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On Today's Bloomberg Intelligence Show, we dig inside the big business story 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 look at why shares of the IT company super Microcomputer roast the most since February plaus.
We'll discuss how a weak housing market impacted quarterly sales at the department store lows.
First, we dive into corporate earnings from AI giant Nvidia, the chip maker delivered a revenue forecast that failed to meet analyst expectations, and this suggests that the company's dizzey and growth has its limits.
However, in Nvidia did ashore investors that its new product lineup can maintain the company's AI fueled growth run for more. Paul was joined by man Deep Sing Bloomberg Intelligence senior tech industry analyst.
I first asked man Deep for his take on in Vidia's most recent quarter.
Any slight miss in the networking side, which was the case here, or even a gross margin degradation which they said will go up in the second half of next year, So it's really a transitory thing. I think overall, the demand side looks pretty solid, they said. Jensen called out there will be no CAPEX digestion until the data center spending hits a trillion dollars.
That's huge.
I mean, just think about you know how much runway. He thinks, without a pause. Now, does the market believe it? Probably not, Given what we heard at our conference yesterday is it's moving from training to inferencing, and on the
inferencing side there is probably more. So if once you have a train model, you're deploying that model in co pilots or chat pots, and it's basically a train model that's being used for answering queries and that's inferencing answering queries or you know, providing some productivity benefit.
And that's where do you really need a high end in video chip. The answer is divided.
Some people say, for the older versions of in video chips, you could use that for inferencing. The latest one will continue to get used for training, and that's a plausible answer, but as we have learned, there is growing competition on the inferencing side from the likes of AMD as well as startups like sam Banava, Cerebras and all these companies are trying to get some portion of that part.
When you listen to this the management team in Nvidia, where do they say, I mean, can they look a year two years in advance? How do they think their business is going to develop?
Yeah?
I mean, look the fact that they're saying gross margins will go down to around seventy one percent over the next two quarters.
But readbound seventy one, seventy one grows.
Smart Yes, wow, and it's it's again terrific when you look at it from every angle is just the way expectations were priced for it's mid seventy percent, So the fact that they are going down to seventy one percent, but in Jensen's case, he called out those margins going back to seventy five percent. So it's really a ramp up of their new architecture Blackwell, which is causing the
transitory gross margin degradation. But once they get that in full production, he expects gross margins to go back to seventy five percent. Now I do think again there will be more competition, but he clearly doesn't believe that to be the case.
All Right, I mean, here are just some crazy numbers of folks, just total Revenue's let's go really simple here. Revenue roughly calendar year twenty two, twenty seven billion of revenue, calendar year twenty four, one hundred and twenty eight billion of revenue. Have you seen anything like this in technology?
I mean, the closest thing that comes to mind is the build out of the internet infrastructure back in nineteen ninety nine. I think Cisco had a similar ramp up on the networking side. But what's different is in Vidia clearly has the balance sheet as well as they are in more products than Cisco was. So Cisco was just providing the networking gear. In Nvidia has a software line, they have a networking business and then their core ship business.
So clearly in Vidia is going with the.
Platform a stupid income statement. They have fifty five percent net income margins, so and they have no capback to speak of two three four poen so the free cash flow is just freakish.
So what do they do with the cash?
Well, right now they're doing some share buybacks, but acquisitions maybe on the table if the incoming Trump administration loses the regulation.
So okay, let's go down that road there. What's the feeling in Silicon Valley in technology about that opportunity, because, boy, your industry, in particularly some of the bigger companies that you cover, the Amazons of the world, the Google's the world, they can't do anything these days. Is the expectation that might loosen up.
Well, the overall m andy environment an IP environment may get better, but in terms of big tech, I doubt it's anything is changing on that front, especially for the likes of Alphabet and Meta. Probably an Apple or an Nvidia may be able to do more acquisitions, but I think the companies that are in the crosshairs of you know what the incoming administration feels on the consumer side. I doubt they'll allow them to make any for their acquisition, all right.
