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On Today's Bloomberg Intelligence Show, we dig inside the big business stories impacting Wall Street and the global markets. Each and every week we provide in depth research and data on some of the two thousand companies and one hundred and thirty industries our analysts cover worldwide. Today, we'll discuss how Google is reshaping search around AI is at racist rivals like chat GP, plus a look at how Chinese evmaker byd is crushing competitors with a five minute charging system.
But first we begin with news on the discount variety chain dollar Tree. This week, dollar Tree announced it's offloading its Family Dollar Chain for about one billion dollars to Brigade Capital Management and masseell them Capital Management. And this comes a decade after Dollar Tree brought the business for nearly nine billion dollars. For more. Co host Alex Steele and I were joined by Jennifer bartashis Bloomberg Intelligence Senior
analyst Retail Stables and packaged Food. We first asked gen to break down Dollar Trees purchase and now discount and sale of its Family Dollar Chain.
You are reading that right. They bought it for eight point nine billion in twenty fifteen. At that time, they had about seventy seven hundred stores and they were generating about sixteen billion dollars and they were generating about ten point five billion dollars in revenue. And you fast forward ten years of multi year investment to try to improve that, and they sold it for one billion dollars. Wow, with seventy seven hundred stores, so I only three hundred fewer
stores and sixteen billion dollars in revenue. Wow, it's well.
Well.
One of the things I'll say is back in twenty fifteen, they way overpaid for this deal and they were in a bidding war for it with Dollar General. And I've long said that Dollar General was the winner in that because they didn't get Family Dollar, and you know Family Dollar. It came with a very worn down, tired asset base, more locations for their stores, unmotivated staff, and it's taking years of investment to try to get it to return
to some some some revenue growth. And they've been successful in doing that, but there just aren't synergies with the core Dollar Tree chain.
Hey, Jen, can you Dollar General Dollar Tree? Can you kind of lay out what market they serve and is there any difference between those two.
There actually is a difference between the two. Both of them tend to serve slightly lower income households, but the main difference is that Dollar General is very focused on the rural communities and actually on their left earnings call, they talked about closing some more of their underperforming urban locations because they just haven't been successful expanding into that space.
In contrast, more Family Dollar stores are in the more urbanized areas, so there is overlap between the two store bases, but they're very different actual consumers, even though their core customer household income is fairly similar, intends to be in those households that earn under fifty thousand dollars a year.
Tell me how these companies make money.
Is it based on volume and how many people are coming in? Because I mean, I know they don't sell stuff for a dollar, but still the whole proposition is on the cheap.
Yeah, it's about convenience and it's about value. And so you know what people like about these kinds of stores is that they're quick to get in and out of. They're located in very close proximity to where people live. And so when you think about people who are in that income bracket of under fifty thousand dollars a year,
transportation is an issue. So having something that's in the local neighborhood that's quick to get to for fill in trips is really how they drive traffic and they make their money.
What are these dollar stores saying these days jen about their customer base. We've seen, you know a lot of uncertainty com into the economic data just over the past couple of months. Here is that being reflected on what you're hearing from those dollar store management teams.
It is with regards to their core customer. Obviously that customer is very strapped so when we're hearing news about potential cuts to snap benefits, which are you know, old term for that as food stamps, that impacts their core customers. People are worried about job security and potential layoffs. So for those those their core customers, there's a lot of stress. But where they are benefiting is they're getting more trade
down customers. So they're getting hired income household that are in sort of middle income households and hire income households who are also a little bit worried about the current economic environment and are trading down into these stores looking for value. So there's a little bit of an offset
that they can take advantage of. The question is as things improve, are they going to be able to hold on to those more valuable customers because the hiirre income customers are the ones who are buying more than just food. They're buying the more discretionary items in the store, and that's how you make your margin in this type of retail format.
In terms of tariffs, do these guys have exposure to imports overseas and when you have a strategy yet.
They definitely do have an exposure to tariffs, But for family dollar and for Dollar General. Most of their mix right now, or the bulk of their sales, is coming from consumable so it's food, it's household cleaning supplies. Most of that is produced domestically. For Dollar Tree itself, they have much higher exposure to to tariffs and to import.
