WEBVTT - Panasonic Unveils EV Battery Plant in Kansas 0:00:00.280 --> 0:00:13.720 Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live 0:00:13.720 --> 0:00:17.560 from coast to coast with Caroline Hige to New York 0:00:17.840 --> 0:00:21.000 and Ed Lovelow in San Francisco. 0:00:23.360 --> 0:00:26.160 This is Bloomberg Tech. I'm Jackie Devalas here in New York. 0:00:26.440 --> 0:00:29.960 Coming up. Ed Ludlow is live in DeSoto, Kansas from 0:00:29.960 --> 0:00:34.720 Panasonic's newest EV battery plant. We'll have the live conversations 0:00:34.720 --> 0:00:39.680 with Panasonic North America CEO and Lucid CEO. Sour Plus 0:00:39.880 --> 0:00:44.080 Bitcoin soares past one hundred and twenty thousand dollars as 0:00:44.120 --> 0:00:49.279 Congress starts Crypto Week, and Musk says Tesla shareholders will 0:00:49.360 --> 0:00:52.440 vote on whether to invest in his AI startup XAI. 0:00:53.280 --> 0:00:56.360 Let's head over to DeSoto, Kansas, where Panasonic has just 0:00:56.480 --> 0:00:59.880 unveiled its latest EV battery plant. At Ludlow is standing 0:00:59.880 --> 0:01:00.920 by h What are you seeing? 0:01:01.040 --> 0:01:01.080 Ed? 0:01:03.640 --> 0:01:05.839 Yeah, this is a four point seven million square feet 0:01:05.920 --> 0:01:10.200 facility that at full capacity thirty gig or what hours, 0:01:10.319 --> 0:01:13.240 enough for five hundred thousand evs for animal powered by 0:01:13.240 --> 0:01:15.959 these little guys twenty one to seventy cells. And we're 0:01:16.000 --> 0:01:19.200 delighted to be joined by Panasonic Corporation of North America 0:01:19.280 --> 0:01:22.600 CEO Meghan beong on Lee regular contributor to the show. 0:01:23.000 --> 0:01:25.080 But this was the moment you and I talked about 0:01:25.080 --> 0:01:28.000 it earlier in the year. What does it mean for 0:01:28.360 --> 0:01:33.280 Panasonic in America and American manufacturing of battery technology? 0:01:33.760 --> 0:01:35.919 So this is more than a ten year vision. 0:01:36.080 --> 0:01:37.920 We wanted to do this and we wanted to go 0:01:38.040 --> 0:01:41.160 big in this market. So we had a commitment and 0:01:41.240 --> 0:01:44.559 we started in Reno and Nevada, and this is our 0:01:45.160 --> 0:01:49.040 factory that we're diversifying our ev strategy, and we're going 0:01:49.080 --> 0:01:52.320 to be full production this year and it's really exciting. 0:01:52.360 --> 0:01:56.600 Today's a fun and exciting day, and this is a celebration. 0:01:56.240 --> 0:01:59.080 Full production this year. The sales are already coming off 0:01:59.120 --> 0:02:02.400 the line. Could you just explain the roadmap for the ramp, 0:02:02.440 --> 0:02:05.520 because no facility is straightforward, but this is the size 0:02:05.560 --> 0:02:07.560 of two hundred American football fields. 0:02:07.720 --> 0:02:09.760 How are you going to get to full capacity this year? 0:02:10.240 --> 0:02:14.359 So we started in November twenty twenty two, two and 0:02:14.440 --> 0:02:17.440 a half years ago, and it was all flat field 0:02:17.800 --> 0:02:21.120 and it was a massive land and we started a 0:02:21.240 --> 0:02:26.919 construction and we started the production and testing last week 0:02:27.160 --> 0:02:30.720 and we're going to produce the batteries this year, and 0:02:31.120 --> 0:02:33.359 you probably saw the cars that we have in Display 0:02:33.600 --> 0:02:37.880 and Tesla, Lucid and Hexagon Truck and we're really excited 0:02:37.919 --> 0:02:44.320 to work with different suppliers and partners and clients this year. 0:02:44.440 --> 0:02:47.200 We're going to discuss in detail those customers. They're really 0:02:47.280 --> 0:02:51.080 key to this. There were media reports Friday nights that 0:02:51.120 --> 0:02:53.880 there would be a delay in reaching full capacity, and 0:02:53.919 --> 0:02:56.160 what the report stated was that was due to demand. 