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Nvidia Shares Surge as Sales Forecast Delivers · Bloomberg Intelligence

0:02
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Speaker 3: They cover two thousand companies in about one hundred and
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Speaker 3: thirty industries a worldwide. We also take a look at
0:39
Speaker 3: all the stock market action. Take a look at Nvidia,
0:41
Speaker 3: that's stock up by still over nine percent that company, Paul,
0:46
Speaker 3: that's some serious cash. I mean that just like mints.
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Speaker 4: The money it does, and you know, it's just extraordinary.
0:51
Speaker 4: You think about kind of how they've.
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Speaker 5: Become really the play on all things AI. I mean
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Speaker 5: they it was a year ago, maybe five quarters ago
1:01
Speaker 5: that they issued that revenue guide increase that just shocked
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Speaker 5: the tech space and talk shocked Wall Street in terms
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Speaker 5: of Wow, this AI spending thing, it is real because
1:12
Speaker 5: we are seeing in videos, seeing it in its order book,
1:15
Speaker 5: and it's just been extraordinary and it's hasn't let up.
1:19
Speaker 5: And you know, I talked to Tim Steneviek every time
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Speaker 5: these company reports earnings, and he asked me, Paul, do
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Speaker 5: you think these guys are gonna.
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Speaker 4: Beat and raise?
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Speaker 5: And I said, I think so until they don't, because
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Speaker 5: I just don't see any end there at least what
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Speaker 5: you hear from the the companies that are making these
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Speaker 5: these orders, like Microsoft, like Amazon. All they talk about
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Speaker 5: is AI AI AI exactly, and they get the chips
1:40
Speaker 5: from in video, So there you go.
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Speaker 3: I mean, so, yes, more than forty percent of Video's
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Speaker 3: revenue comes from just those guys, right, Microsoft, Meta, Amazon, Alphabet. Okay,
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Speaker 3: so there's some so maybe risk in that you have
1:52
Speaker 3: competitors that are still trying to ramp up their own
1:55
Speaker 3: ability for that. So I guess you're looking at again
1:58
Speaker 3: what we what I like to talk about is a
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Speaker 3: structural versus cyclical trend. The AI is here to stay
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Speaker 3: is a structural change, a structural trend? Right? Does it
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Speaker 3: mean that eventually this also won't be some kind of
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Speaker 3: cyclical story but we're clearly not there yet.
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Speaker 5: No, And so when we get the smart people on
2:16
Speaker 5: and we're going to get a smart person on sooners
2:18
Speaker 5: soon as he figures out how to get his microphonnel.
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Speaker 3: In other ways.
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Speaker 5: Yeah, yeah, is a competition. I mean you're supposed to
2:25
Speaker 5: be on there a certain time with the Yeah, how
2:27
Speaker 5: hard is that?
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Speaker 4: You know? So the question is competition. Where's competition?
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Speaker 3: Yeah, well it's hard. It's expensive to get this stuff out.
2:36
Speaker 3: I think that's the problem.
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Speaker 6: And also if you don't want to pay over one
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Speaker 6: thousand dollars this year for Nvidio, even though you're optimistic
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Speaker 6: about the future there, what are the derivative plays? There
2:45
Speaker 6: was so.
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Speaker 7: Many today looking at a company it's not publicly traded
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Speaker 7: and charge the brainschild of a Princeton professor to make
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Speaker 7: it more energy efficient these chips.
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Speaker 3: Oh sure, but there are a ton of those startups.
3:01
Speaker 3: But it's just a question of actually making the money,
3:04
Speaker 3: that is the question. All right, thanks so much for
3:07
Speaker 3: I don't know. I don't know why I'm thanking John Tucker.
3:08
Speaker 3: Now we do, but I'm gonna go to about those.
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Speaker 3: You're welcome. Su Johan Shabani is Boomberg Intelligence senior semi analysts.
3:16
Speaker 3: I hope he knows more than we do about this?
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Speaker 8: Does all right?
3:18
Speaker 3: The stock up ten percent? Can they continue at this
3:21
Speaker 3: point to just continue to beat and raise.
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Speaker 9: I think in the near term they can definitely demand
3:27
Speaker 9: on most of their products keep running ahead of supply.
3:31
Speaker 9: We don't see any slowing down in terms of purchasing
3:35
Speaker 9: from their customers. In fact, beyond their largest cloud customer,
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Speaker 9: enterprise and consumer intern companies are coming in strong. So
3:42
Speaker 9: we don't see any sort of big risk that says
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Speaker 9: they cannot continue.
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Speaker 5: So Kunjohn, I was selling Alex and John. When we
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Speaker 5: get smart people on like you yourself, I like to
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Speaker 5: ask the question about competition.
3:53
Speaker 4: I'm kind of surprised that, you know, in.
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Speaker 5: Nvidia has this competitive leadership position relative to everybody else.
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Speaker 5: How proprietary is their chip design versus I don't know
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Speaker 5: the AMD's of the world, even in Cisco's. What is
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Speaker 5: the competitive landscape?
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Speaker 9: Yeah, I mean, look, they were I would say almost
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Speaker 9: two to even arguably three years ahead of everyone, and
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Speaker 9: it's not easy in the chip landscape to catch up.
4:19
Speaker 9: When someone has that kind of a lead, they have
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Speaker 9: actually aggressively gone out and out in it their peers
4:27
Speaker 9: before they were on an eighteen to twenty four month
4:30
Speaker 9: product cycle. Now they are on a twelve month product cycle,
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Speaker 9: so they just keep staying ahead of their combetition. Their
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Speaker 9: combination is trying to catch up. AMD has made significant
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Speaker 9: progress and now is another second viral alternative in the market.
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Speaker 9: Hence you see that in their significant growth as well.
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Speaker 9: But we don't think at this point there is anyone
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Speaker 9: else who can rival the total system TCO and performance
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Speaker 9: that they have.
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Speaker 3: I was mentioning earlier that Nvidia gets about forty percent
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Speaker 3: it's revenue from the big four players, Microsoft, Meta Alphabet
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Speaker 3: and Amazon. What kind risk is that, if any?
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Speaker 9: I mean there have been concerns around it. So there's
5:04
Speaker 9: two good data points that came out of this print.
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Speaker 9: One that concentration did reduce for the very first time,
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Speaker 9: and what we liked it It was not reduced because
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Speaker 9: the cloud guys slowed their purchasing. In fact, those top
5:16
Speaker 9: four guys that are expected to increase their capec spent
5:19
Speaker 9: by forty five percent this year and they are all
5:22
Speaker 9: lined up to purchase its newest Blackwell products. But what
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Speaker 9: it was good was that the share was taken by
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Speaker 9: strong enterprise demand, which we really like because that is
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Speaker 9: much more diversified and sticky Kunjan.
