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Investing Beyond Earth · Bloomberg Intelligence

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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
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Speaker 1: my co host Matt Miller. Every business day we bring
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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
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Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
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Speaker 1: at Bloomberg dot com slash podcast. All right, let's say
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Speaker 1: you want Matt to invest in space as in the Cosmos,
0:27
Speaker 1: there is an e t F for that to procure
0:30
Speaker 1: space et F ticker symbol you guessed it, u f O.
0:34
Speaker 1: Andrew Shannon, chief executive Officer procure a M joins us
0:37
Speaker 1: this morning. Andrew a lot of interest growing in the
0:40
Speaker 1: commercialization of space working at the spaces x launched last Friday.
0:45
Speaker 1: Talk to us about your space et F. What's in
0:49
Speaker 1: your space et F? Thanks so much for having me.
0:53
Speaker 1: So we launched UFO back in April of and we've
0:57
Speaker 1: seen the space industry go through some dramatic changes. That's
1:01
Speaker 1: really opening up for the commercialization of the space industry.
1:04
Speaker 1: And so someone looking to invest in UFO will notice
1:08
Speaker 1: that the underlying index that are fund tracks um actually
1:11
Speaker 1: focuses with at least eighty percent of the weight of
1:14
Speaker 1: the fund is actually in companies deriving a majority of
1:18
Speaker 1: their revenues from space, while up to of the underlying
1:22
Speaker 1: index can focus on some more diversified companies that are
1:26
Speaker 1: major players in the space industry. Think you're diversified aerospace
1:29
Speaker 1: and defense names your Lockeeds and Bowings, um. But because
1:33
Speaker 1: it's not the largest driver of their revenues, that entire
1:37
Speaker 1: tranche is capped at. So you're really looking at companies
1:40
Speaker 1: that are driving significant revenues from space. So satellite companies,
1:44
Speaker 1: launch providers, companies that are relying upon space based systems
1:48
Speaker 1: and services, so communications is a major driver UM, as
1:53
Speaker 1: well as satellite operators and manufacturers as well. So I see, um,
1:58
Speaker 1: your top ten holdings in include Dish Network, which makes
2:03
Speaker 1: sense because the satellites garment. I guess also um uh
2:09
Speaker 1: Serious x M, which a lot of people are listening
2:11
Speaker 1: to us on Serious x M. What about the explorers
2:15
Speaker 1: like Virgin Galactic for example, or I know Blue Origin
2:20
Speaker 1: and Space x aren't publicly accessible, but do you see
2:25
Speaker 1: a future in which we can be owning you know,
2:27
Speaker 1: companies that make rockets and take people to outer space. Well,
2:32
Speaker 1: so you're already getting exposure to those companies in the funds,
2:35
Speaker 1: so many people aren't familiar. But Boeing and Lockey to
2:38
Speaker 1: actually have a joint venture called the United Launch Alliance,
2:41
Speaker 1: which helps you send send things to outer space. Virgin Galactic,
2:46
Speaker 1: like you mentioned, is a holding specializing in space tourism.
2:49
Speaker 1: Um that they're still working on their product and experience
2:52
Speaker 1: to be able to safety bring people to outer space.
2:54
Speaker 1: But some of those kind of topics that you're already
2:57
Speaker 1: mentioning are things that are already in the fund. And
3:00
Speaker 1: so although SpaceX being a private company, isn't in the fund,
3:04
Speaker 1: their ability to help lower the cost of sending things
3:06
Speaker 1: to outer space is actually benefiting many companies in the portfolio.
3:10
Speaker 1: So I think the company like max Are, which helps
3:12
Speaker 1: build satellites well to the extent that someone can now
3:16
Speaker 1: purchase the satellite from max Bar and send it to
3:18
Speaker 1: outer space for significantly less than they could maybe even
3:21
Speaker 1: just five years ago, is now opening up for significantly
3:24
Speaker 1: more clients for the space industry. So they're already having
3:28
Speaker 1: knock on effects. And then you look at this launch
3:29
Speaker 1: that you know they helped NASA send people to the
3:31
Speaker 1: I s S. Just this past week, and you're it's
3:35
Speaker 1: almost like a Bogo special that SpaceX is offering for
3:38
Speaker 1: its clients. For NASSAIS to spend over eighty million dollars
3:40
Speaker 1: a seat to send an astronauts to the I s S.