0:02:56.560 --> 0:02:58.880 Are you able to comment on that report? And it 0:02:58.960 --> 0:03:01.240 sounds like they were missing formed if you are going 0:03:01.280 --> 0:03:02.640 to hit full capacity this year. 0:03:04.200 --> 0:03:05.800 I do think it was misinformed. 0:03:05.919 --> 0:03:09.840 And we're very We're a Japanese company and when we 0:03:09.960 --> 0:03:14.079 say when we commit to something, we're fully committed and 0:03:14.120 --> 0:03:17.680 we want to make sure that we support all the customers. 0:03:17.080 --> 0:03:17.919 That were committed. 0:03:18.240 --> 0:03:22.720 We're not feeling the slow down yet, and we're very 0:03:22.760 --> 0:03:25.320 bollish on working with all those customers. 0:03:25.560 --> 0:03:28.079 When you say you're not feeling the slow down, that 0:03:28.160 --> 0:03:31.520 means that you're seeing consistent orders from those key customers 0:03:32.040 --> 0:03:34.480 or they're still committing to orders in advance. 0:03:34.520 --> 0:03:36.520 What do you mean by the definition of what you 0:03:36.600 --> 0:03:37.000 just said. 0:03:37.280 --> 0:03:40.800 So we have the operation in Reno and that's going 0:03:40.920 --> 0:03:43.760 very healthy and we're seeing the commitments coming in for 0:03:43.920 --> 0:03:48.560 this facility as well, so we're not feeling the slow 0:03:48.600 --> 0:03:52.320 down yet but yet again, I mean, you see this operation. 0:03:52.600 --> 0:03:53.200 This is a. 0:03:53.320 --> 0:03:57.440 Long term commitment, so there may be some pushback or 0:03:57.560 --> 0:04:01.240 moving ahead, but we're committed for a long term and 0:04:01.560 --> 0:04:05.120 we're not shying away from those from time to time challenges. 0:04:05.680 --> 0:04:07.760 Throughout the morning, there was a lot of discussion about 0:04:07.760 --> 0:04:11.080 Tesla because Tesla makes the best selling EV model in 0:04:11.080 --> 0:04:16.440 the world this specific facility. Does Tesla dominate the proportion 0:04:16.600 --> 0:04:19.400 of output or is it more evenly split across your 0:04:19.400 --> 0:04:20.280 different customers. 0:04:21.120 --> 0:04:23.960 So we're working with Tesla for sure, and we're working 0:04:23.960 --> 0:04:27.840 with Lucid and Hexagon and other clients. So it is 0:04:27.880 --> 0:04:32.400 to diversify our EV manufacturing in the United States. 0:04:32.640 --> 0:04:35.040 What do you mean by diversify move away from one 0:04:35.040 --> 0:04:37.080 sort of core customer, No, not really. 0:04:37.240 --> 0:04:40.640 We're expanding, right So we're definitely working with Tesla, but 0:04:40.720 --> 0:04:43.200 we want to work with other establish the. 0:04:43.160 --> 0:04:46.200 OEMs as well as startups. So it's part of our 0:04:47.760 --> 0:04:51.360 efforts to expand our strategy and manufacturing output as well. 0:04:51.880 --> 0:04:55.719 What signals has Tesla given you about its future orders, 0:04:55.720 --> 0:04:56.479 about the health. 0:04:56.320 --> 0:05:00.120 Of its business your guess is as good as mine. 0:05:00.400 --> 0:05:03.359 But we have a long term relationship, longer than anyone else, 0:05:03.400 --> 0:05:06.200 and there's still a very important strategic partner for us, 0:05:06.680 --> 0:05:09.600 and I believe our partnership is very strong. 0:05:10.279 --> 0:05:12.520 Throughout the morning, there was a lot of discussion of 0:05:12.720 --> 0:05:17.800 how Kansas was the absolute best candidate. What were the 0:05:17.839 --> 0:05:22.159 biggest factors in choosing this site. Were they financial? Were 0:05:22.200 --> 0:05:25.760 they simply the ability to get things done? Lack of 0:05:25.800 --> 0:05:27.960 red tape? Why were we able to move so quickly? 0:05:28.440 --> 0:05:33.320 So we talked about the available workforce and the infrastructure. 