May 20, 2025 • 42 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Elon Musk said he’s committed to still leading Tesla Inc. five years from now and expects to pare back his political spending, assuaging some investors’ concerns about the future of his most valuable company.
The billionaire offered new details about his plans in a wide-ranging interview with Bloomberg News that also touched on his compensation, Tesla’s sliding sales and a possible spinoff of SpaceX’s Starlink satellite business. Musk repeated his criticisms of a familiar cast of characters, from Bill Gates to the Delaware judge who’s twice ruled against his massive Tesla pay package.
Musk, whose $375.5 billion fortune leads the Bloomberg Billionaires Index, reiterated that he wants to own more shares of Tesla for reasons of authority, rather than wealth.
“It’s not a money thing,” he said during a remote appearance Tuesday at the Qatar Economic Forum in Doha. “It’s a reasonable control thing, over the future of the company.”
Musk has been chief executive officer of Tesla since 2008, one of the longest active stints atop the world’s largest automakers. His level of engagement with the company has come under greater scrutiny as the carmaker has followed up its first annual sales drop in over a decade with steeper declines early this year.
Musk, 53, downplayed the extent of Tesla’s challenges, saying that “it’s already turned around.” When pressed about this — the carmaker’s vehicle sales continued to plunge across Europe’s biggest electric vehicle markets in April — the CEO said that the region is the company’s weakest, but that it’s strong elsewhere.
Today's show features:
Bloomberg News Senior Reporter Max Chafkin on Elon Musk’s Qatar Economic Forum interview
Siyu Huang, Co-Founder and Chief Executive Officer of Factorial Energy
Bloomberg News National Security Team Leader Nick Wadhams
Bloomberg News Senior Editor, Equities Americas Eric Weiner
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg Business
Week Daily reporting from the magazine that helps global leaders
stay ahead with insight on the people, companies, and trends
shaping today's complex economy, plus global business, finance and tech
(00:23):
news as it happens. The Bloomberg Business Week Daily Podcast
with Carol Masser and Tim Steneveek on Bloomberg Radio Well.
Speaker 2 (00:32):
Elon Musk giving a wide ranging interview earlier today with
the Bloomberg's Michelle Hussain at the Qatar Economic Forum Some News.
Musks that he's committed to still leading Tesla five years
from now and expects to pair back his political spending,
assuaging some investors' concerns about the future of his most
valuable company. He also addressed the attacks on the Tesla
brand and the actual cars too. Here's part of the
(00:53):
conversation with Bloomberg's Michelle Hussain at the Qatar Economic Forum.
Speaker 3 (00:58):
In terms of political spending, I'm going to do a
lot less in the future.
Speaker 4 (01:03):
And why is that.
Speaker 3 (01:06):
I think I've done enough?
Speaker 4 (01:11):
Is it because of blowbuck Well?
Speaker 5 (01:14):
If I see a reason to do political spending in
the future, I will do it.
Speaker 3 (01:18):
I don't recurrently see a reason.
Speaker 2 (01:19):
That was Elon Musk talking about pulling back on political
spending with Bloomberg's Michelle Assan at the Kaitar Economic Forum.
We've got Max Chafkin with us. He's the co host
of the new Bloomberg podcast Everybody's Business. He's also the
co host of the not so new podcast but still
pretty great podcast it's called Elon Ink, and a reporter
for Bloomberg BusinessWeek. When he's not doing the podcast so reporting,
(01:41):
he joins us here in the Bloomberg Interactive Brokers studio.
I'm glad that's what we played, because that's getting a
lot of attention right now. And I heard that, and
I went back to Elon's Twitter from March of twenty
twenty four, and that's when he posted on X this
is over a year ago, I will not tribute to
either political candidate, and we all saw what happened a
(02:03):
few months later. My point is he says stuff and
doesn't necessarily commit to it.
Speaker 6 (02:10):
Yeah, and even here he's building himself an out right.
He's saying less money, which you'd kind of expect anyway. Right,
midterms are not as expensive as presidential years. So like
it would be very surprising if he dropped another three
hundred million dollars, which is roughly what he spent in
twenty twenty four on twenty twenty six. And he's also saying,
(02:31):
you know, I would it's it's I don't see a
reason now, But if I did see a reason in
the future, I could I see this as a public negotiation.
Speaker 2 (02:39):
Right.
Speaker 6 (02:40):
This is the audience here, well, they aren't. There are
several different audiences. One of course is Tesla's shareholders trying
to say like, look, I'm I'm focused on the company.
I'm not getting sucked into Washington, going to try to
deal with some of the brand damage that my political
presidence has caused. But of course the other audience is Republicans. Right,
He's he's putting it out there that if they want
(03:01):
money from him, they're going to have to do stuff.
And you know, there's lots of stuff that has happened
in Washington since Donald Trump took office that I think
has made Elon Musk really happy. But Elon Musk is
a very long list, and not all those things have happened.
There are lots of opportunities for him to get contracts.
You know, the Golden Dome, as you were discussing, like
(03:21):
that's a potential revenue source for SpaceX. There are lots
of areas that Elon Musk stands to benefit. You also
have this in the bill right now, like they're plan
cutting these EV subsidies. Now, we will see where that
ends up. But if those EV subsidies are cut completely,
that could really hurt Tesla. So I think I think
(03:41):
it's to his advantage to say, hey, I'm you know,
I'm not a gimme for twenty twenty six. You have
to win my support.
Speaker 3 (03:48):
Hey, listen.
Speaker 7 (03:49):
One are the things that we noticed, Max. We got
went on air about two o'clock Wall Street time, and
then shortly thereafter we saw the market pull back and
go down to its lows. So we sell some selling.
We were talking about our Eric Wiener here, who covers
the equity marketing. So a lot of that was with
Tesla doing an interview with CNBC and talk about robotaxis
and saying that they will be a thousand robotoxies in
(04:12):
Austin within a few months, and part of his was
saying the cost of that, there's still a lot to
be worked out in terms of liabilities. So I'm just
curious some of the comments that we got from our
interview as well as just Elon talking a lot today.
Speaker 6 (04:27):
So the Robotaxi thing, I think part of the challenge,
one of the challenges for Tesla is there's so much
sort of assumed in the stock. The Tesla bulls basically
believe that almost overnight they're going to be able to
turn this thing into a massive, massive business. And I
think everything we know from the history of other companies
(04:50):
trying to launch these robotaxi things, and I'm thinking particularly
of Waimo, Google's driverless car division, which has been doing
this for like ten years and has really struggled to commercialize,
is that it's going to take a long time. And
when you look closely at what Musk is saying is
going to happen in Austin, if you are not paying
that close attention, if you're just sort of buying this,
like on robin Hood, you hear Elon must say, you know,
(05:11):
robotax is going to heat over the world. You think
they're going to turn this on, They're going to be
huge fleets, It's going to be very small, you know.
Speaker 2 (05:17):
On the during the earnings call.
Speaker 6 (05:18):
We learned something like ten to twenty robotaxis with tele operation.
That's that's people, you know, sitting in command centers making
sure the cars don't hit anybody.
Speaker 2 (05:27):
It's going to be certainly what WEIMO does by any.
Speaker 6 (05:29):
Means, No, it's it's closer to it's maybe what WEIMO did,
you know, years ago, And it's just it's a realization.
I think that this is going to take a long time.
So I don't know. Elon Musk has this kind of
amazing ability to spin stories about the future to get
people excited about the future, and he may be able
to do that. But but like Tesla's stock has gone
up a lot in recent weeks, you know, And no,
(05:51):
some of that has to do with you know, terriff
expectations and so on. But this is a very valuable
company relative to the number of cars it sells.
Speaker 2 (06:00):
Max in the interview that he gave to our team
at the Guitar Economic Forum earlier today, he was asked
about protesters or the Tesla brand damage, and what he
answered was he said, quote, they're on the wrong side
of history, and that's an evil thing to do. That's
referring to people damaging Tesla cars and showrooms. Something needs
to be done about them, and a number of them
(06:20):
are going to prison and they deserve it. It seems
like he's certainly there were reports of damage to Tesla
vehicles and damage to test Tesla shrooms, but there's also
been these protests that happened happening at Tesla showrooms all
over the country, especially during his work with Doge, that
were not violent. Yeah, it seems like he's He's also
(06:40):
in the past talked about these people being part of
some bigger movement. He's referred to them online as being paid.
Have we seen any evidence of that?
Speaker 6 (06:49):
No, there's no evidence, no good evidence that the people
who are showing up at these Tesla protests are paid.
You know, I would say that there's a he's conflating
a couple of different things. But you know, and having talked,
we did a podcast episode on Eline a week and
a half ago with a former Tesla sales manager, and
who he's talking about is like, the real danger is
(07:11):
not these protesters, not somebody showing up to a protest,
It's just somebody not buying. And like that is a
thing that even if you remove the protests, the protests
are of course not good for the brand. They're an
expression of unhappiness and so on. It doesn't lead to
good headlines. Obviously, protests can sometimes get out of hand,
but also it's just a lot of people, I think,
(07:32):
do not want to be associate associate their car with
something this controversial. And what he was saying is that
when Musk started, what this Tesla manager was saying is
that when Must started getting involved in politics a couple
of years ago, they had people come into the Tesla
stores and argue and say, you know, I like the car,
but I don't like this. You know, still very engaged.
And when he said what changed as Must became more
(07:54):
and more engaged, is they just stopped coming. They just decided,
you know, screw this, Like I don't want to be
associated with something that's controversial. And when you look at
what's happening in the sales, like that's what's showing up.
It's not the protesters, it's just the people not buying.
And that's the thing that's going to be hard to
turn around.
Speaker 7 (08:10):
I think in terms of Tesla, the business just real quickly.
I mean, I think you talked about things are turning around.
Speaker 5 (08:15):
Is he right?
Speaker 6 (08:17):
I think investors are certainly hoping, so we have not
in Again, in the publicly available data, there is very
little to support and that support this. Now Elon Musk
is saying it's happening, trust me, and he's citing the
stock price now. As I said earlier, the stock price.
Lots of things are driving the stock price, but one
of the big things is expectations around Trump's tariffs, in
(08:39):
other words, having nothing to do with sales. So he's
saying you should trust me that the business is turning around.
