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I want to get back to our top story out of Washington, DC. The President and President Zelenski of Ukraine are now talking with Europe's leaders. It's a second meeting that followed the Trump Zelenski bilateral that we saw earlier today. The President has reiterated that he will call President Putin of Russia after talks are over, and you will try to arrange a three way Russia Ukraine US meeting. I want to bring in Jennifer Welch. She's been watching this
very closely. She's chief geoeconomics analyst for Bloomberg Economics. She joins us from our Washing.
To DC bureau.
The signs out of the meeting with Zelensky earlier today there was certainly a different tone, Jennifer. I'm wondering how you're viewing this, and then also the commentary that we got from more than half a dozen leaders of NATO and Europe.
All signs so far look positive. The meeting is still ongoing, which is also a positive sign. This is very much a strong contrast from Zelenski's last meeting in the Oval Office, which ended early, which blew up into fireworks in front
of the press. The camaraderie that Trump and Zelenski were demonstrating to each other in front of the cameras first and there by a lot and then again when surrounded by European leaders, I think just signals how far that relationship has come, and I think, in particular how far Zolensky and European leaders have come in developing a playbook
for how to deal with Trump. And we saw this in the way in which they all engaged in that press conference just about an hour ago, going around the table praising Trump, sort of incepting this idea of maybe we should really emphasize the ceasefire for us to give time to negotiating a larger peace deal, and the security guarantees are going to be a really important part of this. And thank you so much, President Trump for bringing us all here today, So I think we have moved quite
a bit from where we were earlier this year. The key question though, is what are the terms that they're all going to agree on and that Trump will then be presenting to putin. Will those be enough to kind of get us forward momentum towards an ultimate piece deal of some sort.
Yeah, it was really interesting to just watch at least the footage that we could see here the European leaders and Trump. The tone looked fairly positive. People were, you know, laughing, making jokes at least in a lighter kind of casual sense. And you mentioned that it seems like the European leaders are taking a different approach to Trump now, maybe more willing to all work together. What, in your view has sparked that that change in tone.
I think part of it is the recognition of presenting a united front to President Trump.
Right.
The fact that all of these leaders came into town today to join President Zelenski when he was meeting with Trump, so it's not just Lenski and Trump one on one. I think that was really critical. I think also it gives Trump the opportunity to kind of play host, to look like the peacemaker, which is something he signaled over
and over again he's really interested in doing. I think all of these tactics are kind of born out of seeing what didn't work earlier in the year, which was Lenski meeting one on one with Trump, or rather being the only form representative in the Oval Office with Trump
and his team having that more combative conversation. European leaders have been coaching him behind the scenes on how to deal more effectively with Trump, and I think that that has shown a lot of fruit by the time that we get to the meetings happening place today.
It's pretty remarkable that you're you know, that's working so well, and it's and it's yeah, go.
Ahead, no, no, it is, and you have some really clear players at the table earlier today, most notably the NATO Secretary General Mark Rutha, who's someone who is in part picked for that job because of his ability to know how to work well with Trump and the fact that Trump seemed to not so subtly indicate that part of his openness to security guarantees for Ukraine is taking place in the context of what he sees as NATO agreeing to spend more on defense NATO members beyond the
United States, That is what I mean. Spending more on their defense is for him a consideration. But it comes to thinking about how much skinned the US is putting in this game. For Ukraine, what do.
You think they're talking about as we speak right now?
I think there are a couple of key issues it sounds like are still being worked out at the moment based on that press conference we saw in the last hour. The first one is this question of are we going for a ceasefire first or a full peace deal. Coming out of his meeting with President Putin, Trump seemed to be emphasizing We're just going to go for the peace deal. We're not going to pause, you know, We're not going to focus on sort of this lower end of a ceasefire.
We're just going to end this thing once and for all. European leaders Ukraine have actually been pushing the opposite direction. They want to ceasefire first, one because they don't want to be negotiating something as massive as a peace seal while under fire quite literally. And two because this tends to be kind of a Russia delay tactic to push for a larger peace seal that's going to take a long time to resolve while still trying to make gains on the battlefield. So I think that's one issue that
seems clear they're going to be still discussing. A second one is going to be territorial issues Russia. Again, we don't know exactly what Putin and Trump discussed on Friday, but most likely Putin was reiterating some of Russia's long standing and demands that Ukraine seed over formal recognition of territories that Russia has occupied for some period of time, as well as withdrawal from territory that Russia doesn't currently
control but would like to occupy. Those have been non starters for Ukraine and by extension, for a lot of European leaders as well. And then the third issue that I think they're likely to discuss it was a huge point of it emphasis and that press conference is what are the nature of security guarantees that the US and Europe will be providing to Ukraine to hold this deal firmly in place. President Trump said himself that he wants
a deal to last. He doesn't want to have to be going at this again in a couple of years that the deal breaks down and we see complete heat back up again. That's also a key concern for European and obviously Ukrainian leaders as well. Security guarantees could ideally hold that deal in place so that we're not just existing in some sort of frozen armiscist or frozen conflict that could reheat at any point in time.