0:05:33.360 --> 0:05:36.520 I mean you saw the power lines built by the 0:05:36.560 --> 0:05:39.880 factory and as well as the. 0:05:40.120 --> 0:05:42.280 Energy of procurement that we can do. 0:05:43.000 --> 0:05:46.640 But more than anything, there was something very special about Kansas. 0:05:47.200 --> 0:05:49.760 All the officials were able to work with us, and 0:05:49.800 --> 0:05:54.400 you probably heard that Lautana Governor Toland taking some of 0:05:54.600 --> 0:05:58.600 his speech in not only Japanese but Osaka dilatet and 0:05:58.720 --> 0:06:01.599 that level of insights and. 0:06:01.600 --> 0:06:04.360 Care and support really made the difference. 0:06:05.080 --> 0:06:08.400 And it doesn't matter what party they are, they're very 0:06:08.960 --> 0:06:10.560 committed to bring. 0:06:10.400 --> 0:06:12.839 Us here but also make us feel home. 0:06:13.839 --> 0:06:19.520 So that kind of partnership not just numbers and infrastructure, 0:06:19.680 --> 0:06:23.120 but emotional partnership made the difference, and we're so happy 0:06:23.160 --> 0:06:24.080 to celebrate today. 0:06:24.160 --> 0:06:25.360 What I was going to say on the numbers is 0:06:25.400 --> 0:06:28.760 there is a job creation story. So four thousand direct jobs, 0:06:28.800 --> 0:06:32.000 I think the numbers twenty thousand indirect jobs when you 0:06:32.040 --> 0:06:36.599 take into account supply chain construction. What have you had 0:06:36.600 --> 0:06:39.680 to do to kind of bring the other infrastructure you've 0:06:39.720 --> 0:06:43.359 needed to de Soto have everything you need around you? 0:06:43.920 --> 0:06:47.200 So what was great about planning it out? Like I said, 0:06:47.279 --> 0:06:50.039 we started two and a half years ago, and at 0:06:50.080 --> 0:06:53.520 that time we worked with local schools and community colleges 0:06:53.640 --> 0:06:57.719 to create curriculums so when we start from manufacturing, they're 0:06:57.760 --> 0:07:01.400 there already already taking the course and be available to 0:07:01.560 --> 0:07:02.120 take a job. 0:07:02.200 --> 0:07:03.680 To guarantee you had the skill sets. 0:07:03.880 --> 0:07:07.720 Absolutely absolutely, So we created curriculum together and it's been 0:07:07.760 --> 0:07:10.960 a really good partnership and it helps us and it 0:07:11.000 --> 0:07:13.200 helps the community, and it's like wonderful win win. 0:07:13.680 --> 0:07:18.680 The headline figure was that Panasonic put four billion dollars. 0:07:17.760 --> 0:07:19.680 Into this to SODO facility. 0:07:20.200 --> 0:07:23.400 But you also the reported number is eligible for almost 0:07:23.400 --> 0:07:25.760 seven billion dollars from the Inflation Reduction Act. 0:07:26.080 --> 0:07:27.679 How much of that materialized. 0:07:28.960 --> 0:07:32.440 We haven't started the manufacturing here, So we have not 0:07:32.680 --> 0:07:34.240 seen the incentives YEF. 0:07:34.800 --> 0:07:36.120 They're setting against milestones. 0:07:36.240 --> 0:07:38.840 Yes, yes, so it comes with the production. 0:07:39.080 --> 0:07:41.920 So we're looking forward to it and it's definitely a 0:07:41.960 --> 0:07:43.280 big part of our investment. 0:07:43.480 --> 0:07:45.840 Do you anticipate that you will get access to the 0:07:46.120 --> 0:07:47.240 full tranche of money? 0:07:47.320 --> 0:07:48.240 We certainly hope. 0:07:48.280 --> 0:07:51.080 So things have changed, I mean things have changed even 0:07:51.120 --> 0:07:52.680 since you and I spoke in January. 0:07:54.080 --> 0:07:54.960 There is some. 0:07:55.200 --> 0:08:00.280 Effort underway to reshape or or undo the Inflation Reduction Act. 0:08:01.080 --> 0:08:04.040 It seems like the seventy five hundred dollars credit which 0:08:04.080 --> 0:08:07.400 goes to the consumer on this vehicle will go, but 0:08:07.480 --> 0:08:11.520 the forty five x manufacturer credits seems intact. How have 0:08:11.600 --> 0:08:13.720 you navigated that? Is that you'll read. 0:08:13.520 --> 0:08:14.800 On the scenario as well. 0:08:14.960 --> 0:08:17.720 So we're very still a verticle fall that should remain 0:08:18.160 --> 0:08:21.559 and I think it should remain. It's not only for us, 0:08:21.880 --> 0:08:25.600 but it's for creating jobs and manufacturing and bringing technology 0:08:25.840 --> 0:08:30.520 to us. So so far it's very positive and we're 0:08:30.560 --> 0:08:32.320 hopeful that it stay is it will be a big 0:08:32.360 --> 0:08:35.160 part of our long term strategy. 