3:43
Speaker 1: It's now coming in in the mid forty million dollar range,
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Speaker 1: So that frees up more budget for space agencies like
3:49
Speaker 1: the E s A, NASA and beyond. So, Andrew, do
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Speaker 1: you believe there will be more space oriented companies coming
3:56
Speaker 1: to the public markets, will be more opportunities for investors
3:59
Speaker 1: to to in eston what appears to be a growing
4:02
Speaker 1: commercialization of space. We certainly hope so. And you're already
4:06
Speaker 1: seeing in the stack market. There's been eight or so
4:09
Speaker 1: companies that have been named as the targets for potential
4:13
Speaker 1: SPACK mergers. Are Fund doesn't invest in a company that
4:16
Speaker 1: is a STACK until actually SPACs UM and and the
4:20
Speaker 1: merger has fully gone through. So there is opportunity for
4:23
Speaker 1: more companies as they go public, weather NEA, AD, SPACK
4:26
Speaker 1: and I p O or even spinoffs UM that could
4:29
Speaker 1: find their way into UFO. But right now there's over
4:31
Speaker 1: thirty companies from around the world UM, you know with
4:34
Speaker 1: a with a space focus that you could currently get
4:36
Speaker 1: exposure to in the fund, but we're not capped at
4:38
Speaker 1: the amount of companies that can be added, So we
4:40
Speaker 1: certainly will welcome more companies with a pure place space
4:43
Speaker 1: focus in the future. How big is this industry and
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Speaker 1: what kind of growth should we expect? Yes, so the
4:53
Speaker 1: Space Foundation puts up the Space Report annually, and I
4:55
Speaker 1: believe in rough in July we should get the numbers
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Speaker 1: for twenty In twenty nineteen it was roughly a four
5:02
Speaker 1: four billion dollar industry. And you look at different research
5:05
Speaker 1: houses and banks. Morgan Stanley is predicting by you know,
5:09
Speaker 1: over a trillion dollars by twenty forty. Bank of America
5:12
Speaker 1: actually for nix Um that the industry will be about
5:14
Speaker 1: two point seven trillion dollars right now. Roughly one third
5:20
Speaker 1: of the commercial market is actually communications companies. And if
5:23
Speaker 1: you look at what these different banks are saying is
5:26
Speaker 1: going to be the main driver for the space industry
5:29
Speaker 1: in the next twenty years or so, UM, they point
5:32
Speaker 1: to broadband internet and communications, and that's something that our
5:35
Speaker 1: our fund already has a pretty significant exposure to. So,
5:39
Speaker 1: you know, you can't really play the space industry without UM.
5:42
Speaker 1: You know, incorporating communications and broadband internet and some of
5:45
Speaker 1: these other companies that are going to be driving that,
5:48
Speaker 1: um your potential growth. So you know, right now that's
5:51
Speaker 1: kind of the composition of the funds, but certainly as
5:54
Speaker 1: more areas like even resource extraction and infrastructure build out
5:58
Speaker 1: and outer space UM, even the militarization and defense of space,
6:01
Speaker 1: which is something that hasn't gone that ton of attention,
6:04
Speaker 1: but it's clearly picking up all these are areas that
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Speaker 1: people could potentially get exposure to currently and in the future. Andrew,
6:11
Speaker 1: is there any sense that space X will go public
6:15
Speaker 1: at any time in the future. Well, certainly Elon Musk's
6:18
Speaker 1: uh the likes to tease, uh, you know that bad idea. UM.
6:22
Speaker 1: He's mentioned that potentially he would spin off Starlink, which
6:25
Speaker 1: is our satellite network UM business before going public with SpaceX,
6:30
Speaker 1: and he even said that he wouldn't go public with
6:32
Speaker 1: SpaceX until um. You know, we have people on mars
6:36
Speaker 1: UM here who knows, you know, if those timelines are
6:39
Speaker 1: are accurate. But certainly there are some really ambitious hopes.