Because Tesla's stock is up substantially over the last month.
That doesn't to me suggest that sales are definitely up.
What we've seen is numbers out of Europe and numbers
out of China still not good. The US we don't
really know yet, so we will see. But this is
(09:01):
not the kind of thing I think that can be
turned around in a matter of days or weeks. People
make decisions about buying cars over a term of years.
That's why car companies like spend so much doing brand advertising.
And so this is going to be This is going
to have created damage with at least some subset of
consumer that may be hard to undo. Now Musk did
say during the interview this morning in Qatar that some
(09:26):
people are buying Teslas because of who he is, and
there's a very memorable quote he said, maybe they're buying
it the people who are putting the stickers on the cars,
saying I bought this before he was crazy. Maybe some
people are buying it because he was crazy or whatever.
So obviously making light of those stickers. Now, I don't
think we've really seen that show up in the data yet.
Cyber truck sales have not been great, although again this
(09:46):
stuff can take time. Maybe it will start to show up.
Speaker 4 (09:49):
We'll see, We'll see, we'll see.
Speaker 7 (09:51):
Always fun to listen from what Elon has to say,
but always fun to also get someone else's from. Max
Chafkin on all of It. Maxi crosco host of Everybody's Business,
senior reporter for Bloomberg News, author of The Contrarian Peter
Teal and Silicon Valley's Pursuit of Power, and of course,
one of the hosts of the Elon In podcast Check
It All Out at Bloomberg dot Com.
Speaker 4 (10:08):
Are also on the Bloomberg Terminal.
Speaker 1 (10:09):
Max, Thanks, you're listening to the Bloomberg Business Week Daily podcast.
Catch us live weekday afternoons from two to five East
during Listen on Applecarplay and Android Auto with the Bloomberg
Business app, or watch us live on YouTube.
Speaker 2 (10:25):
I want to talk about batteries because last night, Jean.
Speaker 7 (10:29):
Nicol, for every time you said you want to talk
about batteries, I'd.
Speaker 6 (10:32):
Be a rich woman.
Speaker 2 (10:33):
You would be because you like batteries. Batteries are in
everything and they're super important, especially when we think of
the electrification of vehicles.
Speaker 4 (10:40):
Super important.
Speaker 7 (10:40):
So what do you want to tell me?
Speaker 2 (10:41):
Well, last night c ATL jumped in its Hong Kong
trading debut last night our time, I should say, correct
today Hong Kong time. This after the Chinese battery Giant
wrapped up the world's biggest listing this year, raised four
point six billion dollars. This despite being blacklisted by the
Pentagon and grinding through political storms. CTL is the largest
(11:03):
maker of EV batteries. It supplies batteries to Tesla, VW, FOD, Mercedes,
Benz and more. Our next guest, though, is working on
a different type of battery. See U Wong is a
founder in CEO of Factorial Energy. This is a company
that's working on solid state batteries. She joins us from Massachusetts.
See you. Good to have you on the program today.
(11:24):
I started out by doing some research when it came
to different types of batteries, and I was just thinking
to myself, No, I'm just going to have you answer
the question for us. If we think about the batteries
that are prominently featured in EVS right now, how are
these different than the solid state batteries that you are
developing at.
Speaker 8 (11:40):
Factorial solid state batteries like a traditional battery, but instead
of using a liquid insight, it uses solid state or
quasi solid state material. And this makes a battery safer,
longer lasting, and more powerful because you can't store more
energy and it's less likely to leak or catch on fire.
Also more efficient and safer for everything from your cell
(12:03):
phones to electric cars.
Speaker 4 (12:05):
Plus, our unique.
Speaker 8 (12:06):
Dry coding process makes manufacturing cleaner and more cost effective.
Speaker 2 (12:09):
So why is it so difficult to make an EVY
battery a solid state battery?
Speaker 8 (12:13):
Well, there are different part of the challenges coming to play.
The biggest challenges scale up. I mean that has been
uh that's value for a lot of battery companies, from
the first minimal viral product to the manufacturer with a
really good quality and cost effective product. And on top
of that, it's really the supply chain challenges. I think
(12:33):
that's definitely very central to all the battery players in
the world.
Speaker 4 (12:39):
And last, butt of the.
Speaker 8 (12:40):
Least, I think it's really coming down to the execution,
right from a startup to a giant supply chain player
in the value chain for the batteries really the big difference.
So I think that's really coming down to the execution
and also the conviction from the leadership team.
Speaker 7 (12:56):
Wait, so help me understand to in turn of scaling up,
what's the biggest impediment? Is it resources? Financial, resources, materials?
I'm trying to understand because you guys have been working
on this for a while, and I understand there's development
and all of that takes some time. But tell us
what's kind of the biggest point or factor that's holding
(13:19):
you guys back at this point.
Speaker 8 (13:20):
Yeah, I would see there are probably mostly three areas.
But I think the biggest hurdle when it comes from
a technology to a real product is really to scale
up the battery itself. You know, traditionally we have batteries
like with our cell phone size batteries when a lot
of smaller started to de developing, even as small as
your watch battery, like a coy cell battery, and it's
(13:41):
a big hurdle scale from like small cell phone batteries
to like a big automotive sized battery.
Speaker 4 (13:46):
Actually, I brought up a post type that.
Speaker 8 (13:50):
The audience today that this is actually one hundred empower
battery which is launched in twenty twenty three, and actually
we're brought into the b sample earlier last year as well,
So this is actually an automotive size battery, and it's
a huge from a cell phone size battery to automotive
size battery. It's a lot of work to put into
like manufacturing, design the battery, and also even to keep
(14:13):
the quality and cost on track. So I think that's
really the top biggest challenge for making a battery, alongside
with also the cost, the equality checking the.
Speaker 2 (14:25):
Battery that you're holding right now that would be a
battery that would go into an electric vehicle.
Speaker 4 (14:30):
Yeah.
Speaker 8 (14:31):
So actually we launched with Mercedes together earlier this year
the first solid state battery vehicle with the Global OEM,
and we're putting the lithium metal solid state battery that
we produced and we're able to power the vehicle of
EQS and with our battery which is bringing higher energy
and it's a denser energy, so it gives you a
(14:52):
less volume and also.
Speaker 4 (14:54):
A lighter, smaller battery.
Speaker 8 (14:56):
It actually delivers a longer range and also be able
to more caustic FUSHI ending the long run. So this
is what we have delivered with Mercedes earlier this year
in the EQS and it's actually powering the vehicle and
it was running on the street of Stutgart.
Speaker 7 (15:10):
So just for those who are listening on radio, you
know CEU has been holding up.
Speaker 4 (15:15):
We all know our car. You know what our cell
phone looks like in the small.
Speaker 7 (15:18):
Batteries, but this one was about It looked like it
was about a foot and a half long, maybe four
inches wide. It was very light. Was that the actual
battery that batteries are heavy? Was that actually the weight
of an actual car battery, a solid state car battery.
Speaker 8 (15:34):
Yes, that could be a much lighter compared with the
traditional lithium mind batteries. Right, we're using a lithium metal
in the anode, which is the lightest metal on.
Speaker 4 (15:44):
Earth and also has a.
Speaker 8 (15:47):
Lightest weight as ano material has highest capacity as an
ano material, so it does give you much higher energy
density from the volume metric age density to the guadametricity perspective.
Speaker 4 (15:58):
So we're able to enable about fifty to eighty.
Speaker 8 (16:01):
Percent higher energy do as they compare with traditional time batteries.
And this means with the same size of battery you
can potentially give you like twenty thirty or even fifty
eighty percent longer range depends on the integration efficiency and
the same have the same energy battery, you potentially can
have like twenty to thirty percent lighter weight and potentially
lower weight and lower volume as well as a less
(16:24):
expensive vehicle compared to what you have today.
Speaker 7 (16:27):
So kind of win win here, right, lighter weight can
go further. Hey, One thing, and this is actually coming
from the New York Times, which is also written about
what you guys are up to. It says that these
types of battery sales that are more prone to grow
spiky irregularities that cause short circuits best riches a weight
in a company that can overcome this problem develop a
battery that is durable, safe and reasonably easy to manufacture.
(16:47):
But these spiky irregularity is a cause short circuits. Is
that still an issue of problem that needs to be overcome.
Speaker 8 (16:55):
It is a fundamental physics issue when it comes to battery.
When this cycling and is performing, it does.
Speaker 4 (17:02):
Tend to grow.
Speaker 8 (17:03):
There's little dyn drites over the lifetime of the battery.
So the difference between solid state versus a liquid battery
is that we're able to use the solid state material
as well as electrolyze to suppress the dyn dried growth.
Speaker 4 (17:16):
So that's the little.
Speaker 8 (17:16):
Spiky lithium metal or the various materials will be able
to be suppressed when is being grown within the battery system.
So it's much lower risk of this short and also
even when it happens, it's much less hazard compared to
the liquid battery because it's the liquid system is much
(17:38):
more volatile when there's a normal embent.
Speaker 2 (17:41):
What about when it comes to charging and the ease
and quickness of charging range anxiety gives people well anxiety
and what about.
Speaker 8 (17:51):
Charging, Yes, I know there has been a lot of fuzz,
like big buzz around the charging space. I would say
for the solid state back the charging speed is very good.
Right now For our first generation causes only state battery,
we're able to deliver about eighteen eighteen minute fast charging
from like ten to ninety percent, and we're also we
(18:13):
can do potentially fifteen from like twenty to eighty percent.
So that's very much in line with where the lead
inmind battery does. But one thing to remember is that
we do deliver higher energy density, which means it's longer
driving range even as the same size as battery pack.
So with the same minutes of charging, even with the
(18:35):
same state of charge, you'll be able to deliver a
longer range per charge. So it's less about like how
many minutes you can fill up the battery, it's about
how many miles you can drive per charge.
Speaker 7 (18:46):
So will you guys manufacture these batteries, what percentage are
without fault in other words, they work?
Speaker 4 (18:56):
Yeah, that's a really good question.
Speaker 8 (18:58):
Like people in the industry usually colid yield, which is
a very characteristic to evaluate how much scrap and how
much faulty batteries it is coming out of the line.