Given the fact that Russia is not in the room right now, Putin is not there as a part of any of these discussions, how much progress can the EU and Zelenski and Trump make on all of these points that you raise right now with Russia not there.
I think from European and Ukrainian leader's perspective, but they're probably more focused on even obviously they all want to reach a peace seal, but they want to reach the right peace seal for Ukraine. They don't want to make concessions just so that Russia will agree to it. That could end up compromising Ukraine's security and by extension, europe security down the line. I think what they're more focused on in this current moment in time is making sure
that they don't look like the obstacles to peace. So, in a sense, a still positive outcome for them out of this meeting would be they get Trump to agree to certain terms or conditions. He's said earlier he was going to call Putin right after this meeting if Putin doesn't agree to them. Now, Putin's the one who's vietoing the peace process, right and the onus is back on
him and back on Moscow. I think it's very likely that we're going to reach a sort of stalemate here, just given how far apart the different parties of this are on the key terms for a deal, and the fact that Russia probably still thinks time is on its side, and so it's playing for that time because it thinks the more that it has time to make gains on the battlefield, the more it will win back, the more fatigue the West will become, and the more likely President
Trump will move on to other issues. So they are not necessarily genuinely interested in resolving this conflict at this moment in time, and I think that reduces the chance that they'll agree to anything, even terms that could otherwise be considered relatively favorable.
So what does that mean just to you said stalemate but a continuation of what we've been saying, continuation.
Of the conflict, potentially a continuation of efforts at peace, but ultimately we think Moscow isn't really interested in ending the war right now, let alone agree to some sort of ceasefire or something that would put it on pause and give Ukraine a chance to kind of recoup and reconstitute its forces.
Jennifer thirty seconds left here. What position does that leave Europe in?
I think Europe's main focus right now is maintaining that United Front, figuring out ways that they can backfield support for Ukraine without the United States being the direct pride of it. And so far this weapons for money scheme that they've worked out with the US seems to be working.
Jennifer Welch always great when you join us. We really appreciate you taking the time this afternoon. Jennifer Welch's chief geoeconomics analyst for Bloomberg Economics. Check out her research on the Bloomberg Terminal in the entire team's analysis from Bloomberg Economics on the Bloomberg Terminal and at Bloomberg dot Com. Stay with us more from Bloomberg BusinessWeek Daily coming up after this.
You're listening to the Bloomberg Business Week Daily podcast. Catch us live weekday afternoons from two to five Easter and listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
I want to right now bring in doctor Angela Stench. She's a senior fellow at the Brookings Institution, also the author of Putin's World, Russia Against the West and With the Rest. She's a former National Intelligence officer for Russia and Eurasia at the National Intelligence Council. She served in the Office Policy Planning at the US Department of State. She joins us from Nantucket this afternoon, Doctor sten I'm sure like you and the rest of the world, like us,
we watched the meeting just now that press availability. What we heard from these European leaders with great interest, what we heard from Zelensky and Trump in the Oval Office earlier, with great interest. One word kept coming up over and over again. Trilateral the idea of meeting to end this war between Russia, Ukraine and the United States. Is this finally the beginning of the end of this war.
I would definitely hope that it is, but I'm still not convinced that President Putin would be interested in a trilateral meeting. He had what seemed to be a very successful meeting with President Trump on Friday in Alaska, where we had President Trump seemingly agreeing with everything that President Putin said. We had something different today from President Trump
in the Oval Office. And by the way, it was a great relief that there was a successful meeting between President Trump and Zelensky in the Oval Office when you think back to the last time that President Zelensky was there. But the fact that President Trump was willing to say that the UN West would consider security guarantees to Ukraine were there to be a peace agreement, and even you know, possibly supplying more military assistance to Ukraine. This is not
something that we heard on Friday in Alaska. And Putin has already come out today and said that the Russia would not accept any Western troops in Ukraine. He's in fact said that before, he reiterated that now. So it just makes one wonder whether Putin would be really willing to sit down with President Zelenski and presumably President Trump as well, to sincerely negotiate an enter this war.
Doctor sent the two world leaders, Trump and Putin. They met on Friday for hours on end this meeting that we've seen so far, at least between Zelenski and Trump. It was only about thirty minutes. What is your take on really who came out stronger after the Alaska meeting. Was this a win for Putin?
Well, I would argue that it was largely a win for Putin. I mean, here is an indicted war criminal being given the red carpet treatment, literally arriving in the United States meeting with the President of the United States. He hadn't had a meeting with the President of the United States since two thousand and seven on US soil.
