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This is Bloomberg Business. Wait inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Hi, everyone, Welcome to the Bloomberg Business Week Weekend podcast. The countdown to election Day. It is on, and as we approach the final home stretch to November fifth, we'll hear why one outspoken billionaire Trump supporter is now the democrats new supervillain.
We're talking, of course, about.
Elon and speaking of Elon Musk, big tech earning season it is here. Tesla reported a solid quarter. Maybe that's an understatement. More in the company's results just a little.
Later on bit of a surprise, safe to say, okay, from Tesla to its Chinese competitor that Elon Musk once mocked. We talk next hour on BYD's rise from battery maker to auto colossus.
Plus she's responsible for banking, supervision, consumer protection and fintech in Italy. The Deputy Governor of the Bank of Italy stops by all.
Of that to go, and we begin with US politics. We are a little over a week away from the US presidential election between Donald Trump and Kamala Harris. As the nominees enter the final stretch, both are deploying novel tactics, from podcast cameos to star studed concerts as both try to scrounge up undecided voters and basically win this election.
Another tactic writing a giant million dollar check to persuade voters to turn out. That's what Elon Musk has been doing, and it's raised the question from some federal officials as to whether or not it's actually legal. The latest federal filing show that Musk has poured at least seventy five million dollars into his America pack, making him one of the top donors overall this cycle, and that.
Has caught the ire of Democratic voters, who now view him as a political supervillain. Bloomberg BusinessWeek national correspondent Josh Green.
Josh is also the number one New York Times bestselling author of Devil's Bargain, Steve benn and Donald Trump in the Storming of the Presidency, and more recently, The Rebels Elizabeth Warren, Bernie Sanders aoc in the rise of the New Left, but.
In terms of politics, he has become so fiercely identified with MAGA and with Donald Trump. The Democrats and liberal groups have stood up and taken notice, and he's such
a polarizing figure and so emblematic. I think of the kind of rich, dark money billionaires that liberals like to demonize in their political ads that Elon has been popping up in more and more ads across the country, whether it's from Kamala Harris's campaign, or congressional candidates, or unions or liberal super packs, more and more of them are featuring Elon in their political ads. A lot of them
are even featuring the same footage of him in a tuxedo. So, as I write in the piece, he's kind of eclipsed the kochbra as the leading villain among Democratic ad makers, and it's clear that it's resonating with liberal voters.
Without giving the full piece away, because of course, we want everyone to go read Bloomberg Business Week, you know, what are some of those tactics that the Democratic parties using when they are painting Elon Musk as the super villain here? What are they really touching on?
Well, there are two themes that democratic ad makers really key in on, and Elon happens to encompass both of them.
You know.
The first is Democrats obviously for decades have been going after what they would call, you know, greedy corporate billionaires. Elon Musk is the world's richest man, certainly fits that billing. The other thing that I think has become more popular among liberal ad makers in the time of Trump is raising fears of kind of right wing media manipulation, and of course Musk, with his ownership of Twitter, also fills that bucket. So in a lot of way, he's kind
of emerged as this cycle's perfect democratic villain. And the fact that he arouses such intense emotions and liberals causing them either to click and give money or to volunteer for democratic campaigns, I think just shows that he's really an important new player in politics the cycle in a way that most people I don't think would have anticipated even a year or two ago. Yeah, I think that's certainly fair to say, Josh, you mentioned that it's resonating
with Democratic donors, with the electorate. What do we know about polling in the way that Democrats versus Republicans feel about Elon Musk well, perhaps not surprisingly, Elon Musk is very very unpopular with Democrats and especially younger liberal Democrats.
And we know this because the Bloomberg News Morning Consult Swing State poll actually went last month and asked people about their favorable and unfavorable ratings on Elon Musk the same way they would with a politician like Trump or Harris.
And sure enough, Elon is becoming viewed in much the same way that a partisan politician would, where Republicans their views of him have improved, a lot of them like what they hear from him, where as Democrats, who are once very positive about Musk because of his association with Tesla and electric cars and environmentalism, now have turned on him very sharply. And he's deeply underwater. I think something to the extent of seventeen percent are favorable and something
like seventy nine or eighty percent unfavorable. So he's every bit as unpopular or almost as unpopular with Democrats as is Donald Trump.
And what do we know so far about how effective it is for the Republican Party to be using Elon Musk in a positive light as opposed to the Democratic Party kind of using him in negative campaign advertisements.
Well, it's a great question. I mean, we do have some indications that Elon is effective. That Donald Trump's campaign sends out literally daily emails offering to sell the Elon Musk Dark Mind hat, the black make America Great hat that Musk wore his rally with Trump and Butler Pennsylvania. A couple of weeks ago. I get a barrage of emails from the Trump campaign touting is association with Elon
or Elon's offer to match funding. And so the Trump campaign seems to feel that he's a very effective fundraiser because they keep pumping out these emails. So, you know, as one of my Democratic sources told me in the piece, you know, Elon is basically a walking content factory you
can't look away from. So I think the story here really is that whether you're a Republican campaign or a Democratic campaign, Elon Musk has become such a central figure that it's advantageous to put him in political ads, whether that's touting his association with Donald Trump or attacking his association with Donald Trump. It can raise money either way.
Josh, I think what's notable about this is you know, your story comes out on the same day that The New York Times writes about how somebody like Jamie Diamond over at JP Morgan is supporting Kama Harris, but his resident reticent to come out and even say so for fear of alienating and people who work for and for fear of alienating customers and the like. Elon Musk doesn't show any of that fear, and he runs or is
at the helm of several companies. And you don't often see people in positions in business take a stand such as Elon Musk is doing. And I wonder what your view is on that and what's unique about this case and unique about Elon Musk. The Koch brothers certainly had the money and they were donating the money, but they weren't out there jumping around on stage at rallies.
Yeah, that's right. Look, the kind of old style democratic villain were these reclusive fossil fuel billionaires like the Koch brothers, who didn't want to be in the media, didn't want to be featured. And you know, now we have this new style villain in an Elon Musk, who seems as eager to be out there and in front of the cameras and being the center of attention as anybody's maid, the Democrats job really easy for them. As to why Musk has decided to identify himself so strongly with the
MAGA movement Donald Trump, I really can't say. I mean, I know anecdotally and you can see it in the polling numbers that we have that liberal Tesla owners are very upset about this. Democrats don't like him. Presumably this is going to have some effect on the margins of his companies, but he has decided for whatever reason, maybe because he has so much money, maybe because he's such a true believer in Trump and what he stands for that he doesn't care and he's going to go out
and do this anyway. And I think that's one reason why Musk has unexpectedly emerged as one of the most fascinating figures and my bead of presidential politics. He's a new character. He's out there and he's demanding that the spotlight be on him, and I think as a result, it is on him, and we're seeing all the different influences and effects that he can have on a presidential race.
And of course one of those influences is the money involved. Tim had mentioned this. Latest federal filings show that Musk has poured at least seventy five million dollars into the pack that supports Donald Trump. How does that stack up with other donors and then other campaigns that we know Musk has been involved in.
