tv Whatd You Miss Bloomberg January 5, 2022 4:30pm-5:01pm EST
taylor: let's take a look at how the equities performed on the day. it was right all across the screen. the dow coming off record highs yesterday, but it was all about the tech sector. take a look at the nasdaq, the worst day since march of last year. almost the worst day in a year. there was no safe haven in the market. these two ideas have come into where we are in terms of aunt yields. was it the reflationary trade or the rotation back into value from growth? we have seen underperformance of those big growth stocks. that has been the story. that is the market graph.
"what'd you miss" starts now. caroline: i'm caroline hyde. tech was the center of attention today as stocks fell off. it will be the focus as new products get rolled out. we will dig into the ev's part of that. for gm, looking to chase down tesla's lead. companies unveiling new vehicles with technology that is making them more viable for mainstream consumers. we examine the price points, the infrastructure necessary for the industry. ev's have been dominant on the agenda for every auto executive. romaine: a big turnaround. a few years ago you didn't see this out of these executives but they are now all talking about the race to dominate the ev space.
>> the whole auto industry is in a major transformation as we speak. ultimately, we will go to a world with zero admission. >> we are aggressively moving into battery electric. our mission is to be the number two battery electric cellar in the next couple years. >> this is meaningful and driven by the customer. we want to lunch 23 products with 15 battery electric cars. >> i'm excited about the electric vehicles we have coming . that's why i'm confident by mid decade, we will be the leader in ev's. romaine: that is the gm ceo. gm was kind of at the forefront of the electric car revolution in the 1990's. they pulled the plug on it, i guess they didn't feel like there was enough of a market for it but that has changed.
you can take a look at the investments, ford, bmw, gm pledging to spend about 30 bit -- $30 billion. volkswagen says it will spend at $100 billion. we don't have tesla, which is already spending more than most of that combined on the screen. it gives you an idea of the commitment to see this through in a way we didn't see in the 1990's. taylor: let's talk about the ev transformation by legacy automakers. let's do all of this with ed ludlow, here with the story. is the key take away that tesla is no longer the only game in town? >> it is about who can catch up and play the game with tesla. we have been focused in the last 24 months or so on ford and general motors, because of the splashy announcement and the big
spend they plan. but in the global auto industry, there are two names we have to talk about, volkswagen and toyota. they sell 10 million vehicles annually apiece, more than tesla. romaine: how many of those are electric? >> the whole point is, very few of them. in the first 10 men's of 2021, volkswagen sold shy of 300,000 electric vehicles. they have a long way to catch up. what they do have is scale, footprint, global manufacturing expertise. but two different strategies. caroline: now we start to see the silverado being evidence that ces by mary barra, the price went is elevated. at what point do we get mass adoption when you have to pay out $90,000?
>> that economics come down to the battery pack, the price per kilowatt hour. we come down below $100 per kilowatt hour, the forecast range sees them falling quickly over the next decade to a price that goes well beyond cost parity with a combustion engine car. but it depends how quickly they can scale. it is an economy of scale. the problem with tesla is not just price point, but not everyone wants a sedan. in america we want pickup trucks. give us the pickup trucks. that is what is interesting about the silverado announcement. romaine: and of course, reservations for that are locked up. we saw similar demand for the ford f-150 lightning and the rivian trucks. let's move beyond automakers, traditional automakers. there have been rumors about what apple is or isn't
developing. there are other secondary companies that aren't traditional automakers that seem to be moving into this space. sony announced they were trying to develop something. there is the idea that you can be in ev carmaker without necessarily being a carmaker. it is more about the software. >> i had a sony walkman as a kid and now i will have the sony drive-man. i talked to industry sources about the idea, when it comes to apple, no one doubts apple's expertise in software. software is a big part of the battery management system. this makes it efficient, it regulates heat flow. software is a big part of autonomous driving and the discussion around the future is whether any of us drive ourselves our own our own cars. what we doubt, apple has this integration that relies on third-party manufacturers build the iphone and assemble it from
different parts. can it build vehicles? same for sony, the expertise in electronics might be transferable to cars. romaine: there is a bigger question about how you dominate the ev space. is it about being dominant in manufacturing and making batteries or is it about the software or some combination? i want to pose that to our next guest, michelle, executive analyst who spent years governing the global auto industry. this is an exciting time. seeing this transformation of the industry in real time, there is something exciting about that. i wonder who comes out on top. will it be the companies that find the best way to make the most efficient battery or will it be the companies that have broader manufacturing capability like gm, or will it be a software company like apple? >> that is what makes it interesting. it could be anyone.