And you had President Trump going into the meeting saying that a ceasefire had to precede negotiations, and he came out saying, no, We'll go right to the negotiations without a ceasefire. And the reason why Putin doesn't want a cease fire is because he wants to go on fighting. In fact, as all these talks are going on in Washington, the Russians are bombarding the Ukrainians. So it definitely seemed from that Friday meeting that Putin had won a great deal.
And if you look at the Russian media, I mean, they were quite ecstatic after this meeting because they said, you know, finally we're back to where we wanted. The Russians a great power and Putin God is meeting with the American president.
And potentially President Putin gets some land from Ukraine at the conclusion of this conflict. Do you think that will happen, doctor Stan, I think it's going to.
Be very difficult. By the way, when you hear the phrase land swap, there's no land swap, right. I mean, the Russians want the Ukrainians to concede or to see territory to them that they don't control, and this is quite strategic territory. Were the Ukrainians to see that, they'd be in a weaker position. So I think that they would only get that if the Ukrainians really feel that they have iron clad guarantees as much as that's possible from the US and from our European allies to deter
Russia from any future attack. So I think that would probably depend on it.
What would those what would those guarantees be if up to now there have been no repercussions apart from sanctions or even secondary sanctions on Russia as a result of what it's done in Ukraine.
Yeah, so they're now talking about Article five type guarantees. Article five is you know the essence of the NATO alliance, which is, if one member is attacked, the other members will come to its defense, as NATO did after nine eleven when the US was attacked. And I'm not sure that anyone really believes that if Russia were, say to attack Ukraine again, you would have the guaranteurs then get into a war with Russia, because you always come back to the question that Russia is a nuclear power and
everything that that involves. So it's still difficult to understand what security guarantees would mean in this situation. Maybe at a minimum would mean sort of arming Ukraine to the teeth, and the Ukrainian army is now very strong anyway, as
a way of deter Russia. If the Russians really think as they mistakenly thought that the Ukrainians would capitulate when they invaded in twenty twenty two, if now they believe that if they invaded again, they really would be faced with a very strong Ukrainian army that could push them back, maybe that's a security guarantee. It really is harder to imagine any other one that would be credible.
How should we be thinking about territory right now? Is it fair to say that Ukraine is going to have to seed some territory in order for the war to end.
I think what the Ukrainians will have to do at a minimum is to recognize that Russia does now occupy twenty percent of Ukraine. That doesn't mean dejure recognition, but they factor does. But that's without sealing more territory to Russia. I think the Ukrains won't have any choice if the war is to end, but for the time being, to have that land under Russian occupation.
What would this land symbolize to Europe as a result of Russia's ambitions on the continent. The idea that Ukraine excuse me, that Russia could go to war with the country and even yes, after a three and a half year, very bloody and terrible war for both sides, end with additional territory.
I mean, it's a terrible precedent because since World War Two, this is the first time you've had a major war with a land drop like that, entirely unprovoked. So the president for the Europeans, I think would be very worrying, and particularly so those former Soviet states, either Baltic states or former members of the Warsaw packed Poland for instance, that are in the vicinity there and where we know that certainly Russia might have designed certainly on the Baltic States.
So it's a very dangerous president, not only for Europe but really for the rest of the world, that a land grab light that unprovoked goes unpunished.
We're speaking right now with doctor Angelis stan senior fellow at the Burkings Institution, the author of Putin's World Russia against the West, and with the rest doctor Stent. Does it set a precedent for what could happen to a country like Poland? For example? Is it crazy for us to think that that Putin would I mean, the whole narrative right in the last few years and at the beginning of this was what's to stop him moving past
Ukraine and into greater Europe? Is that a realistic thing for us to talk about or is that something that would never happen?
So? I think Poland is a member of NATO and therefore so far right until this point, Russia has not directly attacked a NATO member state, you know, which leads to the argument, correct, I think that had Ukraine been
a member of NATO, Russia wouldn't have attacked it. But we now know that NATO membership at the moment is off the table for Ukra, So it would be unprecedented because again, if Russia were to try to invade Poland, then you would have NATO Article Fight guarantees, and then you could have a major war between Russia and NATO, which of course includes the United States and the two nuclear superpowers, which would be potentially very dangerous.
Trump has said that Putin wants to see the war ended. I'm wondering in your view if you think Putin is showing any sense of urgency to end it.
Putin's not showing any signs of urgency. Putin only wants the war to end on his terms, and right now, his terms are very different than what President Trump and the European leaders and President Zelenski are discussing, because he wants Ukraine to see all of this in this territory. He wants Ukraine to cut down on the size of its military, to promise that it will never join NATO, and so essentially he wants the war to end with
Ukraine's subjugation. And that's not what's on the table today at the White House.