Thanks to Mandy pep Seeing Bloomberg Intelligence, Senior tech industry analyst.
Each week we look at research from Bloomberg and EF previously known as New Energy Finance, so the.
Team at Bloomberg that tracks and analyzes the energy transition from commodities to power, transport, industries, buildings, and ag sectors.
This week we took a look at what Donald Trump's upcoming presidency will mean for the energy transition for more.
We are joined by Derek flakel Bloomberg b and EF lead US policy analyst, and we first asked Derek for his take on what changes will come next.
First of all, there's a lot of worries about the future of the Inflation Reduction Act. The US is signature climate subsidy program. We expect that will mostly remain intact. A lot of Republican district states for benefiting fourteen. How Republicans have signed a letter saying they don't want to see those tax credits repealed hastily, and the Speaker of the House has said that he wants to see the scalpel, not a sledgehammer, So we think a lot of that
will survive. Where you're likely to see more change is regulations and some voluntary initiatives like the procurement for clean products from the federal government.
So I'm just looking. You have a great, great chart graphic here. Fossil fuels are likely to farewell on our Trump administration. Electric vehicles are not. Wouldn't mister Musk have something to say about the fate of electric vehicles?
He certainly would, But the question is what is Tesla's strategy going to be visa VI of a electric vehicle producers, most of the valuation comes from the dream of a ROBOTAXI. And we've certainly seen some Bloomberg reporting recently saying that Musk is likely to put for a favorable framework on
av's when it comes to evs or electric vehicles. You know, he has said and the business and now may or may not bear this out that Tesla would do better sort of survive the loss of the EV tax credits in a way that some of his EV competitors might not. It ultimately depends on what you and what he thinks tesl's interest is whether it's dominating a smaller EV market or having a smaller share of a larger EV market.
Let's move into some of the stuff that feels a little bit disier, and those are the tax credits that are part of the IRA. So one is as a tax credit for carbon that's captured, how you store, how you capture it is debatable in terms of how much tax credit you receive, and the other has to do with hydrogen. How do we feel about those two policies either staying in place or getting reduced.
So these tax credits are favored by industrial interests, oil and gas interests. From what I've heard, there's not a lot of Republican appetite to appeal either of the votes. But you're likely to see is looser regulations on both, which actually strengthens the business case for both. We might see a better outlook for both carbon caster and for
hydrids than under Trump administration. Now, as for emissions benefits, the market acceptance of that, that might be a little bit diceier, but nevertheless we see the economic case too being a little bit easier as compliance costs go down.
So I'm just looking again winners and losers here, how much of this is a day one type of policy thing versus boy, this is just take a while. To the extent that Trump administration may want to shift gears on the energy transition, it seems like a lot of stuff has already been spent. There's a lot of investment already on my ground. What's the timing, do you think?
Right? Well, it depends on what you're talking about. If you're talking about taxes, there's going to be a big tax negotiation taking up probably most of twenty twenty five to do with extending the Trump tax cuts, seeing what happens with the IRA et cetera. You're likely to see closure on that by the end of the year. But
after that will come regulatory changes and so forth. In general, regulatory changes, including those for existing tax credits, take usually about two or three years, give or take, and so a lot of the stuff can't really happen on day one. You can't really shift to sip on a dime. However, in terms of carrif, those are things that can be done more or less immediately, though politically that might not
fly too well. And programs that are sort of voluntary like again federal procurement of clean products, Those could be killed more or less day one by an executive order.
What about wind and solar? So to some extent a lot has our been thrown into that, and it's hard to see onshore wind and solar, it's hard for me to reconcile that being really stripped away. But the offshore wind space that has question marks for me.
Yeah, it does have quite a few. If you look at BNFS modeling for what might happen if the IRA were repealed at the earliest opportunity, which again we don't think will happen, but even if it did, you would see about a seventeen percent drop overall in the combination of wind, solar, and storage installations. Wind itself, though, would see a much bigger drop because it's very expensive and
tax pres dependent. You might see about like thirty percent drop in on store wind and an over forty percent drop in offshore wind, and that's only based on the financial subsidies.