6:42
Speaker 1: But there's also plenty of the man for investing in
6:44
Speaker 1: space X through the private markets, and we've seen through
6:47
Speaker 1: stock and through debt. Um Your Canadian pensions have had
6:50
Speaker 1: a very huge interest in investing in space, even beyond
6:53
Speaker 1: just SpaceX. But yeah, they've been able to access Castle
6:56
Speaker 1: pretty easily and they've had some tremendous success. So you
7:00
Speaker 1: maybe not a real rush for them, but you know,
7:02
Speaker 1: if the time's right, you know, I wouldn't put a
7:04
Speaker 1: test Elon Musk to bring another company public, all right,
7:08
Speaker 1: we appreciate that, Andrew, really fascinating and discussionary Ander Shan
7:12
Speaker 1: and CEO of procure a m Again, they the only
7:15
Speaker 1: pure place space et f. It trades under the symbol
7:19
Speaker 1: u f O. So if you want exposure to space,
7:22
Speaker 1: Matt there you go. Yeah, and it seems like something,
7:25
Speaker 1: you know, the kind of exposure that you want to
7:28
Speaker 1: have on the very long term, right, you want to
7:31
Speaker 1: just take this put in your pocket and not look
7:33
Speaker 1: at it for I was gonna say twenty years, but
7:36
Speaker 1: probably ten years is um? You know we should be
7:39
Speaker 1: at Mars by then, right, ten? Yeah, it would be
7:41
Speaker 1: I'll tell you what, you know, it's it's nice having
7:43
Speaker 1: Elon Musk. They're supporting the commercial of space flight and
7:48
Speaker 1: uh space X. Ever or to consider going public, I
7:51
Speaker 1: think there would be a huge demand because A it's
7:53
Speaker 1: Elon Musk, but B it's space. It's pretty cool, and
7:57
Speaker 1: you can think about some of the commercial aspects going
7:59
Speaker 1: for Let's get over to a company called Emblem m
8:07
Speaker 1: L sorry m b L M Emblem. They've disemvoweled UM
8:12
Speaker 1: their name, which is very trendy lately. I think Aberdeen
8:15
Speaker 1: did the same. Uh. This morning, Mario Natarelli joins us.
8:18
Speaker 1: He's a managing partner at Emblem and Mario, you've recently
8:21
Speaker 1: done conducted your brand intimacy COVID study. Um, it's difficult,
8:28
Speaker 1: I think for listeners to imagine what that is. Brand
8:31
Speaker 1: intimacy makes my childish mind think of Victoria's secret. But
8:35
Speaker 1: when you put it together with COVID, I guess it
8:37
Speaker 1: makes sense with COVID also Netflix some chill, But what
8:41
Speaker 1: exactly is the brand intimacy study? Oh? Sure, disinvowelled and
8:46
Speaker 1: Victoria's secrets. That's a great interest. So yeah, listen, we
8:51
Speaker 1: make decisions based on a motion. Behavioral scientists have proven that,
8:55
Speaker 1: and yet most of what we do in the branding
8:57
Speaker 1: and marketing world is rationally driven. So what we wanted
9:00
Speaker 1: to do was measure, not just how brands perform, but
9:02
Speaker 1: how do people feel about the brands that they use
9:04
Speaker 1: and love. So if we're eleven years in on the
9:07
Speaker 1: science of understanding the bonds that we filled with the
9:10
Speaker 1: brands that we love, all right, what did we learn
9:14
Speaker 1: the pandemic? I'm guessing you know, obviously the pandemic upended
9:18
Speaker 1: our daily lives to so many different degrees. What did
9:22
Speaker 1: you find in terms of which brands performed well during
9:26
Speaker 1: this pandemic? Yeah, it was see. You know, we did
9:29
Speaker 1: the study twice pre impost pandemic, and we weren't sure
9:32
Speaker 1: what we were going to discover. What we found out
9:35
Speaker 1: is that people bonded with brands more during the pandemic
9:38
Speaker 1: than prior we thought would do extremely well like Apple
9:42
Speaker 1: and Amazon continued to thrive and of course did very well.