5:33
Speaker 5: Let's say I'm at Amazon and I buy one of
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Speaker 5: nvidious chips.
5:37
Speaker 4: When do I have to replace it? Question?
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Speaker 9: There's two answers to it. If we were in a
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Speaker 9: normal sector semicharactor cycle like you are in smartphones or PCs,
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Speaker 9: the refreshed time would be longer, so I would say
5:52
Speaker 9: on ideally three to five years. But what's going on
5:55
Speaker 9: right now is all of these customers are just racing
5:57
Speaker 9: against each other, so they cannot afford to stop. So
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Speaker 9: as soon as a newer, better chip is available that
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Speaker 9: they can change, they are going to change.
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Speaker 3: What would stop all this? Like, we know that AI
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Speaker 3: is going to grow, we know that there will be
6:12
Speaker 3: demand for chips. We know all that. That's a structural
6:14
Speaker 3: shift within the economy. But what makes it cyclical?
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Speaker 9: I think the first point of cyclicality would be when
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Speaker 9: the demand momentum stops, which we haven't seen no signs of. Look,
6:28
Speaker 9: the supply keeps on coming up, so at some point
6:31
Speaker 9: demand is going to be meeting supply. And after that,
6:35
Speaker 9: if we see any kind of weakness in demand, look,
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Speaker 9: look if the largest cloud providers don't see return on
6:40
Speaker 9: that investment, don't see monetization benefit, don't see their earnings
6:44
Speaker 9: and revenue grow from these investments. That's when we can
6:47
Speaker 9: start worrying about sort of a cyclical downtown.
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Speaker 5: All right, So, how else in your universe of semiconductors,
6:55
Speaker 5: how else do you if you play this trend?
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Speaker 9: Look, it's Nvidia still remains sort of the best pure
7:03
Speaker 9: play AI play in semiconductors. So I don't know why
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Speaker 9: you would want to look elsewhere, but if you were
7:07
Speaker 9: forced to, we also like you know, players like Broadcommon,
7:12
Speaker 9: Marvel when it comes to AI networking, when it comes
7:15
Speaker 9: to the ask chips, which Nvidia's largest customers are designing themselves.
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Speaker 9: So these are the two areas where we see significant
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Speaker 9: growth coming in over the next two years.
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Speaker 4: All right, Yeah, good, John Sabanni, thanks so much for
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Speaker 4: joining us.
7:31
Speaker 3: There.
7:31
Speaker 5: Sabani, senior analyst covering to sevent conductor space for Bloomberg Intelligence.
7:36
Speaker 5: Joining us from San Francisco is right there in Silicon Valley.
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7:58
Speaker 4: Let's switch gear. Let's get right to our next guys.
8:00
Speaker 5: Shanna Sissel, president and CEO of ben bond On Capital Management,
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Speaker 5: joining us from Chicago via this zoom thing. Shana, think
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Speaker 5: so much for joining us here. I mean, I guess
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Speaker 5: the story of the day this morning is in Nvidia,
8:14
Speaker 5: another beat and raise.
8:16
Speaker 4: As the kids say, what did you take away from
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Speaker 4: the earnings last night?
8:21
Speaker 10: It wasn't the earnings that I was most surprised by.
8:26
Speaker 10: I think we all expected them to be. It was
8:27
Speaker 10: somewhat built into the stock price aftermarket. It didn't move
8:31
Speaker 10: that much. Obviously now it is. But I think that
8:35
Speaker 10: the thing that shoped me most was the ten for
8:37
Speaker 10: one stock split announcement. That surprised me.
8:42
Speaker 3: Not because.
8:44
Speaker 10: It's not unusual for a company to want to split
8:46
Speaker 10: in a way that would make their stock price under
8:48
Speaker 10: one hundred dollars again and make them more attractive to
8:50
Speaker 10: retail investors, make it easier for their employees to take
8:54
Speaker 10: advantage of their stock compensation, and a variety of other reasons.
8:57
Speaker 10: But in the world of fractional shares, it's not as necessary,
9:00
Speaker 10: which is why we see so many stocks trading at
9:03
Speaker 10: you know, five six, seven hundred and eight thousand dollars.
9:05
Speaker 10: I mean Chipolti is like over three thousand dollars. So
9:09
Speaker 10: that actually surprised me the most. But the earnings weren't
9:13
Speaker 10: particularly surprising. Obviously, it was above consensus estimates, but there
9:17
Speaker 10: was a whisper number, and the numbers that they reported
9:21
Speaker 10: were close to that whisper number, And so, you know,
9:25
Speaker 10: I think the probably the real problem here is how
9:29
Speaker 10: long they can they keep doing this. This is the
9:31
Speaker 10: third straight quorder that they reported greater than two hundred
9:34
Speaker 10: percent year or year revenue growth.
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Speaker 3: Yeah, and I feel like we've been asking that question
9:38
Speaker 3: for the third straight quarterer too, so you're not alone.
9:41
Speaker 3: I was really struck by a note that came out today. Man,
9:45
Speaker 3: it's time for spring break in video is done. We
9:47
Speaker 3: got nothing going on until June seventh, which is jobs day.
9:50
Speaker 3: It is time for spring break. Do you subscribe to
9:53
Speaker 3: that view?
9:54
Speaker 10: But I don't. I'm always following the markets. There's always
9:57
Speaker 10: interesting things going on. You know. Obviously, as you said,
10:02
Speaker 10: the next big report is in June, but there's opportunities
10:06
Speaker 10: for here to take a breather. But I think this
10:07
Speaker 10: is a great opportunity to start looking for new opportunities
10:10
Speaker 10: to get into stocks as people are taking a breather,
10:13
Speaker 10: and so I use this time to kind of do
10:16
Speaker 10: my work and figure out what my best ideas are
10:18
Speaker 10: going to be.
10:18
Speaker 5: Going forward, Shenna, do your best ideas include small cap stocks?
10:23
Speaker 10: So right now, small caps have some technical issues they
10:27
Speaker 10: have I think they're in the third longest streak of
10:32
Speaker 10: negative of not reaching a new high, and they have
10:36
Speaker 10: really struggled to get out of the funk that they're in,
10:40
Speaker 10: which is unusual in many ways, and it might be
10:43
Speaker 10: a reflection of some change in market dynamics, especially the
10:47
Speaker 10: concentration and the large caps that MAGS seven kind of
10:50
Speaker 10: feel and what's driving it. But small caps are interesting
10:53
Speaker 10: because if you look at the data, it's the actively
10:57
Speaker 10: managed and the factor based small cap types of ETFs
11:01
Speaker 10: and mutual funds that are outperforming and substantially so. So
11:05
Speaker 10: this whole idea that active management is dead and that
11:08
Speaker 10: you don't need active management in your portfolio in order
11:10
Speaker 10: to do well, I think needs to be reconsidered because
11:13
Speaker 10: in a place like small caps, where there's a lot
11:15
Speaker 10: of inefficiencies and opportunities for smart money and those who
11:20
Speaker 10: are actually doing work on individual names to outperform. I
11:24
Speaker 10: think that, you know, we should reconsider ways that we
11:27
Speaker 10: build portfolios and active management right now is really working
11:30
Speaker 10: in the small cap space.
