WEBVTT - US Tech Earnings, Commercial MBS Bonds Go Bust 0:00:02.120 --> 0:00:05.960 This is Bloomberg Intelligence with Alex Steel and Paul Sweeney. 0:00:06.040 --> 0:00:09.240 The real air performance has been the US corporate high yield. 0:00:09.400 --> 0:00:11.799 Are the companies lean enough? Have they trimmed all the fats? 0:00:11.840 --> 0:00:15.640 The semiconductor business is a really cyclical business. 0:00:15.160 --> 0:00:18.680 Breaking market headlines and corporate news from across the globe. 0:00:18.760 --> 0:00:21.400 Do investors like the M and A that we've seen? 0:00:21.640 --> 0:00:24.680 These are two big time blue chip companies. 0:00:24.800 --> 0:00:28.440 The window between the peak and cut changing super fast. 0:00:28.600 --> 0:00:33.240 Bloomberg Intelligence with Alex Steel and Paul Sweeney on Bloomberg Radio. 0:00:36.360 --> 0:00:38.440 I'm Paul Sweeney. Alex Steel is out this week. 0:00:38.520 --> 0:00:40.879 On Today's Bloomberg Intelligence Show, we dig inside the big 0:00:40.880 --> 0:00:42.240 business stories impacting Wall. 0:00:42.080 --> 0:00:43.360 Street and the global markets. 0:00:43.680 --> 0:00:45.600 Each and every week we provide in depth research and 0:00:45.680 --> 0:00:47.279 data on some of the two thousand companies in one 0:00:47.360 --> 0:00:48.879 hundred and thirty industries around on. 0:00:49.000 --> 0:00:50.239 Is covered worldwide. 0:00:50.479 --> 0:00:53.240 Today, we'll look at that fragility of the commercial mortgage 0:00:53.240 --> 0:00:55.600 backed securities market, as well as the impact that business 0:00:55.720 --> 0:00:59.760 leaders can make by advocating for safe and secure elections. Plus, 0:01:00.200 --> 0:01:03.040 with the US election just a few days away, a 0:01:03.120 --> 0:01:05.959 look at those sway US presidents have on fuel economy 0:01:05.959 --> 0:01:10.000 standards for cards, but first tech earnings. This week, Alphabet 0:01:10.080 --> 0:01:13.360 reported earnings that surpassed analyst estimates, with their cloud division 0:01:13.360 --> 0:01:16.360 seeing a thirty five percent rise in sales, while Meta 0:01:16.440 --> 0:01:20.360 warned of a worsening AI losses. Bloomberg Intelligence senior tech 0:01:20.480 --> 0:01:23.360 analysts Man Deep Seeing breaks down the reports. 0:01:24.000 --> 0:01:29.960 Search, Cloud, YouTube. These are three separate businesses doing extremely 0:01:30.040 --> 0:01:33.199 well at scale. I mean, double digit growth for search 0:01:33.280 --> 0:01:37.240 business is really stellar when you think of all the 0:01:37.319 --> 0:01:39.840 pressure they've been facing, you know, when it comes to 0:01:40.720 --> 0:01:45.759 new entrants like CHATGPT and Perplexity and whatnot. And everyone 0:01:46.600 --> 0:01:48.480 is of the belief that they would take at least 0:01:48.520 --> 0:01:53.200 some share from Google, at least in terms of AD revenue. 0:01:53.320 --> 0:01:56.440 Google hasn't lost any share. In fact, it's a very 0:01:56.480 --> 0:02:00.400 healthy growth at their scale. And YouTube look fifty billion 0:02:00.440 --> 0:02:05.760 plus revenue run rate seventy thirty split between subscriptions ads 0:02:06.120 --> 0:02:09.720 is seventy and thirty percent of subscriptions and subscriptions crew, 0:02:10.320 --> 0:02:12.920 you know, twenty eight percent. I mean, just think about 0:02:13.360 --> 0:02:16.960 fifteen billion dollar subscriptions business growing twenty eight percent. That's 0:02:17.240 --> 0:02:20.560 very impressive. So and we're not even talking about wevemo here. 0:02:20.840 --> 0:02:23.680 So when you look at you know, all the businesses. 