0:08:35.840 --> 0:08:39.120 What's the supply chain story right now for DeSoto, Kansas? 0:08:39.160 --> 0:08:42.000 When you think about your raw material needs and everything 0:08:42.040 --> 0:08:45.080 that goes into the cell process. Are there things that 0:08:45.120 --> 0:08:45.960 are still difficult? 0:08:46.080 --> 0:08:48.319 What are they? Or has bringing this. 0:08:48.360 --> 0:08:53.280 Facility online been smoother because of policy. 0:08:53.800 --> 0:08:58.680 We have been planning for the supply chain resilience, not 0:08:58.960 --> 0:09:03.560 just for this and recent terrificuation, but from COVID. 0:09:04.000 --> 0:09:04.959 During COVID, we. 0:09:05.000 --> 0:09:08.319 Really suffered from weak supply chain. I mean, I think 0:09:08.400 --> 0:09:11.040 all the industry did, and so did we. So we've 0:09:11.080 --> 0:09:14.480 been planning for supply chain resilience and we are I 0:09:14.480 --> 0:09:16.720 mean just for our benefit too, to make sure that 0:09:16.800 --> 0:09:20.599 those supply chains stay local and within. 0:09:20.400 --> 0:09:21.800 The North America. 0:09:22.000 --> 0:09:25.560 And our goal is to complete fifty percent of our 0:09:25.679 --> 0:09:28.559 supply chain by twenty thirty to be completely local. 0:09:29.160 --> 0:09:32.280 Are any of the conditions currently associated with that forty 0:09:32.280 --> 0:09:36.760 five x manufacturer credit difficult when you think about foreign 0:09:36.880 --> 0:09:39.840 entity of concern or parts of the supply chain, which 0:09:39.840 --> 0:09:42.960 in the context of metals like China is still a factor. 0:09:43.040 --> 0:09:48.120 Yes, yes, yes, So we started partnering with China and 0:09:48.360 --> 0:09:51.800 we are for the supply chain resilience. So we are 0:09:51.880 --> 0:09:55.640 trying to diversify and make sure that supply chain. 0:09:55.559 --> 0:09:58.840 Is more resilience to make sure that we can procure 0:09:58.960 --> 0:10:00.560 and process on site. 0:10:00.880 --> 0:10:04.960 So it's not really a new change for us necessarily, 0:10:05.080 --> 0:10:06.360 we've been trying to do that. 0:10:06.280 --> 0:10:07.120 For a few years. 0:10:07.480 --> 0:10:09.600 Where are the bottlenecks right now? If any? 0:10:11.160 --> 0:10:11.880 I don't know. 0:10:12.480 --> 0:10:15.560 It's really the refining process to make sure that we 0:10:15.600 --> 0:10:19.400 can find a supplier who can make sure that quality 0:10:19.480 --> 0:10:23.200 is there. Right the refinement, the quality matters for our 0:10:23.400 --> 0:10:27.560 quality production. So that's where we pay most attention, to 0:10:27.600 --> 0:10:30.920 make sure that the raw material is ready for quality 0:10:31.360 --> 0:10:32.160 EV batteries. 0:10:32.240 --> 0:10:32.400 Right. 0:10:32.720 --> 0:10:34.880 It's good for everyone, for consumers. 0:10:35.080 --> 0:10:38.240 We want to make sure those AV batteries are tested 0:10:38.720 --> 0:10:39.440 and safe. 0:10:39.760 --> 0:10:44.240 I know this might seem far fetched. We're just bringing 0:10:44.240 --> 0:10:47.199 this facility online. Yes, but one of the questions I 0:10:47.240 --> 0:10:49.679 got from you from the audience is what happens next? 0:10:50.120 --> 0:10:52.760 You have the Vada, you now have Kansas. 0:10:53.360 --> 0:10:59.880 Does Panasonic see further sites for EV in the first instance? 0:11:00.080 --> 0:11:01.520 What is your next priority? 