It's because they have a much bigger amount of discretionary categories, so they think about holiday decor, kitchen, you know, choch Key's, things like that, and up to now, you know, we've got a ten percent tariffy on imports from China. They say they've been able to offset about ninety percent of that cost so far, but as additional tariffs come, it's going to become a bigger challenge for Dollar Tree to manage.
Our Thanks to Jennifer Bartashi's Bloomberg Intelligence Senior Analyst Retail, Staples and package Food, this week we focused on a couple of Bloomberg Big Take stories. The story focuses on Jay Clayton, President Donald Trump's pick to lead the Southern District of New York, and in this position, Clayton will have to balance the President's legal priorities with the need to stay independent. For more, co hosts Alex Steel and I were joined by Ava Bennie Marson, Bloomberg News legal reporter.
We first asked Ava to paint a picture of Jay Clayton and his career.
So he has a pretty impressive resume. He has been a long time senior council at Sullivan and from Well, a white shoe firm primarily based.
In New York.
He was the Chair of the Securities and Exchange Commission under the first Trump administration, and most recently he has been the chair of Apollo. He was brought into that position at the investing house to help clean up and get things back in order after the Jeffrey Epstein scandal, and now he is going into one of the most premiere seats in American law, which is the US Attorney for the Southern District of New York, also known as the Sheriff of Wall Street.
So Eva talked us about this. The Southern District of New York historically a very powerful office here, fiercely defending its independence, but arguably it's come under some pressure recently, most recently with the Mayor Adams case here. What's that angle to the story?
Absolutely, So, the Southern District of New York has a nickname of the Sovereign District because it really prizes its autonomy from Washington and see itself as a kind of independent institution. It chases really big headline grabbing cases on Wall Street, in politics, in terrorism, so it's really prized
itself as being independent. But that came under threat recently when after the inauguration day Washington DC, some of the senior officials at the Department of Justice there asked the Southern District to drop the charges against New York Mayor Eric Adams, and that was quite controversial. It led to a string of resignations, including by the acting boss at
the time, a seasoned prosecutor named Daniel Sassoon. She refused to comply with that order to drop the case and resigned and staid that set off a number of other departures. So the office has been in a bit of a tenuous situation. There has been some terminal there, and Joe Clayton is really coming in at an interesting time. One of the big questions is how will he managed that relationship with the Trump administration.
Aside from that relationship, like what will be on his docket regardless, and you know, you mentioned the Eric Adams case, but like what would we expect him to do as head of this area.
So we've gotten a bit of an insight into the kind of priorities he has going into the role. From interviewing more than thirty people who know Clayton and who have had conversations with other SDMY prosecutors, we know that he's particularly interested in focusing on human trafficking, on college campus protests, on anti semitism, and also targeting how bad people finance themselves, so money laundering. That's kind of in
line with what SDM Y has done traditionally. You know here at Bloomberg, we know them as the office that prosecutes big white collar cases like FTX and Archagos. But some of these priorities certainly echo the kind of priorities that President Donald Trump has spoken about since an inauguration day too.
Do we know anything about his relationship with President Trump, because oftentimes that ends up being a critical, critical issue.
Yes, he has quite a close relationship with Donald Trump. From the people that we've spoken to, It's not something that he boasts about, but the tour close golfing buddies. They're both very good golfers. He was in line for the SDNY role actually during the first Trump administration after he was Chair of the SEC, but that didn't work out.
He is JA Clayton is well regarded in the New York circles that Trump seeks out and seeks advice from as well, So he's going in there with that particularly close relationship, and from the conversations that we've had with people around Clayton, he certainly thinks that the President will and the President's allies and people around him will listen to him and will let him get on with the
job that he has to do there. Whether that turns out to be the case is something that we'll have to watch and see.
What are the criticisms surrounding Jake Clayton.
One of the big criticisms is that he has never been a federal prosecutor before, which is extremely unusual for someone going in as the boss of SDMY. Most of the people who have occupied that position have in fact been federal prosecutors, specifically in that office, So that was a big criticism the first time around in twenty twenty. It has been brought up again, but to a lesser degree. When he was first nominated by President Donald Trump late
last year. There was a sense of relief, certainly within the office that this was someone who has a good reputation in legal circles in New York, and he's worked in government before, he's worked at the SEC. He's a known quantity, and there was a sense of comfort with his nomination.
Does you have an agenda right here? At an agenda just meaning a to do list here that's front and center.
He does.
He does.