9:45
Speaker 1: And then no surprise to many, Zoom, uh Purel and
9:49
Speaker 1: Netflix were fast risers and took advantage of our you know,
9:53
Speaker 1: sequestered lives. So the biggest UH winners during the COVID
9:59
Speaker 1: per um we're U S A A. Is that right? Um?
10:04
Speaker 1: The United States Automobile Association. Now it comes to services,
10:11
Speaker 1: the insurance company. I got it, okay, uh U S
10:14
Speaker 1: a A. I'm reading as A as a gearhead is
10:16
Speaker 1: a different thing than the banking and insurance can conglomerate.
10:21
Speaker 1: How do they land in first place? Yeah, good questions.
10:24
Speaker 1: So financial services do historically very poorly in our study,
10:26
Speaker 1: which is that a little ironic that the people we
10:29
Speaker 1: trust with our money we don't have strong emotional bonds with.
10:32
Speaker 1: But U s a A UM finished first in our
10:35
Speaker 1: ranking post coded. This is a brand that really understands community.
10:39
Speaker 1: It's oriented around service members. UM really understands how you
10:43
Speaker 1: emotionally bond and connect with its stakeholders, So probably no surprise.
10:47
Speaker 1: It is interesting that most of the financial service brands
10:50
Speaker 1: that did well are not the typical iconic retail banks.
10:54
Speaker 1: So PayPal, U s a A, even TV Bank rose
10:58
Speaker 1: up in the rankings. UH, credit cards and and the
11:01
Speaker 1: big banks all did uh, you know, as poorly as
11:03
Speaker 1: they usually do in this study. I'm want to go
11:06
Speaker 1: out there and say, I think us A A does
11:08
Speaker 1: stand for United Services Automobile Association, although we just call
11:13
Speaker 1: it USA A. I think that's the actual name for it.
11:17
Speaker 1: All right, Well, at least Wikipedia is showing me that
11:19
Speaker 1: right now. Anyway, who else did well overall in the study.
11:23
Speaker 1: You know, it's interesting brands that sort of harken back
11:26
Speaker 1: to kind of fond memories of the past or kind
11:28
Speaker 1: of comfort related brands that Campbell's, for example, did extremely well.
11:31
Speaker 1: Plus COVID, Ben and Jerry's, for a brand that's all
11:34
Speaker 1: about indulgence, did extremely well. Um, automotive brands surprisingly withheld
11:40
Speaker 1: and did pretty well during COVID, which we thought would
11:43
Speaker 1: they would take a hit, but they didn't. So those
11:45
Speaker 1: are just some of the brands that were strong performers.
11:48
Speaker 1: All right, Mary, I'm a Wall Street guy. I don't
11:51
Speaker 1: don't care about brands. I think you know, marketing is
11:54
Speaker 1: just you know, paint of blue and sell it to me. Um, well,
11:58
Speaker 1: let me tell you why you're wrong the telling. As
12:00
Speaker 1: a stock investor, do I care about brand value. So
12:05
Speaker 1: here's the deal. We rank the most intimate brands and
12:08
Speaker 1: then we compare them to the top performer brands, and
12:10
Speaker 1: the fortune and center iforce indects our brands up foremost
12:14
Speaker 1: in revenue and profit every year, short term and long term.
12:17
Speaker 1: So if you aren't paying attention of this, you're missing something.
12:21
Speaker 1: I mean, the power of brands, Paul is huge. Look
12:23
Speaker 1: at Ferrari. You think Race could get a evaluation like
12:25
Speaker 1: that if it weren't for the brand. Yeah, against the
12:29
Speaker 1: margins help as well. So who who do you think
12:32
Speaker 1: is gonna stick in terms because you know, maybe post COVID,
12:36
Speaker 1: when the lockdown's over, we're not gonna see um consumers
12:41
Speaker 1: care as much about PayPal as they did during you know,
12:45
Speaker 1: their online shopping extravaganza. I think PayPal has done very
12:50
Speaker 1: well in our study over the ten years. Brands that
12:52
Speaker 1: are going to receive maybe Purell probably won't stick as long,
12:55
Speaker 1: or maybe Zoom may fade a little. I think those
12:57
Speaker 1: brands are working aggressively to build product that's gonna resonate
13:02
Speaker 1: with us beyond the pandemic. I think the brands that
13:05
Speaker 1: did extremely well, like Amazon and Apple, you know, increase
13:08
Speaker 1: their leads and build stronger kind of portfolios. I think
13:12
Speaker 1: they're gonna, you know, see that advantage continue. Obviously. Let
13:16
Speaker 1: me just say one more thing about brands. You know,
13:18
Speaker 1: what's interesting is that brands that are hardware related smartphones,
13:22
Speaker 1: brands do extremely well and better than the content or
13:27
Speaker 1: the apps or the services on the phone. So another
13:30
Speaker 1: thing to kind of think about is the role of
13:32
Speaker 1: technology plays and building intimacy. Hey, Mario, thank you so much.
