
Speaker 4: due to hit full capacity this year.
Speaker 6: There's so much more to come here on Bloomberg Tech.
Speaker 6: Stay with us. This is Bloomberg Tech.
Speaker 2: Lawmakers are gearing up to focus on several key bills
Speaker 2: for the crypto industry this week, which has been dubbed
Speaker 2: Crypto Week, including the Senate's Genius Act and the Clarity Act.
Speaker 2: For more, Bloomberg's Zeke Fox joins us.
Speaker 6: Now.
Speaker 2: Part of what's driving this big rally in crypto is
Speaker 2: obviously this momentum on Capitol Hill. Walk us through the
Speaker 2: nuts and bolts of what these bills could do for
Speaker 2: the crypto industry in a tangible way.
Speaker 9: So the Genius Act, which already passed the Senate, would
Speaker 9: effectively legalized stable coins. These are cryptocurrencies that are backed
Speaker 9: by US dollars. They're already quite popular, but their status
Speaker 9: in the US was kind of in a gray area.
Speaker 9: If they're fully legalized, we might see more mainstream financial
Speaker 9: institutions get into that business. Then we've got the Clarity Act,
Speaker 9: which is about the rest of crypto. The Trump administration
Speaker 9: has already dropped a lot of lawsuits that the Biden
Speaker 9: administration had brought against crypto companies, sort of letting it
Speaker 9: be trading free for all. Now this law would kind
Speaker 9: of codify that. I think people are optimistic in the industry.
Speaker 9: This means that crypto could kind of be legalized long
Speaker 9: term in the US.
Speaker 2: I mean, so that speaks to the likelihood of perhaps
Speaker 2: these actually passing. Because some of these are still up
Speaker 2: for debate on the House floor. What kind of consensus
Speaker 2: or even disagreements are we seeing among Democrats and Republicans.
Speaker 9: Yeah, I mean, it's kind of wild that these bills
Speaker 9: have even got here. If you go look at like
Speaker 9: the list of laws that Congress has passed this term,
Speaker 9: this will be other than the budget. If these pass
Speaker 9: these would be the first substantive laws that Congress has
Speaker 9: passed this term. And I think the reason behind that's
Speaker 9: pretty obvious. Crypto industry gave one hundred and fifty million
Speaker 9: dollars last cycle to candidates. They were the number one
Speaker 9: industry in lobbying spending, and now their priorities are moved
Speaker 9: to the top of the list.
Speaker 2: Well, perhaps it also speaks to the shift in narrative
Speaker 2: and comfort with regards to crypto, not just bitcoin, not
Speaker 2: just stable coin, but perhaps other coins out there. What
Speaker 2: other types of crypto is poised to benefit from this?
Speaker 9: I mean, I think the reason people are getting more
Speaker 9: bullish is are thinking, hey, right now, I mean, people
Speaker 9: who want to trade crypto, can you want to go
Speaker 9: by bitcoin, Salana fart coin like it's available to you,
Speaker 9: But some of the more mainstream institutions are not offering
Speaker 9: it to their customers yet. They're thinking, hey, world where
Speaker 9: crypto is quite clearly legal, maybe people will go on
Speaker 9: e trade and right next to Apple or US steel,
Speaker 9: they'll be able to trade dogecoin or part coin, which
Speaker 9: is actually a real and popular cryptocurrency.
Speaker 6: Just for the record, I.
Speaker 2: Know there's no more joking when it comes to this industry,
Speaker 2: is there. That's that's Bloomberg's Zeke Fox, thank you so
Speaker 2: much for joining us core. We've it's set to expand
Speaker 2: its data center in Denton, Texas. Its process is set
Speaker 2: to double the projected electricity needs of the city, causing
Speaker 2: potential stresses on the grid. For more Bloomberg's Brodiford joins us. Now, Brody,
Speaker 2: what is you went through a lot of documents, You
Speaker 2: got emails, documents, you spoke to officials. Talk to us
Speaker 2: about what you've gleaned about the scale that this poses
Speaker 2: on the grid, and what officials plan to do about it.