Right.
Trump has a lot more control over offshore leasing as well as federal permits. There's a pipeline of products that already have both offer leases and permits, but a lot of proposed ones don't have that yet, and there's also questions about how the Unity would approach litigate and against existing off for wind permits. You might see some of that fall by the wayside depending on how lawsuits go.
Derek just broadly defined how committed is Congress as a legislative body to this whole energy transition. Do they feel like it's real or how did they feel about it?
Are facilities being built in their states? Yeah, so that might act they answer.
To exactly from what we attract in clean tech factory deployments, I think about ninety percent is going to red or purple. It has swing states, so there's a lot of electoral consequences, especially if you zoom down at the district level, where overwhelmingly it's Republican districts with the planned better labor costs, rich resource these are the place they're seeing the most investment.
And so I think the commitment primarily is to economic development, local opportunity, as well as to some degree on storing and supply chained diversificatement and de risking, and that I think is fairly durable in a bipartisan manner.
Our Thanks to Derek flakel BN ef lead US Policy ammost.
Coming up, we're going to break down how Wall Street banks are planning money into artificial intelligence as the next big thing.
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We move next to news on the information technology company super micro Computer.
This week, super micro computer shares rose the most since February, and this came after the company hired a new auditor, BDO USA.
Super Micro also filed a plan to come into compliance with Nasdaq listing requirements. If the plan is accepted, super Micro's deadline for filing its financial disclosure reports will likely be extended to February.
This would allow the company to stay listed on the NASTAC until a final decision is made. For more. We're joined by Woujin Hell Bloomberg Intelligence Senior Technology channelst We first asked.
Wujin for his take on this week's news.
The fact that they actually got an auditor, given what they've gone through over the last two to three months, is actually positive news for them.
Which when I kind of just look at this story again, they've had some real concerns with their auditors and some of the auditors concerns about the risk controls. I guess at the company, can you give us your opinion of management of this company and the board of this company.
Yeah. You know, one of the reasons why I and why resigned as an auditor as part of the AK filing was that there were some integrity issues that they found as part of trying to get some financial documents. You know, Paul, I haven't seen the word integrity issues in an AK filing or an auditor resignation since back in the end run days. I'm not saying that this is an Enron, but this is something that you don't
typically find in filing. So you know, I have called for you may need an overhaul of the board or greater independence and possibly change of the CFO, because this is not the first rodeo of having delayed filings.
Do you feel like the stock move is justified?
Yeah, So if we think about the recent moves, there's actually been more headline risk that's been driving the stock than the fundamentals. I think much of this is more of a relief rally that they're not going to get delisted. Now,
delisting would have meant a couple of things. First of all, for they get delisted and it is going to start some force selling, but it also potentially well it would have forced the removal of the S and P five hundred, which would have been another round of forced selling when the rebalancing comes in December the fifth. So that eliminates that risk for super micro risk. Some relief there, but they're still not out of the woods.
Where does this company fit into kind of your part of the tech stack, Wouge in terms of being a supplier of you know, hardware and components and things like that, Because I mean it's got twenty five billion of I guess revenue. I'm just looking at the FA function forecasted for June twenty five. I mean, it's a big company.
Yeah, look, it's all about AI AI AI. The question I have is how reliable are those estimates? Keep in mind there's been several coverage suspensions and I don't know how up to date those estimates are.
Who are the customers for zuper Micro?
Yeah, so we do know that there's one large cloud customer, which we suspect is Meta, but it's tier two cloud customers company that may be filing for an IPO called core Weave, and also Tesla's XAI. They bought probably about a one point five billion dollars in equipment from super Micro this past year, and.