As I was saying before, We've got a bit of a sense of what he's going in with and what he wants to focus on, and that involves human trafficking, a crackdown on college campus protests, and anti semitism. He's been vocal about some of these things in the past and has expressed disappointment that the government hasn't done a whole lot in his view, to crack down.
On college campus protests.
So we expect to see those areas focused on. But also why call work. This is the kind of work that makes that office so famous, and there is a sense he doesn't really need to encourage people to go and chase those big cases. They will just happen regardless. Given that the office is essentially in charge of policing.
Law Street our thanks to Ava, Benny Marris and Bloomberg News Legal Reporter. Coming up will break down how Novo Nordesk is looking to refill its pipepoint of experimental drug treatments. You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies and one hundred and thirty industries. You can access Bloomberg Intelligence via b I go on the terminal. I'm Paul Sweeney. This is Bloomberg.
You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on Applecarplay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
We moved to the health and pharmaceutical space this week. Novo Nordis agreed to pay Hong Kong based United Laboratories as much as two billion dollars for a next generation obesity drug. It's a Danish ozembic maker's latest move to refill its pipeline of experimental treatments. For more on this and the latest news in the biotech space, co host Alex Steel and I were joined by Sam Fazzelli, Bloomberg Intelligence, Director of Research for Global Industries and a senior pharmaceuticals analyst.
I first asked Sam about how much money is going into the ob city market.
As you know, obesity is hot and there's been quite a few deals in there. We talked about the deal between Russian Zealand Pharmaceuticals, and this week, as you run, he said, we have the one between over Notice and this time a Chinese biotech company and it's an asset that continues to broaden their portfolio of X number of mechanisms of action to try and hit this big issue.
And it's an interesting deal.
I mean, you know, it's China for a start, and it's interesting because I've seen others asters an Ix said they're putting two and a half billion dollars investment into a research center in China, two hundred million dollars up front, one point eight billion dollars what we call bio dollars. To come BUYO dollars, very very dollar bio dollars. But bio dollars are the sorts of dollars that you and I would like to have for real, except they're not real.
I you know, if this works, and that works, and that works, you get another hundred, and then that and then landing out of the two hundred. So when far biotech companies love it, they added all up and say, look how big our deal is actually upfront? Only two hundred although I wouldn't mind two hundred million dollars either.
I mean wouldn't turn you away exactly.
So what's the big question or big discussion have with your clients these days? Sam?
So, as you know, Paul, we have these anonymous chats with different industry investors, and we have one for the drug sector, and of course there is a huge amount of Can I call it depression, Yes, I think we can. As regards to public biotech markets, it's been five years. If you look at the XBI, which is an ETF that tracks the biotechs that are listed on the SIMP five hundred, it's gone nowhere pretty much for five years.
And if you want to really depress yourself, plot that against the SMP five hundred and we all know where that's gone, irrespective of the latest little little down. So
that's where biotech investors are a bit sad. On the other hand, we're seeing some deals with private biotechs, there are nowhere near the sort of valuations that would get in the public markets, So it actually starts to question why would they want to go public if they can get these sort of returns by doing a deal with Astroseneca, a deal with Sanofi to get four hundred million dollars up front for a very early stage asset.
Where are we with measles?
Oh?
Yeah, Well, the cases are continuing to rise. The disease is still there. I think a lot of people that I speak to are convinced that we're only looking at the tip of the iceberg when you look at the count. But we are slowly going through the respiratory season. COVID's on this way down, flu is on its way down
RSV and its way down. Hopefully measles will be the same case and that will come out of this without too much collateral damage, which is a horrible thing to call it, without too much misery for people who suffer from it.
Same as you well know, there's been a growing skepticism and regarding vaccinations in general here in the United States. How is it in the rest of the world, the rest of the Western world, I'd say, I.
Mean, Paul Remember the author of the paper that has now been disgraced and disqualified of whatever the right phrase is removed from the scientific conscience for linking MMR vaccines to autism was a British scientist or medic But whether you want to qualify them as scientists or not, it's a different matter. And so there's been you know, the story of vaccine skepticism has been here too. It's just
a little bit different because it's very easy. It's all free, it's available to anybody who wants it is available, and the energies you walk into a doctor and you get it, so you don't have to pay anything. And therefore vaccination compliance, particularly in the older cohort of folks is better here.