One thing that I found noticeable today was that the topic of children in this conflict, and it's not something that's we talk about every day. We probably should talk about it every day. We had President Zelensky talk about a letter that he received from the First Lady of the US, Millennia Trump. On this subject, the President mentioned children in the conflict. We had European commissioned President Ursula vonder lyon mentioned children in the conflict.
Is the narrative shifting a little bit?
So? First of all, the letter that he was talking about was actually a letter that the First Lady of the United States wrote to Putin and which President Trump gave to Putin at the summit, which had to do with children. I think it's unfortunate that in many ways
the US media haven't talked about this enough. The Russians have abducted about twenty thousand Ukrainian children, taken them away from their families, forced them either into the occupied areas of Ukraine or to Russia, trying to annihilate their Ukrainian identity. And by the way, this is part of a broader problem, which is the way that the Russians are treating Ukrainians in the occupied areas which right Russia now controls, which
is treating them very badly, to put it mildly. It's good that this has now come up to this level, and that the First Lady of Ukraine has apparently written a letter to the US First Lady thanking her for bringing this up. But I think there should be much more focus on the humanitarian catastrophe that has befallen so
many Ukrainians in this war. What do you mean by that, Well, just the first of all, the abduction of children, the bombing of civilians, the bombing of maternity hospital, all of the things that the Russians have done in terms of their attacks on Ukraine. You know what it's done to families, the thousands and millions of refugees really and displace people. All of that is part of this war, and we probably don't read enough about that or see enough in the.
Media, right And these are attacks that are ongoing do this day, even as we have the leaders coming together and talking about, you know, a potential end to the war. What would an end look like? Is a ceasefire something that you know we should be paying closer attention to would a ceasefire stop the fighting and these humanitarian issues that you bring up.
Well, a ceasefire might if it were properly observed. But even then, if even if they did say, well we agree to a cease fire, it has to be properly implemented. It has to be properly monitored, so that in itself, you know, could be more complicated. And the thing about the ceasefire is it would be important that it not be one in which Russia could then recoup and then
attack Ukraine again. So you could have, you know, a thirty day cease fire, which is what people were talking about a few months ago, and then in the if in the interim, then you could negotiate more of a peace settlement. I just heard one of the people in the press conference talk about maybe some kind of a pause if there were to be a trilateral meeting, which as I said, I don't think it's very likely soon, but at least to have a pause in the fighting.
But so far, when the Russians have said that they would observe there was a brief ceasefire that was supposed to be observed, just in terms of attacking the energy infrastructure, of the other countries they didn't do it, so even that would have to be very closely monitored to make sure that the Russians didn't violate it.
We're speaking with doctor Angelas Stan, senior fellow at the Brookings Institution, also the author of Putin's World, Russia against the West and with the rest a reminder of where we are right now. The President participated in a so called family photo with European leaders at the White House in the last hour. He, alongside President Zelenski and Europe's leaders, spoke after their first meeting. End of the second meeting
now underway with European and NATO leaders. The President rearea that he will call Putin after the meetings and he will try to arrange a three way meeting after that. Doctor Stent, what do you make of the notion that the President at the end of the speaking to reporters in the Oval Office, said that he would call Putin after the meetings. What does that mean to you? What does that symbolize to you?
Well, it symbolizes to me that even though he's making an effort now obviously with our allies to listen to that concerns as he tries to bring peace. You know, he had a poundy quite what he considered a successful summit with President Putin, and you know, he wants to keep President Putin informed of what's going on, and so it means he wants to keep up all of those contacts with President Putin and make sure that Putin doesn't change his mind about anything.
On the prospects here for a trilateral meeting. Do you think that something would have to maybe give way before we see Trump, Zolensky, and Putin all in the same room together.
Yes, I mean, so far, President Putin has refused to sit down with President Zelenski because he doesn't consider Zelensky his equal, and because, as he keeps saying, Zelenski is an illegitimate president, because they haven't had elections in Ukraine since the war began, presidential elections, because there's a war going on with martial law. So that is what would have to change. It's Putin being willing to do that.
And again, you know, he's already been criticized by the more militant bloggers in Russia for sitting down with President Trump and talking about peace. So he in some ways he has to worry about domestic opinion, that is to say that the people who are you know, fanatically in favor of continuing this war, right.
So, how are we supposed to understand you know, Trump's comments? Then he said to reporters today, if everything works out, well today, we'll have a try. Lad, We're going to work with everyone. I mean, how do we interpret that?
Then?
Well, I think that's probably what President Trump would like, and he would like people to believe that he can bring that about. But you know, that doesn't necessarily mean that it's going to happen that. We don't know what President Putin told him privately in Alaska. Maybe he believes that people would be willing to sit down with President Vilensky. But again, those of us that follow this very closely and follow what Putin says and does, we'd be more skeptical about it.