Well, it immediately makes him one of the single largest donors in American politics. You know, it's remarkable. Before this cycle, he wasn't known as a major donor, and in fact, he was kind of reputed among people in DC in my world to be kind of a chief skate who talked a lot but didn't write a lot of checks. Well, now he has decided that he wants to be one of the biggest donors in American politics. And I think
you can see the effect that that's had. Just in the opening segment you guys showed of all the clips of Trump mentioning Elon Musk, he brings him up again and again in public and in private. And so if Trump is elected, I think that Musk stands to be a very important figure in the Trump administration and that he'll essentially have bought himself a level of influence that most people, even very very rich people are reluctant to do, to try and come out publicly and declare their association
give this much money. Elon is really plowing new ground here and it'll be interesting to see what kind of effect that has if Trump makes it back into the White House.
Yeah, I do wonder what he would want to see when it comes to his own influence or what he would want to do, Which brings me to my next question about unions, Josh, because they play a central role in your story, and Elon Musk has had a contentious relationship with unions given that Tesla is not a union shop, and other US automakers are talk a little bit about that and what we've heard from unions when it comes to Elon Musk.
Yeah, I started noticing a few weeks ago Elon kind of popping up in these political ads, and I remember thinking to myself, like, this is not something we would have seen before this cycle. So I wound up doing a very deep dive looking at the Elon Musk political ads, and some of the earliest ones that ran were buy unions. The Service Employees International Union was one of the first.
They had run ads around Elon even before his MAGA and Trump associations because he was sort of the personification of what they would consider the greedy, corporate union busting boss. He was in a big fight with Swedish unions at a time, and I think that really kind of gained momentum.
You know.
I found other ads from Teamsters against Trump and all sorts of local unions using Musk to kind of highlight this idea that greedy bosses are screwing union workers and Elon Musk sort of stands for everything we're fighting against.
I talked to one union president for the piece who says he Musk is the personification of everything that our polling tells us middle class, ordinary workers don't like, and so it's very easy for us to feature him in our political ads because he tells the story that we're trying to tell.
Hey, Josh, speaking of stories, you wrote the book on Steve Bannon, and we'd be remiss if we didn't ask you about Steve Bannon and his influence or lack thereof, on the election this time around, Given that he's been serving a one hundred and twenty day sentence in federal prison. He set to be released from that next week, what are your thoughts on how Steve Bannon's influence, who had such a big one in twenty sixteen, has loomed over this cycle.
You know, it's a great question. I think if you look at how outrageous some of the Trump claims have been, some of the events, the kind of lack of inhibitions that we see in Trump's campaign visa vi what we would see from an ordinary Republican candidate. I think a lot of that goes back to Bannon and the style of politics that he pioneered. From what I understand, he's getting released from prison in a week, so he will
be here for the final week of the campaign. And you know, who knows, wouldn't surprise me at all to see him out at a Trump campaign rally on stage with Donald Trump leading on the crown in the days before the election, But we'll have to wait and see.
We also just gotten news that Donald Trump is expected to record an interview with Joe Rogan at his studio in Austin, Texas. That's according to Politico. What do you make of that? I mean, how effective is going on a podcast as big as Joe Rogan's. And the political report also said that Kamala Harris is also in talks to go on that podcast as well.
Yeah, look, I mean I think it's smart for both candidates from the standpoint that young men in particular tend to be low propensity but Trump friendly voters, So Trump going on Joe Rogan makes a lot of sense to kind of reach these young men and try and motivate them to get up off the couch and show up
at the polls on November fifth. For Harris, I think the story is very much the same, is that the reason she would go on that show would be to try and make a last bid to these young men not to go support Donald Trump, but maybe to find a reason to support her, or at the very least not be so outraged and provoked by her that they
decide to go vote for Donald Trump. I think for a lot of Harris people, they would be fine having Joe Rogan's listeners just stay at home, But basically they want to fight Trump to a draw when it comes to winning the hearts and minds.
Of young men.
So it looks like now that Joe Rogan's podcast is kind of going to be the arena for that battle to be fought, you know, ten fifteen days before voters go to the polls.
Josh, last question. I'm not going to ask you to make a prediction here, but given your reporting and what you've heard from your visits around the country as you report out your stories, is the election indeed as close as the polls are telling us?
Yeah?
I mean, I've been privy to a lot of private polling from Democrats, Democratic groups, and some Republicans over the last couple of weeks. Everyone that I've seen shows the race to be absolutely as close as the public polls that we're seeing. So my assumption is that those polls are largely accurate, and that we mean to not know for a day or even several days who the winner of the election actually is.
All right, Josh Green, Hopefully we get him one more time before polls close two weeks from tonight. Josh, really appreciate you taking the time. Josh Green is Bloomberg Business with National Corresponding. He's the author of the number one New York Times bestseller Devil's Bargain, Steve benn and Donald Trump and the Storming of the Presidency. Also The Rebels Elizabeth Warren, Bernie Sanders, AFC and the Rise of the New Left.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple car Play and then brought Auto with a Bloomberg Business Act or watch us Live on YouTube.
I do want to give some some rough estimate, which I think twenty to thirty percent vehicle growth next year, you know, notwithstanding negative external events.
That's Elon Musk from this week's Tesla earnings call, as the company reported better than expected profits in the third quarter. Now Tesla's shares surge the most in more than three years after the carmaker reported surprisingly strong earning and forecast as much as thirty percent growth in vehicle sales next year. Elon's saying that on the earnings call.
The third quarter results were boosted by the cybertruk generating a profit for the first time, lower material costs and expanding energy business, and sales of regulatory credits to automakers that need help complying with emission's limits. With more on Tesla's surprisingly strong earnings, we were joined by Bloomberg News Global Autos editor Craig Trudell.
Musk was in sort of rare form. I think you know, you often can sort of can count on him being quite positive, and you know, sometimes he gives people reasons to bid the stock up. Other times, you know, he's less careful. I think he wasn't necessarily careful. He at one point said something about, you know, I'm going to take a risk and offer you know, this upbeat outlook
for next year. He also, you know, sort of couched this later on he talked about, you know, his forecast for how many cyber cabs they'll make, you know, a couple of years out as just his best guesses. So that being said, you know, there was a lot to like about this quarter in terms of, you know, sort of the breadth of what went well. I think expectations were quite low in terms of what revenue and earnings were going to be, and they beat expectations on a
lot of metrics, and it was kind of widespread. It wasn't just the car business. They're doing well on the energy side as well.
Well.
That's what I wondered, you know, Craig, is this a report where we were all managed so well going into it and had very low expectations, and so when Tesla comes in stronger than forecast and above those low expectations.
We were all just like, WHOA really surprised?
Or is this a report where Tessa the business is actually doing well?
I think it's a little bit of all the above. I mean, is it a you know, twenty one percent move up in the shares sort of report. I'm sure oct by this, but you know, what do I know, I'm just a journalist. I think uh, I think it is. It is, you know, the case that the stock has has gotten, you know, roughed up a little bit the
last couple of weeks since the ROBOTAXI unveiling. I think there was really high expectations going into that because Musk, you know, had sort of spent months hyping up you know, all the work that they've done on AI and and you know years now on on self driving. Uh, and we don't actually have you know, necessarily clear indications that you know, some of the promises he's made or uh, you know predictions that he's made are close. You know,
you you do. You don't have to look very far to see you know, people who use the product that the company calls full self driving, you know, acting up not working so well. You know, they recognize some revenue this past quarter from deferred revenue related to that business. And and you know, one of the features that they rolled out actually smart Summon, which is an interesting acronym.