Okay, that's interesting, But then when you take a look at that, at the broader landscape and just the victriol still into the m n R vaccines in general, like not just for measles, but just in general. Does this really hurt innovation? Does it hurt the private sector's willingness to like pump money into all these things?
Well, I mean, the United States is one of the biggest pharmaceutical markets, but they're not the only one. And at the end of the day, one has to assume that good data and good science will prevail, whether it's an MR and A vaccine or not. Maybe it's necessary to do some studies to prove that MR and A vaccines are not changing your genome. That's not very difficult to do. If it's the intent is there, maybe the
CDC should do that. But in general, MR and A vaccines, normal vaccines, style or standard type vaccines, They're all here to stay as far as I'm concerned.
Our thanks to Sam Fazelli, Bloomberg Intelligence, Director of Research for Global Industries and senior pharmaceuticals analysts. We move next to earnings from the pet food retailer Chewy. Chewy reported earnings for the fourth quarter that beat analysts expectations. The results were supported by strong customer growth as a company attracted pet owners with its assortment and reliable automated shipments.
For more co hosts, Alex Steel and I were joined by Deanna or rossetto Painya, Bloomberg Intelligence consumer staples analyst. We first asked Diana how the Chewy business is going.
So far, so.
Good, it seems, and one of the things that I find very interesting is that insters seem to wait for the next shoe to drop. These companies have experienced good growth regardless of how the economic situation is going, because it seems to be resilient. The category as a whole seems to be very resilient.
Because what's up at the style one hundred and twenty percent of the last year.
Well, it is because a few things. During four Q they experienced the first growth in active consumers. For the past couple of years, sales growth has been mainly been because of net sales per active consumers, which is pretty much pricing. So now that there seems to be growth, but at the same time, the forecasts, the guidance for twenty twenty five, it seems to be on the lower end of long term goals, so that seems to worry investors.
I think what were the competitors to Chewy?
I would say Amazon is is you know, significant, Yes, on the merchandise side. Obviously one of the things that Chewy is doing, and I think it's it's a very smart smart play is to be able to differentiate themselves besides merchandise, which Amazon does that very well. We have conducted a couple of pricing studies Amazon versus Chewy, and they are pretty comparable. So one of the things that Chewy will differentiate itself is by doing other things such
as healthcare, such as sponsor ads. That has been very profitable for Chewy.
I'm full disclosure, I have never been a pet owner. I know that's a character flaw. But these people are passionate about their pets. Does that get reflected into the business model that like, is it kind of who cares what the economy is doing. I'm buying my fluffy, whatever toy it is, or whatever great food it is.
Yes, I think it is a couple of things. One, sometimes you tend to be a little bit more resilient in terms of pet spenditure because they don't tend to talk, so you.
Know, so they talk well, you know, talk differently, and that is true. But wow, now it's something you're saying real words. Okay, go ahead, no.
But in terms of if they like something, you tend to stick with that. And that has been the fuel for the premium sation of food and that is why you have you know, a companies such as Fresh Pet growing twenty percent sales every quarter.
Our thanks to Diana Rossero pin Yeah, Bloomberg Intelligence Consumer Staples analyst. One Bloomberg Big Takes story we focused on this week was entitled Google reshaped Search around AI as a racist rivals like chat GPT. You can find it on Bloomberg dot Com and The Terminal. The story focuses on how big change is centered around artificial intelligence are underway for the Internet's most popular product, Google. For our co hosts Alex Steele and I were joined by Davey Albat,
Bloomberg Technology reporter. You first asked Davey how Google is currently looking at chat GPT.
You know, it's it's been a few years at this point since chat gpt kind of burst out into the scene,
and that was in late twenty twenty two. I believe when that moment happened, there was a lot of panic, i would say, within Google, as we've heard from sources, and it was really sort of an existential threat to them because even though chat GBT wasn't, you know, exactly a search product, people were using it like search, so they were asking it questions and getting the answers delivered to them written by AI, and in a lot of cases, you know, it just delivered the information that people were
looking for, which is kind of the essential function of search, and so Google for the past several years has just been trying to figure out how to answer you know, this threat from open AI and their plan, it appears, is to stuff traditional search with generative AI as well.
So when I go on and I search for, like, I don't know swim class for my hid in park slope, Now what comes up is that AI generated that pulls from broad search.