On a weapons front, the idea of the US supporting Ukraine through weapons sales or weapons sales to European allies, does that continue? Does the US have the appetite for that? Do politicians have the appetite for that? Jd Vance, the Vice president has been outspoken about this, at least before he became vice president.
Well, we've barely started the process by which the Europeans are going to be purchasing weapons from the United States and then giving them to Ukraine. There's been an agreement on it. My sense is that it hasn't actually begun yet because the Europeans are waiting to get these weapons from the United States. I think that will continue as long as President Trump's magabase understands and in fight manufacturing those weapons and selling them to the Europeans. These are
American jobs. I mean, much of the assistance of the US has given to Ukraine even since the war began in for Overview twenty twenty two, has been you know, enhanced the American economy and given Americans who work in the arms industry and things like that a job. So I think that that would continue. I think that what is more difficult I think the President Trump would be to say that we'll supply weapons to Ukraine without making them pay for it.
Just zooming out here, what do you think are the key takeaways that are going to come out of the meeting with the EU? What is at stake for the EU leaders here and when we're talking about this, you know, this meeting tomorrow, What do you think we're going to be talking about.
Well, I think the EU leaders really would like to have a ceasefire in place, even though President Trump has now said maybe we don't need one. That'll be one thing they'll focus on. And then I think the security guarantees talking about, well, if there is if Ukraine is forced to make some kind of territorial concession to Russia, then are we sure that there will be real security guarantees which are backed up by the United States.
One thing that we were talking about before we heard from these European leaders and before we heard from Zelenski, was how earlier the European leaders actually met ahead of time. I believe it was at the Ukrainian embassy, but do not quote me on that. I'm just looking through my notes here. They met ahead of their meeting at the White House today to get aligned on what their goals were.
What would you say their goals are obviously they want an end to the war, but what do they want that end to look like?
What are they unified on?
Well, they did meet at the Ukrainian embassy earlier today. You can look at the pictures of it. Great, Yeah, I mean they wanted to make sure that this war
ends in such a way that Russia. I mean, it's easy to say, as President Trump did early, will never again attack Ukraine, given you know of years of history, I think you have to be cautious about saying that, but to ensure that for the foreseeable future Russia will not be tempted to attack Ukraine again, and that Russia under Putin even will be willing to accept an independent, sovereign Ukraine, which is free to make its own decisions if we put the NATO issue aside about where to
align itself in foreign policy. So they want to make sure not only that the war ends, but then it won't start again in two or three years.
I want to get your thoughts on NATO here, just as we talk about this meeting with the EU. Is there any chance that we would see Ukraine get added to NATO or is all of this kind of making the chances lesson or.
Would that be a precondition on Vladimir Putin's side that he says, no, you cannot add Ukraine to NATO.
Well, Putin, I mean that's one of the conditions he has, which is that Ukrainian encounter, Ukraine can't join NATO. But I don't think anyone's going to agree to that. I think what the US side would say is not for the time being. And I think certainly President Trump has said that might Ukraine join NATO in the future, That's quite possible. It'll depend, you know, on what happens to NATO. It'll depend on what happens after the end of the war.
So it's not on the horizon. But it also I think you can't expect Ukraine or it's European backers to say that it will never join NATA.
Why do you think that European leaders are right now all visiting the White House three and a half years into this. Is it President Trump who's brought them together? Why didn't they do this two weeks after the war started, a month after the war started, a year after the war started.
Why is this happening now?
Well, because I think under the Biden administration, first of all, they believe that the US was giving a lot of support to Ukraine, and they let the US do that. They were still in the mindset that the US was the most powerful country, had all the weapons. So I think it's a combination effect is I think it's because
the war has gone on for so long. Then you have President Trump coming in and saying he's going to end the war quickly, also questioning NATO, also questioning why the US should be supporting NATO, all of these things. I think what happened at the end of February with the disastrous Oval Office meeting the previous one with President
Zelanski was a wake up call. But I think the real wake up call is understanding that they cannot any longer rely on the United States to support them for their security or really to provide for their security in the way that it used to, and that they have
to take much more of a burden on themselves. And then I think the other factor is clearly realizing after the Alaska summit, but even before then, that they weren't quite sure that President Trump, you know, wasn't willing to tell Ukraine that it had to exceed to Russian demands, which would you know, could also be quite dangerous for Europe. So I think it's a combination of factors.
Do you see it as a good sign though?
I do, because I think that President Trump, first of all, will understand now that Europeans are really quite united about this, and that they're back in Ukraine.
So, doctor stan I want to end the interview with the question that I always ask you, and I've asked you this for the last three and a half years, and I want to know if your answer has changed based on today.
How does this war end?
I don't think anyone knows how it ends yet. I mean the you know, the best solution would be a negotiated settlement which doesn't take too long, which doesn't involve too many concessions, and which guarantees that Russia will not in the near future again try and attack Ukraine.