Speaker 7: Yeah, so we all kind of hear this story about
Speaker 7: how AI is causing more electricity used, but it sounds
Speaker 7: kind of vague often when it's said, what we have
Speaker 7: here is a pretty nice case study that a large
Speaker 7: data center is going to double the power needs of
Speaker 7: a Texas city. I mean, that's just one data center
Speaker 7: being put in, and this is a story playing out
Speaker 7: across the country. We're talking here about Denton. That's a
Speaker 7: pretty large town on the outskirts of Dallas. They would
Speaker 7: be offended if you called it a suburb. One hundred
Speaker 7: and fifty thousand people or so. And you see that
Speaker 7: just pretty incredible ramp. And I mean the amount of
Speaker 7: new electricity being plugged into the grid is causing a
Speaker 7: lot of utility operators to say, hey, this is a
Speaker 7: lot of money for us, but this also can present
Speaker 7: some problems down the road.
Speaker 2: What's unique about this project is also that it didn't
Speaker 2: offer local level tax breaks. What does that mean for
Speaker 2: the local economy.
Speaker 7: Yeah, I thought that was really interesting. I mean I've
Speaker 7: spoken with a lot of local officials who have inked
Speaker 7: very large projects, and generally what you hear is, look,
Speaker 7: we had to waive most of our property taxes, right
Speaker 7: ninety percent in some cases, just tons and tons of
Speaker 7: potential tax revenue gone. In this case, they didn't. I mean,
Speaker 7: I don't know if Core we've Core Scientific really likes
Speaker 7: a location, but what that means is that their accounting,
Speaker 7: which we saw exclusively, means hundreds of millions of dollars
Speaker 7: of net income and tax revenue, assuming you know, their
Speaker 7: Excel spreadsheets were correct in this case.
Speaker 2: That's Bloomberg's Bertie Ford, thanks so much for joining us.
Speaker 3: Coming up. A new Bloomberg survey.
Speaker 2: Reveals that AI features on dating apps aren't making hearts
Speaker 2: race and might even be turning users away. More on
Speaker 2: that next. This is Bloomberg Tex. Dating apps are introducing
Speaker 2: new AI features in an effort to drive growth, but
Speaker 2: there is a problem. The features aren't landing with gen z.
Speaker 2: That's according to a new Bloomberg Intelligence survey. Let's bring
Speaker 2: in Bloomberg's Natalie Lung for more. Natalie, you cover dating
Speaker 2: apps match Group, Bumble as another one. They've been investing
Speaker 2: heavily into AI. So what does this pretend for them?
Speaker 2: I mean, how existential of this is an issue?
Speaker 11: Yeah?
Speaker 12: So gen Z is an increasingly important cohort for the
Speaker 12: companies as millennios age up and gen Z are becoming
Speaker 12: the new generation of daters became about about half of
Speaker 12: Tender's monthly active users. And so if gen zs are
Speaker 12: not dating as much as millennials and they're reporting more
Speaker 12: discomfort than older generations with using AI toos like selecting
Speaker 12: photos or helping with prompts, you know, companies really face
Speaker 12: a problem there if they're investing much into it and
Speaker 12: they're not getting as much in return.
Speaker 2: What have companies said in recent months about how they're
Speaker 2: adjusting to kind of these generational behaviors? I mean, do
Speaker 2: they rely a lot on gen Z to participate in
Speaker 2: dating apps or is it you know, still relatively concentrading
Speaker 2: amongst the older folks like millennials.
Speaker 12: So they're trying to release new products to attract gen Z.
Speaker 12: They recently announced a double dating feature where gen Z
Speaker 12: can you know, date with friends, making a lower pressure
Speaker 12: experience for them, so they're trying different ways to get
Speaker 12: their subscription ups.
Speaker 11: It's been in decline for.
Speaker 12: The past eight quarters, and as they're experimenting with new features,
Speaker 12: they expect revenue to decline as well before returning to growth.
Speaker 2: Is there anything that we know about how long this
Speaker 2: kind of generational shift really will last?
Speaker 3: Is it a blip?
Speaker 2: Is it the kind of thing that might wear off
Speaker 2: after a while or longer lasting.
Speaker 12: This is what the companies are hoping that, you know,
Speaker 12: as they come up with new products gen Z, will
Speaker 12: you know, be more interested in the apps again.
Speaker 11: And so we'll see.
Speaker 12: They did not expect growth to return into twenty twenty seven,
Speaker 12: so they have some time to figure it out.
Speaker 2: That's Bloomberg's Natalie Lng. Thank you so much for joining us.
Speaker 2: And that does it for this edition of Bloomberg Tech.
Speaker 2: Don't forget to it. Got our podcast. You can find
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