You know, we're seeing reports of people trying to summon their cars and parking lots and getting into scrapes, and so, you know, there's there's still you know, a lot left to be said about you know, just how much longer this company, you know, needs to work on this technology to get it to where it's safe.
Hey, Craig, there were a lot of questions ahead of the earnings call you about whether or not analysts would ask any questions related to Elon Musk's political activities, the seventy five million dollars he's given to the America pack and support of foreign President Donald Trump during this election cycle. What did we hear from Musk on the call about a potential second Trump administration? How did he weigh in on politics?
Yeah, it was it was interesting. I think you know, Tesla solicits investor questions, you know, going into these calls, and there were a lot of questions submitted having to do with politics and wanting to you know hear Musk address his support for Trump and just how outspoken he's been. He didn't utter Trump's name at once, which was a
little surprising to me. But he did allude to this idea of, you know, maybe if he were to be appointed the head of the government efficiency department that he and Trump talked about on X a while back, and maybe he would work on you know, national rules for getting robotaxis on the road. So he sort of gave investors a little bit of a taste of how he would, you know, potentially be able to tip the scales after after becoming such a huge benefactor of Donald.
Trump, investors who wanted something today got better than expected profit and guidance for growth on deliveries and deliveries that was from Gene Munster over a deep water asset management. He said, the long term investors got the golden carrot. So is the golden carrot on the delivery numbers?
Is that what it is?
I think that was a big one. I mean, you know, there's there's I think real legitimate concern as to whether or not the company will deliver more cars this year than it did last year. You know, through the first three quarters of the year that that the deliveries are down, and they're going to need a real substantial jump in the fourth quarter to get to where they're They're positive.
I think the company surprised people by saying they do expect some slight growth for this year, so they're really going to have to finish strong and then twenty to thirty percent. I think, you know, that sounds great. I didn't necessarily get, you know, a strong sense of how exactly this company is going to pull that off, because they have not specified what sort of product is coming that that could possibly you know, paste that.
What about the affordable more affordable car that was promised, and what was the first half of twenty twenty five.
Didn't we kind of say something about that.
He's alluded generally to new vehicles, including more affordable models, but what those models are, we have no idea. It's not going to be a twenty five thousand dollars Tesla with a steering wheel and pedals, because he was very
dismissive of a question posed about that. So I, you know, I think I think it's pretty clear at this point they're going to you know, refresh the model Y and you know, maybe offer some cheaper versions of of the model y and the Model three and are counting on you know that that, you know, getting growth going again.
And we know Carol that steering wheels and pedals are not the future.
So I'm thinking it's a cheaper cyber truck like you get into like discounted version.
I don't know, No, that's definitely coming to it's got too.
Yeah, good stuff.
Craig Drudale, Thank you so much, Global Autos editor at Bloomberg News. Joining us from our bureau in London.
Now.
One especially vocal Tesla shareholder, cyber truck owner, and frequent guest on our air is Ross Gerber. He's the co founder, president CEO Gerbert Kawasaki Wealth and investment management. Ross in recent has expressed doubts about Tesla's ability to meet its sales goals, dismissing bullish claims about the company's robotics and self driving technology. Well, he joined us right after Tesla's latest earnings release on Wednesday.
You know, really Tesla runs into the problem of cannibalizing its other cars, and that I think is what's causing them to pause. Now, what I've been saying is if they would have put a steering wheel on that robocab.
It would have been a much.
More exciting launch for me and I think for customers knowing that this two seater, cheaper car could be something we could actually just buy and drive. The robotaxi business is not a business that I'm excited about. It's not really what I think Tesla should be doing. There already are robotaxes that exist called Weimo, and Uber is already
the master of transportation. So to me, Tesla should be selling EV's focusing on making great evs with great software and not trying to pivot into being some sort of robo taxi company. But you know, once again, I think people want to buy the car, and if they worried about selling the cars, they'll do just fine.
Russ elon Musk and politics. He's donated, He's one of the largest donors to the Trump candidacy, to the Trump campaign. He's got his America Political Action Committee as super Pack, He's become incredibly active. I'm wondering, from the perspective of business, if in a time when we're so divided as a nation, if taking such a clear stance and doing so much to elect one candidate is a risk to the company.
Yes, of course, you know why are you laugh strategic?
Well, because I think it's an absurd risk to put your company in that you could avoid. Right, So, you know, I've personally tried to stay out of this election. I don't get any positive from my clients expressing my liberal opinions, which are liberal, and you know, I think people who work at my firm know that. And but you know, as a business person, it doesn't really serve. My purpose has to espouse my liberal beliefs on everybody. And that said, Elon's extremely right wing beliefs turn.
Off a lot of his core demo.
Now a lot of people don't believe that's happening, but I mean, look at what the effort they have to do to sell a car today, and they still refuse to advertise.
So taking this stance for Elon is kind.
Of a lose lose for TESLA because if Trump wins, he doesn't give a crap about EV's. He supports oil, and Elon's gonna learn about Trump, which.
Is that he's a liar. And so all this.
Money Elon's putting into Trump to hopefully have some power, he's gonna learn the hard.
Way about Trump. Just asked Juliani.
So that's a lose, and if Trump loses, it's a disaster for Elon just personally and for his personal brand and for everything that he's been working on. And it really puts Tesla in a tough position because the administration isn't going to do anything to help them, that's for sure.
So I don't I don't get it other than I guess.
He thinks the America is in this horrible place, but the stock market's hitting all the time highs every day, and I think America is in a wonderful place.
But it's all a matter of perception.
You know.
And I think this is the most political I've ever seen a CEO. And that's one of the reasons we've lowered our position in Tesla is we do think it affects sales and affects the brand and ultimately margins. And we're excited about margins going up instead of going down
for a quarter, which is great news, you know. But this is coming from the fact that the car market is so difficult that the cost of goods has gone down, not because Tesla is making more margin because people are willing to pay more for a Tesla.
I want to talk a little bit more about Elon Musk. Matt Levine calls it the attention auction that you know, there's just a lot of things competing for Elon Musk's attention. And this has been discussed before, but I am curious to hear your opinion on whether or not the fact that Elon is so spread thin across these different efforts, how you're thinking about that when you're taking to look at your Tesla position.
Well, this is probably one of the biggest issues is he doesn't actually work at Tesla, you know, like you go to work at your company every day like you're the CEO. I don't think that's what he does. And I don't think that Elon gets more hours in a day than you or I do. So he might sleep four hours a day instead of eight. Well, you know where that's going to cost him is at the end of his life, because it's super unhealthy to live this way.
You know, there's this sort of opinion that he has some superhuman ability.
He doesn't.
So he's spending his time working for Trump right now and doing politics, and he's not spending his time getting his full self driving to work, which it still doesn't and So this is really the issue for me as an investor is shouldn't the CEO of your company be there every day or at least pretend you know. And then the second thing is this lack of attention to what needs to be done, especially around full self driving, is really troubling to me because I s the competitors
all over the place. I'm here in the heart of EVS right and Rohogue Taxis, They're everywhere. They're working in extremely difficult driving conditions that my cyber truck can't even come close to tackling.