11:31
Speaker 3: So where in the small cap space, whether is it
11:33
Speaker 3: sector specific, is it balance sheet specific? Is it a
11:37
Speaker 3: growth value kind of thing?
11:39
Speaker 10: It's more factor based, so like quality, but even it
11:43
Speaker 10: has to be even higher quality because the active managers
11:46
Speaker 10: are beating the S and P six hundred, which tends
11:48
Speaker 10: to be higher in quality than the Russell two thousand,
11:51
Speaker 10: which tends to be full of a lot of like
11:53
Speaker 10: junk and penny stocks and things of that nature. So
11:56
Speaker 10: we're seeing that in active management. We're seeing it and
12:00
Speaker 10: the quality factor. You're seeing it in the momentum factor,
12:04
Speaker 10: but you're seeing it more in the factors than in
12:07
Speaker 10: like growth value, in more than.
12:10
Speaker 3: Style per se.
12:11
Speaker 5: Hey Shanna, what are you guys doing in fixed income?
12:14
Speaker 5: I mean I can sit in to your treasury and
12:16
Speaker 5: get close to five percent here with no risk?
12:20
Speaker 4: Do I sit there? Do I go out on the
12:21
Speaker 4: credit curve a little bit?
12:23
Speaker 10: So we are being focused on alternatives. We're looking more
12:27
Speaker 10: at the private credit and private debt markets. Some interesting
12:31
Speaker 10: opportunities in real estate income and with the advent of
12:35
Speaker 10: interval funds, it allows us the opportunity to gain exposure
12:39
Speaker 10: to those types of credits even for clients that aren't
12:44
Speaker 10: qualified or credited. So you know, there's a there's a
12:48
Speaker 10: Pender Capital has a real estate debt fund that is
12:51
Speaker 10: an interval fund that allows for you know, the average
12:54
Speaker 10: investor to gain exposure to an area in private credit
12:57
Speaker 10: that was not traditionally available to that space. There's others
13:01
Speaker 10: like that, So for us, that's kind of where we're
13:04
Speaker 10: playing because that's where the real opportunity lies. You know,
13:07
Speaker 10: rates are kind of volatile right now, and as you said,
13:12
Speaker 10: you can get really good yield and treasuries, but we're
13:16
Speaker 10: seeing a lot of demand in the non traditional credit
13:19
Speaker 10: markets and the non bank lenders because the credit markets
13:24
Speaker 10: after the financial crisis kind of seized up for a
13:27
Speaker 10: lot of potential potential businesses, small business and such. So
13:33
Speaker 10: the private debt markets have real opportunity to get above
13:36
Speaker 10: average yield with relatively good credit quickly before we.
13:41
Speaker 3: Let you go, before we let you go. When you
13:44
Speaker 3: look at alternatives like that, that also include like gold,
13:48
Speaker 3: and I say that because man gold has been on
13:50
Speaker 3: a tear like is that part of the portfolio.
13:53
Speaker 10: Oh, absolutely, Commodity is a part of the portfolio. Gold
13:56
Speaker 10: and copper are really interesting right now. Gold hit all
13:59
Speaker 10: time his yesterday. I would also put crypto in that space,
14:04
Speaker 10: so big point. And you know there's a lot of
14:06
Speaker 10: chatter right now about the probabilities of the spot E
14:11
Speaker 10: ETF being approved this week or next week. I know
14:15
Speaker 10: your colleague Eric Belcunus has been writing a lot about it.
14:19
Speaker 10: So it's one of those things where crypto is also
14:22
Speaker 10: quite interesting right here. But yeah, those are all alternatives,
14:25
Speaker 10: and those are all things we consider for portfolios.
14:27
Speaker 3: All right, Thanks Lott, really appreciated. Thank you for jumping
14:29
Speaker 3: on with us. Shana Sissel joining US, President and CEO
14:33
Speaker 3: of a bandy Own Capital Management joining us from Chicago, Illinois.
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14:54
Speaker 3: We're also keeping our eye on the broader market as well.
14:57
Speaker 3: You're looking at the s and key is barely high
15:00
Speaker 3: up one tenth of one percent. The Nasdaq Shocker is
15:02
Speaker 3: at performing up by six tenths of one percent, really
15:06
Speaker 3: helped by Nvidia at a record high fifty two week
15:09
Speaker 3: high below and past one thousand. So let's get what
15:12
Speaker 3: I'm interested in now is now what? It's not only
15:14
Speaker 3: what's now what for Nvidia, but now what for the
15:18
Speaker 3: broader market? Is tech still going to be responsible for
15:21
Speaker 3: pushing it higher? Gina Martin Adam's chief equity strategist at
15:24
Speaker 3: Bloomberg Intelligence, joins us now. And you know this comes
15:26
Speaker 3: directly from your guys's note this morning that came out
15:29
Speaker 3: that talked about the importance of tech when it comes
15:31
Speaker 3: to earnings, but how much that importance will still be
15:34
Speaker 3: there in the coming quarters.
15:37
Speaker 1: Yeah. I think it's a critical issue for the market
15:40
Speaker 1: at large because we've been in this really intriguing sort
15:43
Speaker 1: of environment over the course of the last year where
15:45
Speaker 1: tech has sort of almost single handedly held up S
15:49
Speaker 1: and P five hundred earnings. Tech and communications together as sectors,
15:53
Speaker 1: have been the earning stalwarts and the index, while the
15:55
Speaker 1: rest of the index has suffered through some kind of
15:58
Speaker 1: earnings recession. Intulular, the commodity centric sectors really posting very
16:02
Speaker 1: strong declines, but also healthcare posting double digit clines and
16:05
Speaker 1: earnings over the course of the last year. As we
16:08
Speaker 1: move forward, this sort of onus on technology should lighten
16:12
Speaker 1: up at the very least, and that may get reflected
16:15
Speaker 1: in the stocks as well. Naturally, when these were the
16:17
Speaker 1: only earners on the index, capital concentrated in those names,
16:22
Speaker 1: concentrated in those themes, and we're already starting to see
16:25
Speaker 1: some evidence that that thematic trade, that tech centric trade,
16:29
Speaker 1: is breaking up. Some of the evidence that we presented
16:32
Speaker 1: in the note this morning. For example, first is Navidia
16:35
Speaker 1: isn't even the top theme stock that we follow right now.