So typically for a Gigo factory, which is a huge
battery factories, you spend a two three billion dollars into this,
and that's a state of art is about ninety five
(19:21):
percent or higher compared with traditional like smaller size of
the manufacturing presence, and with the POWERT line which is
usually about two hundred three hundred, like what our line
and if you get you can get to seventy to
eighty percent yield.
Speaker 4 (19:37):
It's already state of art in the industry.
Speaker 8 (19:40):
So our line, which is a prototyping line right now,
is already over eighty five percent yield from our current
production line.
Speaker 2 (19:48):
What about when it comes to competition, as Carol and
I mentioned, there are a lot of companies working on
this technology, how do you differentiate yourself from what is
out there, what's being worked on by competitors now, including
c Ato.
Speaker 4 (20:02):
And that's a great point.
Speaker 8 (20:04):
I mean, it's a great thing that solid state has
been perceived as the next generation to go product for batteries.
I mean that's unprecedented an industry. Even among all the
top ten players in automotive industry have all seen that
this is coming up and it's going to be the
immediate next step from the Lindi min battery. And the
(20:25):
challenge for that is, like there's a lot of competition
around us, including c Atos. You said, yeah, so our
big advantage for our battery first of far, compared with
other solid state players.
Speaker 4 (20:36):
Is that we have been leading industry with the first So.
Speaker 8 (20:40):
We were the first one that scaled it up from
a small cell to one hundred empower solid state battery,
and we were the first one has the un test,
which is very important standard test for shipment with the
linked metal battery.
Speaker 4 (20:54):
And we were the first one.
Speaker 8 (20:56):
Deliver the b sample to a global automotive OEM just
for cities. And we were also the first one announced
that demol fleet and with the stolentis that's the first
fleet being announced by any Saudi state player.
Speaker 2 (21:12):
Got it?
Speaker 4 (21:12):
Heyns.
Speaker 7 (21:13):
Can I just say we're running out of time? Fifteen seconds?
What does this thing cost? Is it more expensive than
other batteries? And just really quickly ten seconds?
Speaker 4 (21:23):
It is very cost competitive at a cell level.
Speaker 8 (21:26):
And then we're bleeding that is actually lower costs for
the vehicle because it's lighter and safer.
Speaker 7 (21:30):
Interesting stuff. Hey, stay in touch and let us know
how things are going. See Huang she's founder and CEO
of Factorial Energy, a company that's working on those solid
state batteries. She's joining us from Massachusetts on this Tuesday.
Speaker 1 (21:44):
This is the Bloomberg Business Week Daily Podcast. Listen live
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Speaker 2 (22:02):
Risk off Trade. We also heard from the President right
when the markets closed. The big news is about the
Golden Dome. The President says that it will be operational
in three years. He vowed that a Golden Dome missile
defense shield would be fully operational by the end of
his term. He said it would be able to protect
the US from threats including ballistic missiles, hypersonics, and advanced
(22:23):
cruise missiles. Here's what he said, quote, we will truly
be completing the job President Reagan started forty years ago.
This is from the Oval Office and it referenced Ronald
Reagan's unfulfilled quest for a space based missile defense system
that was widely known in the nineteen eighties as Star Wars.
Speaker 7 (22:39):
Gotta say it was something I actually remember as a kid,
that big announcement by Reagan, and it was, you know,
to be kind of this massive spending program, but to
build kind of a you know, Star wars like defense.
Speaker 2 (22:55):
System in the sky that was during the Cold War.
The here of would'tay the height of tension, but during
a time of very much tensions. It was in the
Cuban missile crisis, but it was pretty tense.
Speaker 3 (23:05):
Right all right.
Speaker 7 (23:06):
I know someone who knows about this better than we do,
Bloomberg National Security Team leader Nik Wada. I'm sitting by
in DC. I don't know, Nick, we get so much
out of the White House. I am curious about this plan.
What struck you in terms of the President's announcement sitting
there of course and making talking about it with the
Defense Secretary as well, Pete Hesett.
Speaker 5 (23:25):
Well, the big thing is that the president has essentially
set a timeline. I mean, he said this would be
operational by the time he leaves office, so in about
three years. But the technology at the heart of this system,
the idea of space based interceptors, is still totally unproven.
So you know, the US is capable of intercepting some
(23:48):
ground launched missiles, and you know it does have some
ability to knock down incoming threats, but the threats that
he really listed and the idea that they have of
developed this network of interceptors in space to be able
to neutralize threats before they even threaten the United States
(24:08):
is completely unproven and a massive gamble. The other element
of it. He said that the system would cost one
hundred and seventy five billion dollars overall, but the Congressional
Budget Office has estimated that it's going to cost about
five hundred and forty two billion dollars over twenty years
(24:31):
to develop and launch the interceptors. So you know, no
surprise that the president would have a lower cost and
a truncated timeline, but that's out of whack with what
experts did even the Congressional Budget Office say are realistic.
Speaker 2 (24:44):
Okay, that's a good point, Nick. I'm also wondering too
about the risk or the threats, rather that this protects
the United States from. As Carol and I were talking about,
the Star Wars program was during the Reagan administration that
obviously did not end up happy, but it was at
a time when the US and the Soviet Union were
locked in the Cold War. I'm just wondering about the
(25:06):
threats that the US faces right now. And look, nobody
can see the threats in the future, but what is
out there that he's so concerned about.
Speaker 5 (25:15):
Well, I mean, you know, certainly the threats of intercontinental
ballistic missiles have not gone away. I mean, Russia retains
its arsenal and another concern is North Korea. But you know,
there is a sort of wing of experts who argue
that actually by creating this system, the administration might in
some ways actually spur even greater threats, that it would
(25:38):
essentially provoke an arms race or a new arms race
have you know, like we haven't seen since the Cold War.
But you know, then there's China as well. So there
are plenty of countries that retain these capabilities, and the
question is whether putting or trying to put a system
like this in place will only lead them to advance
(26:00):
it's those capabilities, or make it so that they can't
be intercepted. So there are all sorts of sort of
practical questions around this system, but also strategic ones as
well that you may actually be spurring innovation by your adversaries.
Speaker 7 (26:13):
Nick, why is he doing this?
Speaker 5 (26:15):
Why is he doing this?
Speaker 3 (26:16):
Now?
Speaker 5 (26:17):
Well, I think you know, this was an executive order
he signed, you know, on January twenty seventh, so a
couple days into his second administration. It's a big project.
It's a splashy project. It's a little bit like sort
of you know, declaring you're going to put a man
on the moon. I mean that's the sort of level
of technological achievement that is going to be required here.
(26:42):
And it's also something I mean, he hasn't explicitly said
this is why, but it's something that is going to
be a huge boon to defense contractors. You know, amid
all the talks about cutting waste and efficiency in the
government and looking to both increase the defense budget but
also cut back on wasteful programs. I mean, this is
going to be a mega program with you know, unlimited spending.
(27:07):
I mean, it's sort of extraordinary. Even as this has
just started to only get off the ground, you're already
seeing companies from all over the US saying, hey, we
have an idea, we have an idea, we have an idea.
And it's like, you know, it's just seen as this
essentially you know, cashapalooza, where they could just get tons
of funding to be able to work on these systems
(27:27):
and try to pursue technology, like I said, doesn't exist yet.
Speaker 7 (27:30):
All right, So three years from now, we'll see what happens. NICKA,
I am curious you understand this stuff. What do you
think is going to get done first, the dome or
the retro fit on the plane that may come from Qatar.
Speaker 5 (27:45):
Well, I mean it's a great question because in some
ways it shows you how truncated that timeline is. I mean,
the conversation around the plane from Qatar, you know that
they're saying they're not even going to be able to
get that plane retrofitted to be able to go into
service before or Trump leaves office in twenty twenty eight.
So you know, you have one plane that's the timeline
(28:06):
is already there saying it's going to be it's unrealistic
to have that done, and then you have a whole
space based interceptor system whose technology doesn't even exist, much
less less contracted, much less deployed. Three years is an
awfully short timeframe for.
Speaker 7 (28:22):
That interesting times.
Speaker 4 (28:24):
Hey, thank you so much.
Speaker 7 (28:25):
We know a lot coming at you as always, but
Nick Wadams is a voice we always want to check
in with. He's Bloomberg News National Security Team leader joining
us from.
Speaker 4 (28:33):
Our bureau in DC.
Speaker 7 (28:34):
Nick, thank you so much.
Speaker 1 (28:35):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five eas during
Listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (28:49):
The market's exactly where I want to go right now?
Is Carol mentioned near our session lows? Right now the
S and P five hundred down about nine tenths of
one percent. We've got with us Eric Wiener. He's Bloomberg
News Senior editor for Equities Americas. He joins us here
in the Bloomberg Interactive Brokers studio.
Speaker 3 (29:04):
Eric.
Speaker 2 (29:04):
When I was preparing our interview with you earlier today,
I was planning to talk about what happened yesterday because
it was a little bit of a wild day. We
all thought that equities would fall and that bond yields
would surge, and that happened in the early part of
the day. Then the dip buyers appeared to come in.
We could talk about that in a few minutes, but
first I want to talk about the reversal, not a reversal,
(29:24):
but sort of the leg lower that we saw in
the last hour. What do we attribute this to.
Speaker 3 (29:28):
Well, probably the best place to look would be Tesla's chart.
If Musk has been out talking today, he's been talking
more about his companies and on a rival network, will
say he said something to the effect of the future.
He reiterated that the future is in robotaxis. And whereas
(29:52):
robotaxis were seen as a positive for the company, that's
kind of flipped because of the amount of some cost
that goes into developing it. And then a lot of
a lot of people who started asking the question about
regulating all of this and ensuring all of this. And
there are many, many, many pieces that go to creating
(30:14):
a robotaxi environment, and we don't know if Tesla is
going to be the company that does it and where
those costs go.
Speaker 2 (30:22):
And I mean, if you go to Washington, d C. Well,
I won't say if you go to Washington, d C
now because I don't know if they're there yet, but
I know they're on their way there. These are the
waymo cars. Carol her mind blown last week.
Speaker 7 (30:33):
The week closed my eyes and like on the whole
twenty twenty five minute run.
Speaker 2 (30:36):
Once, I've been saying you got to try one of
these things. I tried one in San Francisco on the fall.
It was amazing.