Russ.
We gotta go, We gotta let you get back to work. We do appreciate you joining us. It's always a treat when you are on our air, especially post test learnings. Ros Gerber, President and CEO of at Gerber Kawasaki Wealth and Investment Management.
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The European Central.
Bank recently lowered interest rates for the third time this year, as a hastier retreat in inflation allowed it to offer support to the regions stuttering economy. We got some economic news just this past week on showing how the European Zone is struggling.
In an exclusive interview with Bloomberg, ECB President Christine Laguard said that the bank is quote rather satisfied with how inflation is slowed below the two percent goal, but that the central bank will remain cautious and not jump to conclusions.
At the moment.
We are not totally unhappy with what we see, because it looks very much that inflation is on the right track of des inflation. You know, we come from very high numbers, as high on average for the whole of the euro Area as ten point six percent, and the latest reading we had for the inflation in September was one point seven and we're looking at a lot of data to make sure that this disinflationary process continues to be well on track.
That was ECB President Christine Laguard speaking exclusively on Bloomberg Television in Washington, DC.
We get another view on the rate cut in Europe and more specifically the Economy of Italy with Alessandra Petzeli, Deputy Governor of the Bank of Italy, the Italian Central Bank, Tim and Bloomberg's Emily Garfao began with her take on the easy B decision to cut rates.
Well, you know, this was expected and follows like a very long period of unprecedent, you know, very restricting monetary policy that has taken us in twenty two, twenty twenty three to an unprecedent situation since the Euro was introduced. So it's kind of too soon to understand how this is going to play both for the banks and for the system as a whole, for the stability of the
system as a whole. What I can say is that this was expected and we will see how, you know, it goes forward in the coming in the coming months. It's clearly a situation that has been quite interesting for
supervisors like myself. You know, we have been seeing banks making unprecedent you know, profitability in the last years they were rocket high, something that has of course created a number of impacts on the market and has you know, given us supervisors a little bit of a red flag on everything like credit risk and liquidity risks, and these are the issues that right now are under the limelight of the ECB, the SSM ARM which is the supervisory arm of the ECB, and of course also Bankavilly that
participates to the Eurozone and in the SSM.
So we know that.
Spain, Portugal and Greece are among the countries helping you keep the Eurozone out of a recession. How would you describe the economy in Italy right now?
Well, right now, what we've see is, you know, the economy is being growing, you know, in the last year. Predictions are you also bring in the economy steadily? I would say for the next quarters. The banking system in Italy has been strong and able to support the economy and this is due to the work that has been done you know in the last years together with the SSM. So we are looking at a you know, with some
positive expectations as to the next quarter. So I would say that between Spain, Portugal and Italy we are you know, pretty much going the same direction.
What about when it comes to immigration in Italy? This is a huge topic here in the US ahead of the presidential election. Our own Bloomberg News team reporting that Italian prime Minister Georgia Milleni's government is pushing through new legislation to salvage it's controversial plan to curb undocumented migration after a court blocked to project to divert asylum seekers to Albania. How do you look at the role of documented migrants and undocumented migrants in the Italian economy?
Well, this is a very difficult issue. That's difficult in Italy, you know, given also the fact that we have you know, borders that can be easily sort of you know, penetrated, and this has been an issue that has been brought by a number of our governments at European and European level. We are I think that we are in the process of understanding and this issue of you know, uh, catering for external aid in order to take care of undocumented immigrants is on you know, as being very much wanted
by the government. I know there right now there are some you know issues that also concern the judiciary is a ve that decision. We will see how it goes. For sure, this is something that europe needs to tackle together. I mean, there isn't something that every single country can take care of. It's a European issue. As much as an American issue.
That's it's interesting, That's that's my question because here in the US, I think it's fair to say, and you know, a lot of economist would agree, there are jobs that Americans who are born in America typically will not do in the United States, jobs that traditionally go to migrants and migrant labor. Do those jobs exist in Italy?
More and more I would say yes. I think that Italians are not, you know, taking those jobs that were traditionally there for maybe you know, lower income classes and lower income people. It's slowly becoming the same as it is here, maybe not with the rhythm and with the growth you know, they have seen and experienced in the United States.
I want to pivot to financial regulation because Bloomberg News is Laura Nonan had written earlier in October that Germany, France, and Italy had urged the EU to show restraint in financial roommaking and instead focus on boosting the competitives competitiveness of the banking sector. That was the Treasury, and so we're wondering if the Bank of Italy kind of shares that stance when it comes to balancing competition relation.
Well, I think that if we look at the last couple of years and what happened in Switzerland and what happened with the US regional banks, we clearly see that there has to be a balance between regulation and competition. But regulation is we believe, you know, the most important tool, together with supervision in order to keep you know, financial
stability in the eurosystem. And you know, I think that we prove that the full implementation of Basil three has given it to supervisors a harmonized set of schemes of you know, reporting that has been extremely helpful in the years that follow the crisis of twenty oh seven twenty eight. Today, if you look at the European banking market, you see that, you know, the banks are very stable and able to support the economy, and that's exactly the job they should do.
I want to talk a little bit inv and fintech in particular, because here in the United States you have regulators trying to figure out the role that fintech should play when it comes compared to big banks. For example, what do you think the priorities for the next Commission should be when it comes to the future of finance When it comes to fintech companies that I speak of.
Well, in Europe, we definitely have to complete the capital market union. That is very very instrumental to you know, innovation because it creates all the you know, the financial tools to finance innovation. What we see happening in Italy right now that the competition is shifting, you know, it's not among banks anymore, but it's also between banks and those tech companies that come from other sides.
Of other industry. Here in the US, it's the same.
As in the US, and there's a lot also coming from the payment system industry. So if we look at the number of licenses that we've been granting in the last few years out of like say eighty seven two or for banks and eighty five for other type of
financial institutions. So the thing is really how do banks cope with legacy when it comes to the it, you know, with it legacy and how also they are entering more and more into contracts with third parties, providers that come from like tech industry, and they're becoming extremely relevant also for the kind of concentration you know, in the European market.
But do you think your colleagues and do you think regulators in Italy are doing the right thing when it comes to embracing this technology.
I think.
So we have had a lot of changes, you know, within our own institution in order to cope with this, you know, and created a way to talk to the market and understanding of what kind of regulation is needed. The European Commission has issued a number of vertical and horizontal regulation that are extremely interesting and that we are now implementing their and trying to organize sort of innovation in a way which does not create instability at the market.
But at the same time, we don't want to stiffle it. We want newcomers, we want innovation, we want to create new industry.
We're talking about fintech and an issue that comes up a lot is cybersecurity, and I'm wondering how the ECB plays a role in protecting both consumers and corporations, including banks, from this emerging threat.
Well, there are now a couple of peace of legislation that have been put together in the EU that look after explicity, after a security of infrastructure, and that is of course, you know, an issue that concerns banks, but concerns also utilities and other important networks of the country.