0:02:24.040 --> 0:02:27.120 They clearly have a lot going on, and Vemo is 0:02:27.160 --> 0:02:30.360 a future bet, but something that could be huge in 0:02:30.440 --> 0:02:31.800 terms of you know, top line. 0:02:31.880 --> 0:02:33.600 You know, it's interesting you just mentioned fifty billion of 0:02:33.639 --> 0:02:37.680 run right revenue YouTube advertising subscription. That sounds a lot 0:02:37.760 --> 0:02:41.640 like the cable television business, the cable network business. I 0:02:41.680 --> 0:02:46.200 look at Paramount, Paramount Global, you know, all those cable networks, 0:02:46.560 --> 0:02:50.840 they have thirty billion of revenue. So YouTube is significantly 0:02:50.880 --> 0:02:54.560 bigger than some of the largest advertising and subscription German 0:02:54.600 --> 0:02:57.560 media companies out there. Yeah, in a dozen years, it's 0:02:57.600 --> 0:02:58.320 just extraordinary. 0:02:58.320 --> 0:03:00.520 I mean, you were talking about these massive and sms 0:03:00.560 --> 0:03:03.280 that Google in Alphabet obviously the parent company has been 0:03:03.280 --> 0:03:05.760 trying to catch up to the likes of obviously Microsoft 0:03:05.960 --> 0:03:08.280 and of course open Ai. Walk us through some of 0:03:08.320 --> 0:03:10.320 those investments and how they're starting to pay off. 0:03:11.240 --> 0:03:14.720 I mean, look, in the case of Alphabet, they have 0:03:15.080 --> 0:03:19.640 huge data center investments simply because they have a giant 0:03:19.680 --> 0:03:24.480 infrastructure that's powering these big businesses. So there's a lot 0:03:24.520 --> 0:03:28.760 of internal consumption of these chips. But also the cloud business, 0:03:28.800 --> 0:03:32.359 which saw a nice acceleration, you know, sequential acceleration from 0:03:32.360 --> 0:03:35.680 twenty nine percent growth to thirty five percent growth, I 0:03:35.680 --> 0:03:39.160 would say a lot of that is driven by the 0:03:39.200 --> 0:03:43.440 availability of GPUs in their cloud. So I'll be interested 0:03:43.480 --> 0:03:47.280 in seeing how much of Microsoft GPUs are being used 0:03:47.280 --> 0:03:50.640 for internal consumption versus what is being exposed on their 0:03:50.680 --> 0:03:54.640 Azure cloud because in my mind, Google having their own 0:03:54.720 --> 0:03:58.200 chips is making a difference in terms of their cloud growth. 0:03:58.240 --> 0:04:02.680 With Microsoft, at least they quantify the AI services contribution 0:04:02.880 --> 0:04:06.120 being ten billion dollars by next quarter, so that's huge. 0:04:06.600 --> 0:04:06.960 Still. 0:04:07.000 --> 0:04:10.040 You know, when it comes to Azure, the fact that 0:04:10.600 --> 0:04:14.120 growth is not accelerating like we saw with Google Cloud, 0:04:14.600 --> 0:04:17.039 it makes you wonder, you know, if capex is growing 0:04:17.080 --> 0:04:21.920 fifty percent, why is it not translating into faster Azure growth? 0:04:21.920 --> 0:04:24.839 Even though thirty three percent is a very solid number, 0:04:25.080 --> 0:04:27.520 but you want to see that acceleration which we saw 0:04:27.600 --> 0:04:31.320 with Google. In the case of Meta and Microsoft, the 0:04:31.400 --> 0:04:35.599 expectations were higher, and I would say Meta is somewhat 0:04:35.600 --> 0:04:38.919 different in the sense that they have their all large 0:04:38.920 --> 0:04:41.560 angrid model, they have their lead when it comes to 0:04:42.200 --> 0:04:45.039 you know, generative AI, but they don't have a separate 0:04:45.160 --> 0:04:48.800 AI revenue line like you see with you know, Microsoft 0:04:48.960 --> 0:04:53.120 or with Alphabet, And that's where you know, if they say, 0:04:53.160 --> 0:04:56.080 you know, capex is going to significantly increase for twenty 0:04:56.160 --> 0:05:00.960 twenty five without really quantifying how significant it will be. 0:05:01.040 --> 0:05:03.039 Whether it's going to be twenty percent which is the 0:05:03.080 --> 0:05:06.520 consensus number, or thirty percent of fifty percent. Nobody knows, 0:05:07.000 --> 0:05:11.400 and that's what I think created that uncertainty around Meta's 0:05:11.440 --> 0:05:13.919 capex spen. And we saw what happened in three qu 0:05:14.160 --> 0:05:17.080 of twenty twenty two where they had a very similar print, 0:05:17.440 --> 0:05:20.280 but they actually quantified that significant and you know, the 0:05:20.400 --> 0:05:24.479 stock dropped twenty percent