13:36
Speaker 1: We really appreciate that. Very interesting study. Mario and not
13:39
Speaker 1: a Relly from Emblem talking to us about brand infacy
13:41
Speaker 1: and the value of brands. And uh, you know, Matt,
13:45
Speaker 1: I kind of asked that question of facetious because I
13:47
Speaker 1: have seen a lot of studies that show like positive
13:50
Speaker 1: correlation between brand value and shareholder returns here and you
13:54
Speaker 1: bring up a great example, you know, Ferrarians and some
13:57
Speaker 1: of these other mega brands that I heard this arcasm.
14:00
Speaker 1: I knew you were trying to play the devil's advocate
14:03
Speaker 1: to some extent, So I think it makes sense though,
14:06
Speaker 1: I mean especially I think we've learned more about the
14:09
Speaker 1: strength of brands during COVID than we than we need
14:11
Speaker 1: to be. All Right, thanks so much, appreciate it. All right,
14:15
Speaker 1: let's get our latest update on all things Wall Street.
14:19
Speaker 1: We do that with Shale Bassic Bloomberg Wall Street reporter
14:22
Speaker 1: Shinnali loves you talk to you about you know, E
14:25
Speaker 1: S G investing. It's kind of been a little bit
14:26
Speaker 1: of a theme today for us, and it comes on
14:29
Speaker 1: the heels of the Biden uh Climate Summit, of the
14:32
Speaker 1: Global Summit from last week here what's the perspective of
14:36
Speaker 1: kind of our own kicking off today exactly and kind
14:40
Speaker 1: of just get a sense of what's the the feeling
14:42
Speaker 1: from Wall Streets perspective as to is this really a
14:46
Speaker 1: long term investment theme that will be with us for
14:49
Speaker 1: some time? Well, yeah, that's the most important thing. It
14:51
Speaker 1: has to be long term because none of these things
14:53
Speaker 1: change over time. And with a lot of these issues right,
14:57
Speaker 1: namely climate and also what's so issues, namely race um,
15:02
Speaker 1: they have been problems that have been brewing for a
15:04
Speaker 1: long time, and frankly, the financial industry has exacerbated in
15:08
Speaker 1: a lot of ways. So you know, at the end
15:11
Speaker 1: of the day, you look back to the people who
15:14
Speaker 1: are counting on these investors, right that the people who
15:17
Speaker 1: have their pension funds at stake that have been very
15:20
Speaker 1: vocal and very loud and forcing these changes that you know,
15:24
Speaker 1: really the the large asset managers are are really starting
15:29
Speaker 1: to step up now, but hopefully kept to be held
15:32
Speaker 1: accountable too. So we have, as I said, this Green
15:36
Speaker 1: Summit kicking off today. It's a two day summit. Um.
15:39
Speaker 1: There's some huge names. I know. Francine Lackwa talked to
15:42
Speaker 1: Al Gore. He's got to be kind of the poster
15:46
Speaker 1: politician for UM the green movement. And you're going to
15:49
Speaker 1: talk to Melody Hobson later today, who runs Ariel Investments.
15:55
Speaker 1: But she's also I mean she's now she's the chairwoman
15:58
Speaker 1: of Starbucks, but she used to be the chair dream
16:01
Speaker 1: Works as well. A huge career here. What does she
16:04
Speaker 1: have to say about E. S G. Yeah, it's really
16:06
Speaker 1: interesting because she's a major board member right, a board
16:10
Speaker 1: of She's on the board of JP Morgan and as
16:11
Speaker 1: you said, share of Starbucks, So she has influence in
16:14
Speaker 1: that way. But they're also an investor right over at
16:17
Speaker 1: our Investments, and so how do they vote with their feet? Right?