Speaker 3 (30:40):
Loved it.
Speaker 7 (30:41):
At night, I'm like, would I feel comfortable? I was
kind of blown away by it, and I loved it
was clean, it was easy, no music if.
Speaker 6 (30:49):
I didn't want it.
Speaker 2 (30:50):
So you were in a Jaguar that was powered by
Google's technology. I was not in a Tesla. That's the point.
If I was in a Jaguar, would be happy. But
they are a nice cars.
Speaker 3 (31:01):
The flip side of that, we can all see the
base case for it. You know you're out late, you
don't want to drive home, and your car just takes
you there, or you know the city is you know
has plenty of cabs and you don't have to worry
about anything. They come right over. The question is our
whole system is built on liability, right, So the whole
(31:25):
idea of ensuring something is being able to point the
finger it oo's to blame. So if you're in the
backseat having had you know, a couple too many drinks
and are just doing what you're supposed to do with
what you bought the car for and then it t
bones somebody else, who pays for that accident? Who's responsible?
Speaker 2 (31:44):
It's such a basic question that I've never actually considered, well.
Speaker 3 (31:47):
And this is where this is where a somebody who's
going to bet on that goes because if that infrastructure
is in place, then of course, yeah, you know, Waimo
and all of these things become national the idea of
us having self driving cars becomes completely you know, reliable.
But without that, we're still in a you got to
(32:11):
drive your own car world, or you need to figure
out who is going to be responsible to the company
take that, How do we how do we do the
insurance for that. We have to re regulate a whole
bunch of things before that can become a national reality.
And if you're putting if you're one of the most
important stocks in the market, and you're putting a bunch
of money behind this and there isn't that background there,
(32:33):
the risk of that turning into a sunken cost is
very real.
Speaker 4 (32:37):
Yeah, it's kind of fascinating.
Speaker 7 (32:38):
It's funny because we do these gainers into winners and losers.
And Tessa was a gainer for me because it was
up you know, more than three percent earlier in the session.
And now I'm like, okay, I got to kind of
pull the yank this one, because it's just pretty much
sticking around unchanged or it's even got into the red
a little bit. But it's a really good point, I
do think about it. It was interesting when I was
in the Waimow and there was at a point where
(32:59):
a biker, know, kind of scooted alongside and then.
Speaker 2 (33:02):
Terms we prefer the term cyclist unless you're talking about
a guy on a motorcycle, like it was a cyclist.
Speaker 7 (33:08):
And I was watching how the car like navigated and
I was even watching it was impressive, wasn't it. It
was pretty impressive And I was like, whoa, okay, saw
it like stayed around, you know, around also started there
like with yellow lights, like kind of went through some
yellow lights, and I was like, hmm, how did.
Speaker 2 (33:23):
I feel about that?
Speaker 4 (33:23):
But it was the ride was smooth.
Speaker 7 (33:26):
But you're right, there's so many questions, right, and if
there's a lot more on the road, does that make
the road more safer or does it create more variable
But I don't know.
Speaker 3 (33:34):
Poretically, theoretically, when you talk to people who are involved
in mass producing cars that that actually is safer because
they're all going to travel at the same speed and
they're going to keep the same gaps and everything track together.
But technology is not perfect, it is not infallible. So
when and it's not if, it's when a circuit goes
(33:57):
a little haywire, who catches the black aim for that?
And our society is very very clear on blame. And
so when you don't have that you and you have
something that's doing sixty miles an hour and can kill someone,
it becomes a much disier proposition.
Speaker 7 (34:13):
Isn't a product liability? Yes?
Speaker 3 (34:15):
It actually interested and personal and if you hurt somebody,
good luck.
Speaker 2 (34:19):
And look, we've seen this happen over the last couple
of years as different companies have experimented. I mean there's
a company that doesn't even operate wait the way it
used to operate because of issues that happened when it
was testing these vehicles in San Francisco. And even on Reddit,
the weaimo reddit threads have examples of when the car
hasn't necessarily not necessarily crashed or anything, but when something
has gone wrong, like there's examples of it just going
(34:41):
around and around it for example, Yeah, yeah, yeah, we've
all clitched.
Speaker 7 (34:44):
It's interesting even the pickup, you know, is that kind
of a for work a resort And it was like
the guys even there said, like, the car may just
kind of park somewhere.
Speaker 3 (34:52):
Because it can.
Speaker 2 (34:53):
You'll find it because it's not like a human. This
is why I talked to somebody who works in AI.
I was saying, I would love for this to come
to New York and he was like, the challenge with
this happening in New York is there aren't very many
legal safe places for them to pull over, yeah, and
pick people up. And it's the truth. I mean, if
you think about the way we pick up cabs and
(35:14):
ubers and lifts. Here, we're walking into the middle of
the street and they're stopping. It's all about I mean,
and you can't somebody do it but it's nuts. Well, no,
it's absolutely insane. No, that's what I mean.
Speaker 3 (35:24):
Like, it's all about us interacting with the person who
picks us up. And when you have cars that are
just pulling in by themselves, you don't know how this
is going to work. And that's really what it's about.
If you're sinking your money and this is a company
that builds cars, you're sinking your money into something that
you don't know how it's going to work. That gets dangerous.
Speaker 2 (35:43):
Okay, So this is all about Tesla.
Speaker 3 (35:45):
Well, I think the last hour has been about Tesla.
Speaker 2 (35:48):
That's interesting because there's the chart.
Speaker 3 (35:49):
It's it's the one in the SMP that really it's almost.
Speaker 7 (35:53):
Two percent of the S and P five hundred terms
of waiting, it's about a little bit more than it's
almost three point two percent of the Nasdaq one hundred
three at move.
Speaker 3 (36:02):
On our system, you can see that like basically the
whole MAG seven is on is in the red. Google
got hammered earlier as well, so it's like sort of
a tech risk off. But like the big turn was
in Texa where it had it had gone down when
Musk was talking from to us and it went flying
(36:24):
down and then it came back up and now it
just dropped like a stone.
Speaker 2 (36:29):
Okay, yeah, good point. I mean, look, six out of
the seven MAG seven are in the red. Tesla shares
were up earlier in the session. They're still up about
half a percentage point, but a far crytit.
Speaker 3 (36:40):
They were like up three. Yeah, that's big, big move
on the SMP.
Speaker 2 (36:44):
Hey, I want to go back in time a little
bit and talk yesterday, which was actually the plan before
we saw things move a little lower. What would happened
yesterday because we thought that because of this Moody's downgrade,
we'd see this certain tone with the trade that didn't
end up coming to fruition.
Speaker 3 (36:59):
So well, the bond market is hard to figure because
that actually should have happened, and it did. I mean, yields,
you know, jumped, and stock sort of responded. What we
saw in the market was the highest retail buying that
we've seen in I think it was over a decade,
(37:22):
some absurdly strong amount of retail buying up until twelve thirty.
So basically as that market sold off, retail stepped in
and bought every inch of it. So whereas we were
positioning like you, we were thinking like you, you know, okay,
well it's a down day and it's probably going to
stay down. Instead, it turned into this you know, V
(37:45):
shape recovery where all of a sudden it sort of
gets this lift and by the end of the day
we're in the green. But there is so little conviction
in this market right now that everything's on a hair trigger.
So Musk saying something about robo taxis and suddenly everybody
sells it off. There's just this sort of waiting for
(38:05):
the other shoe to drop feel to everything, and then
you have retail buying their dip, and the question is
how much longer they can when the SMP is approaching
six thousand six, when you're at fifty nine and yeah,
and so you've come all the way back. How much
more strength does retail have to keep this going because
(38:29):
the institutional guys are on the sidelines and they cannot
buy in at these levels, so they have to sit
Why can't they buy in? Well, because if you're timing
this and you're questioning whether it's going to go higher,
your risk is enormous. Buying in right now. You're much
better off waiting for yesterday's one percent drop buy that
(38:52):
you know, you wait for some sort of announcement that
is going to temporarily take the market down two percent.
You buy there. But if you were looking at things
a month ago and you were like, if we get
up to six thousand, this is amazing, and then we
do it, well, now you buy in and you're at it.
You're buying in at a level where it's really dicey
(39:15):
whether you're going to go higher, and there's a strong
chance you're going to go lower, So the entry point
is not attractive. To somebody who's actually building a portfolio.
If you're just trading in and out during the day,
doesn't really matter, and that's what you see and you're
acting reacting to the way the charts look. But if
you're actually putting positions on in your portfolio, right now,
(39:36):
stocks are pretty fully.
Speaker 7 (39:38):
Valued, right, It's like, Okay, what's the next catalyst you
can really trade on definitively? And I keep thinking about, Okay,
ninety days out in terms of the tariffs, like that's ticking.
Speaker 2 (39:48):
We got to wait for that.
Speaker 7 (39:49):
I mean, there's a lot of issues that we have
to wait for, right, Yes, Eric to kind of understand, Okay,
so what's kind of the next backdrop for It's the
economic term tread.
Speaker 3 (39:57):
It's the economic data, right, So we're gonna have a
jobs report coming up, We're going to be having you know,
pc CPI all that sort of stuff coming. I don't
know that anybody is expecting a June rate cut from
the Fed anyhow. Yeah, I mean, I think we're down
to September if if at all. But it's really it
(40:19):
really feels like people are waiting. When I say people,
I mean Wall Street pros are kind of waiting for
the confirmation to come that the economy is weaker than
the market is playing.
Speaker 2 (40:33):
We've been hearing for weeks about this idea of empty
shelves coming that hasn't materialized. And the pause that we
saw between the tension with the US and China could
perhaps be some sort of reprieve. But in the background,
Eric I can't help but think we're still in a
trade war.
Speaker 3 (40:51):
Yeah. Well, and it's see so we go back to
COVID and it's like, we remember.
Speaker 2 (40:56):
What that was like, and everybody says, oh, we don't
want to go back to that.
Speaker 3 (40:59):
But if if you look at like the seventies or
like periods where there was very slow growth and high inflation,
it does mean that certain things, there are shocks and
certain things, but overall, it's just the economy doesn't move,
and that's what people are fearing. It's not so much.
I mean, obviously, you know, walking into Target and just
(41:20):
seeing empty shelves, well that's you know, that's a huge problem.