0:11:02.400 --> 0:11:03.600 It's TBD. 0:11:04.040 --> 0:11:08.359 Today's first day of this operation, and we're really excited 0:11:08.400 --> 0:11:13.560 to make sure that this goes smooth producing quality EV batteries. 0:11:13.679 --> 0:11:16.480 We'll focus on their first and if it goes well, 0:11:16.520 --> 0:11:17.080 who knows? 0:11:17.360 --> 0:11:17.560 Right? 0:11:19.200 --> 0:11:20.760 Demand is still a question. 0:11:20.920 --> 0:11:23.800 Yes. What I find interesting is a lot of the 0:11:24.040 --> 0:11:27.560 customer basis pure play EV. But the lesson we've learned 0:11:27.600 --> 0:11:30.120 in the last eighteen months or so is hybrid is 0:11:30.200 --> 0:11:33.400 still a big part of the market, maybe in a 0:11:33.400 --> 0:11:36.480 way that surprised many. Do you have the ability to 0:11:36.559 --> 0:11:39.760 tap into demand for hybrid from this facility or others? 0:11:40.760 --> 0:11:45.080 We don't know yet, but we're pleasantly surprised that EB 0:11:45.200 --> 0:11:48.360 sales still rows by like eleven point four percent. 0:11:48.800 --> 0:11:49.960 So that's a good sign. 0:11:50.240 --> 0:11:52.439 And like I said, this is a long term play, 0:11:52.880 --> 0:11:55.920 so we're not going to be happy and said with 0:11:56.080 --> 0:11:59.120 the small ups and downs, we're still bullish that EV 0:11:59.240 --> 0:12:03.839 markets should role and hybrid transition should be part of it. 0:12:04.360 --> 0:12:06.760 Have you done a sort of side by side analysis 0:12:07.360 --> 0:12:10.840 of the economics of a single cell? Bring mine back out. 0:12:10.880 --> 0:12:13.760 I have one single twenty one seventy cell here, so 0:12:13.800 --> 0:12:17.560 this will be manufactured in Kansas, not subject to tarifs. 0:12:17.600 --> 0:12:20.720 You have the Nevada facility, but Panasonic Energy also has 0:12:20.760 --> 0:12:24.040 facilities all around the world. Is it just an instant 0:12:24.120 --> 0:12:27.760 fixed that the cell on a unit basis is just 0:12:27.800 --> 0:12:30.320 a more attractive economic proposition if it's built here in 0:12:30.400 --> 0:12:34.000 Kansas for the American market versus shipping cells. 0:12:33.720 --> 0:12:36.080 In from EU. Overseas facilities. 0:12:36.720 --> 0:12:40.040 It makes a lot more economic sense to produce here, right, 0:12:40.200 --> 0:12:42.760 bring raw materials here and produce here anyware. 0:12:43.320 --> 0:12:45.680 And we're cutting in for some breaking news. 0:12:45.679 --> 0:12:45.880 Here. 0:12:45.920 --> 0:12:49.439 We have President Trump in the White House with the 0:12:49.520 --> 0:12:53.360 NATO Secretary General Tick A. Lissen. That was President Trump 0:12:53.400 --> 0:12:56.920 with the NATO Secretary General announcing that he was quote 0:12:56.960 --> 0:13:00.520 unhappy with Russia and is threatening secondary terror of one 0:13:00.600 --> 0:13:03.560 hundred percent on Russia if a deal with Ukraine is 0:13:03.600 --> 0:13:07.800 not reached. But first, let's get to some breaking news 0:13:07.840 --> 0:13:12.960 that crossed the wire. Mark Suckerberg, metas CEO, took to 0:13:13.080 --> 0:13:15.880 threads to say that the company will invest hundreds of 0:13:16.000 --> 0:13:20.200 billions of dollars in computing to build super intelligence. Shares 0:13:20.440 --> 0:13:22.680 rows off the news and let's get right to that 0:13:22.960 --> 0:13:26.800 with our very own Kurt Wagner. Kurt walk us through 0:13:26.840 --> 0:13:29.640 this latest investment in how it compares to the previous 0:13:29.640 --> 0:13:31.360 announcements the company has made. 0:13:32.600 --> 0:13:34.720 Yeah, so some of this is as you point out, 0:13:34.800 --> 0:13:36.440 you know, hundreds of billions of dollars at the very 0:13:36.520 --> 0:13:39.400 eye catching. I will say that is a number that 0:13:39.480 --> 0:13:42.520 Mark Zuckerberg has thrown around before historically. He said that 0:13:42.559 --> 0:13:45.600 this is you know this this dry for