16:21
Speaker 1: How do they hold companies to account? What we're finding
16:24
Speaker 1: is two sorts of approaches. Right, you have this terminal
16:28
Speaker 1: headline right now on black Rocks lettery seeking activism, right,
16:32
Speaker 1: forcing those changes. Uh, Hobson's firm is trying to work
16:35
Speaker 1: with companies to to really get them to be more
16:38
Speaker 1: constructive and change the way they hire suppliers, look at
16:41
Speaker 1: more minority owned businesses. When it comes down to it,
16:45
Speaker 1: our arial in itself is really trying to invest in
16:49
Speaker 1: more minority owned businesses as well as work at the
16:51
Speaker 1: companies they they invest in. There's something interesting happening that
16:56
Speaker 1: I wanted to point to this coming weekend, for example,
16:59
Speaker 1: is Warren Buffett's annual meeting. What they are facing is
17:04
Speaker 1: also company their own shareholders who are very frustrated with
17:09
Speaker 1: social issues that they're facing, the impacts of their business
17:12
Speaker 1: on the customers and employees around them, and as well
17:16
Speaker 1: as environmental issues. Right now, Newberger Berman has votes that
17:20
Speaker 1: are out there that are really trying to force change
17:23
Speaker 1: among one of the biggest investors in the world. So
17:26
Speaker 1: it's interesting we this is growing momentum clearly, Chanale for
17:29
Speaker 1: as you're reporting for uh E s G, and it
17:32
Speaker 1: seems like the focus has been on environmental maybe a
17:35
Speaker 1: little bit less so on social and governance. I mean,
17:37
Speaker 1: even though the tech company screen well on you know, environmental,
17:41
Speaker 1: you take a look at some of their supervoting share
17:43
Speaker 1: structures just for example, and that doesn't mark well a
17:47
Speaker 1: grade well for the governance issue, yeah, that's for sure.
17:50
Speaker 1: And there's a lot of pressure on the SEC to
17:52
Speaker 1: kind of change the way that they force people to
17:54
Speaker 1: disclose things, right because at the end of the day,
17:56
Speaker 1: a lot of this comes down to disclosure on top
17:59
Speaker 1: of you know, just companies saying that they're doing the
18:03
Speaker 1: right thing, and so you know, on the social issues
18:06
Speaker 1: in particular, you know, we're coming up on one year
18:09
Speaker 1: since George Floyd has been murdered, right, we are also
18:12
Speaker 1: coming up on a hundred years since the Tulsa race massacre.
18:15
Speaker 1: You know, these issues are very very real to a
18:20
Speaker 1: lot of people who are demanding not just change but
18:24
Speaker 1: also disclosure. And you know, on top of climate, you're
18:26
Speaker 1: seeing these social issues really come to the forefront of
18:30
Speaker 1: the investment community's minds and where can they use their
18:34
Speaker 1: own money to create change? And the race issues as well,
18:38
Speaker 1: um which we see in in all other facets of
18:41
Speaker 1: American life. It's interesting that Melody hops and when she
18:45
Speaker 1: was named the chairwoman of Starbucks, was the first black
18:48
Speaker 1: woman ever to be the chairwoman or chair well, I
18:52
Speaker 1: guess it could only be a chairwoman of of any
18:55
Speaker 1: SMP five companies. So she's making waves there. And of course,
18:59
Speaker 1: as you point out, running aerial investments can also vote
19:03
Speaker 1: as an investor. Shinnelli Boss, thanks very much for that.
19:09
Speaker 1: Let's bring in Kevin Tynon joins us from Bloomberg Intelligence.
19:14
Speaker 1: He's our go to guy when it comes to reporting
19:17
Speaker 1: on the automakers and um, a senior autos analyst. I
19:22
Speaker 1: don't know if you're titles guy analysts. Yeah, I'm I've
19:27
Speaker 1: been asking Kevin for advice on cars for at least
19:30
Speaker 1: fifteen years. I'd say, so, he's a he's got the crease.