But just you're paying ten percent more on everything. Nothing
is on sale. Your meat is more expensive, your groceries
are more expensive. Everything you buy everywhere you go, it's
more expensive. And what happens then, is people just with trench.
(41:42):
You know, It's like each individual decision happens and people go, Okay,
well I'm gonna pull back, and that hits earnings and
that's when it starts spreading. So too, if you're a trader,
you're looking at the clues that are going to get
you to those earnings that are then going to send
you lower.
Speaker 7 (41:59):
Yes, okay, off to the next earning cycle. But I
think about what Lebby Cantralla, Pimco's at two, the same
thing like Tyris. We're going to be in a higher
tariff environment and that's that's going to have an impact.
Eric Wiener, thank you, as always, Bloomberg New Senior Editor
of Equities Americas.
Speaker 1 (42:14):
This is the Bloomberg Business Weekdaily podcast, available on Apple, Spotify,
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(42:35):
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Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg Business
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(00:23):
news as it happens. The Bloomberg Business Week Daily Podcast
with Carol Masser and Tim Steneveek on Bloomberg Radio Well.
Speaker 2 (00:32):
Elon Musk giving a wide ranging interview earlier today with
the Bloomberg's Michelle Hussain at the Qatar Economic Forum Some News.
Musks that he's committed to still leading Tesla five years
from now and expects to pair back his political spending,
assuaging some investors' concerns about the future of his most
valuable company. He also addressed the attacks on the Tesla
brand and the actual cars too. Here's part of the
(00:53):
conversation with Bloomberg's Michelle Hussain at the Qatar Economic Forum.
Speaker 3 (00:58):
In terms of political spending, I'm going to do a
lot less in the future.
Speaker 4 (01:03):
And why is that.
Speaker 3 (01:06):
I think I've done enough?
Speaker 4 (01:11):
Is it because of blowbuck Well?
Speaker 5 (01:14):
If I see a reason to do political spending in
the future, I will do it.
Speaker 3 (01:18):
I don't recurrently see a reason.
Speaker 2 (01:19):
That was Elon Musk talking about pulling back on political
spending with Bloomberg's Michelle Assan at the Kaitar Economic Forum.
We've got Max Chafkin with us. He's the co host
of the new Bloomberg podcast Everybody's Business. He's also the
co host of the not so new podcast but still
pretty great podcast it's called Elon Ink, and a reporter
for Bloomberg BusinessWeek. When he's not doing the podcast so reporting,
(01:41):
he joins us here in the Bloomberg Interactive Brokers studio.
I'm glad that's what we played, because that's getting a
lot of attention right now. And I heard that, and
I went back to Elon's Twitter from March of twenty
twenty four, and that's when he posted on X this
is over a year ago, I will not tribute to
either political candidate, and we all saw what happened a
(02:03):
few months later. My point is he says stuff and
doesn't necessarily commit to it.
Speaker 6 (02:10):
Yeah, and even here he's building himself an out right.
He's saying less money, which you'd kind of expect anyway. Right,
midterms are not as expensive as presidential years. So like
it would be very surprising if he dropped another three
hundred million dollars, which is roughly what he spent in
twenty twenty four on twenty twenty six. And he's also saying,
(02:31):
you know, I would it's it's I don't see a
reason now, But if I did see a reason in
the future, I could I see this as a public negotiation.
Speaker 2 (02:39):
Right.
Speaker 6 (02:40):
This is the audience here, well, they aren't. There are
several different audiences. One of course is Tesla's shareholders trying
to say like, look, I'm I'm focused on the company.
I'm not getting sucked into Washington, going to try to
deal with some of the brand damage that my political
presidence has caused. But of course the other audience is Republicans. Right,
He's he's putting it out there that if they want
(03:01):
money from him, they're going to have to do stuff.
And you know, there's lots of stuff that has happened
in Washington since Donald Trump took office that I think
has made Elon Musk really happy. But Elon Musk is
a very long list, and not all those things have happened.
There are lots of opportunities for him to get contracts.
You know, the Golden Dome, as you were discussing, like
(03:21):
that's a potential revenue source for SpaceX. There are lots
of areas that Elon Musk stands to benefit. You also
have this in the bill right now, like they're plan
cutting these EV subsidies. Now, we will see where that
ends up. But if those EV subsidies are cut completely,
that could really hurt Tesla. So I think I think
(03:41):
it's to his advantage to say, hey, I'm you know,
I'm not a gimme for twenty twenty six. You have
to win my support.
Speaker 3 (03:48):
Hey, listen.
Speaker 7 (03:49):
One are the things that we noticed, Max. We got
went on air about two o'clock Wall Street time, and
then shortly thereafter we saw the market pull back and
go down to its lows. So we sell some selling.
We were talking about our Eric Wiener here, who covers
the equity marketing. So a lot of that was with
Tesla doing an interview with CNBC and talk about robotaxis
and saying that they will be a thousand robotoxies in
(04:12):
Austin within a few months, and part of his was
saying the cost of that, there's still a lot to
be worked out in terms of liabilities. So I'm just
curious some of the comments that we got from our
interview as well as just Elon talking a lot today.
Speaker 6 (04:27):
So the Robotaxi thing, I think part of the challenge,
one of the challenges for Tesla is there's so much
sort of assumed in the stock. The Tesla bulls basically
believe that almost overnight they're going to be able to
turn this thing into a massive, massive business. And I
think everything we know from the history of other companies
(04:50):
trying to launch these robotaxi things, and I'm thinking particularly
of Waimo, Google's driverless car division, which has been doing
this for like ten years and has really struggled to commercialize,
is that it's going to take a long time. And
when you look closely at what Musk is saying is
going to happen in Austin, if you are not paying
that close attention, if you're just sort of buying this,
like on robin Hood, you hear Elon must say, you know,
(05:11):
robotax is going to heat over the world. You think
they're going to turn this on, They're going to be
huge fleets, It's going to be very small, you know.
Speaker 2 (05:17):
On the during the earnings call.
Speaker 6 (05:18):
We learned something like ten to twenty robotaxis with tele operation.
That's that's people, you know, sitting in command centers making
sure the cars don't hit anybody.
Speaker 2 (05:27):
It's going to be certainly what WEIMO does by any.
Speaker 6 (05:29):
Means, No, it's it's closer to it's maybe what WEIMO did,
you know, years ago, And it's just it's a realization.
I think that this is going to take a long time.
So I don't know. Elon Musk has this kind of
amazing ability to spin stories about the future to get
people excited about the future, and he may be able
to do that. But but like Tesla's stock has gone
up a lot in recent weeks, you know, And no,
(05:51):
some of that has to do with you know, terriff
expectations and so on. But this is a very valuable
company relative to the number of cars it sells.
Speaker 2 (06:00):
Max in the interview that he gave to our team
at the Guitar Economic Forum earlier today, he was asked
about protesters or the Tesla brand damage, and what he
answered was he said, quote, they're on the wrong side
of history, and that's an evil thing to do. That's
referring to people damaging Tesla cars and showrooms. Something needs
to be done about them, and a number of them
(06:20):
are going to prison and they deserve it. It seems
like he's certainly there were reports of damage to Tesla
vehicles and damage to test Tesla shrooms, but there's also
been these protests that happened happening at Tesla showrooms all
over the country, especially during his work with Doge, that
were not violent. Yeah, it seems like he's He's also
(06:40):
in the past talked about these people being part of
some bigger movement. He's referred to them online as being paid.
Have we seen any evidence of that?
Speaker 6 (06:49):
No, there's no evidence, no good evidence that the people
who are showing up at these Tesla protests are paid.
You know, I would say that there's a he's conflating
a couple of different things. But you know, and having talked,
we did a podcast episode on Eline a week and
a half ago with a former Tesla sales manager, and
who he's talking about is like, the real danger is
(07:11):
not these protesters, not somebody showing up to a protest,
It's just somebody not buying. And like that is a
thing that even if you remove the protests, the protests
are of course not good for the brand. They're an
expression of unhappiness and so on. It doesn't lead to
good headlines. Obviously, protests can sometimes get out of hand,
but also it's just a lot of people, I think,
(07:32):
do not want to be associate associate their car with
something this controversial. And what he was saying is that
when Musk started, what this Tesla manager was saying is
that when Must started getting involved in politics a couple
of years ago, they had people come into the Tesla
stores and argue and say, you know, I like the car,
but I don't like this. You know, still very engaged.
And when he said what changed as Must became more
(07:54):
and more engaged, is they just stopped coming. They just decided,
you know, screw this, Like I don't want to be
associated with something that's controversial. And when you look at
what's happening in the sales, like that's what's showing up.
It's not the protesters, it's just the people not buying.
And that's the thing that's going to be hard to
turn around.
Speaker 7 (08:10):
I think in terms of Tesla, the business just real quickly.
I mean, I think you talked about things are turning around.
Speaker 5 (08:15):
Is he right?
Speaker 6 (08:17):
I think investors are certainly hoping, so we have not
in Again, in the publicly available data, there is very
little to support and that support this. Now Elon Musk
is saying it's happening, trust me, and he's citing the
stock price now. As I said earlier, the stock price.
Lots of things are driving the stock price, but one
of the big things is expectations around Trump's tariffs, in
(08:39):
other words, having nothing to do with sales. So he's
saying you should trust me that the business is turning around.
Because Tesla's stock is up substantially over the last month.
That doesn't to me suggest that sales are definitely up.
What we've seen is numbers out of Europe and numbers
out of China still not good. The US we don't
really know yet, so we will see. But this is
(09:01):
not the kind of thing I think that can be
turned around in a matter of days or weeks. People
make decisions about buying cars over a term of years.
That's why car companies like spend so much doing brand advertising.
And so this is going to be This is going
to have created damage with at least some subset of
consumer that may be hard to undo. Now Musk did
say during the interview this morning in Qatar that some
(09:26):
people are buying Teslas because of who he is, and
there's a very memorable quote he said, maybe they're buying
it the people who are putting the stickers on the cars,
saying I bought this before he was crazy. Maybe some
people are buying it because he was crazy or whatever.
So obviously making light of those stickers. Now, I don't
think we've really seen that show up in the data yet.
Cyber truck sales have not been great, although again this
(09:46):
stuff can take time. Maybe it will start to show up.