after that, so clearly there is 0:05:24.560 --> 0:05:27.960 some nervousness and uncertainty around their cap expin How. 0:05:27.880 --> 0:05:34.000 Is AI impacting John Tucker justman's search results, right, I mean. 0:05:34.000 --> 0:05:36.800 Just the nature of search is changing in the sense 0:05:36.880 --> 0:05:41.359 you can ask you know, a lot longer queries. The 0:05:41.480 --> 0:05:45.560 prompts can be infinite and length. You can you know, 0:05:45.640 --> 0:05:48.839 have a video or an image prompt. It just doesn't 0:05:48.920 --> 0:05:52.279 have to be text. So that's what Google called out, 0:05:52.279 --> 0:05:54.680 that the queries are getting a lot more complex in 0:05:54.760 --> 0:05:57.680 nature and users are actually engaging with it. So it's 0:05:57.720 --> 0:05:59.760 not as if, you know, that's driving them to some 0:05:59.800 --> 0:06:02.760 of the platform users want to use what they call 0:06:02.960 --> 0:06:07.680 multimodal search, which is a combination of texts, videos, and 0:06:07.760 --> 0:06:12.360 images and audios. So that's why these lms are so powerful, 0:06:12.440 --> 0:06:16.040 because they give you that innate capability to search in 0:06:16.160 --> 0:06:18.719 whatever format you want and you can just throw it 0:06:18.800 --> 0:06:21.960 in that search box. So that search box is getting 0:06:22.000 --> 0:06:25.080 a lot bigger and a lot more complex on that 0:06:25.160 --> 0:06:25.880 Google page. 0:06:25.960 --> 0:06:28.480 Our thanks to Bloomberg Intelligence senior tech analysts Man Deep 0:06:28.480 --> 0:06:31.680 saying sticking with earnings, ELI Lilly lowered its guidance due 0:06:31.680 --> 0:06:34.760 to lackluster sales of its weight loss drug zet Bound 0:06:35.160 --> 0:06:39.240 and diabetes drug Montro. Each missed estimates by nearly nine 0:06:39.320 --> 0:06:42.200 hundred million dollars. For more on the drugmaker shocking results, 0:06:42.440 --> 0:06:44.760 we were joined by bloomerg Intelligence director of Research for 0:06:44.800 --> 0:06:48.400 Global Industries and senior pharmaceutical analyst Sam Fazzelli. 0:06:48.240 --> 0:06:51.520 When they reported we got a miss, right and I'm 0:06:51.520 --> 0:06:53.920 looking at it right now. They missed by six percent 0:06:54.000 --> 0:06:56.960 on revenue. That is not what do you do when 0:06:57.000 --> 0:07:00.240 you're a sixty pe company, right, It just that it 0:07:00.640 --> 0:07:03.480 is the world's not forgiving enough on that. Just breaking 0:07:03.520 --> 0:07:06.119 that down further, that miss was two drugs on Jarro 0:07:06.480 --> 0:07:09.120 and zep Bound, and those are the drugs that everybody 0:07:09.120 --> 0:07:13.640 talks about. This is the the obesity drugs that are 0:07:13.680 --> 0:07:14.160 on the market. 0:07:14.480 --> 0:07:15.000 They missed. 0:07:15.040 --> 0:07:17.640 Why did they miss The company said that it's because 0:07:18.160 --> 0:07:21.960 there was an inventory d stocking going on at some wholesalers. 0:07:22.240 --> 0:07:25.200 So people go, wait a minute, you're saying to me 0:07:25.400 --> 0:07:31.320 that demand cannot be satisfied, supply were supply limited, So 0:07:31.400 --> 0:07:33.800 why is there an inventory issue in the middle here? 0:07:34.400 --> 0:07:36.760 And of course that's what led to the question of 0:07:36.880 --> 0:07:39.520 oh my god, are we overestimating demand? 0:07:39.520 --> 0:07:42.640 Here? Is the company overestimated it? Why? It's the world? 