Is it closer now to ending than at any point that then we spoke to you in the past three and a half years.
Possible? I mean that there's too much that we don't know, but possibly it is.
Yeah, Okay, want to let you go even so generous with your time today, Doctor Stent, really appreciate you joining us. That's doctor Angela Stent. She's senior fellow at the Brookings Institution. She's the author of Putin's World, Russia Against the West and With the Rest. She's also a former National Intelligence officer for Russia and Eurasia at the National Intelligence Council. She also served in the Office of Policy Planning at
the US Department of State. She's been a go to voice over the last three and a half years for US, as we've reported on Russia's invasion of Ukraine.
Stay with us.
More from Bloomberg Business Week Daily coming up after this.
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Eleven thirty shares of the green hydrogen company Plug Power, closed two and a half percent lower last Tuesday. That was the first day of trading after the company reported net revenue for the second quarter that came in above estimates, but the bottom line was the issue. EPs missed the
average analyst estimate. Plug provides hydrogen products including electrolizers, hydrogen transport, storage and dispensing solutions, and more to a variety of customers including Walmart, Amazon, Home Depot, Airbus, at and t Kroger, FedEx, Pgene, Coca Cola, and more. We've got back with us Andy Marsh, the CEO of Plug power. He joins us from just outside of Albany, Andy. Always good to have you on the program. I want to start with your customers. I
mentioned just about ten of them. The list goes on, what are you hearing from them in a world where green energy is no longer sort of the buzz phrase, the buzzword, there's not the same government incentives for this stuff that there was in the last administration.
What are you hearing from them right now?
So the last part of that, tim's not true. The incentives for forty eighty, which is the tax credit for fuel cells and the last bill is actually much better than it was.
Well, I was talking about green energy as sort of a monoliss just to be clear.
Yeah, So when I look at first globally, the incentives for hydrogen and fuel cells and green energy remains robust. And if you look at our business in the second quarter, our revenue in Europe for electoralizers and all of it's really primarily Europe actually tripled to forty five million dollars from what it was a year ago. And here in the United States, you know, when we look at the tax lands the credit landscape, we actually see it better today that it was a year ago.
So why is that happy?
Well, I think because when you looked at the tax credit for fuel cells, it was you know, not well structured or positioned in forty eight eight, and we see an extension of what was essentially the ITC, which was extended the last time under President Trump in twenty eighteen in the latest bill, which extends a credit for fuel cells which is used by Amazon, Walmart and many of
the customers you mentioned through twenty thirty two. So we're actually pretty thrilled with what happened for hydrogen, especially in the last bill.
When you look at plug Power's earnings, the margins are still negative, but they have improved from the last year. What are your thoughts on just how much more runway you guys need before plug power is consistently profitable.
Yeah, so you know, we I think you hit on the point. You know, we moved gross margins from a year ago by over sixty percent, and we are targeting to be gross margin zero by the fourth quarter. And there's a clear map with our hydrogen plants and the improvements we've seen in service and more importantly, selling more and that really helps us a great deal. And we're targeting being EBODOS positive by the end of next year.
And I think with our project Quantum Leap, where we really focused on cost and selling, that we are on the right track. And I think you're beginning to see it in the financials. Even the miss when EPs was right downs, which were non cash right downs associated with our plants. That really align the business for the future to be successful.
What's the US market right now for green hydrogen that's hydrogen made from water using clean electricity to power the electrolysis process.
So big straight it is a bit slower than what you see in Europe and other places. You know, our primarily focus for electoralizers are really Europe Australia where the climate's right. But we actually operate the largest green hydrogen liquid hydrogen plant in the world at the moment in Georgia.
And when I looked I reviewed this morning our demand for hydrogen from the second quarter of the fourth quarter, we actually see that our daily usage go up from fifty five tons per day to about sixty seven tons per day by the end of the year. So we're using our plants, we're creating green hydrogen. We're involved in some blue hydrogen projects, so we feel comfortable about the long term trajectory and even near term trajectory for hydrogen in the United States.
Talk a little bit more about that demand and where it's coming from. Are you seeing customers, you know, pivoting from other sources of energy or are you seeing you know, just increasing need for more sources of energy and that's what's really driving your growth here.
That's actually a real good question because when we look at the world the United States, with what we've deployed already about it's you know, two hundred and seventy five sites in our material handling business across the US. We've actually taken off the grid approximately five hundred megawatts of electricity, and as I think everybody knows, it has become more and more challenging to bring electricity to you know, there's over a three and a half year backlup log to
get electricity to facilities. No typical distribution center. We take off two to three megawatt off the grid, which can then be used for things like increasing freezer capabilities. So if you think about if you're or fuel food retailer and you want to sell more frozen goods, which is a growth area, one way you can One way you can increase the size of your freezer and not have to worry about the power needs is actually use fuel sales and hydrogen from plug Power.