Speaker 4 (09:49):
We'll see, We'll see, we'll see.
Speaker 7 (09:51):
Always fun to listen from what Elon has to say,
but always fun to also get someone else's from. Max
Chafkin on all of It. Maxi crosco host of Everybody's Business,
senior reporter for Bloomberg News, author of The Contrarian Peter
Teal and Silicon Valley's Pursuit of Power, and of course,
one of the hosts of the Elon In podcast Check
It All Out at Bloomberg dot Com.
Speaker 4 (10:08):
Are also on the Bloomberg Terminal.
Speaker 1 (10:09):
Max, Thanks, you're listening to the Bloomberg Business Week Daily podcast.
Catch us live weekday afternoons from two to five East
during Listen on Applecarplay and Android Auto with the Bloomberg
Business app, or watch us live on YouTube.
Speaker 2 (10:25):
I want to talk about batteries because last night, Jean.
Speaker 7 (10:29):
Nicol, for every time you said you want to talk
about batteries, I'd.
Speaker 6 (10:32):
Be a rich woman.
Speaker 2 (10:33):
You would be because you like batteries. Batteries are in
everything and they're super important, especially when we think of
the electrification of vehicles.
Speaker 4 (10:40):
Super important.
Speaker 7 (10:40):
So what do you want to tell me?
Speaker 2 (10:41):
Well, last night c ATL jumped in its Hong Kong
trading debut last night our time, I should say, correct
today Hong Kong time. This after the Chinese battery Giant
wrapped up the world's biggest listing this year, raised four
point six billion dollars. This despite being blacklisted by the
Pentagon and grinding through political storms. CTL is the largest
(11:03):
maker of EV batteries. It supplies batteries to Tesla, VW, FOD, Mercedes,
Benz and more. Our next guest, though, is working on
a different type of battery. See U Wong is a
founder in CEO of Factorial Energy. This is a company
that's working on solid state batteries. She joins us from Massachusetts.
See you. Good to have you on the program today.
(11:24):
I started out by doing some research when it came
to different types of batteries, and I was just thinking
to myself, No, I'm just going to have you answer
the question for us. If we think about the batteries
that are prominently featured in EVS right now, how are
these different than the solid state batteries that you are
developing at.
Speaker 8 (11:40):
Factorial solid state batteries like a traditional battery, but instead
of using a liquid insight, it uses solid state or
quasi solid state material. And this makes a battery safer,
longer lasting, and more powerful because you can't store more
energy and it's less likely to leak or catch on fire.
Also more efficient and safer for everything from your cell
(12:03):
phones to electric cars.
Speaker 4 (12:05):
Plus, our unique.
Speaker 8 (12:06):
Dry coding process makes manufacturing cleaner and more cost effective.
Speaker 2 (12:09):
So why is it so difficult to make an EVY
battery a solid state battery?
Speaker 8 (12:13):
Well, there are different part of the challenges coming to play.
The biggest challenges scale up. I mean that has been
uh that's value for a lot of battery companies, from
the first minimal viral product to the manufacturer with a
really good quality and cost effective product. And on top
of that, it's really the supply chain challenges. I think
(12:33):
that's definitely very central to all the battery players in
the world.
Speaker 4 (12:39):
And last, butt of the.
Speaker 8 (12:40):
Least, I think it's really coming down to the execution,
right from a startup to a giant supply chain player
in the value chain for the batteries really the big difference.
So I think that's really coming down to the execution
and also the conviction from the leadership team.
Speaker 7 (12:56):
Wait, so help me understand to in turn of scaling up,
what's the biggest impediment? Is it resources? Financial, resources, materials?
I'm trying to understand because you guys have been working
on this for a while, and I understand there's development
and all of that takes some time. But tell us
what's kind of the biggest point or factor that's holding
(13:19):
you guys back at this point.
Speaker 8 (13:20):
Yeah, I would see there are probably mostly three areas.
But I think the biggest hurdle when it comes from
a technology to a real product is really to scale
up the battery itself. You know, traditionally we have batteries
like with our cell phone size batteries when a lot
of smaller started to de developing, even as small as
your watch battery, like a coy cell battery, and it's
(13:41):
a big hurdle scale from like small cell phone batteries
to like a big automotive sized battery.
Speaker 4 (13:46):
Actually, I brought up a post type that.
Speaker 8 (13:50):
The audience today that this is actually one hundred empower
battery which is launched in twenty twenty three, and actually
we're brought into the b sample earlier last year as well,
So this is actually an automotive size battery, and it's
a huge from a cell phone size battery to automotive
size battery. It's a lot of work to put into
like manufacturing, design the battery, and also even to keep
(14:13):
the quality and cost on track. So I think that's
really the top biggest challenge for making a battery, alongside
with also the cost, the equality checking the.
Speaker 2 (14:25):
Battery that you're holding right now that would be a
battery that would go into an electric vehicle.
Speaker 4 (14:30):
Yeah.
Speaker 8 (14:31):
So actually we launched with Mercedes together earlier this year
the first solid state battery vehicle with the Global OEM,
and we're putting the lithium metal solid state battery that
we produced and we're able to power the vehicle of
EQS and with our battery which is bringing higher energy
and it's a denser energy, so it gives you a
(14:52):
less volume and also.
Speaker 4 (14:54):
A lighter, smaller battery.
Speaker 8 (14:56):
It actually delivers a longer range and also be able
to more caustic FUSHI ending the long run. So this
is what we have delivered with Mercedes earlier this year
in the EQS and it's actually powering the vehicle and
it was running on the street of Stutgart.
Speaker 7 (15:10):
So just for those who are listening on radio, you
know CEU has been holding up.
Speaker 4 (15:15):
We all know our car. You know what our cell
phone looks like in the small.
Speaker 7 (15:18):
Batteries, but this one was about It looked like it
was about a foot and a half long, maybe four
inches wide. It was very light. Was that the actual
battery that batteries are heavy? Was that actually the weight
of an actual car battery, a solid state car battery.
Speaker 8 (15:34):
Yes, that could be a much lighter compared with the
traditional lithium mind batteries. Right, we're using a lithium metal
in the anode, which is the lightest metal on.
Speaker 4 (15:44):
Earth and also has a.
Speaker 8 (15:47):
Lightest weight as ano material has highest capacity as an
ano material, so it does give you much higher energy
density from the volume metric age density to the guadametricity perspective.
Speaker 4 (15:58):
So we're able to enable about fifty to eighty.
Speaker 8 (16:01):
Percent higher energy do as they compare with traditional time batteries.
And this means with the same size of battery you
can potentially give you like twenty thirty or even fifty
eighty percent longer range depends on the integration efficiency and
the same have the same energy battery, you potentially can
have like twenty to thirty percent lighter weight and potentially
lower weight and lower volume as well as a less
(16:24):
expensive vehicle compared to what you have today.
Speaker 7 (16:27):
So kind of win win here, right, lighter weight can
go further. Hey, One thing, and this is actually coming
from the New York Times, which is also written about
what you guys are up to. It says that these
types of battery sales that are more prone to grow
spiky irregularities that cause short circuits best riches a weight
in a company that can overcome this problem develop a
battery that is durable, safe and reasonably easy to manufacture.
(16:47):
But these spiky irregularity is a cause short circuits. Is
that still an issue of problem that needs to be overcome.
Speaker 8 (16:55):
It is a fundamental physics issue when it comes to battery.
When this cycling and is performing, it does.
Speaker 4 (17:02):
Tend to grow.
Speaker 8 (17:03):
There's little dyn drites over the lifetime of the battery.
So the difference between solid state versus a liquid battery
is that we're able to use the solid state material
as well as electrolyze to suppress the dyn dried growth.
Speaker 4 (17:16):
So that's the little.
Speaker 8 (17:16):
Spiky lithium metal or the various materials will be able
to be suppressed when is being grown within the battery system.
So it's much lower risk of this short and also
even when it happens, it's much less hazard compared to
the liquid battery because it's the liquid system is much
(17:38):
more volatile when there's a normal embent.
Speaker 2 (17:41):
What about when it comes to charging and the ease
and quickness of charging range anxiety gives people well anxiety
and what about.
Speaker 8 (17:51):
Charging, Yes, I know there has been a lot of fuzz,
like big buzz around the charging space. I would say
for the solid state back the charging speed is very good.
Right now For our first generation causes only state battery,
we're able to deliver about eighteen eighteen minute fast charging
from like ten to ninety percent, and we're also we
(18:13):
can do potentially fifteen from like twenty to eighty percent.
So that's very much in line with where the lead
inmind battery does. But one thing to remember is that
we do deliver higher energy density, which means it's longer
driving range even as the same size as battery pack.
So with the same minutes of charging, even with the
(18:35):
same state of charge, you'll be able to deliver a
longer range per charge. So it's less about like how
many minutes you can fill up the battery, it's about
how many miles you can drive per charge.
Speaker 7 (18:46):
So will you guys manufacture these batteries, what percentage are
without fault in other words, they work?
Speaker 4 (18:56):
Yeah, that's a really good question.
Speaker 8 (18:58):
Like people in the industry usually colid yield, which is
a very characteristic to evaluate how much scrap and how
much faulty batteries it is coming out of the line.
So typically for a Gigo factory, which is a huge
battery factories, you spend a two three billion dollars into this,
and that's a state of art is about ninety five
(19:21):
percent or higher compared with traditional like smaller size of
the manufacturing presence, and with the POWERT line which is
usually about two hundred three hundred, like what our line
and if you get you can get to seventy to
eighty percent yield.
Speaker 4 (19:37):
It's already state of art in the industry.
Speaker 8 (19:40):
So our line, which is a prototyping line right now,
is already over eighty five percent yield from our current
production line.
Speaker 2 (19:48):
What about when it comes to competition, as Carol and
I mentioned, there are a lot of companies working on
this technology, how do you differentiate yourself from what is
out there, what's being worked on by competitors now, including
c Ato.
Speaker 4 (20:02):
And that's a great point.
Speaker 8 (20:04):
I mean, it's a great thing that solid state has
been perceived as the next generation to go product for batteries.