19:37
Speaker 1: I actually, I actually, I know we're gonna talk about Tesla,
19:40
Speaker 1: but before we get to it, you, me and Paul
19:42
Speaker 1: have all been pretty interested in the mock E and Uh,
19:46
Speaker 1: I think that you've had a chance to drive Ford
19:48
Speaker 1: Mustang mach E. It's tough to get a dealership lots
19:51
Speaker 1: across America. It looks so cool, and I've heard positive reports.
19:55
Speaker 1: So I wanted to know, have you had a chance
19:57
Speaker 1: behind the wheel, and what do you think I have?
20:00
Speaker 1: I had it for um for about a week, a
20:03
Speaker 1: couple of weeks ago, maybe about a month ago. UM,
20:06
Speaker 1: and I guess I was totally whelmed, neither neither over
20:11
Speaker 1: nor underwhelmed by it. Um, and I have to say
20:15
Speaker 1: it was a little chilly. Well, let me give you
20:17
Speaker 1: two things that that kind of jumped out at me.
20:19
Speaker 1: One was I had to drive it to the office,
20:22
Speaker 1: and I don't live far from this office, and we
20:24
Speaker 1: have charging stations here because right right, So I wanted
20:28
Speaker 1: to give it back with to Ford with a full
20:31
Speaker 1: charge on it. So I had it charges at three
20:35
Speaker 1: miles of range per hour. So if I left it overnight,
20:39
Speaker 1: I would have had about, you know, forty miles of
20:42
Speaker 1: range on It's got to be a faster way there is.
20:46
Speaker 1: But I mean, I don't have a you know, a
20:48
Speaker 1: level two charger in my garage. That would have just
20:50
Speaker 1: been plugging it into the outlet you know where I
20:52
Speaker 1: where I plugged my compressor. So um, and then when
20:56
Speaker 1: it was full, it only read a hundred and eighty
20:58
Speaker 1: miles of range. And then the other thing was while
21:00
Speaker 1: I was driving it in that cold March morning, the
21:04
Speaker 1: you know, the big guy pad stuck to the dashboard froze,
21:08
Speaker 1: so I couldn't I couldn't change the radio station. I
21:11
Speaker 1: couldn't change the temperature. I couldn't, you know, because it's
21:14
Speaker 1: sort of like the way Tesla doesn't wear. Everything runs
21:17
Speaker 1: through that center that center screen. So once it froze,
21:21
Speaker 1: and it restarted right away and was fine after you know,
21:24
Speaker 1: I I restarted the car, but um, but it was
21:28
Speaker 1: just kind of strange that I couldn't do anything, you know,
21:31
Speaker 1: I had to listen to hair Nation blasted all right, Kevin,
21:38
Speaker 1: So are our good friend Elon musk Uh and Tesla
21:41
Speaker 1: report earnings after the clothes today. We know that the
21:43
Speaker 1: deliveries came in better than expected. What are you really
21:46
Speaker 1: gonna be looking for at this quarter? Um, you know,
21:50
Speaker 1: I think a lot the delivery number was similar to
21:53
Speaker 1: the fourth quarter, so you know, I think a lot
21:54
Speaker 1: of things will probably be sequentially in line with what
21:58
Speaker 1: we saw at the end of And I think I
22:01
Speaker 1: don't know what what other people want, but for me,
22:03
Speaker 1: I think what will be interesting will be the trajectory
22:06
Speaker 1: of the regulatory credit sales this year. Right. Those were
22:11
Speaker 1: one point six billion dollars last year and it put
22:15
Speaker 1: them at you know, one point two billion in profits.