We're speaking with Andy Marsh, the CEO of Plug Power, joining us from just outside of Albany. Andy, I want to go back to regulatory issues, tax credits and that sort of thing, because you did say that demand is better. We were in a better position than you were a year ago. Our own will wide and team reporting that a year ago credits were expected to help lead about one point two million metric tons of annual green hydrogen production by twenty thirty. That's according to BNF or in
house Bloomberg New Energy Finance. Now projects with just one hundred and fifty thousand tons of production capacity are expected to qualify for the incentives, dramatically reducing anticipated US output. Is after the Trump administration's tax and spending legislation significantly limited tax credits to produce the fuel.
How is that affecting you?
Well, when I take a when I look at I'm already using the tax credits. We expect to have online our additional Texas plant by twenty twenty eight before they fire, which allows us to use those credits through twenty thirty two. I think when we look at our own needs, you know, we're looking at other expansion opportunities. You know, we think that we'll be able to generate the hydrogen to meet our customers' needs and be able to take tax credits
through twenty thirty two. So, you know, quite honestly, I'm very comfortable with the present legislation.
Back in January, there was a Bloomberg News story about the White House confirming a one point six billion loan guarantee for plug Power to build hydrogen plants. How have you guys received that that loan yet and how crucial is support like that to continue to grow plug Power.
It's important, but it's not you know, we will still move ahead with building plants. Ultimately, we're focused, and I've been down to the DOE recently, uh and we're working on details to make sure we can pull down funding for the plant in Texas, which is a plant that gets very very low cost electric electric electric energy from a next era wind farm. When we take a look at that, we're working through the final details to start being able to pull down funding from the DOE. I know,
they've canceled many projects. We haven't been on the cancel list, and we have a good relatelationship. I think the Trump administration and their goals of being energy dominant. You know, the world's going to one green saff the world's going to one green pneumonia. The US is well positioned to be the leader in providing those fuels in green hydrogen is critical the becoming energy dominant for the long term. Additionally,
hydrogen generation is really important for national security. I mean next to SpaceX, all the vehicles use hydrogen, so we really think about the long term benefits. And then on top of that, when you think about hydrogen, over thirty percent of detail food moved through a plug power fuel cells. Boy, you don't want that disrupted overnight.
No you don't.
Andy, We only have about a minute and a half left, and I want to talk about the stock price. It's down about ninety seven percent since the twenty twenty one highs. Even though you're a relatively small company, you're still among at least today the most actively traded stocks, with fifty four point seven million dollars or million shares rather trading today. It's massive. The volume this year has been massive. You've
got twenty eight percent of your shares floated. What's your message to investors and traders right now.
Well, I think I would tell them it's a great opportunity to come in. You. You can look at the financials revenue growing at twenty percent, gross margin improving dramatically. The deployments in Europe, where the electoralizer industry is really happening today, has tripled in the past year. You know, I think this is the opportunity to successfully enter the stock and it's one of the reasons our CFO has
made significant investments. And I'm putting about twenty five percent of my salary to work buying stock, actually fifty percent of my salary to work buying stock every week.
Andy, thanks for coming on. Appreciate you taking the time this afternoon. Always get a check in with you, and it has been quite a few months since we last spoke, so don't.
Be a stranger. Come back soon.
Andy Marsh, CEO of Plug Power, joining us from just outside of Albany.
Stay with us.
More from Bloomberg Business Week Daily coming up after this.
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Roamco.
I'll bet you let me drive.
Oh no, no, no, no, this is not a twin.
Holright please, I'll do Excuse me, I want to drive.
It's good question.
This is the Drive to the Clothes Punk's a thing on Bloomberg Radio.
All right, welcome back, guys, it's time for the Drive to the Close. We're here today with Andrew Krye. He's co chief investment officer at Crescent Grove Advisors. It's got about five billion dollars in aum. Andrew's joining us from Milwaukee. We've been talking all about geopolitics today. We've been talking about the meeting at the White House with Ukrainian President Zelenski, Trump and a number of other European leaders. So we
have to start there. Andrew, how are you factoring in geopolitical risk into your investment strategy right now?
You know, I would say from our perspective, I think the markets have largely been desensitized to the geopolitical circumstances that we've found ourselves in now. For the last several years. Whether you look at Russia, Ukraine, you look at the situation in the Middle East, perhaps there's a little bit of excess risk premium that could still be wrung out if we were to find some sort of resolution over
the coming weeks and months. But nonetheless, we tend to think it's more about just the fundamental economic drivers, the business cycle. The FED. You know, we're more focused, let's say, on Jackson Hole this week, than we are on what's happening with these geopolitical negotiations that are happening.