Is that what that is?
Yeah, that's right. So that's a fairly new product called AI overviews. So that's where the search results page seeds the top portion to results that are written by AI. And this you know, Google has come out with a search centric AI model that pulls from results and sort of summarizes and tries to give you the information right on that first page.
So it gives the.
User the information faster, but there are problems with it. There's the possibility of hallucinating in those responses. And the other big problem, and one that we explore in this story is you know, what does this mean for the open web if people don't need to click through to websites anymore and can just get their answers right on the search page. Then why would the open Internet still exist? Why would it be a good business model to advertise on websites. So that's been fascinating to look at.
So again, one could paint the argument that this is a existential threat to the entire Google business model, Yet the stock doesn't really reflect that. You know.
I think that Google has rolled out a lot of these changes around generative AI slowly and experimentally, and for the most part, what it's doing is trying to show the public that it matches the capabilities of open AI and chat GPT, and for the most part it actually really does. You know, Google is a company with a lot of deep AI history even before the you know,
generative AI was extremely popular. But I think the issue is also that the there's this sense of like a slow degradation of search and the open Internet that just won't really be reflected in the day to day stock market because it's so slow. But I think people are starting to really get that. Sent who's in charge of the AI strategy at Google? So Liz Reid is the head of Google Search. She's the person that we profile
in this story. She's a relative newcomer to search. She used to be an executive on the Google Maps division, and then when Generative Ai exploded onto the scene, she moved over slightly into main search, and she was the one behind Search Labs, which hosted a lot of the experimental features that I was talking about. So AI overviews, for instance, started as an experiment within Search Labs before it rolled out to the public more widely.
Our thanks to davey Abbot, Bloomberg Technology Reporter, coming up a conversation with International Papers CEO Andrew Silvernail. You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies in one hundred and thirty industries. You can access Bloomberg Intelligence via bi go on the terminal. I'm Paul Sweeney. This is Bloomberg.
You're listening to the Bloomberg Intelligence podcast. Catch the program live weekdays at ten am Eastern on Applecarplay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.
We move next to the International Paper Company, which trades on the New York Stock Extrange under the ticker IP. The company is one of the leading producers of sustainable packaging, container board, and pulp products. This week, co hosts Alex Steele and I had the pleasure speaking with the International Paper CEO Andrew Silvernail. We discussed what the company does,
Andrew's economic outlook, and the potential impact of tariffs. We began by asking Andrew what the theme was for the company's most recent investor day Transformation.
Okay, it's really about the transformation. It heard in the opening talking about International Paper. Of course it's in our name, and so people think Global Paper. And the reality is we're a packaging company now, so almost one hundred percent sustainable packaging. With the acquisition of Dia Smith North America and Europe, we're number one in both places, and we're all focused on the customer and their packaging needs. You mentioned Chewy, great customer for us and a wonderful opportunity
to build their branding to help them be successful. That's what we're all about, is transforming into a packaging company.
So something that definitely came up is value over volume. You want to get the most out of what you're doing rather than just the numbers ups is doing something very similar and the short term there's a lot of angst and pain kind of around that before you get to that volume off to that value growth.
Talk me through the cycle.
Yeah, So if you think about we were our own worst enemy. So for years and years and years, we would chase volume at the most inopportune time. And so what we've effectively had to do is go back to the marketplace and say we need to be paid for the value that we're bringing. And that's what we do. We come into the marketplace. We're trying to help you get your goods to the place you want them to be, whether it's fast moving consumer goods or it's industrial goods.
That's what we're trying to help. But we've got to make sure that we're taking care of all of our constituents, and frankly, we weren't, and so we've got to get that value proposition right. I think we've made that switch over the last couple of years. We're seeing that start to play out appropriately and we're getting paid for the value that we bring.
You're building a state of the art box plant in Waterloo, Iowa, So talk about onshore. That's big time twohundred and sixty million dollars. Talk to us about that investment. What are you trying to do there?
So what a lot of people don't understand about the packaging business, certainly the paper based packaging business is all of the business is done within two hundred miles. Two hundred mile radius of a plant. Air is expensive to ship and so you've got to be close. So we want to be close to our best customers. That's protein alley. So that area there's protein a protein alley, Protein alley.
Really heard, Yeah, I think of the.
Beef and the chickens.