16:38
Speaker 1: And when we look at all the stocks that are
16:40
Speaker 1: most levered two themes, the stock that has actually performed
16:44
Speaker 1: the best is Seman's Energy. We're seeing physical environment themes
16:47
Speaker 1: generally outperform AI centric themes. Already in twenty twenty four,
16:52
Speaker 1: earnings trends are shifting, and correlations with the market between
16:55
Speaker 1: tech and the rest of the market are also shifting somewhat.
16:58
Speaker 1: So there's a lot of evidence that this is already
17:00
Speaker 1: ocurring in anticipation of that earnings trend shift later this year.
17:05
Speaker 5: How about valuation, Gina, where are we here kind of
17:08
Speaker 5: post earnings and we've seen the shakeout in kind of
17:11
Speaker 5: earnings estimates and guidance and so on and so forth.
17:13
Speaker 5: What does that mean for you in terms of valuation.
17:15
Speaker 4: Of this market?
17:17
Speaker 1: Yeah, I think you have to look at valuations on
17:20
Speaker 1: a sector by sector, stock by stock, industry by industry basis.
17:23
Speaker 1: If you're looking at valuations in the market at large
17:25
Speaker 1: right now, you're also looking at valuations that reflect in
17:29
Speaker 1: earnings recession outside of tech and an expected slow recovery
17:34
Speaker 1: from that recession. You're also looking at valuations that are
17:38
Speaker 1: abnormally skewed toward tech, and tech is the one sector
17:42
Speaker 1: in the index where we can prove that using valuations
17:45
Speaker 1: as a tactical timing measure is a faulty strategy. So
17:49
Speaker 1: I do think that if you're looking at broad market valuations,
17:52
Speaker 1: you're kind of missing the bigger picture in really unique circumstances.
17:56
Speaker 1: So we do look at sector level valuations, and what
17:59
Speaker 1: you find is there are still quite a few very
18:03
Speaker 1: discounted segments of the US equity market outside of tech
18:07
Speaker 1: and communications, where again capital has concentrated because those were
18:11
Speaker 1: the only earnings grows stories largely in the market over
18:14
Speaker 1: the course of the last year. So when we look
18:16
Speaker 1: across the landscape of the S and P five hundred,
18:19
Speaker 1: we actually see nearly half of the stacks in the
18:21
Speaker 1: index are training at levels below their media and valuation
18:25
Speaker 1: multiples of the last cycle, the pre pandemic cycle. So
18:29
Speaker 1: that's just one small stat on what's really happening beneath
18:32
Speaker 1: the headline of multiples. Sure everyone will tell you the
18:36
Speaker 1: S and P five hundred looks expensive. It looks expensive
18:39
Speaker 1: relative to recent pass because of these unique earning circumstances
18:43
Speaker 1: as well as the unique concentration of earnings inside tech
18:47
Speaker 1: and tech specifically.
18:48
Speaker 3: And that's what happens when we say things like maybe
18:50
Speaker 3: this time is different, like maybe the economy is different
18:53
Speaker 3: this time than it was, say, twenty years ago. Gina.
18:56
Speaker 3: One of my favorite stories of this year has been
18:59
Speaker 3: the outperformance of utilities, And typically if that happens, you're like, ooh, well,
19:03
Speaker 3: investors are going to be really scared because that's where
19:05
Speaker 3: you go, and you're scared and you want higher yield
19:08
Speaker 3: and you don't want to have any growth, et cetera.
19:11
Speaker 3: Is there possibility for utilities to become a growth sector?
19:15
Speaker 3: As we tie that into the data center AI story.
19:19
Speaker 11: I think no, no, But is there anything to that
19:23
Speaker 11: at all? I think the reason utilities have outperformed is
19:26
Speaker 11: actually several fold. Yes, there is some optimism with respect
19:30
Speaker 11: to AI, but we're in the process actually of working
19:33
Speaker 11: through our earning sentiment analysis right now, and no utilities
19:37
Speaker 11: companies are mentioning AI as a growth opportunity for them.
19:42
Speaker 1: So as much as the market has maybe tried to
19:46
Speaker 1: push this narrative, that's really only part of what's impacted
19:51
Speaker 1: the utility stocks. It's important to keep in mind that
19:53
Speaker 1: utilities are very low beta stacks. We did go through
19:56
Speaker 1: a pretty significant corrective process in the month of apriltilblities
20:00
Speaker 1: naturally outperformed that process, so their base was higher coming
20:05
Speaker 1: into May. And then we've had a bond market rally
20:09
Speaker 1: to boot. Utilities are a high rate sensitivity sort of
20:12
Speaker 1: segment of the market. When bond yields rally, then of
20:16
Speaker 1: course utilities tend to outperform. So there's three reasons why
20:20
Speaker 1: utilities have done well over the last three months. I
20:23
Speaker 1: do think that there's a possibility, certainly that you have
20:27
Speaker 1: some exposure to AI propelling demand for utilities The question then,
20:33
Speaker 1: is how much of that demand ultimately results in pricing
20:36
Speaker 1: power for utilities. And this is a really critical question
20:39
Speaker 1: for this segment. This is a hyper regulated sector, especially
20:42
Speaker 1: here in the United States. Will they ultimately just get
20:46
Speaker 1: price passed through on a regulated basis or will we
20:49
Speaker 1: actually see real shift in growth in the business model.
20:52
Speaker 1: I don't know, but it seems like the short term
20:55
Speaker 1: answer is not anytime soon.
20:57
Speaker 4: Hi, Gina, thank you so much for joining us.
20:58
Speaker 5: As always, Gina Martin Adams us strategist for all the
21:02
Speaker 5: equity stuff for Bloomberg Intelligence.
21:04
Speaker 4: She does, she does it all. We appreciate getting some
21:06
Speaker 4: of her time.
21:08
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
21:12
Speaker 2: weekdays at ten am Eastern on applecar Play and Android
21:15
Speaker 2: Auto with the Bloomberg Business app. You can also listen
21:18
Speaker 2: live on Amazon Alexa from our flagship New York station,
21:22
Speaker 2: Just Say Alexa playing Bloomberg eleven thirty.
21:26
Speaker 4: Staying on the auto kind of theme here.
21:29
Speaker 5: Joel Lavington joins us here he covers He's the director
21:31
Speaker 5: of credit research for Bloomberg Intelligence.
21:34
Speaker 4: He does it all. One of the research areas he
21:36
Speaker 4: covers is the automobile industry. And Joel, thanks so much
21:39
Speaker 4: for joining us here in studio.