0:07:42.840 --> 0:07:46.960 It sounds like with the twelve different forms of the 0:07:47.040 --> 0:07:48.160 drugs that they have. 0:07:48.760 --> 0:07:50.120 That no one in. 0:07:50.120 --> 0:07:53.400 This early launch phase we can call it the early launch, right, 0:07:53.480 --> 0:07:56.240 given that it's been a couple of years, is really 0:07:56.280 --> 0:07:59.600 able to manage and work out what they need to 0:07:59.640 --> 0:08:03.680 have as inventory. Because in such a massive product, you're 0:08:03.680 --> 0:08:06.720 going to have an impact on working capital, even for 0:08:06.760 --> 0:08:10.480 the wholesalers. It sounds like that that's the issue that 0:08:10.560 --> 0:08:14.440 even Lily themselves can't necessarily forecast here, right, I mean 0:08:14.520 --> 0:08:17.760 the actual details of how much of each product has made. 0:08:18.000 --> 0:08:20.480 If that's true, then and I think you get a 0:08:20.480 --> 0:08:23.400 little with of that in the fact that Folier guidance 0:08:23.600 --> 0:08:26.760 wasn't dropped by as much as the miss that at 0:08:26.840 --> 0:08:30.320 least currently they are optimistic about picking a whole bunch 0:08:30.360 --> 0:08:32.720 of that backup in the Q four that you should 0:08:32.760 --> 0:08:35.160 not worry about. Demand you talk to any doctor you want, 0:08:35.960 --> 0:08:38.160 do they say, oh, I have no patients left to 0:08:38.240 --> 0:08:40.679 asking me for he set bound or we go viaor whatever. 0:08:40.800 --> 0:08:44.880 So I think that's what's happening here. The difficulty in 0:08:45.000 --> 0:08:47.880 managing and thinking about how to manage your inventory. 0:08:48.440 --> 0:08:50.400 Something I wanted to pick your brain about was when 0:08:50.400 --> 0:08:52.720 it comes to knockoffs, because we saw a huge drop 0:08:52.760 --> 0:08:56.280 in hymns in hers earlier this month, so they were 0:08:56.400 --> 0:08:59.760 so they previously were allowed to manufacture copycap drugs when 0:08:59.760 --> 0:09:02.320 they're deemed in short supplied by the FDA, But the 0:09:02.400 --> 0:09:04.600 FDA at that time said when it came to Zebound 0:09:04.600 --> 0:09:07.600 and Manjaro specifically for Eli Lily, they weren't shortage anymore. 0:09:07.720 --> 0:09:09.360 So that's why you saw that drop there. But they 0:09:09.480 --> 0:09:12.360 still when it came to a Zempic and Wegovi when 0:09:12.400 --> 0:09:14.760 you think about Novo Nordisk, they were still able to 0:09:14.800 --> 0:09:18.640 offer compounded version actually versions of those, So I'm wondering 0:09:18.640 --> 0:09:21.280 when you think about Eli Lily versus what's happening with 0:09:21.400 --> 0:09:23.920 Novo nordis, how does that kind of come into play 0:09:23.960 --> 0:09:26.160 when you're thinking about when it comes to sort of 0:09:26.160 --> 0:09:28.280 the knockoffs and the copycat type drugs. 0:09:28.720 --> 0:09:28.920 Yeah. 0:09:28.960 --> 0:09:32.080 Sure, I mean I'm not even sure that people have 0:09:32.160 --> 0:09:36.720 stopped making compounded versions of zep pound and Manjara because 0:09:36.760 --> 0:09:39.840 the FDA kind of reeled back a little bit and said, oh, 0:09:39.880 --> 0:09:41.280 we're going to actually look at this again. 0:09:41.400 --> 0:09:43.400 So I don't think that story is finished. 0:09:43.440 --> 0:09:45.800 I think that these folks are some folks are still 0:09:45.840 --> 0:09:49.600 able to supply those from a compounded pharmacy perspective, So 0:09:50.480 --> 0:09:54.040 you know that is that's that's a lot. That's a 0:09:54.240 --> 0:09:56.560 root that the FDA does provide to people. If there's 0:09:56.559 --> 0:09:58.400 a shortage of a drug and someone else can. 0:09:58.320 --> 0:10:00.199 Make it, well let them do it. 0:10:00.280 --> 0:10:02.680 The interesting angle, of course, is that a whole bunch 0:10:02.720 --> 0:10:05.880 of people who are taking off the compounded pharmacists are 0:10:06.080 --> 0:10:09.880 probably paying less, and therefore if they're forced to go 0:10:09.920 --> 0:10:11.880 and take it from a prescription, they may have to 0:10:11.880 --> 0:10:13.800 pay more out of pocket. So that's not going to 0:10:13.800 --> 0:10:17.360 be a leaving a particularly good taste in folks. Mouths 0:10:17.679 --> 0:10:21.880 once that this actually happens, but it hasn't happened yet. 0:10:21.920 --> 0:10:23.840 So and they did say on the call that this 0:10:23.960 --> 0:10:28.319 is not because there's enormous demand being fulfilled by compounded pharmacies. 0:10:28.760 --> 0:10:32.960 It's literally to do with that inventory management issue. 