Which to your point about the analyst coverage, right, just pulled up the A and R function for analysts recommendations. Most or a lot of the annals have suspended coverage or not rated. Is kind of what we see. So we of the ones that do have a rating on their three buys, seven holds, and two sells. So it sounds like this company has a lot of ground a head of it to rebuild confidence from the analyst community, probably their customers, and from investors. Is that kind of your thought?
Yeah?
Yeah, I mean, look, I think some of the headline risk has been eliminated for now, or at least extended. You know, they only received an extension from the Nasdaq. The next milestone, quite frankly, is probably February twenty fifth, when if they don't follow their filings on time by that time, the delisting questions going to start arising again. They essentially kick the can down the road.
This might be a super silly question. At one point I probably knew the answer to this, But where does super micro sit in the AI play stack?
Yeah, so they're actually in the server space. It's the hardware equipment that helps run the models. Among the US vendors, they actually had the largest amount of AI service sales, larger than Dell and larger than HPE.
So they're very much like needed in this market. Like it's going to be hard to replace them either way, right, Like they're needed essential.
Well, that's a good comment and good question. Competition has grown. Dell is actually strengthening their AI chops quite a bit. But I came back from a couple of conferences recently and we're starting to see other companies with similar capabilities
that we'll be making it much more competitive. And one of the evidence there so far is the lower gross margin they peaked their gross margin at around seventeen percent a couple of years back when they were the sole player, and now that you have more players coming in, their gross margin the last couple of quarters went from went to about three team percent in eleven percent all.
Right, thanks to Bujin Hoo, Bloomberg Intelligence Senior Technology Analyst.
This week we focused on a Bloomberg Big Take story entitled Wall Street Banker Spot a fat payday in one trillion dollar AI hysteria.
You can find it on Bloomberg dot com and the Terminal, and the story looks at how Wall Street banks are plowing capital into artificial intelligence as the next big thing from work.
We're joined by one of the stories authors, Neil Callanan, Bloomberg Senior Editor.
We first asked Neil to talk to us about how much money Wall Street banks are actually steering towards AI.
We're talking about a trillion in credit and two trillion and overall expenditure on data centers and AI and everything related to that. And basically what we have at the moment is the banks and private credit providers saying the flow of capital that's needed to fund these things means that we don't even have to compete with each other because everybody is going to get a slice of the
pie regardless of what happens. But having said all that, actually it's probably the that's part of financing right now, and margins are quite tight compared with other types of lending, so you know, less than two percentage points if you've got one of these hyperscalers like Amazon or Meta or Alphabet is one of your tenants in one of these data centers, and each one is massive, so you know, these things are going to cost about twelve billion dollars
each to construct. They're about the size of a skyscraper if you put it down sideways, and they're just filled them with rocks of computing powered and tended to drive AI forward.
Neil, talk to us about this Morgan Stanley dinner you wrote about in the piece.
Yeah, it's a dinner between the bank and a number of private credit firms. You know, usually these these companies are competing quite heavily with each other. Among the invitees are Ares and Blackstone and Apollo, for example. But at that dinner day kind of mood was like, we don't need to compete in the same way in this in this area because there's just a demound for so much capital at the moment and so much credit that we
can all make out quite well out of this. And you know, it's kind of a new goal rush as it were.
Up Did that message land like, are they all on the same page about that?
I think the fact we got a hold of the details suggests perhaps not. And again, the competition seems to be there in terms of the pricing of the loans for the construction of data centers, which are very competitively priced at the moment.
And is this equity financing, debt financing both all of the above public private? What kind of capital is being raised?
It's pretty much everything. So you know a lot of people I wouldn't get involved in data centers until such time as they're built, so particularly for the pre construction works where you're adding the power and stuff, and that's very much equity driven at the moment. And then the debt comes in for construction of these data centers, but also for the power and the utilities that are needed to service them as well, and that's coming from a mix of public and private sources.
So this is enttally un for a question, who do you think is going to win. Like, if they're not all happy, go likely, let's work together and there's enough pie for everybody who's in the lead in this right.