21:40
Speaker 5: You guys are gonna have a concert a conference next
21:43
Speaker 5: week in New York City focusing on the auto business.
21:46
Speaker 4: Tell us about that. What are you guys doing?
21:48
Speaker 12: It's sure, Paul, thank you so much for having us.
21:50
Speaker 12: It's gonna be a great conference next Thursday. Everybody please
21:53
Speaker 12: come out to one twenty.
21:54
Speaker 13: Park for the show.
21:57
Speaker 12: We're gonna be talking about things like auto loans and
22:00
Speaker 12: have delinquencies which are as high as they were in
22:03
Speaker 12: the Great Depression.
22:04
Speaker 13: Gregscuse me? The Great Recession? Where are they headed?
22:07
Speaker 12: And what does it mean that when Tesla cuts its
22:09
Speaker 12: prices by thirty five percent? What does it mean for
22:12
Speaker 12: your residual values and your ability to buy a new
22:14
Speaker 12: car with the average price of forty eight thousand dollars.
22:17
Speaker 13: And of course we'll have the rating agencies there.
22:19
Speaker 12: We'll have valuation views from JP Morgan, from Merrill Lynch
22:24
Speaker 12: and from credit site.
22:25
Speaker 13: So it should be a great, great afternoon for everybody.
22:27
Speaker 3: First of all, I want to point out he brought
22:29
Speaker 3: me swag. Oh let's see in the radio studio. It
22:32
Speaker 3: is a hat. Autopalooza twenty twenty four, Bloomberg intelligence on
22:36
Speaker 3: the back, I love me swag. For those of you
22:38
Speaker 3: on radio, sorry, but for those of you on YouTube
22:41
Speaker 3: you can check out my goods back. The problem is
22:43
Speaker 3: is that I like terrible in hats.
22:45
Speaker 4: Oh you look right?
22:46
Speaker 3: No, yeah, no, trust me. This is this is a
22:49
Speaker 3: joke in my family that I ever, but my husband
22:52
Speaker 3: looks great in hats. Why are delinquencies so bad right now?
22:56
Speaker 1: Sure?
22:56
Speaker 12: Well, you know, twenty five percent of loans right now
22:59
Speaker 12: alex cost one thousand dollars or more a month. And
23:02
Speaker 12: so if you're thinking about your average consumer that makes
23:05
Speaker 12: about sixty five thousand dollars, that's your average household a
23:08
Speaker 12: forty eight thousand dollars car with one thousand dollars plus loan.
23:12
Speaker 12: And then you know, like eighteen percent of the loans
23:14
Speaker 12: that are outstanding, Paul have a negative sixty two hundred
23:17
Speaker 12: dollars equity value. Because prices, particularly for EV's have been
23:20
Speaker 12: coming down so much, so it really puts you in
23:23
Speaker 12: a spot where you're paying for something that is already underwater.
23:27
Speaker 12: So why continue tends to be the question, and I
23:30
Speaker 12: think that's the key reason why you're starting to see
23:33
Speaker 12: seeing these numbers rise despite unemployment levels that are quite low.
23:37
Speaker 5: So what's the feeling in the auto industry, jol about
23:41
Speaker 5: kind of where we are on this transition to evs.
23:43
Speaker 4: We seem to have hit a little bit.
23:45
Speaker 5: Of a bump in the road here, and I'm not
23:47
Speaker 5: sure if it's just a little pothole or if it's
23:49
Speaker 5: something much bigger. What are the companies saying, What are
23:52
Speaker 5: the investors that you talk to, what are they.
23:53
Speaker 13: Saying to me?
23:55
Speaker 12: I think it's actually much bigger than what people think.
23:58
Speaker 12: I think you're going to see more R and D
24:00
Speaker 12: and CAPEX being cut and reduced. And I think you're
24:03
Speaker 12: really seeing a recycling of capital usage where you're investing
24:08
Speaker 12: in evs into an unknown project with unknown returns, whereas
24:13
Speaker 12: when you're socks traded three or four times PE, why
24:16
Speaker 12: not go buy the shares or give more dividends. And
24:18
Speaker 12: I think you're seeing the shift in capital allocation from
24:21
Speaker 12: capex and growth from evs because most consumers don't want them,
24:26
Speaker 12: right BI Survey after survey tells you around the globe
24:29
Speaker 12: that people are not that interested in owning EU.
24:31
Speaker 5: Are they not interested owning evs because of the costs
24:34
Speaker 5: they politically they don't link this whole green energy thing.
24:38
Speaker 4: They're just not good vehicles. Why don't they want them?
24:40
Speaker 12: Cost is a huge factor, you know at the beginning,
24:44
Speaker 12: when you have people that will buy whatever the latest
24:47
Speaker 12: and greatest technology is.
24:48
Speaker 13: That's great and they can afford that.
24:51
Speaker 12: But a one hundred and twenty thousand dollars Mercedes is
24:53
Speaker 12: not going to work for the average person like myself,
24:57
Speaker 12: And so you have issues there with price, which is
25:00
Speaker 12: what Tesla has been trying to do to solve that, right,
25:02
Speaker 12: and that creates different sorts of issues.
25:04
Speaker 13: I think the other thing is infrastructure. There's just not enough.
25:07
Speaker 12: And if you think about your typical consumer, perhaps in
25:10
Speaker 12: the Midwest, they go on long trips and they want
25:13
Speaker 12: three four or five hundred miles of guaranteed road and
25:17
Speaker 12: you just can't get that with the infrastructure that you
25:19
Speaker 12: have today.
25:20
Speaker 3: And this is just also sort of the wrong time, Like
25:22
Speaker 3: if we just pair that with auto delinquencies, we haven't
25:26
Speaker 3: seen this since the Great Recession, Like that's not the
25:29
Speaker 3: right time to then try and convince people to buy
25:32
Speaker 3: a car whose base price is sixty.
25:34
Speaker 12: Grand, especially because you can get into something better like
25:36
Speaker 12: a hybrid or better venege than a pure better value.
25:40
Speaker 3: Or like cheaper and sold as the same.
25:42
Speaker 12: Thing relative from a green standpoint, certainly better than a
25:44
Speaker 12: pure ice engine, where you could probably double your mileage,
25:47
Speaker 12: pay a lower dollar amount and feel like you're doing
25:49
Speaker 12: something for the you know, for the Earth. And so
25:52
Speaker 12: I think that's really why you're starting to see a
25:54
Speaker 12: huge ramp up in hybrid sales across the platforms.
25:58
Speaker 3: Cask a really dumb question about Tesla. So I've been
26:01
Speaker 3: using a lot of Tesla's to get into the office.
26:02
Speaker 3: Like Uber has a green car thing, what I've noticed
26:05
Speaker 3: is like the size looks exactly the same, but inside
26:08
Speaker 3: I feel like I'm in a hotel room. It's like huge.