Let's let's go to the Federal Reserve and to Friday where we'll hear from FED chair j Powell. Emily, remind me what was the FED theme this year?
Oh, I don't have it in front of the title. It's labor. It's about It's about labor, and we had some fancy words.
We spoke to Jim Bianco earlier about the changing labor market, and I mean, he's kind of just blowing my mind with this idea that if we don't have immigration into the US, the numbers that we'll see when it comes to the monthly jobs report will be very tiny. And I'm wondering how you're looking at the labor market. Obviously that's half of the Fed's dual mandate.
What does J. Powell say about it?
How does it shift in this in this no immigrant immigration environment.
Yeah, I think that's a key factor to look at for sure. I think you've ended up in this situation where we're kind of low hiring, low firing. I think that's actually a phrase he's used now several times. But you know, we've got a situation where one of the metrics we look at is continuing claims is a percentage of the labor force. It's ticked up modestly, but it's not anything that's terribly concerning, particularly in a historical context.
You look at, you know, sort of initial claims. Yeah, they've moved up somewhat, but again not to the point where it's it's ultimately an acute issue, we would say, again from a labor perspective. So I think it's something that the Fed's clearly watching. And you go back to the Jobs report most recently in the revisions that we saw, needless to say, they're going to be concerned about it,
and that was a real headline grabber. But I think they've got this dual mandate and they're going to have to balance you know, sort of a pick your poison scenario here, where they want to support the labor market that might be softening somewhat, or do they want to risk, you know, inflation ticking back up because they're cutting and providing stimulus in an environment where inflation hasn't really been tamed.
At this point, I think there's still a lot of uncertainty around the tariff impact on inflation.
Yeah, there's certainly a lot of kind of I guess, just still lack of clarity on how the tariffs are being passed on to companies and being passed on to consumers. What's your assessment right now of whether consumers are feeling the effects of tariffs or have you seen at least in the earnings that the companies are I guess the party able to absorb the tariff increases.
Yeah.
I think what we've seen so far is that there's
clearly a lagged effect here that's happening. There's an element where companies are able to absorb some of the price increases, you know, I think it's yet to be seen the full impact, and it's if we're able to kind of spread this over a long enough period in terms of these incremental pricing increases along the way, then maybe we don't see a real uptick in inflation in sort of a meaningful acute way, kind of a you know this concerning number where CPI spikes, pc spikes, those sorts of things,
but we just slowly kind of adjust and see, you know, this not a step function change again, but just an insidious level of sort of inflation building in the system.
And then, you know, I think part of the argument that the Fed's making here too for being a little bit more I guess cautious about this whole scenario is that it could really just be a one time reset that as well, right, and then we start going to comps next year on a year over year basis, And once we've gotten through this initial wave of the tariff adjustments within pricing, you know, then really it's all baked
into the cake. At that point, we're kind of back to where we started in terms of figuring out the balance between what's fundamental inflation, what's sort of that underlying structural level of inflation, and then what's the labor market doing. And then they're balancing their dual mandate and their policy settings around those two factors.
So it sounds like what you're saying, Andrew is you don't find the tariffs being inflationary.
Well, for sure, they will be inflationary to a degree. I think it's this idea that we were going to see this one time or you know, really acute sense of, you know, a three month period where inflation spikes really meaningfully. I don't think the evidence is suggesting that that's what we're going to see. It's going to be spread out over several months, which you know, I guess tells us.
You know that we just have to be a little bit more patient in terms of understanding the full impact of these tariff levels, which, mind you, are still changing as well. I think that's part of the other issue.
So so okay, so how should investors and how should investors and traders think about that, like in the sense of how should they think about them still changing or should they think about them being Well, President Trump's favorite word in the dictionary is tariff, so they're here at least while he's president.
Yeah, I think we've reverted back to some level now of what we can expect going forward in terms of you know, we to look at the most extreme version that was put forth going back to the March April Liberation Day discussions, right, and we've reverted back to something that's not nearly as extreme. Is that so if there's some band I guess around where we are today, Okay,
that's reasonable enough. But I think from investors' perspectives, we start to zoom out and look at sort of derivative effects of everything related to not only tariff policy, but broader trade policy, broader America first policy, and for US that's still the sort of incremental shift away from dollar assets from US markets, looking at things that might be cheaper in non US markets, in particular in areas where we've potentially got a catalyst as well, So like Europe
for instance, where now they're loosening the fiscal purse strings, they've got consumers that didn't spend down all of their COVID stimulus that are still pretty well healed from a savings perspective, that could support their economy were they to fall on a little bit of a hard time. But we just tend to think that there's an interesting catalyst
in non US markets. And again this idea that the dollar may not be kind of the end all be all that once was this haven currency for a variety of reasons, not least to which is the policies we've talked about.
Andrew Crye Co, Chief investment Officer at Crescent Grove Advisor.
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