it reminds me of the beginning of the auto industry, where there were hundreds of companies doing, there was steam and electric and gasoline. ultimately gasoline won and many manufacturers went away. we are sort of in that same place again. i think it depends on what you mean by success. there will be niche makers. legacy makers have an advantage in terms of manufacturing scale and also, an area that i look at is the commercial fleet business, which is ideal for electric vehicles. the legacy players have a leg up in that business. caroline: i'm interested in the price point. we were debating that, how expensive ev's are at the moment compared to a more traditional engine. what does that level out? when can there be a mass adoption?
>> study show over and over that price is the number one obstacle for mass ev adoption. it is interesting, we did a study recently this past fall, and range and infrastructure, charging infrastructure were concerns but the concern for that had dropped a little bit. that is largely due to the big improvements in range and we are seeing more infrastructure built. there are is a lots of promise of more charging infrastructure. now it is priced. that comes down to bringing battery costs down. i don't know when the turning point will be. there is all kinds of speculation, mid decade, and of decade, but that will be key. taylor: can we talk about infrastructure? there is a plan but is it coming soon enough? where people are confident ordering or even buying now, when we aren't sure if the infrastructure will 100% be
there? >> it is a chicken and egg. early tech adopters have less concern about that, but for the masses i think we need to see more infrastructure come into place. as people see that, they may become are confident. but we have a ways to go. romaine: i'm wondering if you could put this in historical context. there was a lot of hay made about the gm and other automakers that cobbled together back in the 1990's and i don't know if there wasn't enough consumer demand or there wasn't enough support on the corporate side or the infrastructure wasn't there, but i'm curious as to why that effort failed, but now today, there seems to be more enthusiasm across the board for electric vehicles. >> a number of reasons. tesla has proven that ev's can be made, made well, be popular.
and remember, back with the ev one, we were in a different place in terms of technology and software. these cars are reliant on software development and chips and that kind of thing. they may have been a little before their time. i would say the bigger cultural landscape, we are starting to see regulatory moves requiring zero emissions. those have been increasing a lot of late. and there is a lot more sensitivity about climate change. so there is a change in culture consciousness and regulations that are driving it. caroline: which countries are front and center? obviously we see the push in the united states but which other countries have been a motivating factor? >> we are actually behind, the u.s. is behind. i would say china is way out there. they are the biggest ev market,
tesla is building that there. europe is next, and norway is selling a lot because of incentives that the government is offering. then i would say the u.s. is third. taylor: with incentives, i'm curious how you view the supply and demand. the incentives are helping, but is that enough to make these companies profitable on a standalone basis? a lot was criticized overeager credits that tesla was selling. how do you view that? >> there are tax credits that go to the consumer, and i think there is a lot of build back better has a controversial clause that gives more tax credit to people who by domestic , u.s.-made, union made, i'm not sure that will make it through. i'm not sure.