I heard that before.
And so if you think about kind of kind of where protein happens in the United States from if you think of the South all the way through the Midwest through there. We want to be close to our customers. We have a great customer relationships. We need a modern facility. We're going to have them. I think it's going to be the largest facility in the US that does paper based packaging. And we want to make sure, because we're shipping in from other parts of the country now, service
those customers very ineffective, very inefficient. We want to be local, we want to be close. We want to drive customer service and innovation as close to the customer as we can.
Internationals in your name, So how are you affected by potential tariffs? And everyone sort of every country shift to nationalism whenever that way that is energy nationalism, goods nationalism, supply to nationalism.
Where do you play and that has affect you?
Yeah, so we are.
We're definitely international company, principally North America and Europe. We're about two thirds North America and a third Europe. We don't ship actually a lot across borders, believe it or not, so that doesn't happen. So we're not being impacted directly by tariffs with cross border trade, but we're impacted by the economy and so as tariffs impact the econ to me, that will have an impact of us. So we're watching what's going on and we see it in our numbers.
We've seen the volatility in the last month or so, so we're keeping a close eye on that. But that's really how it impacts us.
What are your customers saying about their outlook for the economy? I would think that you would have a finger on.
The pulse of that.
Yeah, I think we do have a pretty good pulse. I think there's uncertainty, if we're fair about that. The last month or two or so, there's been some real uncertainty, and I think, well, nothing's really happened yet. It's caused people to retrench a little bit and ask, hey, do I want to make that investment right now? Can I hold off on spending money right now?
And let's see.
Look, my belief is these things wash out over time, and we make investments for decades. We don't make investments for quarters or even years. And so we're thinking about investments for the.
Long term in terms of say, hiring labor, how you're managing the business. Is it a retrenchman time? Is it expansion? How would you define it for you guys?
Actually, interestingly, it's a little bit of both, right, And what I mean by that you yeah, you can actually, So when you think about that, you have certain parts of your business that aren't as strong or aren't as healthy, and you have other parts that are very healthy. So, as an example, protein alley very healthy for us, Let's make investments in water, rely on it. Let's move the
the let's move people and this investment. There things that are weaker, things that are struggling or markets you're not as strong in. You have to reach trend, so you have.
To do blaking areas. Are those well you've.
Got you've got softness in parts of the economy kind of broad base. You've got to be concerned about things that are going to shrink over time and things, you know, things like e commerce that are strong. Things like protein and fresh vegetables, those are strong. You want to move
towards those things. And uh and so you know, we want to move our investment towards the parts of the economy that we think are going to expand over time, location and industry and and really you know, grow on those strengths.
So to the extent, if I think about your company, I think about a GDP top line growth story, is there anything different than that? I mean, that's it?
And is it?
So?
Is your business really about managing the cost of managing margin?
No, it's not.
Okay, Yes, you always have to manage your costs, right, but the key thing is you want to align yourself with where growth is. I think that's the biggest thing. In our investor day, we talked about a volume growth that's kind of one to two percent that follows underlying volume growth and pricing power over time, it's also about one to two percent, so we think we're three to
four percent grower over time the core market. And then that question is can you align with better growing industries and can you win markets?
Here our thanks to the International Paper CEO Andrew Sillerno. Each week we look at research from Bloomberg n EF previously known as New Energy Finance. They're the team at Bloomberg that tracks and analyzes the energy transition from commodities to power, transport, industries, buildings, and agricultural sectors. This week we looked at how Chinese electric vehicle maker BYD is
crushing competitors with a five minute charging system. For more, co hosts Alex Stale and I were joined by Ryan Fisher, Bloomberg b n EF EV charging team leader. We first asked Ryan to describe BID's new charging system.
Yeah, I mean this just come out of nowhere. In some ways.
We had the Porsches of this world doing charging three fifty killer? What this is a thousand killer? What we got three to four times the kind of other best in class that people were expecting when we talk about five minutes. Obviously that's similar to gasoline for four hundred kilometers of charge. Some of the others are more like the best in class. Lucid obviously is quite famous. They're doing it in like one hundred maybe one hundred and eighty kilometers in that time. So this is a real
step change. And not only is it that, what you've got is an announcement and they're going to do it, going to make the vehicles available a month later. So typically you might hear an announcement from a Western automaker and maybe a couple of years later that tech you've heard about will be there. Whereas they're saying these vehicles in China, you'll be able to buy them soon.