The one thing that you know, it's very important. The kind of risk that we're looking at is how interconnected the platforms are becoming and how this role of third party providers are are is you know, increasingly important when it comes to create you know, new ability for companies, for banks to provide these services. So I think this is main top issue on the U legislator agenda and on ours.
We have a story by our team here at Bloomberg News about central makers losing sleep over europe souring economies. Have another worry looming large, how much more damage Donald Trump could cause if he returns to.
The White House.
We're two weeks away from the election here in the US. How are you watching it?
Well, you know, we concern like everybody else. And I think that you know, one of the issues for US regulators is that you know, deregulation will see what happened with the US regional banks. You know, there are huge banks compared to European size, and you know, the the lack of application of Basil three, the sort of like the light touch supervision. I think it's something that worries
the international markets. You know, the you don't need to be a non internationally active bank in order to create a wave that touches and other countries and other industries.
So your concern is mostly about regulation when it comes to smaller banks in in.
You know, I would say so, yes, definitely, that is an area that has been clearly, you know, something that has created concern in last year when you know, Silicon Valley Bank and the other regional banks that didn't hit the press too much, but we knew about it, and this is of course something that we don't know whether there can be a contagent, you know, and how that's going to work. Also going towards Europe.
Alessandro Petzzlli, Wuty Governor of the Bank of Italy, the Italian Central Bank, Joining us here in the Bloomberg BusinessWeek Studio.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple car Play and then brought auto with a Bloomberg Business act or watch us live on YouTube.
Plenty ahead in our second hour of the weekend edition of Bloomberg Business Week, including the high schooler who kind of schooled us. He created a method to detect pesticide residue on produce using a handheld detector with some AI thrown in. We're just kind of liked Tim and I like, wait.
What how old are you and what did you do?
I truly every time I wash fruit or eat fruit, I think about his device and I want one.
Plus.
The CEO of Lifewave Foods on tapping into the dairy resurgence among American consumers Kafir anyone.
I know, we're still trying to figure it out, right, it.
Doesn't matter how you say it, it tastes good.
Ah, nice to know.
First up this hour, what started as a battery company in the nineteen nineties in Shenzhen, China has now become one of the best selling EV brands in the world. And now the company's startling growth has made it a global player, and that has sparked tariffs from the United States and the EU.
We're talking about Chinese automaker BYD it stands for build your Dreams. They've seem to figure out something that the rest of the auto industry has not, and that is build an affordable EV for the masses.
Yeah.
I feel like that's the holy grail in the EV world.
All right.
This story is the cover of the upcoming new issue of Bloomberg Business Week and is by Bloomberg News auto reporter Gabby Coppola, who joined us to talk about China's EV offensive.
BYD was founded in nineteen ninety five by a Chinese battery scientist named Wan Chuanfu. And he was basically a government researcher who saw that, you know, the Chinese economy was opening up, and he decided to move to Shenzen in the south of China, which is today kind of one of the like a Silicon valley of China. And he started out making batteries for mobile phones, but his dream was to.
Electrify the auto industry.
He always thought that you could make you know, battery powered vehicles, and it took a really long time from nineteen ninety five to up until about twenty twenty for him to make that a reality. But the story is really about how he did that. And you know buid because they are kind of the poster child for China's EV offensive around the world. I mean, they're not the only one by any means. There's lots of Chinese EV companies that are now trying to export around the world.
You know, we see a lot in Europe but also in Southeast Asia, the BID is kind of the strongest and the biggest, and you know, they're the biggest EV seller in China. And I think because we're in this moment of trade war and talking about tariffs and tension with China, there's a tendency by people in the West to kind of think that, oh, this is all because of Chinese subsidies. And I'm not at all saying that there aren't Chinese subsidies involved. I mean, the Chinese economy
is not a free market economy. There's a lot of protectionism, and the scale of subsidies that they use is much higher than what other, you know, free market democratic countries do. But if they were just subsidies, there would be twenty byds and there's really just one. And you know that is the due to the innovation and the sort of long term vision of Tuan Fu and the other key people in the company.
Well, Gabby, get to it, because it does feel like the thing, the nut that they figured out how to crack, the holy grail, if you will, is to build an affordable EV for the masses, which we keep getting promises from the likes of Elon Musk and others, and yet it hasn't happened. BYD though figured it out.
How is that? Is it just getting the cost of batteries down? What was it?
You know, it's not just one things. I think it's a confluence of things. But you know, one thing I learned in researching this story, Carol, is that you know, we look at the US now and we say, oh, evs aren't taking off. Look at this, sales are down. China went through that too for like ten years. Like China also was engineering incentives. But the thing is BYD never stopped. I mean they had a vision to do this and they kept doing it when it was not popular,
when they weren't selling. One thing that's really key is they also sell hybrids, so they're not like Tesla, where if EV demand drops, that's all they got. You know, if you got range anxiety, BYD's got to plug in hybrid for you. But I think the key, the key to what they've achieved is a lot of it has
to do with vertical integration. You know, UBS did a report that their vehicles are twenty five percent cheaper to make than basically the rest of the auto industry, and a lot of that is because they make so many things themselves in the house. This is not just a battery, This is not just a car company. They make semiconductor chips, they make solar panels, they make components for consumer electronics for companies like Apple. I mean, they're manufacturing Titan really
in China. But the other part of it is they had a battery breakthrough. Like I said, Wan Chuanfu is a battery scientist. And I think China gives a lot of subsidies for research and investment, you know, R and D and investment. That's a big part of their economy. And so I mean he I visited. I did visit their headquarters in chen Jin, and I felt like I was at an academic campus or like a national lab, because there was just the museum of what all the things they've invented and researched is.
There's a lot there.
What's the give us an idea of what's there apart from vehicles that we've seen pictures of because we know we're not driving these things here in the US. We'll get to that in just a minute.
Right well, And keep in mind, like they're not letting an American journalist in to see behind the wall and see all their secrets. But I mean, one thing that Wan Chuanfu is very proud of is they always do this nail test where they have you go in the museum lobby area and there's this glass wall, and there's a lithium ion battery with nickel, and then there's the
BID battery, which uses LFP or lithium iron phosphate. That's kind of a key part of their success is they decided early on to work with this battery chemistry LFP, which is more stable and less fire prone than the nickel based batteries we've seen the Koreans and everybody in the West using. So when you go into this museum, they have this like robot arm that comes down and sticks and nail right through the battery, and on the nickel side you see the thing explode, and on the
bid LFP battery nothing happens. So that's like probably one of Wangwan Fu's greatest achievements is who's saying, look, I made this battery that you know can actually be used for long range vehicles, but it could and I and I look, they call it. They branded as the safe Thing No batteries A hundred percent you know, zero fire risk, and I think if you were to google you'd find that's true for BID two. But you know that is
a key part of it. But the you know of suspension systems, you know, research on materials, polymers, so many things, I mean, the engineering, you know, all these things. But another thing I should mention in my story. You know what a scoop that we uncovered myself and our our you know star Apple or reporter Mark German, is that actually BID and Apple worked together, uh for a battery system for the Apple car when that project was still going.