26:11
Speaker 3: Is that because Elon Musk takes out all the stuff
26:14
Speaker 3: that's in a regular internal combustion engine car.
26:17
Speaker 12: The design and the compactness of their battery has done
26:20
Speaker 12: a tremendous job, and much like Lucid has. Lucid of
26:22
Speaker 12: course was founded by the former designer for Teslas, so
26:26
Speaker 12: they've done a great job of like re designing the
26:29
Speaker 12: insides of a vehicle. And that's why it feels so
26:32
Speaker 12: much more roomier than you get because the battery essentially
26:35
Speaker 12: is pushed lower and the truck or the front is
26:39
Speaker 12: pushed forward so you get more space, and they also
26:41
Speaker 12: have more of a curved dome on the on the roof.
26:45
Speaker 3: Have you been in one? Like, yes, have you noticed it?
26:47
Speaker 3: I feel like so much favor.
26:48
Speaker 4: Yeah, now do you think about it?
26:49
Speaker 8: Yeah?
26:50
Speaker 5: But I mean I drove the thanks to Matt Miller,
26:53
Speaker 5: the four f one fifty lightning the electric version. That
26:56
Speaker 5: now is you like, Yeah, I'm not a pickup truck
26:59
Speaker 5: driver because I'm an investment banker. I don't do that
27:02
Speaker 5: and I don't do electric, but boy, it was an
27:04
Speaker 5: awesome car, awesome vehicle.
27:06
Speaker 4: So what's the feeling, Joel. Is hybrid's going to be
27:09
Speaker 4: kind of where we settle out? Do you think or?
27:12
Speaker 8: Like?
27:13
Speaker 5: Like I asked the BCG guys right, and the auto
27:15
Speaker 5: guy there says he thinks in ten years forty percent
27:18
Speaker 5: of sales will be evs.
27:19
Speaker 4: Does that sound reasonable?
27:20
Speaker 13: I would take the under on that.
27:21
Speaker 12: Take the under on that, yeah, And I you know,
27:24
Speaker 12: I think it doesn't really help. It really doesn't help
27:28
Speaker 12: anybody until the technology is stronger and the cost is
27:31
Speaker 12: lower on the battery side to really make an effective
27:34
Speaker 12: car and an effective price. And I think you'll be
27:36
Speaker 12: seeing that ramp up in part because the Chinese are coming,
27:39
Speaker 12: and the Chinese can make a.
27:40
Speaker 13: Profit at ten thousand dollars.
27:42
Speaker 5: They're not coming now because we have the don't we
27:44
Speaker 5: have like tariffs on them on something like that.
27:45
Speaker 12: We do, and that is a huge concern, really more
27:48
Speaker 12: for the Europeans than for the US. Four and GM
27:51
Speaker 12: don't make a lot of money in China, but when
27:54
Speaker 12: you think about Volkswagen, or you think about Mercedes or BMW,
27:59
Speaker 12: that's about a thirty five percent of their business is
28:02
Speaker 12: based in China. So it's really the tariffs that are
28:05
Speaker 12: going back and forth or being discussed with between China
28:08
Speaker 12: and Europe and Europe and China. That's really where the
28:11
Speaker 12: sticking point is going to be in the near term
28:13
Speaker 12: for these autos.
28:14
Speaker 3: So going back to the autopalooza that you're going to
28:16
Speaker 3: have and you have rating agencies there, it sounds very
28:18
Speaker 3: cool rating agencies and cool maybe not usually what you say,
28:22
Speaker 3: but you nevertheless, what is going to be your forecast,
28:25
Speaker 3: Like what kind of forecasts are you looking at for
28:27
Speaker 3: the charge offs for the delinquencies? How are you thinking
28:30
Speaker 3: about that for the medium term?
28:32
Speaker 12: Yeah, well, I think what's really going to be great
28:34
Speaker 12: there is Cox Automotive that experience are going to be
28:37
Speaker 12: coming in and talking about what electrification means for finance companies.
28:42
Speaker 13: I know that doesn't particularly sound.
28:44
Speaker 12: Cool, but really you have seen a perfect performance or
28:48
Speaker 12: near perfect performance out of electric cars, and at least
28:51
Speaker 12: the slides that they've shown me tell me that that
28:53
Speaker 12: is not the case any longer. And in fact, it's
28:55
Speaker 12: going to be a lot worse than ice engines. And
28:57
Speaker 12: so people that we're betting on evs holding their residual
29:01
Speaker 12: values I think are going to be in for a
29:02
Speaker 12: bad surprise, whether it's the finance companies or people that
29:05
Speaker 12: own abs securities that have a lot of EVS in them.
29:09
Speaker 12: So I think they'll be able to provide a lot
29:10
Speaker 12: of detail next Thursday.
29:12
Speaker 4: All right, Joel, thank you so much for joining us.
29:14
Speaker 5: Joe Levington, he runs all the credit research for Bloomberg Intelligence,
29:18
Speaker 5: also covers the audio industry in his spare time.
29:22
Speaker 8: Autopoalooser.
29:22
Speaker 5: Get the Auto industry together in New York City for
29:25
Speaker 5: Bloomberg Intelligence Investor Conference Thursday one twenty, Park Avenue Next Thursday.
29:33
Speaker 2: You're listening to the Bloomberg Intelligence podcast. Catch us live
29:37
Speaker 2: weekdays at ten am Eastern on applecard Play and Android
29:40
Speaker 2: Auto with the Bloomberg Business app. You can also listen
29:43
Speaker 2: live on Amazon Alexa from our flagship New York station.
29:47
Speaker 2: Just say Alexa play Bloomberg eleven thirty.
29:51
Speaker 5: This is the perfect time to check in with Matt Miller,
29:54
Speaker 5: the exceedingly overworked Matt Miller, who joins his here in
29:57
Speaker 5: our Bloomberg studio here at some shade.
30:00
Speaker 8: Sarcasm is the lowest form of wit.
30:02
Speaker 4: Paulley, all Right, what do you guys? I mean, you've
30:04
Speaker 4: got your You are so into this auto gig.
30:06
Speaker 5: You've got a podcast with our good friend Hannah Elliott
30:09
Speaker 5: tell us about it.
30:10
Speaker 14: Yeah, and we have some amazing guests. So you're just
30:14
Speaker 14: talking to Michael Barr. He has a podcast, The Business
30:16
Speaker 14: of Sports, and this weekend is one of the most
30:19
Speaker 14: iconic races in motorsports, his Charlot Speedway, the Indy five.
30:24
Speaker 8: Hundred, The Indy five hundred.
30:25
Speaker 3: I even kind of knew that.