I mean that's unprecedented an industry. Even among all the
top ten players in automotive industry have all seen that
this is coming up and it's going to be the
immediate next step from the Lindi min battery. And the
(20:25):
challenge for that is, like there's a lot of competition
around us, including c Atos. You said, yeah, so our
big advantage for our battery first of far, compared with
other solid state players.
Speaker 4 (20:36):
Is that we have been leading industry with the first So.
Speaker 8 (20:40):
We were the first one that scaled it up from
a small cell to one hundred empower solid state battery,
and we were the first one has the un test,
which is very important standard test for shipment with the
linked metal battery.
Speaker 4 (20:54):
And we were the first one.
Speaker 8 (20:56):
Deliver the b sample to a global automotive OEM just
for cities. And we were also the first one announced
that demol fleet and with the stolentis that's the first
fleet being announced by any Saudi state player.
Speaker 2 (21:12):
Got it?
Speaker 4 (21:12):
Heyns.
Speaker 7 (21:13):
Can I just say we're running out of time? Fifteen seconds?
What does this thing cost? Is it more expensive than
other batteries? And just really quickly ten seconds?
Speaker 4 (21:23):
It is very cost competitive at a cell level.
Speaker 8 (21:26):
And then we're bleeding that is actually lower costs for
the vehicle because it's lighter and safer.
Speaker 7 (21:30):
Interesting stuff. Hey, stay in touch and let us know
how things are going. See Huang she's founder and CEO
of Factorial Energy, a company that's working on those solid
state batteries. She's joining us from Massachusetts on this Tuesday.
Speaker 1 (21:44):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting at two pm Eastern on Apple Corflay
and Android Auto with the Bloomberg Business App. You can
also listen live on Amazon Alexa from our flagship New
York station. Just say Alexi play Bloomberg eleven thirty.
Speaker 2 (22:02):
Risk off Trade. We also heard from the President right
when the markets closed. The big news is about the
Golden Dome. The President says that it will be operational
in three years. He vowed that a Golden Dome missile
defense shield would be fully operational by the end of
his term. He said it would be able to protect
the US from threats including ballistic missiles, hypersonics, and advanced
(22:23):
cruise missiles. Here's what he said, quote, we will truly
be completing the job President Reagan started forty years ago.
This is from the Oval Office and it referenced Ronald
Reagan's unfulfilled quest for a space based missile defense system
that was widely known in the nineteen eighties as Star Wars.
Speaker 7 (22:39):
Gotta say it was something I actually remember as a kid,
that big announcement by Reagan, and it was, you know,
to be kind of this massive spending program, but to
build kind of a you know, Star wars like defense.
Speaker 2 (22:55):
System in the sky that was during the Cold War.
The here of would'tay the height of tension, but during
a time of very much tensions. It was in the
Cuban missile crisis, but it was pretty tense.
Speaker 3 (23:05):
Right all right.
Speaker 7 (23:06):
I know someone who knows about this better than we do,
Bloomberg National Security Team leader Nik Wada. I'm sitting by
in DC. I don't know, Nick, we get so much
out of the White House. I am curious about this plan.
What struck you in terms of the President's announcement sitting
there of course and making talking about it with the
Defense Secretary as well, Pete Hesett.
Speaker 5 (23:25):
Well, the big thing is that the president has essentially
set a timeline. I mean, he said this would be
operational by the time he leaves office, so in about
three years. But the technology at the heart of this system,
the idea of space based interceptors, is still totally unproven.
So you know, the US is capable of intercepting some
(23:48):
ground launched missiles, and you know it does have some
ability to knock down incoming threats, but the threats that
he really listed and the idea that they have of
developed this network of interceptors in space to be able
to neutralize threats before they even threaten the United States
(24:08):
is completely unproven and a massive gamble. The other element
of it. He said that the system would cost one
hundred and seventy five billion dollars overall, but the Congressional
Budget Office has estimated that it's going to cost about
five hundred and forty two billion dollars over twenty years
(24:31):
to develop and launch the interceptors. So you know, no
surprise that the president would have a lower cost and
a truncated timeline, but that's out of whack with what
experts did even the Congressional Budget Office say are realistic.
Speaker 2 (24:44):
Okay, that's a good point, Nick. I'm also wondering too
about the risk or the threats, rather that this protects
the United States from. As Carol and I were talking about,
the Star Wars program was during the Reagan administration that
obviously did not end up happy, but it was at
a time when the US and the Soviet Union were
locked in the Cold War. I'm just wondering about the
(25:06):
threats that the US faces right now. And look, nobody
can see the threats in the future, but what is
out there that he's so concerned about.
Speaker 5 (25:15):
Well, I mean, you know, certainly the threats of intercontinental
ballistic missiles have not gone away. I mean, Russia retains
its arsenal and another concern is North Korea. But you know,
there is a sort of wing of experts who argue
that actually by creating this system, the administration might in
some ways actually spur even greater threats, that it would
(25:38):
essentially provoke an arms race or a new arms race
have you know, like we haven't seen since the Cold War.
But you know, then there's China as well. So there
are plenty of countries that retain these capabilities, and the
question is whether putting or trying to put a system
like this in place will only lead them to advance
(26:00):
it's those capabilities, or make it so that they can't
be intercepted. So there are all sorts of sort of
practical questions around this system, but also strategic ones as
well that you may actually be spurring innovation by your adversaries.
Speaker 7 (26:13):
Nick, why is he doing this?
Speaker 5 (26:15):
Why is he doing this?
Speaker 3 (26:16):
Now?
Speaker 5 (26:17):
Well, I think you know, this was an executive order
he signed, you know, on January twenty seventh, so a
couple days into his second administration. It's a big project.
It's a splashy project. It's a little bit like sort
of you know, declaring you're going to put a man
on the moon. I mean that's the sort of level
of technological achievement that is going to be required here.
(26:42):
And it's also something I mean, he hasn't explicitly said
this is why, but it's something that is going to
be a huge boon to defense contractors. You know, amid
all the talks about cutting waste and efficiency in the
government and looking to both increase the defense budget but
also cut back on wasteful programs. I mean, this is
going to be a mega program with you know, unlimited spending.
(27:07):
I mean, it's sort of extraordinary. Even as this has
just started to only get off the ground, you're already
seeing companies from all over the US saying, hey, we
have an idea, we have an idea, we have an idea.
And it's like, you know, it's just seen as this
essentially you know, cashapalooza, where they could just get tons
of funding to be able to work on these systems
(27:27):
and try to pursue technology, like I said, doesn't exist yet.
Speaker 7 (27:30):
All right, So three years from now, we'll see what happens. NICKA,
I am curious you understand this stuff. What do you
think is going to get done first, the dome or
the retro fit on the plane that may come from Qatar.
Speaker 5 (27:45):
Well, I mean it's a great question because in some
ways it shows you how truncated that timeline is. I mean,
the conversation around the plane from Qatar, you know that
they're saying they're not even going to be able to
get that plane retrofitted to be able to go into
service before or Trump leaves office in twenty twenty eight.
So you know, you have one plane that's the timeline
(28:06):
is already there saying it's going to be it's unrealistic
to have that done, and then you have a whole
space based interceptor system whose technology doesn't even exist, much
less less contracted, much less deployed. Three years is an
awfully short timeframe for.
Speaker 7 (28:22):
That interesting times.
Speaker 4 (28:24):
Hey, thank you so much.
Speaker 7 (28:25):
We know a lot coming at you as always, but
Nick Wadams is a voice we always want to check
in with. He's Bloomberg News National Security Team leader joining
us from.
Speaker 4 (28:33):
Our bureau in DC.
Speaker 7 (28:34):
Nick, thank you so much.
Speaker 1 (28:35):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five eas during
Listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (28:49):
The market's exactly where I want to go right now?
Is Carol mentioned near our session lows? Right now the
S and P five hundred down about nine tenths of
one percent. We've got with us Eric Wiener. He's Bloomberg
News Senior editor for Equities Americas. He joins us here
in the Bloomberg Interactive Brokers studio.
Speaker 3 (29:04):
Eric.
Speaker 2 (29:04):
When I was preparing our interview with you earlier today,
I was planning to talk about what happened yesterday because
it was a little bit of a wild day. We
all thought that equities would fall and that bond yields
would surge, and that happened in the early part of
the day. Then the dip buyers appeared to come in.
We could talk about that in a few minutes, but
first I want to talk about the reversal, not a reversal,
(29:24):
but sort of the leg lower that we saw in
the last hour. What do we attribute this to.
Speaker 3 (29:28):
Well, probably the best place to look would be Tesla's chart.
If Musk has been out talking today, he's been talking
more about his companies and on a rival network, will
say he said something to the effect of the future.
He reiterated that the future is in robotaxis. And whereas
(29:52):
robotaxis were seen as a positive for the company, that's
kind of flipped because of the amount of some cost
that goes into developing it. And then a lot of
a lot of people who started asking the question about
regulating all of this and ensuring all of this. And
there are many, many, many pieces that go to creating
(30:14):
a robotaxi environment, and we don't know if Tesla is
going to be the company that does it and where
those costs go.
Speaker 2 (30:22):
And I mean, if you go to Washington, d C. Well,
I won't say if you go to Washington, d C
now because I don't know if they're there yet, but
I know they're on their way there. These are the
waymo cars. Carol her mind blown last week.
Speaker 7 (30:33):
The week closed my eyes and like on the whole
twenty twenty five minute run.
Speaker 2 (30:36):
Once, I've been saying you got to try one of
these things. I tried one in San Francisco on the fall.
It was amazing.
Speaker 3 (30:40):
Loved it.
Speaker 7 (30:41):
At night, I'm like, would I feel comfortable? I was
kind of blown away by it, and I loved it
was clean, it was easy, no music if.
Speaker 6 (30:49):
I didn't want it.
Speaker 2 (30:50):
So you were in a Jaguar that was powered by
Google's technology. I was not in a Tesla. That's the point.
If I was in a Jaguar, would be happy. But
they are a nice cars.
Speaker 3 (31:01):
The flip side of that, we can all see the
base case for it. You know you're out late, you
don't want to drive home, and your car just takes
you there, or you know the city is you know
has plenty of cabs and you don't have to worry
about anything. They come right over. The question is our
whole system is built on liability, right, So the whole
(31:25):
idea of ensuring something is being able to point the
finger it oo's to blame. So if you're in the
backseat having had you know, a couple too many drinks
and are just doing what you're supposed to do with
what you bought the car for and then it t
bones somebody else, who pays for that accident? Who's responsible?