0:10:33.840 --> 0:10:36.320 Where what are the companies saying Sam about getting this 0:10:36.360 --> 0:10:38.280 in an oral format? I think that might be one 0:10:38.320 --> 0:10:41.920 of the next big I guess mileposts for this type 0:10:41.960 --> 0:10:42.720 of treatment. 0:10:43.920 --> 0:10:46.440 Yeah, I remember, Paul, there's already an oral form of this. 0:10:46.559 --> 0:10:49.400 It's called Robels's. It's from over NOTICEK. It's just a 0:10:49.440 --> 0:10:51.280 tough drug to use because you have to have it 0:10:51.360 --> 0:10:54.040 within about half an hour of eating. You can't take 0:10:54.080 --> 0:10:57.080 it too close or too far from an eating because 0:10:57.120 --> 0:10:58.800 you need an empty stomach. 0:10:58.440 --> 0:10:59.360 Before you take the drug. 0:10:59.400 --> 0:11:01.720 And it's a big dose and maybe the side effect 0:11:01.760 --> 0:11:03.959 profile isn't as great and the weight loss isn't as great. 0:11:04.000 --> 0:11:08.400 So people are trying to develop oral versions of these drugs, 0:11:08.400 --> 0:11:12.559 but also oral drugs that are like normal drugs, small 0:11:12.600 --> 0:11:14.160 molecules that they can swallow as a pill. 0:11:14.200 --> 0:11:15.680 Once today, So that's coming. 0:11:16.160 --> 0:11:18.280 So what do you think shareholders need to watch for 0:11:18.480 --> 0:11:21.439 next when it comes to especially after its outlook disappointed. 0:11:23.400 --> 0:11:25.520 I think we need to see how Q four does. 0:11:26.000 --> 0:11:30.240 So let's hope that that they're current guidance. At least 0:11:30.240 --> 0:11:32.640 they meet it, maybe beat it, that would be nice. 0:11:33.880 --> 0:11:37.120 The issue is then we move into Q four. There's 0:11:37.120 --> 0:11:39.640 an interesting result from a clicker trial that's coming up. 0:11:39.679 --> 0:11:42.800 They've done this before. They're comparing zep bound with wig 0:11:43.000 --> 0:11:47.280 V and I suspect that they're hoping and that that 0:11:47.480 --> 0:11:50.040 data suggests that they might. They will show that it 0:11:50.120 --> 0:11:53.840 has better weight loss. Whether the side effect profile would 0:11:53.840 --> 0:11:55.920 be better or a different time will tell, but that 0:11:56.160 --> 0:11:58.600 there are not many farmer companies do these type of 0:11:58.800 --> 0:11:59.760 head to head trials. 0:12:00.600 --> 0:12:02.440 Did it take some Yeah. 0:12:02.320 --> 0:12:04.040 Yeah, no, I just wanted to get real quick. 0:12:04.120 --> 0:12:06.960 What's the latest thinking on the size of this market? 0:12:07.000 --> 0:12:08.120 I know you guys have done a lot of work 0:12:08.160 --> 0:12:08.360 on this. 0:12:09.440 --> 0:12:09.640 Yeah. 0:12:09.679 --> 0:12:12.120 I think my key's latest numbers that are at ninety 0:12:12.160 --> 0:12:16.160 three billion. I don't remember exactly. It's bag well out 0:12:16.200 --> 0:12:17.520 of nothing exactly. 0:12:17.280 --> 0:12:19.920 Our thanks to Bloomberg Intelligence, director of Research for Global 0:12:19.920 --> 0:12:23.280 Industries and senior pharmaceutical analyst Sam Fizzelli coming up on 0:12:23.280 --> 0:12:26.160 the program. The next US president will wield major power 0:12:26.160 --> 0:12:28.760 in shaping the future of electric vehicles. We'll find out 0:12:29.120 --> 0:12:32.160 in which direction each candidate wants to go. You're listening 0:12:32.200 --> 0:12:35.280 to Bloomberg Intelligence on Bloomberg Radio, providing in dipper research 0:12:35.320 --> 0:12:37.199 and data on two thousand companies and one hundred and 0:12:37.240 --> 0:12:40.200 thirty industries. You can access Bloomberg Intelligence via b I 0:12:40.240 --> 0:12:43.199 go on the terminal. I'm Paul Sweeney, and this is Bloomberg. 0:12:48.120 --> 0:12:52.520 This is Bloomberg Intelligence with Alex Steele and Paul Sweeney 0:12:52.800 --> 0:12:54.439 on Bloomberg Radio. 