AI is 0:13:45.640 --> 0:13:48.800 going to be incredibly expensive. He's even admitted some companies, 0:13:48.800 --> 0:13:52.400 presumably his own, will overpay on AI in order not 0:13:52.440 --> 0:13:55.640 to fall behind. So hundreds of billions on infrastructure. But 0:13:55.720 --> 0:13:57.480 I think, Jackie, when you when you look at this, 0:13:57.960 --> 0:14:00.640 why it makes sense is you recall over these last 0:14:00.679 --> 0:14:03.520 couple of weeks they've been spending very aggressively to hire 0:14:03.600 --> 0:14:07.320 AI talent for this super intelligence group. And I think this, 0:14:08.000 --> 0:14:10.840 you know, commitment to these infrastructure side is meant to 0:14:10.840 --> 0:14:12.320 sort of go hand in hand with that. Okay, So 0:14:12.360 --> 0:14:14.120 we've hired the talent, we have the people in the 0:14:14.120 --> 0:14:16.160 building that we think can build this thing, and now 0:14:16.200 --> 0:14:19.000 we're putting the money behind the infrastructure to help support them. 0:14:19.280 --> 0:14:22.200 Kurt, this announcement has fresh resonance, especially as some of 0:14:22.280 --> 0:14:25.960 Meta's competitors are making their own moves to really bolster 0:14:26.120 --> 0:14:28.880 their AI ambitions. Talk to us a little bit about 0:14:28.920 --> 0:14:32.280 what XAI is hoping to do by tapping some of 0:14:32.400 --> 0:14:33.400 Tesla's coffers. 0:14:34.840 --> 0:14:40.280 Yeah, so XAI is become like this central hub of 0:14:40.320 --> 0:14:43.560 the Elon Inc. Universe. Right, we've talked about this historically 0:14:43.560 --> 0:14:46.600 on this show before, this idea that all of Elon 0:14:46.720 --> 0:14:50.600 Musk's various businesses sort of work together and help one another, 0:14:50.640 --> 0:14:52.720 and I think that's just become more and more prevalent, 0:14:53.120 --> 0:14:55.960 especially as Xai has grown. And so we learned, you 0:14:56.000 --> 0:14:58.800 know that SpaceX, for example, is now investing two billion 0:14:58.840 --> 0:15:02.040 dollars into Xai. We've seen that Elon Musk plans to 0:15:02.080 --> 0:15:05.400 put a shareholder vote to Tesla's shareholders asking if Tesla 0:15:05.440 --> 0:15:07.880 should invest in Xtai. We obviously know Xai on Twitter 0:15:08.240 --> 0:15:11.240 already merged or x already merged. So this notion that 0:15:11.320 --> 0:15:14.400 all of these different sort of businesses of Elon's are 0:15:14.480 --> 0:15:18.160 now contributing to the AI business, I think is super notable. 0:15:18.240 --> 0:15:20.840 And you can see there are some, you know, to 0:15:20.960 --> 0:15:24.360 use the terrible cliche synergies between these companies, right the 0:15:24.360 --> 0:15:28.480 idea that groc might be distributed through Tesla's is one 0:15:28.520 --> 0:15:31.720 example of that. But it does feel like Elon is saying, Okay, 0:15:31.760 --> 0:15:34.040 I have these other businesses that are doing well financially, 0:15:34.560 --> 0:15:37.360 I'm going to take some of that cash and try 0:15:37.400 --> 0:15:39.880 to use that as jet fuel on my AI startup, Kurt. 0:15:40.000 --> 0:15:43.360 It really depends on the outcome of this shareholder vote. 0:15:43.360 --> 0:15:46.400 What is the case that Elon needs to make two 0:15:46.440 --> 0:15:50.200 shareholders about what it stands to benefit from this move. 0:15:51.680 --> 0:15:51.960 Yeah. 0:15:52.000 --> 0:15:53.960 Well, I think if you're an Elon, first of all, 0:15:54.000 --> 0:15:56.640 you have a ton of loyal shareholders already, people who 0:15:56.720 --> 0:15:59.560 want this thing to happen simply because Elon Musk wants 0:15:59.560 --> 0:16:01.800 it to happen, right, So you have a pretty strong 0:16:01.840 --> 0:16:03.760 base of people. But for those who are on the fence, 0:16:04.080 --> 0:16:06.280 I think what you would sit here and say is, look, 0:16:06.400 --> 0:16:10.880 this technology, this AI technology is going to be world changing, 0:16:10.960 --> 0:16:13.880 transforming if it hasn't you know, already been the case 0:16:14.520 --> 0:16:18.000 with self driving for example, being maybe the core Tesla example. 