And our reporting showed that that work that Apple and BYD did together did influence and you know, impact somewhat of BID's own blade development, cause at one point both companies had access to this very similar technology. Apple decided to shelve it cause who wants to get into the car business these days, I guess, and BID was all went ran with it, you know. And to be clear, you know BYD developed the blade battery by themselves. There's no Apple ip in that blade battery. But the two
companies work together. You had some of the best and brightest minds in this field working together, and BYD is the one that commercialized it, and now they're, you know, the biggest carmaker in China thanks in part to that battery breakthrough.
I well, listen, you know, I my husband and I've been looking at EV's for a while and they're just crazy expensive and it's just hard to get it and I kind of want to do the right thing for the environment.
Well, you're not going to get a bid.
I'm not going to get a byd Listen.
We only have about forty five seconds left hair Gabby and I highly recommend everybody check out the magazine because there's so much detail in this and it's a company that we talk about so much. Thirty forty seconds, so take away before we have to say goodbye.
If the West, if US and Europe European companies want to compete with China, they have to be honest about what they're up against. And it's not just subsidies. It's a very competitive company. You know, we're down a few points, quite a few points in the fourth quarter, but the game's not over. There's still a chance. But you know, companies need to get honest with themselves about the kind of cultural change and technological change that needs to happen for them to compete with BID.
I wonder how many automakers are somehow, you.
Know, seruptitiously like getting a BYD car and pulling it apart and like understanding everything that's in it and trying to figure out what they need to do right.
Gab Business and do it in teardowns.
Yes, that's happening.
Great reporting the Apple scoop too as well. Unbelievable Bloomberg News Auto reporter Gabby Copola. She's of course got the cover story of Bloomberg Business Week.
You're listening to the Bloomberg Business Week Podcast. Listen live each weekday starting at two pm Eastern on Apple car Play and Androyd Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa, playing Bloomberg eleven thirty.
Sticking with the automotive space, General Motors had its best day in four years this past week after it signaled colid us demand for its highest margin vehicles. Even as a broader auto market softens.
Well, some rival automakers are cutting prices and boosting incentives to reduce inventory. GM has been able to hold the line on high demand vehicles like it's old school gas powered GMC Yukon suv and the Chevy Silverado pickup. For more on GM's success, Eligrafey and I spoke to Bloomberg News auto reporter Keith Notten.
Well, they're making a lot of money in the home market with their traditional vehicles, with gas fueled pickup trucks and sport utility vehicles, and that's helping to offset losses that they have in electric vehicles, and losses that they have in China, and losses that they have with their autonomous unit crews. So they're selling a lot of traditional vehicles at high prices and high margins.
Who's buying these vehicles? These are these cars? I mean, they're not as expensive as the evs, but these are expensive cars now.
Well for sure. I mean, you know, cars average almost fifty thousand dollars these days in price and interest rates still remain sort of stubbornly high, though the FED has begun to lower rates that will hopefully pull down car loan rates. But you know, the American consumer, at least in GM's experiences, remaining incredibly resilient and continues to buy really well outfitted cars, which is, you know, driving profits up for them. And you know they, as you said,
they raised their guidance. It's the third time this year that they've raised guidance. They've beat earnings estimates for seven quarters in a row, so consumers have not stopped buying cars.
So is this more a story about the resiliency of the US consumer in general or is this a GM specific kind of I guess optimism.
Well, GM is definitely out gunning its Troit rivals Ford and Stilantis. Neither of them have beat estimate seven quarters in a row and are not raising guidance. So you know, GM is doing especially well. But what new car buyers are buying these days are more well outfitted cars and larger cars that have higher sticker prices, and that has driven up margins. You know, everybody is expecting pricing to soften because inventories are finally replenished after you know the
shortages of the pandemic era. But still consumers are paying up for new wheels.
Hey, we got thirty seconds left, Keith. You know I'm going to go there. Evs How ugly is it for GM?
Well, you know it's interesting with GM, Tim because they are coming out with lower priced evs like the Equinox, and those are really resonating because you know, they're not too expensive. So GM is having some success with its evs, and Mary Barrow, the CEO, said they're going to reduce those losses on ev substantially next year.
Keith Notton, Bloomberg News Auto reporter, joining us from Detroit, Michigan. Keith, thanks for joining us. Always good to see you. General Motor shares hire by ten point three percent as we speak.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple car Play and and Brout Auto with a Bloomberg Business app, or watch us live on YouTube.
Well, you can find our next guest products in the dairy section of your local supermarket LifeWay known for its kaffir. You know what it's like that yogurt like drink compikable yogurts movie.
Oh okay, it's kind of yeah, drinkable gotten.
Sorry, maybe because you don't have critics young critters.
Right, I have older critters older.
It's a bubbly traded company about Foydard million dollar market cap but Julius and Lanski is the second generation of her family to run the company after her father started it and took it pup like a couple years later on the Nasdaq. Julia is chairman, president and CEO of LifeWay. She joins us from Los Angeles. Julie, how are you welcome?
Good?
Thank you so much for having me.
Yeah, thanks for joining us. You've got a really cool story and the company is a really interesting one because it's not often that you find publicly traded firms that have such a narrow focus in terms of products. Give us an idea of how business is right now and where areas of growth are for you.
Sure, well, it's an exciting time to be at LifeWay. Our category is the probiotic dairy functional food space and we are seeing just a booming explosion of business. Just the last nineteen quarters have been year over year consecutive growth years for us, and that trend is not slowing down anytime soon.
Is that because of what's happening in terms of of the way people think about products such as yours or are you doing things internally when it comes to product development, when it comes to placement, distribution and the like, what are you attributing that to.
Yeah, I mean, I think it's both. I think, first of all, to just step back a little bit, I think people really want to know where their products are coming from, where the brands originate from. And I think LifeWay is really the embodiment of the American dream. It's just a remarkable story. As you mentioned, my dad came from the We all came from the former Soviet Union, and we were the first of forty eight families that
were settled in Chicago. And you know, this idea of living the American dream was something my father aspired to. And when he walked the grocery stores in America, he noticed that there was no Kiffeir, which was a staple product for two thousand years, for two thousand years, something that my ancestors, my grandmother's passed down generation to generation, and it was simply non existent in the United States.
And I think that, you know, and so that's how LifeWay was started, and then he took it public two years later. But I think consumers really love that heritage story. They want to know that their brand came from someplace authentic and real, not just out of an ai private equity office or something like that. And so I think that thirty eight years of legacy that LifeWay has been bringing to American consumers and consumers globally is part of
the reason. Additionally, you know, with this really wonderful, storied product, past of my ancestors, knowing intuitively that kafir improved their well being, their health, they attributed their centurion you know, living to one hundred years of age based on their consumption of keyfer And it wasn't until nineteen oh eight when Elie Mechnipoff, doctor Ellie Mechnikoff, did the first round of science and research on kaffir and probiotics and fermented
dairies like Kiffer, and he found that it did indeed help improve the body's health. And today modern science is only just catching up on the microbiome friendly bacteria, probiotics and kafir specifically, and so there's so much exciting medical research and we're LifeWay is a brand that meets the moment. We are on every grocerysource shelf across the United States, from Whole foods and ultra premium markets to Walmart and Costco.