0:12:56.280 --> 0:12:58.480 I'm Paul Sweeney. Alex Steele is out this week. 0:12:58.559 --> 0:13:01.120 Each week we look at research from Bloomberg and EF 0:13:01.160 --> 0:13:03.840 previously known as New Energy Finance. They're the team at 0:13:03.840 --> 0:13:07.040 Bloomberg that tracks and analyzes the energy transition from commodities 0:13:07.080 --> 0:13:11.559 to power, transport, industries, buildings, and agricultural sectors. This week 0:13:11.640 --> 0:13:14.120 we took a look at the overall EV market and 0:13:14.160 --> 0:13:17.440 the sway US presidents have on fuel economy standards for cars. 0:13:17.720 --> 0:13:20.160 For more guests, Thost, Billy Lipschultz, and I were joined 0:13:20.160 --> 0:13:23.920 by Corey Kantor b n EF, lead US electric vehicle analyst. 0:13:24.200 --> 0:13:26.840 You first asked Corey, how would the EV market change 0:13:26.880 --> 0:13:28.320 under each presidential candidate? 0:13:28.600 --> 0:13:32.000 Everything from federal fuel economy standards. That's the kind of 0:13:32.240 --> 0:13:35.000 miles per gallon of new vehicles which electric vehicles help 0:13:35.040 --> 0:13:39.840 automakers achieve. To the implementation of the Inflation Reduction Act, 0:13:39.880 --> 0:13:42.439 So even though the law has passed now over two 0:13:42.520 --> 0:13:44.680 years ago, you're going to see those loans and grants 0:13:44.679 --> 0:13:47.280 from the federal government impacted all the way up to 0:13:47.480 --> 0:13:50.680 the seventy five hundred dollars Clean Car ev tax credit 0:13:50.760 --> 0:13:53.400 that people know and love in some cases. 0:13:53.480 --> 0:13:55.079 So depending on who wins. 0:13:55.120 --> 0:13:57.680 Obviously with the IRA, you're going to need Congresses input 0:13:57.720 --> 0:13:59.680 on that, but there are things that the Trump administration 0:13:59.720 --> 0:14:02.320 could do very early on on the implementation side to 0:14:02.320 --> 0:14:03.559 make those credits. 0:14:03.280 --> 0:14:04.360 A bit more restrictive. 0:14:04.520 --> 0:14:07.320 So it's going to be big, but also a split 0:14:07.400 --> 0:14:09.640 decision could have an impact too if you have, say 0:14:09.640 --> 0:14:13.160 a Republican Congress with Kamala Harris's president or vice versa, 0:14:13.600 --> 0:14:14.040 and how. 0:14:13.880 --> 0:14:16.959 Does that actually impact the ability for these car makers 0:14:17.000 --> 0:14:20.280 to sell cars? When I look at targets of Biden 0:14:20.280 --> 0:14:23.119 administration having a certain number of evs, I'm from California, 0:14:23.160 --> 0:14:25.800 where they lay out these overly ambitious goals five six, 0:14:25.880 --> 0:14:28.240 seven years down the road and then seemingly chop them 0:14:28.280 --> 0:14:29.480 down when they get closer. 0:14:29.680 --> 0:14:31.880 Yeah, Bailey, I mean even beyond that, there's been a 0:14:31.960 --> 0:14:34.160 kind of back and forth between California and the rest 0:14:34.160 --> 0:14:36.160 of the country for a long time, known as you know, 0:14:36.200 --> 0:14:41.080 the California Advanced Clean Cars to policy, which aims to 0:14:41.080 --> 0:14:42.920 have one hundred percent of all new sales by twenty 0:14:43.000 --> 0:14:45.840 thirty five is electric, eighty percent fully electric, twenty percent 0:14:46.080 --> 0:14:48.680 plug in hybrid. And so last time Trump was elected, 0:14:49.040 --> 0:14:51.320 there was a lot of lawsuits, a lot of uncertainty 0:14:51.360 --> 0:14:53.560 in the market. Makes it very difficult from an automaker 0:14:53.600 --> 0:14:56.960 perspective to actually plan. And so these automakers for a 0:14:57.000 --> 0:14:59.200 long time have wanted both the carrots, which are these 0:14:59.240 --> 0:15:02.200 IRA kind of subsidies and incentives on grants and loans, 0:15:02.560 --> 0:15:04.280 and then they'd be willing to take the stick, which 0:15:04.320 --> 0:15:05.880 is the fuel economy standards. 