22:18
Speaker 1: So you know, it'll be interesting to see how those, um,
22:22
Speaker 1: you know, reconciled to each other quartered a quarter as
22:25
Speaker 1: we go through by all of those in order to
22:30
Speaker 1: make you know, the demon the beast to the t
22:33
Speaker 1: r X. Yeah, and I think GM, you know, was
22:37
Speaker 1: did a little hedge and probably Ford as well, just
22:40
Speaker 1: in case, um, you know, in terms of the election
22:44
Speaker 1: and if things intensified before they had a chance to
22:47
Speaker 1: get you know, Lyric and gmc hummer and more Bolt
22:51
Speaker 1: sales or whatever they wanted to do. But yeah, the
22:53
Speaker 1: the the majority of it was to the former f
22:57
Speaker 1: c A. And now that it's Statlantis, you that's they're
23:01
Speaker 1: saying by next year they won't need to buy any
23:03
Speaker 1: more credits. And I think that's what's you know again,
23:05
Speaker 1: That's what's interesting to me is that you're starting to
23:08
Speaker 1: get even if they're just compliance vehicles, you're getting competing
23:12
Speaker 1: automakers getting to the point where they're going to sell
23:15
Speaker 1: enough of them that they don't need to pay Tesla
23:20
Speaker 1: to be profitable. All right, That's where I want to go, Kevin.
23:23
Speaker 1: This is the money question I think for Tesla and
23:25
Speaker 1: this EV market. It seems to me that if I
23:29
Speaker 1: think about where the comments Volkswagen is made, the comments
23:33
Speaker 1: GM is made, and FOD is made that this these
23:36
Speaker 1: these are not compliance vehicles, it seems like they are
23:38
Speaker 1: really going all in on the EV market. Is that
23:41
Speaker 1: in fact the case? Do you think, well, look, they
23:45
Speaker 1: have to say that, right, and I've you know, I
23:48
Speaker 1: recently drove the new Bolt EUV and you're, you know,
23:52
Speaker 1: there with the engineers and talking to them and it's
23:54
Speaker 1: a great vehicle for what it is, and you know,
23:57
Speaker 1: and and God bless them, you know, those those engineers
24:00
Speaker 1: and and those general motors people really believe in the
24:03
Speaker 1: vehicle and they they don't want to hear it when
24:06
Speaker 1: I say like, yeah, but you really don't want to
24:07
Speaker 1: sell it if it's losing money, do you? You know? So? Um,
24:11
Speaker 1: it's something like they have to say it, and I think, um,
24:16
Speaker 1: are they not a path of profitability? There will be
24:20
Speaker 1: you know as as uh you know, economies of scale
24:24
Speaker 1: and and raw materials cost comes down there you can
24:27
Speaker 1: see that path. And I think that's part of the
24:30
Speaker 1: reason why you get commentary from automakers that we're going
24:33
Speaker 1: to do this, and they then they put a ten
24:36
Speaker 1: year timeline on it, you know, and it's like, well,
24:38
Speaker 1: couldn't you do that faster if you really wanted to
24:41
Speaker 1: do it? Um? You know? Why by why by five
24:46
Speaker 1: does it take so long to do this? Um? You know?
24:48
Speaker 1: And and I think that just comes back to the
24:50
Speaker 1: to the profit dynamics that are currently in place. You know, Look,
24:56
Speaker 1: Tesla's nine years in and they did five hundred thousand units.
24:59
Speaker 1: Lest you know, it's not a lot I actually drove
25:02
Speaker 1: around in a bolt with Mark Royce once and he
25:05
Speaker 1: was telling me how great it was. And you don't
25:07
Speaker 1: want to contradict Mark Royce, the president of GM, because
25:10
Speaker 1: he's he's a big dude, you know, and he can
25:12
Speaker 1: get pretty serious pretty fast. But I was thinking, man,
25:15
Speaker 1: you have a nineteen sixty three Corvette C two split window.
25:19
Speaker 1: Do you like this thing? You gotta be kidding me,
25:21
Speaker 1: But he did seem very enthusiastic. Kevin Tynan, Senior Auto's
25:24
Speaker 1: analyst for Bloomberg Intelligence, Thanks very much for joining us.
25:28
Speaker 1: This is Bloomberg. Thanks for listening to the Bloomberg Markets podcast.
25:34
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Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller. I'm
25:41
Speaker 1: on Twitter at Matt Miller three. Put on false Sweeney
25:45
Speaker 1: I'm on Twitter at pt Sweeney Before the podcast. You
25:48
Speaker 1: can always catch us worldwide at Bloomberg Radio.