Now, I think there will be enough pie for everyone. Maybe I'm being naive Alex by saying that, but I actually think this is going to be a big driver of credit markets in particular coming forward. These bankers have suffered from you know, private equities difficulties, meaning there's been less leverage loans around. That's got to change because these these of the checks that need to be written for these will also drive a bigger resuscitation in the securitization markets.
They're they've been quite good in the US, but they've been murbed and in Europe. So you know, overall, this should be a very very positive thing for both banks and private credit.
Will there be some idea as long as it works.
That should be the qualifier. As long as it works. There is a chance of these things are not going to work, and banks are kind of trying to protect themselves by they're giving lower leverage for data centers that are AI focused on a charge more for them as well. So that's their attempt to protect themselves if AI doesn't come true in the way people hope, Well, that's kind.
Of our what I wanted to go neil, because for some folks saying, are we really going to get the return on investment? We being these companies that are making these big capital expenditures, and as equity investors, are we going to get their returns from all this spending? So there's a note caution that's been kind of coming into the AI story a little bit. Are the banks thinking about that as well.
Yeah, one hundred percent. It's something that's definitely on their minds, and one of the ways they protect themselves is those kind of higher returns that they're demanding from ai A focused data centers, because the risk is if these things don't work out, you're left with an obsolete auset, So
you definitely need some downside protection there. There's also been cases of some of these data centers that have been built and can't get connections, So there there's already talked of what people are calling zombie data centers, and one of the ways investors can protect themselves against those risks
to actually do the plumbing instead. And we have some stuff about people advising that the utilities and the power providers may be a better way of playing this game rather than investing directly in the data centers themselves.
Yeah, that's what I was going to bring up too. It's not just building the data center, but especially when you have say, you know, the report from the information on video saying that it's just really hot and it's too hot, and that's why sort of we may see some delays in chips AKA you need air conditioning, you need power, et cetera. Is there one company that's making a bigger bed on one area of AI versus the other.
I don't think so at this stage, but the difficulty, I mean, you could probably cite some of the power companies in Virginia because Virginia is the kind of capital of data centers globally. You know, the scale of power that's needed for these things is the equivalent in just in the US is the equivalent of Tree New York cities.
So that is just huge amount of power. So utilities, particularly around Richmond, which is, as I say, they're kind of capital of these things, they're probably the ones who are taking the biggest risk. But one way that people are looking to mitigate that is they're talking about building
small nuclear reactors next to these power centers. They sorry next to these data centers to provide a power for them, because basically, what we don't want to happen is for consumers set up paying higher energy prices in order for people to be able to play on Instagram more than they normally would before.
Our thanks to Neil Callanan, Bloomberg Senior Editor.
Coming up on the program will take a look at why Ford Motor is cutting more jobs in Europe.
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And am Malex deal and this is Bloomberg.
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We moved next to the Home improvement Space and Lows.
This week, the company reported at declining comparable sales for the third quarter. This was due to a weak housing market and high interest rates, which a weight on home improvement spending.
For more, we are joined by Drew Reading Bloomberg Intelligence, US home building analyst.
We first asked Drew to break down this week's results from Lows.
Yeah, not too dissimilar from what we heard from Home Depot was a beaten raise on same store sales. That being said, there were some non core items as you mentioned. You know, we know, we had a prolonged period of warm, dry weather across the US, which provided a lift to some of their seasonal and outdoor categories. At the same time, there were beneficiaries of some of the hurricane activity we saw in the South out one hundred basis point impact
to same store sales. Home Deepo called out fifty basis points, So some transitory items in there. But I think when you look at the core business, while it certainly appears that maybe things have stabilized, I think if you were looking for that inflection point, I don't think you got it yet. We continue to see consumers pressured by the cumulative impact of inflation, economic uncertainty, and you know, housing activity which is at the lowest level in over a decade, So.