0:15:06.080 --> 0:15:07.840 So we have to see how it shapes out. 0:15:07.880 --> 0:15:10.440 But from the automakers that we speak to, it's a 0:15:10.480 --> 0:15:13.920 pretty confusing policy environment. But given that the globe is 0:15:13.960 --> 0:15:16.880 moving towards electric vehicles and cleaner cars in general, they 0:15:16.920 --> 0:15:19.080 have to kind of prepare to move that way regardless, 0:15:19.080 --> 0:15:21.000 and it's just how quickly in the US are they 0:15:21.040 --> 0:15:22.040 going to move in that direction. 0:15:22.640 --> 0:15:25.800 The Chinese are moving very aggressively. How do you expect 0:15:25.800 --> 0:15:29.160 them to do outside of China? Will there be market 0:15:29.200 --> 0:15:31.520 for Chinese evs in Europe? 0:15:31.760 --> 0:15:32.480 In the US? 0:15:32.880 --> 0:15:34.280 Yeah, it's a really good question, Paul. 0:15:34.360 --> 0:15:36.160 And you know, looking at the data which we do 0:15:36.200 --> 0:15:39.800 at BNEF, you can see Chinese automakers like BYD making 0:15:40.000 --> 0:15:43.280 upground in places like Brazil, in places like Latin America, 0:15:43.360 --> 0:15:45.400 in places like Israel, you know where you might not 0:15:45.520 --> 0:15:49.760 expect to see Chinese automakers. They've been moving into Europe 0:15:50.000 --> 0:15:51.880 and there's been a pushback with all the tariffs and 0:15:51.880 --> 0:15:53.880 back and forth there. I think that's also why the 0:15:53.960 --> 0:15:56.040 US election does have a big impact, because if there's 0:15:56.040 --> 0:15:59.080 no kind of counter bailing force coming out of the US, 0:15:59.160 --> 0:16:02.000 you see what's going on Volkswagen on the European side, 0:16:02.120 --> 0:16:04.320 it's going to maybe make the road easier for those 0:16:04.400 --> 0:16:07.520 Chinese automakers on electric to kind of shift into those 0:16:07.520 --> 0:16:10.800 export markets. Because if Tesla isn't focused on making more 0:16:11.040 --> 0:16:13.600 affordable EV's, then there's really only going to be one 0:16:13.600 --> 0:16:15.960 major player in town. It doesn't mean, you know, that 0:16:16.680 --> 0:16:18.600 Chinese automakers are going to be the only ones who 0:16:18.600 --> 0:16:22.400 are making mass evs, but it's a pretty big transformation 0:16:22.480 --> 0:16:24.840 at the global auto market level, just like when the 0:16:24.920 --> 0:16:26.600 Japanese automakers came onto the scene. 0:16:26.640 --> 0:16:27.880 So I think that's the way I like to think 0:16:27.880 --> 0:16:28.280 about it. 0:16:28.160 --> 0:16:30.240 It doesn't mean that you know, EV's are going to 0:16:30.280 --> 0:16:33.160 be sold everywhere overnight, but without a kind of other 0:16:33.240 --> 0:16:35.560 major automaker, that's where I think a lot of these 0:16:35.560 --> 0:16:36.440 countries are going to turn. 0:16:36.880 --> 0:16:41.040 And if we do see tariffs on some magnitude, yeah, 0:16:41.120 --> 0:16:44.320 what does that actually mean for the market for Elon 0:16:44.440 --> 0:16:47.560 Musk's Tesla, who he's had a very prominent role campaigning 0:16:47.600 --> 0:16:49.480 for Donald Trump as well as other companies. 0:16:49.960 --> 0:16:52.240 I think when it comes to US tariffs, you know 0:16:52.280 --> 0:16:54.680 that could buy you. I think some time you look 0:16:54.720 --> 0:16:57.120 at the one hundred percent tariff that the buy An 0:16:57.120 --> 0:17:00.040 Administration put on Chinese EV makers. While there weren't that 0:17:00.080 --> 0:17:03.640 many Chinese EV makers selling electric vehicles here currently, Jilie Group, 0:17:03.640 --> 0:17:06.600 which owns Volvo and Pollstar, was pretty much the major 0:17:06.920 --> 0:17:09.760 automaker impacted. So that's why you saw those prices. Or 0:17:09.920 --> 0:17:12.280 the Volbo Ex thirty, which is a really popular model 0:17:12.400 --> 0:17:15.920 globally not sold here yet. It's keeping byd Out for 0:17:15.960 --> 0:17:18.760 a little bit longer. But if the automakers like GM 0:17:18.840 --> 0:17:21.800 or Stillants or Forward aren't helped or don't move towards 0:17:21.800 --> 0:17:23.320 electric vehicles, you know, maybe. 0:17:23.080 --> 0:17:24.919 It buys you two, three, four years. 