But yeah, that is only in China.
How how did they get it down to five minutes?
So it seems like they've improved the fast charging technology through both the voltage so you have higher voltage on the vehicles, you could lower the current or the current accept this power, and then changing the battery chemistry as well.
So the interesting thing is.
That they've added different types of cooling because if you have really high currents going through the battery, then you have a lot of heat being created. So they've changed their cooling technology. They've improved some of the other intricacies of the cells as well. And on a bigger market point, you've got a lot of companies saying we're going to build solid state batteries, So like next generation battery technologies
for the car, Well, is that even needed anymore? If BYD can do this with an evolution of the current tech, So.
What can be what likely will be the competitive response from the Western battery infrastructure people. They got to up their game like now, don't they.
Yeah, it's just such a race.
Like you look at these evs and you think about buying one, and there's just something new coming that's more advanced, one after the other. So like as a consumer, maybe you don't want to buy because you think, well, I'm going to buy something and that'll be absollete pretty quick. From the Western automakers, they going to find it hard. You look at BYD, they've just got so many engineers,
they're vertically integrated. They're doing much of this by themselves, all the way down to now buying the ships to distribute these cars they've built around the world and getting involved in the metals and mining game and things like that. So it's hard to imagine how everybody is going to compete. Obviously, we've got tariffs in different regions to try and block the Chinese out. And then when you think about this tech, there is an element of do you actually need it?
So when you look on the Chinese articles, they were looking at the Jaumi Su seven, which is the vehicle made by the Jammi, which is the smartphone maker. So they've entered the market and they're selling electric vehicles and the hundreds of thousands of volume, they've outsold loads of cars. It's kind of an amazing story and people comparing saying, well, actually this one b Wyde is talking about it is
ten thousand dollars more expensive. So like the tech is not necessarily everything on fast charging when there's people who are doing I don't know, fast cars, fancy cars. They got a lot of other features as well, like whilst this is a step change, do we necessarily need five minutes over ten minutes?
Does everybody care? It's debatable, I mean depends how.
Long your bathroom break is, which you know, you got a shot, you get some concessions. So bid is out selling a Tesla's in China in particular, you can't get a bid car in the US, I should point that out. And the BYD sales for this year about five to six million cars, So is this five minute battery like a big selling point for this in comparison to say a Tesla or.
No, Yeah, I think so.
And then in China what you've got is I think last year BID saw something like one point six million pure battery electric because it just the battery powers the car, and I think Tesla was somewhere around six hundred thousand to seven hundred thousand. So it gives you and they were seconds, so it gives you an idea teslare doing well. But obviously just how well BYD are doing one of the things BYD had been leaning into previously with these plug.
In hybrid models. So you have an engine and you have a battery.
The engine might only be small and the car itself might be mainly running off the battery. So they've done quite well with those, and it might just show a little bit of a pivot from them to say, actually we can maybe do without the engine.
Now, look we've got this.
Huge range, fast charging power vehicles like you don't necessarily need to worry about that all so it might be a pivot from them in terms of Tesla versus BID when you said that they're not available in the US, but they are available in other regions. So they've done
very well in places like Brazil and Thailand. There's something like eighty to ninety percent share of the EV market there, and like eighty ninety percent share is obviously huge for the that's just that's Chinese manufacturers, with which Bwide is pretty major one.
They've got a plant out.
In Brazil as well, so they're making moves to kind of dominate those The charging tech could be part of that too. So the interesting thing is, like we've had these like charging connector wards. Do you have the Tesla connector? Do you have the connector that all the other manufacturers are using? And in Europe all the other manufacturers won out.
In America, Tesla went out well. Arguably in some of these kind of smaller merging markets that you could end up with the Chinese connector becoming an interesting proposition, and maybe the Chinese automotive industry will.
Think about that.
And it doesn't mean that they've got it so far, but if they're selling the most cars and they've got the most advanced charging tech.
Then maybe that's the way that they can exert more influence over the rest of the world.
Our thanks to Ryan Fisher, Bloomberg b n ef EV Charging team leader. That's this week's edition of Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies and one hundred and thirty industries. And remember you can access Bloomberg Intelligence via b I go on the terminal. I'm Paul Sweeney.
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