tax credits are confusing for people. they have gone to people who are quite well-to-do. does that really drive them to buy and ev? that is a question that needs to be answered. in terms of tesla, they have made a nice chunk of change i selling its tax credits, as well. i think there is a lot of things in the mix that have to be looked at to spur 80 -- ev development, but price and range and charging infrastructure are top of the list. caroline: michelle, great to get your expertise. meanwhile, coming up we will be getting more insight into this sector and how the chip shortage is helping drive prices higher. the executive director for insight it -- is going to be with us. the -- an extraordinary day, the worst selloff in the nasdaq
automakers, temps -- tesla promised a cheaper version. the silverado, potentially under $40,000. those are low range, very base model things. when you get into the higher range vehicles, you are paying $50,000, $80,000 for some of these cars. at tesla you can top out at $100,000. these are not affordable. when we talk about affordable cars, you are talking $25,000, $30,000 cars. you don't see that in the ev space yet. taylor: one of these days you will have to learn to take the subway like me. romaine: i did that once. taylor: and here we are. on the impact of the chip shortage and auto industry, we do it all with jessica caldwell. talk to us if you can about that. our previous guest said price
and range and batteries will be some of the key points. our prices maybe a hang up? as you think about the masses? >> definitely. it started a high. if you look at the market is it -- it is at price points that most people aren't comfortable paying. a lot of them are over $100,000, even the silverado, the consumer version is over $1000. the price continues to be an issue. people want it to be the same price as what they are used to paying. prices have increased a lot, especially over the past year because of the chip shortage. people are getting used to paying more for their vehicles, but if you think about everything involved with and ev, you have to figure out whether you want a home charging station which will cost more money, or figure out those logistical issues. the cost could be more than just the vehicle. people get a bit salty about
that sometimes. caroline: these are luxury large automobiles, which are expensive whether they are ev or not. what about smaller ones? the nissan leaf and those types of european or japanese cars do have a lower price point. are they attractive yet? >> we see those on the market. today, the chevy volt is the vehicle you are describing, or the nissan leaf, which has a lower price point. seems like those vehicles have not really taken off. people don't necessarily, they have grown out of the corky -- the quirky ev design. americans are buying more suvs and pickups, but they want and ev. they need it with more space and flexibility. if automakers can do that, like general motors announcing the chevy equinox ev, that seems to be more of the sweet spot of
what consumers want. romaine: particularly in the u.s. i'm curious, when you talk about the decision process consumers will make with regards to buying a new car, whether they go for an ev or stick with the regular gas engine, there is a lever discussion about charging, the idea that people have a lot of range. tesla has a pretty broad network of charging stations. but you can't charge a ford or gm on that. where are we at with those other companies, gm, volkswagen, ford, building out their networks where you can charge a vehicle? >> i think we will have to see a lot of that over the next few years. it didn't matter for these companies if they had established charging networks but all of a sudden it is going to. all of them have big plans in the works of really moving those out. cities in san francisco like -- and los angeles, people want these vehicles but if they
really want mass adoption, it will have to go across the country. that requires more infrastructure. there will be a lot of exploration in that. hopefully the infrastructure bill will help it along. i have to imagine charging stations will have to take more than one brand of vehicle. they need to come together for some sort of thing. romaine: doesn't make sense why we haven't seen a government efforts. when you fill up a gas car, it is not like you fill up a nissan versus a toyota. >> exactly. if you have charging stations that work for not all vehicles, that is the next step for countries to embrace the technology so it can take off. you have to make it easy and noninvasive for consumers to really want to buy an electric vehicle. you are asking them to do
something different and have a different relationship with how they drive and consume. this will be a barrier to entry for a lot of consumers along with price. taylor: has your research looked at the consumer, the pivot to ev's helping the environment, have you looked at the cost, the environmental cost of getting the minerals, getting the battery, all these charging stations? is there a point when this is more hurtful, but eventually it offset? does the consumer care about that? >> when you ask consumers if they care, the answer is yes, but the question is committed -- question is, how much are you willing to offset the cost by different actions or paying more? that is where it gets a bit hazy. this will be a major global rollout of these things and of course it doesn't come without cost.
i haven't done any specific research in that field but i think it is something that a debate -- is a debate among consumers. people say mining for components that go into batteries is more hurtful to the environment than driving gasoline cars, so you see these conversations popping up among main street consumers. i think those issues will have to be addressed and that is important for automakers, along with charging and how to own ev's, some of these externalities. taylor: jessica caldwell, executive director of insights at edmunds.com, really good show. we will debate this in our final thought so stick with us. this is bloomberg. ♪
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