0:17:25.080 --> 0:17:28.080 But all the while, BYD and other Chinese automakers are 0:17:28.119 --> 0:17:31.200 making more investments in battery technology, and I think, regardless 0:17:31.200 --> 0:17:32.760 of who wins, you need to see more of those 0:17:32.800 --> 0:17:35.280 investments here on batteries because those are going to be 0:17:35.280 --> 0:17:37.760 important not only for electric vehicles but for the grid 0:17:37.800 --> 0:17:40.640 as well, and you're letting China get a major competitive advantage. 0:17:40.840 --> 0:17:44.080 What are the US manufacturers doing? Have they pulled back 0:17:44.119 --> 0:17:45.200 on their EV investments. 0:17:45.480 --> 0:17:47.960 We've definitely seen at a global level those EV targets 0:17:47.960 --> 0:17:50.480 moving back. I think for it in particular, you saw 0:17:50.520 --> 0:17:53.080 them move their new EV models out a couple of years, 0:17:53.119 --> 0:17:55.280 so it's less so on the dollar amount and more 0:17:55.320 --> 0:17:56.320 pushing it back. 0:17:56.760 --> 0:17:58.280 GM has seen better EV sales. 0:17:58.320 --> 0:17:59.960 In fact, the third quarter this year was the best 0:18:00.280 --> 0:18:02.080 in the US that they had seen to date, with 0:18:02.160 --> 0:18:05.440 the Equinox and Blazer and Lyric really taking off. To 0:18:05.800 --> 0:18:08.280 make one bright point, Bailey, your home state of California 0:18:08.320 --> 0:18:10.760 actually saw in that third quarter the best TV shriff 0:18:10.800 --> 0:18:13.680 sales they've ever had at twenty seven percent, So that's 0:18:13.880 --> 0:18:17.040 twenty three percent about almost twenty four percent fully electric, 0:18:17.080 --> 0:18:18.119 the rest plug in hybrid. 0:18:19.119 --> 0:18:21.520 So it's pretty good. Calif Like, what's the US average? 0:18:21.680 --> 0:18:24.880 US average has been at about ten percent now nine 0:18:24.920 --> 0:18:25.639 and a half ten percent. 0:18:25.840 --> 0:18:26.760 Just yeah, far. 0:18:27.280 --> 0:18:30.760 California twice twice the average. But what's significant about that 0:18:30.800 --> 0:18:33.480 is California had been stuck at about twenty five percent. 0:18:33.960 --> 0:18:36.679 Tesla actually for four quarters in a row in California 0:18:36.720 --> 0:18:40.920 has seen decline in deliveries because of I think some 0:18:40.960 --> 0:18:44.120 of the kind of Tesla or Musk fatigue, and so 0:18:44.160 --> 0:18:47.199 to see California begin to grow again from the other automakers, 0:18:47.200 --> 0:18:49.760 even if Tesla's pullback is pretty significant, we. 0:18:49.760 --> 0:18:53.440 Stick with the automotive space first. Chinese carmaker BYD notched 0:18:53.520 --> 0:18:56.760 up another win over Tesla this week, reporting quarterly revenue 0:18:56.760 --> 0:18:58.720 that beat Tesla for the first time since the pair 0:18:58.760 --> 0:19:02.560 have gone head to head, and global electric vehicle sales well. 0:19:02.640 --> 0:19:05.320 Volkswagen announced a cost saving proposal to keep its German 0:19:05.400 --> 0:19:08.639 plants open, after announcing plans earlier in the week to 0:19:08.640 --> 0:19:11.240 close at least three factories in Germany and eliminate thousands 0:19:11.320 --> 0:19:14.199 of jobs amid struggles with poor demand in Europe and 0:19:14.240 --> 0:19:17.800 intensifying competition in China. For more normal INNDON, I spoke 0:19:17.840 --> 0:19:20.600 with Bloomberg Intelligence senior auto analyst Steve Mann. 0:19:20.880 --> 0:19:22.119 B y D is on a roll. 0:19:22.880 --> 0:19:25.560 I mean, the whole EV market and China is on 0:19:25.600 --> 0:19:30.120 a role. It's displacing you know, ice vehicles, internal conventionment 0:19:30.200 --> 0:19:33.960 engine vehicles. Uh, and it's growing, you know, double digits. 0:19:34.440 --> 0:19:36.520 You know what b I D. You know, BID. 0:19:36.240 --> 0:19:39.560 Eclipsing Tesla's revenues. Is that's not the end of it, 0:19:40.240 --> 0:19:44.120 you know, I think the Chinese automakers have a really 0:19:44.119 --> 0:19:49.000