Yeah, that's what I wanted to talk about because I was talking to somebody recently who has a startup ish food company. They've raised quite a bit of money and they're pretty prominent, but she was telling me how difficult it is to get shelf space at some of these prominent retailers. How do you do it? As you know, you're not independent in the sense of a startup, You're far from it. You're a publicly traded company, but you're you know, you're not Danin by any means. You know,
you're not like Talless. So so how do you do it? How do you compete with the big players?
Well, I think they compete with us. I think they aspire to be relevant like LifeWay is. You know, we have been very passionate and trend setting from day one, and we still operate very nimble, and we are trend setting. We aren't just following trends, but we're creating the trends. We have been, you know, dedicated to putting a bottle of LifeWay Keeper in everybody's hand, every consumer's hand, from cradle to grave, generation to generation, and you know, building trial,
showing up at culturally relevant events, yoga. You know, we were one of the first brands to partner with yoga studios across the country. You can try our samples, our products at Lallapalooza at Austin City Limits, all different, you know, really amazing cultural moments that are relevant for concers. And the way that we show up to our consumers, educating them on the importance of gut health is one of the reasons why we have had such tremendous success.
So so okay, so really interesting story, family story. Publicly held company, small market cap about three hundred and ninety million dollars. Stocks almost doubled year to date, Julia, I am curious, so tuck us through some of the metrics, the type of growth that you're seeing, revenue, top line growth, earnings growth, cash coming in. What do you do to kind of keep growing the company?
Yeah, I mean, you know, we have had the most incredible historic quarters. The last five quarters were record breaking quarters. Like I mentioned, nineteenth consecutive quarters of year over year top line growth. We just hit our the second quarter this year, we almost hit fifty million dollars, which has been a number we've had long circled in our aspirations.
Up more than twenty five percent this year. Our twenty twenty nineteen, revenue went from about ninety three million to almost two hundred million right now two hundred million run rates, So we've doubled our revenue. While I don't obsess about the share price at all, I am very proud of the fact that in the last five years our share price is up over almost over twelve hundred percent. So you know, these are some remarkable numbers. Our gross profit
improved to a ninety two percent increase. You know, our gross margin was up two hundred and ninety basis points. So the metrics that prove that, you know, consumers are looking for Lifewaykeeper. We are taking market share away from other brands of other types of functional beverages or other kind of old stale products like yoga.
I think we're the.
More trendier, fashionable, healthier cousin of yogurt.
Hey, one thing we wanted to ask you is you know nifty function on the Bloomberg where you can look at you know, your top shareholders and denote North America has about what about a twenty twenty three twenty I guess yeah reported that back in September, and they, you guys, confirmed a receipt of a proposal from denote they offered twenty.
Five dollars a share.
You guys right now change trade at twenty six dollars forty cents a share.
Is there an offer?
Is like?
Is there is that the future that you ultimately will maybe connect with this company danone will own you?
Or is the plan to kind of keep going alone?
Well, while I can't comment on that, I would like to point to the incredible success that we're having at LifeWay. We're on a really strong growth trajectory with a really long runway, and in terms of growing both our flagship product of but also an incredible exciting emerging category which is not new for us, but new for the American people,
which is farmers cheese and farmer sheees. Is so exciting because maybe you've noticed that last year cottage She's went viral on TikTok and it's all over everyone's making blended cottage. She's in various recipes like that on social media. And our farmer sheeese is one of our legacy products that we've been making for over thirty eight years. It's something
my grandmother's made. Like I mentioned footwog in my language, it's called footwog and Farmers Cheese is exploding and we're really excited to be growing that category where the largest manufacturer of Farmers She's today and it's going to be really exciting to scale that into all of our locations where our Kifer is currently sold and bring this new
new category in the dairy space. You know, bioavailable, high quality protein is something that consumers are really looking for in their craving and that's something that Lifeboys really has been pioneering and paving for a long time in the natural food space, organic food space, which is now mas market. So that's a really exciting time for us.
We only have about a minute left, but what's your product pipeline look like expansion beyond Farmer Cheese and Keifer.
Yeah, well, we are scaling our pro Bugs, which is a pouched product for kids, Pouchkifer product for kids that we innovated over ten years ago, and we've really invested in some equipment and machinery to really scale that. You know, we disrupted the entire baby food packaging space by launching the first ever pouch in the United States for kids, so we're excited to scale that into mass market right now. It's a whole foods nationwide. We also just announced the
expansion of ten exciting new trendy flavors lactose free. That's another big concern in the dairy space. People are looking for lactose free products, which Lifewi offers, but they're really exciting flavors like taro ube, Macha, latte, leachy, you know, really on trend, snackaball easy, instagrammable types of new products that we're exciting to scale. Excited to scale that nationwide
as well. And then we have just like a long long trajectory of new products in the pipeline which I can't discuss us yet, but look for more things connected to skin gut access. We know that abiotics work really well on the skin or inside out, so some kind of skin and friendly products good Brain's okay.
We'll come back and tell us more when you can give us some of the specifics, because that's super interesting.
Julie Smolanski, CEO at LifeWay Foods, joining us from LA.
You're listening to the Bloomberg Business Week Podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple car Play the Android auto with a Bloomberg Business app or want us live on YouTube.
It is Bloomberg Business Week, And I want to know, Carrol Masser, Yes, what you were doing when you were in ninth grade?
For sure?
High school?
Yeah, I don't know.
Just trying to gymnastics, gymnastics, cheerleading, trying to get a's, getting a's.
You were you anywhere close to creating an AI based handheld pesticide detector?
That would be a no, okay.
That's what sirrich Subash has been up to. He's in ninth grade and that creation helped crown him the winner of the twenty twenty four to three M Young Scientists Challenge. Also includes a nice twenty five thousand dollars cash prize, a trip here to New York, YEP to Ring the Belt in New York Stock Exchange, and yes, gets to hang out with us, which I think is just the biggest prize.
That's their round.
Siries Shabash is the winner of the twenty twenty fourth REEM Young Scientists Challenge and Aditya Banerjee is Senior Research Energy of the Corporate Research Process Lab. Over at three am, they both join us in our Bloomberg Interactive Broker Studio. Very cool to have you both here. Congratulations Soris. First, I want to ask you aditya tell us about this challenge, how long you've been doing it, how it came about, and why you're doing it.
So the Three and Young Scientist Challenge has been around for seventeen years. This is my first year doing this mentorship. So I'm just awfully lucky to be paired with Series and it has been an awesome experience. Our goal as part of the Three and Young Scientist Challenge is to nurture and just work with such young, bright, young minds and just help them bring their imagination their creations to life.
So I mean we live by science applied to life, so they have all the science innovations in their mind. We have some experience in getting the science to people's hands, so we hope that we can breach the gap for them to take his concepts to hands off consumers and help them in any way possible to make that journey smooth.
Well, Series, tell us about what you have sitting in front of you, because it looks like an iPhone attached to some sort of gizmo. Here, what's going on?
So my device, my project, it's called PESTI scanned and so what it is is at home people can scan for pesticide residues on their produce items. That's the real core concept here because there's a lot of contaminants like pest side residues they can stick around on produce after washing where they've been linked to health issues like certain cancers and Alzheimer's, Parkinson's, near degenerative diseases along those lines.