30:27
Speaker 14: This weekend, so a lot of people are getting their
30:30
Speaker 14: RVs driving out to Indianapolis and Hannah and I spoke
30:34
Speaker 14: with Catherine.
30:35
Speaker 8: Legg, who is gonna be one of the drivers.
30:38
Speaker 14: She had an amazing qualifying session a couple of days ago.
30:42
Speaker 14: She was doing an average speed of two hundred and
30:43
Speaker 14: thirty miles per hour and she hit the wall, but
30:46
Speaker 14: she did not take her foot off the gas pedal.
30:50
Speaker 8: Never lift.
30:52
Speaker 14: One of my favorite automotive phrases. So she's she's on
30:55
Speaker 14: the podcast this week and it's really interesting. But we
30:58
Speaker 14: have an amazing line of guests coming up. Next week.
31:01
Speaker 14: We're going to talk with Zach Brown, who's the team
31:04
Speaker 14: principal for McLaren in Formula one.
31:08
Speaker 8: One of the most watched sporting leagues in the world.
31:11
Speaker 14: Then tell me and then the week after that, I
31:14
Speaker 14: just snagged Tom Wagner.
31:16
Speaker 8: He runs Nighthead Capital.
31:18
Speaker 14: So everyone knows they own Hertz and they had the
31:21
Speaker 14: whole Tesla thing, but they also own Singer, which is
31:25
Speaker 14: a Porsche customizer. I guess you could say a Porsche
31:29
Speaker 14: restomat outfit in La that's very famous. You can pick
31:31
Speaker 14: one of those up for about a million bucks if
31:34
Speaker 14: you wait long enough. And they also own Revology, which
31:39
Speaker 14: does replicas or reproductions. They prefer of the nineteen sixty
31:44
Speaker 14: eight Mustang down in Florida. They have licensing deal with
31:47
Speaker 14: Ford and they do an entirely new vehicle from the
31:51
Speaker 14: frame up, but it looks exactly like a nineteen sixty
31:55
Speaker 14: eight Mustang with modern day performance.
31:57
Speaker 8: Yeah so an amazing business.
31:59
Speaker 14: He also owned is a soccer team, So I guess
32:01
Speaker 14: Tom Kean would care Birmingham I think yeah, no, uh
32:05
Speaker 14: and a couple of.
32:06
Speaker 8: Worlds a player racing teams.
32:07
Speaker 4: Yeah.
32:08
Speaker 8: So I'm pretty excited about Hot Pursuit right now. We
32:10
Speaker 8: have a pretty good lineup.
32:11
Speaker 3: Good that sounds really fun.
32:12
Speaker 8: Do you ever listen?
32:14
Speaker 3: Yeah?
32:15
Speaker 6: Okay, what was the last topic?
32:18
Speaker 3: It were cars? I follow her, come.
32:22
Speaker 4: On Elliott on social and what a life she leads.
32:25
Speaker 4: She's all over the globe.
32:27
Speaker 8: Literally today she's at Lake Como perfect.
32:30
Speaker 14: Why wouldn't you be in Italy right for the Villadesta
32:34
Speaker 14: some kind of concourse delgo.
32:35
Speaker 3: And you get that gig.
32:37
Speaker 9: Uh.
32:37
Speaker 8: Well, Hannah's much better at it, you know.
32:39
Speaker 14: She she prefers like the high end luxury market, the
32:43
Speaker 14: supercars and hyper cars. She knows all the millionaires and
32:46
Speaker 14: billionaires that do the collections. I like, like a Dodge
32:50
Speaker 14: muscle car or a Chevy truck. You know, I'm more
32:53
Speaker 14: salt of the earth when it.
32:54
Speaker 3: Comes to seems like a perfect combination exactly.
32:57
Speaker 14: Well, we span the whole gamut and we often disagree,
33:01
Speaker 14: but we have a lot of respect for each other.
33:03
Speaker 8: So it's podcast.
33:05
Speaker 3: Yeah, sure, okay, all listen. So what what are you
33:08
Speaker 3: driving right now?
33:10
Speaker 14: I actually last week I was in the Fiat five hundred,
33:14
Speaker 14: the tiny little compact car, the electric electric version of that.
33:19
Speaker 8: It's actually pretty.
33:19
Speaker 14: Roomy on the interior, and I enjoyed driving it. I mean,
33:23
Speaker 14: it's not the right vehicle unless you're only gonna go
33:26
Speaker 14: like maximum five or ten miles, right because it's a tiny,
33:29
Speaker 14: little sort of city car, but it really really cool
33:33
Speaker 14: and all the ladies in my hometown loved it and
33:37
Speaker 14: h And this week I'm I'm gonna test drive the
33:40
Speaker 14: new Mercedes E class, the four fifties, so it's got
33:43
Speaker 14: the inline six. I'm pretty excited about that. But I'm
33:46
Speaker 14: most excited about the Mustangs that are coming up. I've
33:49
Speaker 14: been promised by four that I'm gonna get to drive
33:51
Speaker 14: the new Mustang dark Horse, and I'm so pumped to.
33:55
Speaker 8: Try that out. Are you talking about I see John?
33:59
Speaker 4: I see John.
34:00
Speaker 3: No, he's not talking.
34:03
Speaker 14: So the Mustang, Uh, you know, they came out the
34:05
Speaker 14: new Mustang last year. It's kind of a beefier, brawnier,
34:09
Speaker 14: more muscular shape.
34:11
Speaker 8: And it's the last of the big muscle cars.
34:14
Speaker 14: They They finished making the Dodge Challenger last year. They
34:17
Speaker 14: don't make that anymore.
34:18
Speaker 4: Would you own? I bought one.
34:19
Speaker 14: I bought one of the last call versions. Yeah, the
34:22
Speaker 14: RT scatpack wide body.
34:24
Speaker 4: I knew that.
34:24
Speaker 14: And and they finished making the Camaro, so GM and Chrysler,
34:29
Speaker 14: Dodge or whatever you want to call it.
34:31
Speaker 8: They're out of the muscle car business.
34:33
Speaker 14: Mustang is the only American sort of muscle car you
34:37
Speaker 14: can see anymore.
34:38
Speaker 5: Like, uh, this seems like they made a mistake because
34:41
Speaker 5: I don't think those muscle cars are going away.
34:43
Speaker 4: I don't think evs are going to take over the
34:45
Speaker 4: world like we thought as recently as a year ago.
34:47
Speaker 8: Yeah, I think they did it a little bit too early.
34:49
Speaker 8: They closed down production a little too early.
34:50
Speaker 3: But you still have can you have like hybrid muscle cars?
34:55
Speaker 14: That's not really like the point The point of a
34:57
Speaker 14: muscle car is kind of a small vehicle, rear wheel drive,
35:01
Speaker 14: big motor and like dumb analog is the point of
35:04
Speaker 14: a muscle car.