Speaker 2 (31:44):
It's such a basic question that I've never actually considered, well.
Speaker 3 (31:47):
And this is where this is where a somebody who's
going to bet on that goes because if that infrastructure
is in place, then of course, yeah, you know, Waimo
and all of these things become national the idea of
us having self driving cars becomes completely you know, reliable.
But without that, we're still in a you got to
(32:11):
drive your own car world, or you need to figure
out who is going to be responsible to the company
take that, How do we how do we do the
insurance for that. We have to re regulate a whole
bunch of things before that can become a national reality.
And if you're putting if you're one of the most
important stocks in the market, and you're putting a bunch
of money behind this and there isn't that background there,
(32:33):
the risk of that turning into a sunken cost is
very real.
Speaker 4 (32:37):
Yeah, it's kind of fascinating.
Speaker 7 (32:38):
It's funny because we do these gainers into winners and losers.
And Tessa was a gainer for me because it was
up you know, more than three percent earlier in the session.
And now I'm like, okay, I got to kind of
pull the yank this one, because it's just pretty much
sticking around unchanged or it's even got into the red
a little bit. But it's a really good point, I
do think about it. It was interesting when I was
in the Waimow and there was at a point where
(32:59):
a biker, know, kind of scooted alongside and then.
Speaker 2 (33:02):
Terms we prefer the term cyclist unless you're talking about
a guy on a motorcycle, like it was a cyclist.
Speaker 7 (33:08):
And I was watching how the car like navigated and
I was even watching it was impressive, wasn't it. It
was pretty impressive And I was like, whoa, okay, saw
it like stayed around, you know, around also started there
like with yellow lights, like kind of went through some
yellow lights, and I was like, hmm, how did.
Speaker 2 (33:23):
I feel about that?
Speaker 4 (33:23):
But it was the ride was smooth.
Speaker 7 (33:26):
But you're right, there's so many questions, right, and if
there's a lot more on the road, does that make
the road more safer or does it create more variable
But I don't know.
Speaker 3 (33:34):
Poretically, theoretically, when you talk to people who are involved
in mass producing cars that that actually is safer because
they're all going to travel at the same speed and
they're going to keep the same gaps and everything track together.
But technology is not perfect, it is not infallible. So
when and it's not if, it's when a circuit goes
(33:57):
a little haywire, who catches the black aim for that?
And our society is very very clear on blame. And
so when you don't have that you and you have
something that's doing sixty miles an hour and can kill someone,
it becomes a much disier proposition.
Speaker 7 (34:13):
Isn't a product liability? Yes?
Speaker 3 (34:15):
It actually interested and personal and if you hurt somebody,
good luck.
Speaker 2 (34:19):
And look, we've seen this happen over the last couple
of years as different companies have experimented. I mean there's
a company that doesn't even operate wait the way it
used to operate because of issues that happened when it
was testing these vehicles in San Francisco. And even on Reddit,
the weaimo reddit threads have examples of when the car
hasn't necessarily not necessarily crashed or anything, but when something
has gone wrong, like there's examples of it just going
(34:41):
around and around it for example, Yeah, yeah, yeah, we've
all clitched.
Speaker 7 (34:44):
It's interesting even the pickup, you know, is that kind
of a for work a resort And it was like
the guys even there said, like, the car may just
kind of park somewhere.
Speaker 3 (34:52):
Because it can.
Speaker 2 (34:53):
You'll find it because it's not like a human. This
is why I talked to somebody who works in AI.
I was saying, I would love for this to come
to New York and he was like, the challenge with
this happening in New York is there aren't very many
legal safe places for them to pull over, yeah, and
pick people up. And it's the truth. I mean, if
you think about the way we pick up cabs and
(35:14):
ubers and lifts. Here, we're walking into the middle of
the street and they're stopping. It's all about I mean,
and you can't somebody do it but it's nuts. Well, no,
it's absolutely insane. No, that's what I mean.
Speaker 3 (35:24):
Like, it's all about us interacting with the person who
picks us up. And when you have cars that are
just pulling in by themselves, you don't know how this
is going to work. And that's really what it's about.
If you're sinking your money and this is a company
that builds cars, you're sinking your money into something that
you don't know how it's going to work. That gets dangerous.
Speaker 2 (35:43):
Okay, So this is all about Tesla.
Speaker 3 (35:45):
Well, I think the last hour has been about Tesla.
Speaker 2 (35:48):
That's interesting because there's the chart.
Speaker 3 (35:49):
It's it's the one in the SMP that really it's almost.
Speaker 7 (35:53):
Two percent of the S and P five hundred terms
of waiting, it's about a little bit more than it's
almost three point two percent of the Nasdaq one hundred
three at move.
Speaker 3 (36:02):
On our system, you can see that like basically the
whole MAG seven is on is in the red. Google
got hammered earlier as well, so it's like sort of
a tech risk off. But like the big turn was
in Texa where it had it had gone down when
Musk was talking from to us and it went flying
(36:24):
down and then it came back up and now it
just dropped like a stone.
Speaker 2 (36:29):
Okay, yeah, good point. I mean, look, six out of
the seven MAG seven are in the red. Tesla shares
were up earlier in the session. They're still up about
half a percentage point, but a far crytit.
Speaker 3 (36:40):
They were like up three. Yeah, that's big, big move
on the SMP.
Speaker 2 (36:44):
Hey, I want to go back in time a little
bit and talk yesterday, which was actually the plan before
we saw things move a little lower. What would happened
yesterday because we thought that because of this Moody's downgrade,
we'd see this certain tone with the trade that didn't
end up coming to fruition.
Speaker 3 (36:59):
So well, the bond market is hard to figure because
that actually should have happened, and it did. I mean, yields,
you know, jumped, and stock sort of responded. What we
saw in the market was the highest retail buying that
we've seen in I think it was over a decade,
(37:22):
some absurdly strong amount of retail buying up until twelve thirty.
So basically as that market sold off, retail stepped in
and bought every inch of it. So whereas we were
positioning like you, we were thinking like you, you know, okay,
well it's a down day and it's probably going to
stay down. Instead, it turned into this you know, V
(37:45):
shape recovery where all of a sudden it sort of
gets this lift and by the end of the day
we're in the green. But there is so little conviction
in this market right now that everything's on a hair trigger.
So Musk saying something about robo taxis and suddenly everybody
sells it off. There's just this sort of waiting for
(38:05):
the other shoe to drop feel to everything, and then
you have retail buying their dip, and the question is
how much longer they can when the SMP is approaching
six thousand six, when you're at fifty nine and yeah,
and so you've come all the way back. How much
more strength does retail have to keep this going because
(38:29):
the institutional guys are on the sidelines and they cannot
buy in at these levels, so they have to sit
Why can't they buy in? Well, because if you're timing
this and you're questioning whether it's going to go higher,
your risk is enormous. Buying in right now. You're much
better off waiting for yesterday's one percent drop buy that
(38:52):
you know, you wait for some sort of announcement that
is going to temporarily take the market down two percent.
You buy there. But if you were looking at things
a month ago and you were like, if we get
up to six thousand, this is amazing, and then we
do it, well, now you buy in and you're at it.
You're buying in at a level where it's really dicey
(39:15):
whether you're going to go higher, and there's a strong
chance you're going to go lower, So the entry point
is not attractive. To somebody who's actually building a portfolio.
If you're just trading in and out during the day,
doesn't really matter, and that's what you see and you're
acting reacting to the way the charts look. But if
you're actually putting positions on in your portfolio, right now,
(39:36):
stocks are pretty fully.
Speaker 7 (39:38):
Valued, right, It's like, Okay, what's the next catalyst you
can really trade on definitively? And I keep thinking about, Okay,
ninety days out in terms of the tariffs, like that's ticking.
Speaker 2 (39:48):
We got to wait for that.
Speaker 7 (39:49):
I mean, there's a lot of issues that we have
to wait for, right, Yes, Eric to kind of understand, Okay,
so what's kind of the next backdrop for It's the
economic term tread.
Speaker 3 (39:57):
It's the economic data, right, So we're gonna have a
jobs report coming up, We're going to be having you know,
pc CPI all that sort of stuff coming. I don't
know that anybody is expecting a June rate cut from
the Fed anyhow. Yeah, I mean, I think we're down
to September if if at all. But it's really it
(40:19):
really feels like people are waiting. When I say people,
I mean Wall Street pros are kind of waiting for
the confirmation to come that the economy is weaker than
the market is playing.
Speaker 2 (40:33):
We've been hearing for weeks about this idea of empty
shelves coming that hasn't materialized. And the pause that we
saw between the tension with the US and China could
perhaps be some sort of reprieve. But in the background,
Eric I can't help but think we're still in a
trade war.
Speaker 3 (40:51):
Yeah. Well, and it's see so we go back to
COVID and it's like, we remember.
Speaker 2 (40:56):
What that was like, and everybody says, oh, we don't
want to go back to that.
Speaker 3 (40:59):
But if if you look at like the seventies or
like periods where there was very slow growth and high inflation,
it does mean that certain things, there are shocks and
certain things, but overall, it's just the economy doesn't move,
and that's what people are fearing. It's not so much.
I mean, obviously, you know, walking into Target and just
(41:20):
seeing empty shelves, well that's you know, that's a huge problem.
But just you're paying ten percent more on everything. Nothing
is on sale. Your meat is more expensive, your groceries
are more expensive. Everything you buy everywhere you go, it's
more expensive. And what happens then, is people just with trench.
(41:42):
You know, It's like each individual decision happens and people go, Okay,
well I'm gonna pull back, and that hits earnings and
that's when it starts spreading. So too, if you're a trader,
you're looking at the clues that are going to get
you to those earnings that are then going to send
you lower.
Speaker 7 (41:59):
Yes, okay, off to the next earning cycle. But I
think about what Lebby Cantralla, Pimco's at two, the same
thing like Tyris. We're going to be in a higher
tariff environment and that's that's going to have an impact.
Eric Wiener, thank you, as always, Bloomberg New Senior Editor
of Equities Americas.
Speaker 1 (42:14):
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