0:16:18.320 --> 0:16:20.000 And so I think if you're Eline, you just say, look, 0:16:20.080 --> 0:16:22.480 you're putting in money now into a technology that's going 0:16:22.520 --> 0:16:25.360 to be worth ten, one hundred times more down the line. 0:16:25.440 --> 0:16:27.840 But also you're going to get you know, all of 0:16:27.880 --> 0:16:31.600 this data, this infrastructure that I'm building at XAI, and 0:16:31.680 --> 0:16:34.600 it could potentially benefit Tesla as well. Again as you 0:16:34.640 --> 0:16:37.840 improve self driving, as you know, take Grock for example, 0:16:37.880 --> 0:16:40.680 put it into the cars. So if I'm him, I 0:16:40.960 --> 0:16:43.760 paint this as very much like a rosy marriage between 0:16:44.000 --> 0:16:48.080 the future technology and putting all of that into an automobile, 0:16:48.120 --> 0:16:50.320 which I think they're already doing so. I think it's 0:16:50.360 --> 0:16:52.120 easy for people to wrap their heads around, but it's 0:16:52.120 --> 0:16:53.720 something he's going to have to really hammer home for 0:16:53.760 --> 0:16:54.720 those who are skeptical. 0:16:55.040 --> 0:16:58.400 Kurt, we know that Bloomberg has reported that Xai is 0:16:58.440 --> 0:17:02.760 burning over a billion dollars a month on its AI efforts. 0:17:02.840 --> 0:17:05.000 What do we know about how much the company is 0:17:05.000 --> 0:17:07.280 bringing in and how that compares to its competitors. 0:17:07.720 --> 0:17:10.399 Yeah, we don't know much about the revenue of Xai 0:17:10.680 --> 0:17:13.359 because at this point they're not really as far as 0:17:13.400 --> 0:17:16.760 I know, making much money outside of you know, Grock is, 0:17:16.800 --> 0:17:19.560 for example, available to subscribers on x there's probably some 0:17:19.680 --> 0:17:22.120 kind of financial arrangement, at least there was before the merger, 0:17:22.960 --> 0:17:26.040 where you know, each subscriber sort of pays for a 0:17:26.040 --> 0:17:28.639 little bit of Grock. But I do think this is 0:17:28.680 --> 0:17:30.320 going to be the key, Right you're spending a ton 0:17:30.320 --> 0:17:32.400 of money on here. Does this payoff into a real 0:17:32.480 --> 0:17:33.879 legitimate business moving forward? 0:17:34.200 --> 0:17:37.560 That's Bloomberg's Kurt Wagner, thanks for joining us. Coming up, 0:17:37.640 --> 0:17:41.200 Lucid interim CEO Mark Winterhof joins us from the Panasonic 0:17:41.240 --> 0:17:45.800 EV battery plan in Kansas. More Next, this is Bloomberg. 0:17:45.359 --> 0:18:02.760 Tech Welcome back. To Bloomberg Tech. 0:18:02.800 --> 0:18:06.879 We're live in DeSoto, Kansas at Panasonic's brand new EV 0:18:07.040 --> 0:18:11.480 battery plants four point seven million square feet at full capacity, 0:18:11.520 --> 0:18:13.960 which will happen later this year. So news we broke 0:18:14.000 --> 0:18:16.960 with Panasonics North America CEO making the Young one. 0:18:16.880 --> 0:18:19.080 Lee thirty gig or hours of capacity. 0:18:19.119 --> 0:18:22.840 That's enough cells for five hundred thousand evs perannum. One 0:18:22.880 --> 0:18:26.520 of the key customers Lucid, and Lucid CEO Mark went 0:18:26.600 --> 0:18:30.080 Off Interim CEO Mark winter Off is with us. Now 0:18:30.800 --> 0:18:32.840 this is a significant moment for you as well, because 0:18:32.960 --> 0:18:37.320 your first domestic supply of cells reflect on that. 0:18:36.880 --> 0:18:41.119 That is true. Yeah, So currently we're getting our battery 0:18:41.160 --> 0:18:44.520 supplies either from Japan or from Korea, depending on the supplier, 0:18:45.000 --> 0:18:48.160 and Panasonic is a great partner for us. We decided 0:18:48.160 --> 0:18:51.119 two and a half years ago to make together this 0:18:51.240 --> 0:18:55.200 investment here and to localize the production that's held production 0:18:55.320 --> 0:18:56.399 here to county. 