35:05
Speaker 3: But if we're gonna keep the muscle car like over
35:08
Speaker 3: the next sixty eighty years.
35:09
Speaker 8: Yes, so that is what that is what Dodge is
35:12
Speaker 8: trying to do.
35:12
Speaker 14: They're trying to make electric or hybrid versions of they
35:16
Speaker 14: haven't come out with it yet, but the Challenger and
35:19
Speaker 14: the charger, so they.
35:20
Speaker 8: Do want that. But the muscle car fans might want that.
35:25
Speaker 14: The buyers of these products are very averse to electric
35:31
Speaker 14: like anything ev if you.
35:32
Speaker 8: Go on the forums, they don't like.
35:34
Speaker 14: On the other hand, Ferrari is just about to open
35:37
Speaker 14: up its first all electric factory, so okay, they're not
35:41
Speaker 14: muscle car makers, but you know.
35:42
Speaker 4: Again, typically it's not gonna sell. I just don't see it.
35:46
Speaker 6: That's the sound that you'll okay.
35:48
Speaker 8: I'm with you, I'm with you, I Alex I think
35:51
Speaker 8: is on the right track. That's what.
35:53
Speaker 14: They don't have any other choice, right because because of
35:56
Speaker 14: the cafe regulations, they can't make a six point four
36:00
Speaker 14: leader naturally aspirated V eight anymore. It's just too polluting.
36:05
Speaker 14: So they're trying to do anything else they can. The
36:07
Speaker 14: problem is that the market just isn't there yet.
36:10
Speaker 6: And I ask a quick Tesla question, is Elon must
36:13
Speaker 6: focus on selling cars or selling or doing the autonomous driving.
36:19
Speaker 8: I mean you'd have to ask elon Musk.
36:21
Speaker 3: ANSWER's yes, and space and battery stores.
36:24
Speaker 8: Yeah, well exactly.
36:25
Speaker 6: Well, they're not focusing on the number of cars that
36:28
Speaker 6: they're selling now. He seems to be really committed to
36:30
Speaker 6: autonomous driving from point.
36:33
Speaker 14: I mean, yeah, he's focused on so many different things, right,
36:36
Speaker 14: and a lot of investors are concerned that he's not
36:39
Speaker 14: as focused as he should be on their specific thing.
36:42
Speaker 5: So like like Folkswagen Ford, as you know, unless three
36:46
Speaker 5: years they've made big announcements, big investments in EV and
36:49
Speaker 5: billions of dollars of loss dollars of losses where we've
36:54
Speaker 5: we've seen Ford pull back.
36:55
Speaker 4: I mean, we've seen a lot of the companies pull
36:57
Speaker 4: back right and say we're gonna go this.
36:59
Speaker 8: Yeah, I think they just lost too much money.
37:01
Speaker 14: They've obviously been regulated into and you know, socially cajoled
37:06
Speaker 14: towards this EV thing, and they've all made the big
37:10
Speaker 14: bet that can't be unmade.
37:12
Speaker 8: Like it's too late to turn around.
37:14
Speaker 14: They're all headed towards evs, but they do have the
37:17
Speaker 14: ability to take their foot off the accelerator in terms
37:20
Speaker 14: of how many straight evs they make and head more
37:24
Speaker 14: towards hybrids because that's what the consumer wants. The consumer
37:28
Speaker 14: wants the hybrid. You can drive around town electric power
37:31
Speaker 14: only emitting zero CO two from your tailpipe, but when
37:35
Speaker 14: you need to go on a longer trip, the range
37:37
Speaker 14: extending internal combustion engine kicks in and you don't have
37:41
Speaker 14: to like wait at broken chargers to get more power.
37:46
Speaker 14: So I think they're all pivoting back towards hybrids. But yeah,
37:51
Speaker 14: they've already sunk so much into the battery power, the electrification,
37:57
Speaker 14: you know, the software, they can't turn back around.
38:00
Speaker 3: And so here's also my question talking about like the
38:03
Speaker 3: nuts and the bolts of the stuff. And this is
38:04
Speaker 3: where it gets to my world. So when you have
38:07
Speaker 3: these tariffs on like things that you need to build
38:10
Speaker 3: those cars on China, but the price to buy them
38:14
Speaker 3: in North America is so much higher, what are these
38:17
Speaker 3: guys gonna do? Are they gonna pay thirty percent more
38:19
Speaker 3: to get graph fyighte from Canada or are they just
38:22
Speaker 3: gonna wait for China to import that graph Bite to
38:24
Speaker 3: Mexico and then they're gonna get it for a lot cheaper.
38:27
Speaker 14: You know, first of all, I don't know the answer,
38:29
Speaker 14: but I would guess that at some point the government
38:33
Speaker 14: is going to have to step in and help because
38:35
Speaker 14: I agree with you, the administration has regulated them into
38:39
Speaker 14: this path.
38:39
Speaker 8: They have no other choice.
38:41
Speaker 14: On the other hand, consumers can't afford to pay, you know,
38:44
Speaker 14: forty five thousand dollars for an electric car when the
38:47
Speaker 14: IC equivalent is twenty five thousand dollars. You know, they've
38:52
Speaker 14: got the seventy five hundred dollars credit, But you're gonna
38:54
Speaker 14: have to either give more. I mean, especially if you've
38:57
Speaker 14: got these protectionist tariffs that are gonna drive prices even higher.
39:01
Speaker 14: They've already cost so much inflation, and they're gonna continue
39:05
Speaker 14: to inflate prices at the government level. So the consumer,
39:09
Speaker 14: if it's gonna be able to keep up, is gonna
39:11
Speaker 14: have to get a little bit more help from Uncle Sam.
39:14
Speaker 14: That means all of us are gonna have to pay
39:16
Speaker 14: even more taxes than we already do.
39:18
Speaker 5: And plus John Tucker has to play the congestion pricing
39:21
Speaker 5: to come into Mintown, Manhattan.
39:23
Speaker 8: Which is a no.
39:24
Speaker 14: If I were Tucker, I would definitely charge that to work.
39:27
Speaker 14: Like he comes in here at midnight. At two o'clock
39:29
Speaker 14: in the morning, we keep telling his commute has to
39:31
Speaker 14: be subsidiential.
39:32
Speaker 3: We keep telling him that, yes, you're not allowed.
39:34
Speaker 14: I don't know why you murder yourself, you know, I mean,
39:37
Speaker 14: we all love our bosses, But.
39:39
Speaker 5: All right, all right, Matt Miller, thanks so much. He's
39:41
Speaker 5: got the podcast. He does everything for Bloomberg Radio and TV.
39:45
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39:52
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40:00
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