Drew, do you expect then for twenty twenty five consentsus to start coming down to reflect that or just pushed out?
Well, I think the recovery in housing has certainly been pushed out, you know. I think expectations for home improvement as a whole are somewhat depressed. But what you have to keep in mind is, although housing activity is very low, home people and Lows will start to lap those comparisons, so strictly from an optics perspective, things will become a little bit easier. So we do think you could start to see a little bit of growth maybe in the back half of next year off of a lower base.
Operationally, how is Low's doing, say, compared.
To Home Depot, They do have some company specific things going on, and the two that I'd call out and that they point to are what they're doing in their pro business and what they're doing online. When you compare Home Depot and Lows, that's really the big differentiators. Home Depot has a lot more exposure to the professional contractor fifty percent of sales. Lows only has about twenty five
percent exposure to that business. But it's over the last summer years, since Marvin Ellison came in and took over, it's really been a point of emphasis for the company. They didn't really have a strategy before. They didn't have
proper inventory staffing the brands that pros need it. So they've made significant investments in that part of the business, not only in getting the product into the store and how they're serving their customers, but through supply chain investments and how they're actually getting that product to their contractors, whether it's on the job site, you know, through online delivery or in store pick up, things of that nature.
At the same time, we're seeing improvement in their online business. Again, they were operating an antiquated platform which really didn't allow consumers to go in and find the products they need. So they've made significant investments there and we actually saw mid single digit growth in that business. So when you look longer term, certainly you need the macro to turn
in order for these businesses to return to growth. But I think once once that happens, they've made the investments in the appropriate place to capitalize on that turnaround.
All right.
Thanks to Drew Reading Bloomberg Intelligence, US home building analyst We.
Moved next to earnings from the department store TJX.
The off price retailer reported overall comp sales that beat analyst expectations.
TJX also raised its earnings outlook for the full year, but lower than expected sales at the company's TJ Max and Marshall stores dampen investor enthusiasm for more.
We were joined by Mary Ross Gilbert Bloomberg Intelligence, senior equity analysts. We first asked Mary for her take on the numbers.
The way we look at it is that TGX for the quarter, their comp sales came in at three percent, and that was sort of considered. You know, it's at the high end of their estimate. It was below analyst estimates, particularly on the marmac side, and you said that you're a tjmac shopper. They had strength and home goods and also international up seven percent. But I think if you look at the outlook, they basically raised the profit outlook,
but it was below analyst estimates. So in looking for EPs of as high as a four dollars and fifteen cents for the full year, the estimate out there is four nineteen and then for the quarter it's one nineteen versus about one fifteen for the company's guidance. But what we also think with TJX is they like to put out conservative figures. We wouldn't be surprised if they come in at four twenty for the year, and already the fourth quarter is starting out strong for the company.
So, Mary, who is a TJX shopper? And what's the company saying about that shopper?
Everyone? Everyone is a tj shopper.
Mary, That's exactly right. It actually appeals across income bands. But we did notice that when you look at shoppers earning with a household income over one hundred thousand, it's well distributed across that even above two hundred and fifty thousand. And the reason for that is if you look at their assortment, you can actually buy handbags such as Chloe Burberry Valentino and also Botega Vanetta, so here you can
get the cream of the crop. But it also appeals to lower income consumers where they have more accessible brands like a Juicy Juicy couture and you can get Nike in tennis shoes. So it's a wonderful place to treasure hunt across income bands. And so they do have that strong appeal.
So this is what you've never been in Tjmax, right, Paul, No, right, Okay, So here's how it goes. In most of the stores, they have this runway section. One way section is all the designer stuff that comes from whatever agreements that they have with different other designers or big stores like a SAX. They don't have a SAX, but you get my Drift
and then they have that on sale. Then they had the clearance there and you can get some seriously good deals, and then you have other stuff and you got some food you can get you get housewares and that's also not related to the home goods part, which is a whole different store.
Store.