0:18:56.440 --> 0:18:59.920 It's not just volume supply. This is twenty one to seven. 0:19:00.600 --> 0:19:03.600 My understanding is there were some co engineering to make 0:19:03.680 --> 0:19:05.480 this as good as it can possibly be. 0:19:05.920 --> 0:19:06.919 Explain how that worked. 0:19:07.200 --> 0:19:10.440 It's a great collaboration between our engineering departments and their 0:19:10.520 --> 0:19:14.160 engineering department. We bring in a lot of experience on 0:19:14.200 --> 0:19:16.760 what this cell is supposed to do in real life, 0:19:17.160 --> 0:19:20.320 and they make it happen with chemistry and with all 0:19:20.359 --> 0:19:23.080 of the parameters of the cell. So what was really 0:19:23.200 --> 0:19:27.480 really great collaboration, and that we also then are able 0:19:27.520 --> 0:19:31.360 now to produce us here locally obviously in the current climate, 0:19:31.440 --> 0:19:32.120 helps us a lot. 0:19:33.320 --> 0:19:37.239 How did the economics of the DeSoto Candice May twenty one, 0:19:37.400 --> 0:19:40.760 seventy stack. I know that you love charts and spreadsheets 0:19:40.800 --> 0:19:42.920 as much as I do, but you must have done 0:19:42.920 --> 0:19:43.720 that analysis. 0:19:44.160 --> 0:19:47.600 Yeah, absolutely, I mean, like I would say, we wouldn't 0:19:47.600 --> 0:19:52.440 have done it if it wouldn't be economically feasible or beneficial. 0:19:53.640 --> 0:19:56.960 As I mentioned before, we made that decision, not just recently, 0:19:57.280 --> 0:20:00.840 so terrists were not on the radar screen at that time. 0:20:00.840 --> 0:20:02.720 We did that decision two and a half years ago, 0:20:03.359 --> 0:20:06.480 and at that time, together with the forty five X 0:20:07.320 --> 0:20:11.560 incentive a text credit, the economics make sense. I still 0:20:11.600 --> 0:20:14.000 have to say, and I hope the Panasic Sonic hears 0:20:14.040 --> 0:20:17.000 that that you know, there's some room of improvement. But 0:20:17.119 --> 0:20:20.520 also right now obviously with the tariffs, this is a 0:20:20.640 --> 0:20:21.440 very good move for. 0:20:21.440 --> 0:20:24.560 Us because the same cell that would otherwise have come 0:20:24.640 --> 0:20:27.760 from Japan or career is subject to tariffs. 0:20:27.800 --> 0:20:28.120 It is. 0:20:28.160 --> 0:20:31.480 That's a part of the equation that is correct. 0:20:31.680 --> 0:20:33.639 And the other thing that we are currently working on 0:20:33.680 --> 0:20:37.360 together with Panasonic is obviously further localizing the supply chain 0:20:37.359 --> 0:20:40.040 for the cell because it doesn't do you a lot 0:20:40.080 --> 0:20:44.680 of good if your manufacturer here, but you still import 0:20:44.720 --> 0:20:47.480 the raw material which is then subject to terriffs. So 0:20:47.920 --> 0:20:50.280 we're already doing a lot of investments in that. You 0:20:50.400 --> 0:20:54.199 heard about our graphite one investments on the graphite and 0:20:54.280 --> 0:20:57.600 other materials, So we're working with them on making that 0:20:57.680 --> 0:20:59.040 happen as well. 0:20:59.080 --> 0:21:01.560 Mark, I've come Lucid for a number of years. 0:21:01.600 --> 0:21:03.439 This is the first time you and I have spoken, 0:21:03.480 --> 0:21:07.800 and I'm grateful for your time. Your predecesssessor, Peter Rodinson 0:21:07.800 --> 0:21:11.280 had a very simple argument. Lucid had the best technology 0:21:11.560 --> 0:21:15.080 on the hardware side and software battery management system. And 0:21:15.119 --> 0:21:18.879 even though your journey started in the premium segments, that 0:21:18.960 --> 0:21:22.280 you would scale to volume because you would just say 0:21:22.560 --> 0:21:25.560