You can pick that up and you can there's a camera right there in front of you for those watching on YouTube, Elizabeth's going to get a shot of this thing.
It's pretty cool. So there's an app.
That goes with it. There's also some hardware there. It uses a type of technology I practice so many times saying this type of technology say it? Can you say it.
For me please? Spectro photometry.
Spectro photometry, Yeah, and what does that do?
So the idea is different materials reflect and absorb different wavelengths of light. So PESTA scan can look for those wavelengths that are reflected and absorbed by pest said residues.
So okay, so we are very lucky that we have a lot of food here at Bloomberg and a lot of fresh fruit and we all tap into it. I've just had a banana and often tap an apple or some other things.
We had some grape fruit this morning.
You picked up an apple in our food court up in the link on the sixth floor, and so tell us show us how it works and what you do and then what you found out.
So for using the actual device, you just connect the app to the device.
You just turn both on.
You point the device at the protocetem and then you tap scan and then a couple of seconds the results are back. And this apple had no pested residues on it at all.
Score, which amazing because I don't know if these are organic apples.
I don't know that they are either.
But that's good to know it does. There is a sign upstairs that says please wash fruit before eating it.
But that's what least do.
Sometimes, you know, people go and like check the peaches to make sure they're soft.
I check out a few things. It's really fascinating.
So how did you how did you kind of come up with the idea, how did you pull it together? And how did you use your mentor to help you.
So the whole concept really started when I was having a conversation with my mom so she was insisting that I washed my produce before consuming it, right, And yeah.
Okay, mom, you gotta wash your produce, so go ahead.
And my question was why and how effective is it? So looking into that, I saw that there were a bunch of caeminists like Pesta residues that can be on produce, but washing isn't necessarily completely effective, like the residues do stay on afterward. So the idea is if we could detect them, we could make sure that we weren't consuming them. And that's really where the idea for Pestis came from.
So after I started building the device and I joined the three Mek Scientist Challenge, my mentoralitya has been really helpful with this, especially when I've gotten stuck. One big time was when I was designing my machine learning models, and these are what take the actual data from the sensor and then turn that into results. What you'd see on the screen whether the device has pest said residues,
whether the predecess pest said residues or not. And he's helped me when I get stuck, He's helped me get unstuck.
Did you I want to ask you, So, what's the.
Balance of here's how you do it and solving the problem and helping him to say, you've got this problem, let me steer you so that you figure it out yourself.
You got that exactly right. Like I said, our goal is to help nurture them. So I would pose it as le a, have you thought about this? Have you thought about that? And he, being a very meticulous and very energetic person, he would do his homework and he would make sure he follows up on that and next next week when we chat, he would inevitably come up with a solution.
So, Sirish is in uh is in Georgia, Snellville, Georgia. You're in Minneapolis.
Yep?
Were you guys meeting like on zoom once a week?
How was it?
How did this work?
Yep?
We would meet after his school's done once a week and have a conversation about what he has been up to last week, anything he wanted to discuss with me, any next steps and stuff like that.
Can you talk a little bit, Sish about how you got introduced to this program, because it's my understanding that you've known about the Young Scientists Challenge from three AM since you were in second grade.
Yes, this is I had.
I learned about the Third Big Scientist Challenge when gitan Lei Rau got nominated as Time Scard of the Year, and when I learned about it and what the challenge really stood for what it was doing, I thought that this would be a great place for me to submit
my inventions. That was really because I wanted I've always wanted to have to leave an impact on the world nice and a good way to leave society a better place, and that was I thought three at the Cremning Science Challenge would be a great place for me to start with that. So I skipped fifth grade, so I wasn't able to put it in then sixth grade, our family was in India and we weren't able to get things figured out. Seventh grade I did apply, but it didn't
quite work out. And this year I was able to get it in and everything worked out.
Yeah.
Did I hear you say inventions plural?
Yeah? So I've worked on a couple of things before.
Okay, PESTI Scan maybe the one single project that I've put my most time into.
So I've built a couple things before.
I made one robot to deliver books that that was probably the runner up to this and how much time I put into it that took. I've spent four or five months on that. I've spent about a year on this latest version.
So what's the commercialization of this?
Because I think I could see I would love to have one in my home and I'm sure.
You would, or even just an app that could do this using technology that exists inside a phone already, right, Like, so you're at the grocery store, You're like, oh, this is good to.
Go exactly right, Like we do barcodes of things to find out pricing or whatever or information.
So did you how do you guys.
Think about like just three AM, who's known for like all their different products and it's not just posted, it's a lot of different things. So I'm just curious, do you see something like this and say, okay, there's commercial applications?
Well for sure.
I mean part of our conversations was how do you simplify the prototype? That was one of the driving questions that he seek to answer during the summer. He started off with making the module simpler, something that you can just clip onto your phone, right so that it can be used for consumer He did a lot of work in driving down the unit cost of each of the modules, and he already has plans to drive it down even lower, so he is already on it.
Well, what do you guys do next?
I mean, these guys know I'm like super obsessed with shark Tank and when people pitch their ideas.
But what do you do to help him?
Maybe?
Is it on his own or do you guys work with him to kind of get it to the next step.
So he would be driving a lot on his own, but we are always there to support him whenever there's anything that we can help out. Me personally, three AM as a company, we would definitely be more than happy to help him out. And also the three and Young Scientists Challenged Alumnize. They have a grant program that has been set up, so there are a lot of alumnizs who leverage that to fund their programs in the future as well. So that is something that's all set up that can be used.
So what do you want to do?
Like our venture capitalist knocking on your door, You've got.
A few more years, I imagine you want to continue your education? What's the plan here?
So the big big next steps are I'm trying to scale shrink this quite a bit to where it would be far more portable and easier for a consumer to carry around. And then from there also just dropping the cost to where it could easily go into people's homes. That was that's those are my key plans for this device.
In particular, how much what's the cost associated with this prototype? Like how much would this device cost as is now?
So as of now for this setup if I were to make a hundred of them, that would be seventy five dollars?
Is that that?
But for I have a plan laid out to where there's there's a solution I can put this onto a printed circuit board, which would make this all one singular piece, and that would bring the price down to roughly thirty five dollars. But I'm looking forward to in the future reach your price, Stager, maybe twenty dollars.
Cool, right, Like I don't yeah, I just think about, Oh, do you have it in the supermarket where people can I don't know, or does everybody have their own and check it out?
Really really cool?
One thing I want to ask you. We often talk with folks about the importance of STEM education and companies, whether it's they're out in Silicon Valley, or thinking about the next generation of workers that they need. Is this part of why three M is looking.
To do this?
Yes, yes, absolutely. I mean we have a we if we seek to educate or reach out to folks about science and how it's integral part of our life. We have a great science advocacy team if within three them as well. And that's also one of the reasons why during this program we get to meet young brilliant minds like him, and we try our best to, like I said, nurture and mold him and inspire them to do something like he said, like science is part of it. Merging
with the society. That's another huge thing that we see. So what he's doing pretty close to society. Bigger, Yeah, y better, that's what we hope.
For, the bigger impact.
Srich congratulations, sabash Aditya Banerjee of three AM.
Guys, thank you so much. This is Bloomberg.
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