Yeah, and then you get toys, and then you get kids clothes, and then you get towels and you get sheets, and it's like and in all the stores you get kind of the similar footprint. Did I do justice there? Mary?
You did?
Absolutely?
But they also have beauty, and beauty has been a big draw. So for example, you could get Clinique or even Laura Mercia, so it has incredible options again across the income band, even in beauty. So beauty and fragrance has also been one of the stronger categories for them.
So is there a read through to other stores Mary from this or is this a unique TJX thing.
You know, if you get the numbers that came out from Target, it was very disappointing, especially when you had such robust figures coming out of Walmart, and Walmart indicated that a big percentage out performance was due to that consumer from a household earning over one hundred thousand, So you can see that that consumer is looking for value everywhere, and with Walmart, they're getting those better prices on essentials, and while they're there, they're also shopping apparel because that's
where Target saw some weakness. So some challenges going on with Target, which is always appealed to the premium shopper. So I think that it comes down to execution and then also the fact that we have this hire income consumer really looking for value in TJMAX and TJX as a company, I mean, they sort of fit that they're one of the companies that are picking up share.
Our thanks to Mary Ross Gilbert Bloomberg Intelligence Senior Equadanalysts.
We move now to the auto industry and Ford. This week we heard that Ford Motor will look to eliminate another four thousand jobs in Europe.
The reductions, which to mount about fourteen percent of Ford's europe workforce, will primarily hit operations in Germany and the UK by the end of twenty twenty seven.
Now, this comes as the region's transition to electric vehicles is losing traction industry wide and from More. We were joined by Craig Trudell, Bloomberg Global Autos Editor.
We first asked Craig, what's behind the recent layoffs at Ford.
Yeah, I mean this is a story that's both sort of one that's bigger than just Ford and yet very acute for them. You know, Europe, we've seen just the last few months sort of one automaker after another do profit warnings. Whether you're talking about Volkswagen or Stilantis or
BMW Mercedes. It's really been sort of across the board that a lot of manufacturers are having trouble with the increase in competition at a time when we're not seeing demand growth, and so you know, that leads to some real need to kind of take a look at how many people you're employing, how many plants you've got running, and whether you need to take shifts out or even
go so far as to potentially take plants down. And so you know, we've seen Volkswagen, you know, for the first time minute's history actually looking at at closing plants in in in Germany. Ford has been pulling back in Europe for quite some time, and they're they're doing just
you know, sort of more of the same here. They were really trying to to kind of you know, get off to a fresh start and and move more aggressively to evs and some of their competitors, and that hasn't panned out particularly well.
They also said that pricing power on us EV's next year is going to get hit. And then that's on and then we're counting in those rollbacks of the tax credit of cent of f one hundred dollars. Are we going to see more cuts than to the US.
I think for Ford, you know, the amount of investment in electric vehicles has been curtailed pretty significantly, so we may not see a ton of pressure for them, although you know we have we have actually you know, seen them you know, already pulling back even some of the existing production of of the F one fifty Lightning and
Mustang Machi. Their their two main electric vehicles. We have a development The Automotive News reported that the Bronco SUV actually will have a direction and in production early next year. So you know, this is this is beyond just electric vehicles.
I think what we're seeing is is maybe sort of a topping out of sales and and I mean to your question in terms of the outlook for the US next year, I do think there's some some real, uh you know, questions you have to ask yourself about, you know, just how much you can count on electric vehicle demand continuing to grow in the US if Trump follows through with some of the things he was threatening on the campaign trail.
Craig just thirty seconds. What's the feeling out there today consent US about demand for evs? Is it really softening?
Yeah? I mean I think here in Europe, uh, you know, we were further along in making this transition, and yet that was a large part due to significant and sustained support from governments. And what we've seen is that if that support gets pulled, you see a sort of immediate falling out in terms of demand. And we've seen that in Germany in particular, and that's been very, very troubling all right.
Thanks to Craig Drudell, Bloomberg Global Autos Editor.
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