Mnuchin Eyes TikTok

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Steve Menushan is apparently targeting a purchase of TikTok from his Chinese parent company. This comes a day after House lawmakers passed a bipartisan bill that would ban the widely popular social media app in the US. Quite interesting, particularly after he led that buyout of a NYCB.

I know, and I think it's even more interesting about it is because there was that whole issue with NYCB earlier. It cause a lot of concern about regional banking, a lot of concern about TikTok and the minds of teenagers all across the country and politicians.

So let's go to Dan Ives. He joins US managing director and senior equity analyst ever at Web Securities. He always has opinions about these things. Hey, Dan, I guess it's twofold. What do you think about manution leading a group of investors to buy TikTok let's just start there.

He's gonna join the long list, right, I mean, others haven't talked. If you a strategic financial you're gonna have a long list of buyers from Big TAC as well as outside looking to get TikTok because it's a unique golden asset that no one ever thought would become available. We still believe only a twenty five percent chance this ban actually happened.

So what's gonna be the big sticking point for that kind of a bet? Is it the algorithm?

It's all about the source code is not gonna lead by dance in China. Are not gonna allow the source code and the algorithm to go to a US company, And that's buying an F one car without the engine. That's the fundamental issue here is that because of the source code, it makes us extremely complex. The value is vastly different without the source code.

Well, then here's my question in terms of what the government will allow. It's like, well, the government like a minus led investor takeover. Will the government like a Netflix or a Netflix I'm in, a meta or another social media company buying TikTok, like if you divest, like they have to be okay, with who's going to buy it?

What do you think the devil's in.

The details, right, I mean the problem is, Look, this is all a third rail issue. It's great theater in DC in front of the microphones. The reality is the selling and ban of TikTok. First, besides First Amendment, what could happen to other social media. There's a huge ripple effect, the negative retaliatory from China as well as ultimately, how could you sell this without the source code? And that and Bye Dance in Beijing are not going to allow source code to be sold.

And that's the issue.

Shoot for Senate, I mean, the Shumer you even let this get on the floor, that's going to be the problem. It's very good for grand standing, but the reality of it is very complex.

I mean, and you add to that that Congress really just has not done well in the past of turning denunciations of these perceived tech abuses into law. I mean, you think about things about protecting children online, anti trust authority, data privacy. This is not something that has come into really forceful law. So I mean there's a chance this might just all fall apart anyway.

That's why it goes. But like all the work.

We've done twenty five percent chans a ban actually happens because to Alex to your point, Okay, so now a ban happens the twenty five percent chance, how do you sell it? So you're forcing them to they don't have to sell without source code.

Then who's going to buy it? And then it comes down to this.

Now let's say it gets sold to Microsoft, to Oracle, then is there anti trust issues from a government perspective?

The problem is you can't put Genie back in the bottle.

This is going to have huge complications because TikTok as well as the precedent and even the Spider Web in terms of how it gets sold.

How much do you think TikTok's worth? Like, let's just game it out.

One hundred billion with the source code, without the source code, thirty to forty billion.

Wow, that is a big, big, big, big difference. So what do you watching next for it? Then? Like, what's the next trigger point for you?

Well?

I think now the soap opera, we'll see that in the two or two area. So it does it actually get to the Senate for what negotiations go behind the scenes?

You have one hundred and fifty.

Million users, So you know you're in election year too, So it goes back to that third rail issue. Voting down TikTok as a ban not good for the eighteen twenty four year old vote.

So that's we got to see how this all puts out.

Obviously Trump on one side, by none the other in terms of TikTok ban book, Manutian has the first shot across the bout in terms of you know, looking for you know, potential to line up as buyers. Others are clearly behind the scenes doing the same thing. But it's all a game of high stakes poker right now playing out.

So on the assumption that somehow this algorithm and the source code does become part of the sale, who do you think is the best strategic fit for this as a buyer.

Look, there's a better chance of me playing in March Madness next week than this being sold with source code.

And that's what you never know.

Man, they could never.

Again and again three pointer decent but but look, but the point is, you never know in terms of now what Beijing and byte Dance are thinking to now even to just trajector you this out, what's do they do it without source code and there's buyers.

Then the question is.

Where does it is a big tact Is it a consortium like Ammunition other financial buyers? And this is gonna be just despite whoever regulatory it'll get, It'll go through the court system. And I think that's how this is all going to play out, is there's a huge ripple effect unintended consequences when you go down this path.

Before I let you go, I got to ask Tesla. We talked about it earlier in the hour after that downgrade yesterday over at Wells Fargo, saying that it's a growth company with no growth, Uh correct, accurate, not accurate?

Look for now, I mean clearly going through massive headwinds in China, but we've never called Tesla for the last decade in terms of the next thirty days sixty days. On the other side, growth is still going to be massive ev leadership AI. That's what we continue to be bullish here. But no doubt it is a white knuckle period that we're going through in you know, especially in China for Tesla, and that's why bears are all coming out of hibernation.

Yeah, so what do you think is next for them in the next two quarters or so in terms of analysts coming out with dimmer views on it.

Yeah, clearly numbers are getting caught.

A lot that's getting probably, But it comes down to, like they got away out the goalpost. Are the price cuts done? We just came back from Asia. I think ninety five percent price cuts are done. If they put a line to stand, their street starts to look through second half of the year into next year, and I think then we sort of bought them out. It's also about Musk the twenty five percent ownership I think at the shareholder me and they formally go to Texas from Delaware.

Yeah, it's just sort of like delayed kind of thing. Hate real quick twenty seconds in video headed into their GTCAI conference, what do you think.

The godfather of Ai Jensen I think continues to is going to show behind the curtains just what's coming and because they're going to continue to lead the revolution. And this is not a nineteen ninety nine moment, it's a nineteen ninety five and get out the popcorn parties you started.

That's how you love Dana Ives. He gives you those wonderful soundbites. Dan Ives of Rodwood Bush. We appreciate your time. Today.

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So one stock to watch is US Steel. It's down another one point three percent today. President Biden says that US Steel should stay in American owned and operate a company. This is nip On Steel over in Japan is trying to buy the company. JP Morgan now saying that it is possible that Cleveland Cliffs could rebid for US Steel. So it's a lot. It's a lot happening. At the end of the day, is we need the steal. We want to produce it. Prices are not that great, therefore

Really?

Politics?

Oh, that's so weird.

If you look at US steel is located in Pennsylvania. Biden won Pennsylvania by a little over eight thousand votes last election twenty twenty. Steel Union members in Pennsylvania are about seven hundred and fifty thou Union members in Pennsylvania, and.

They don't necessarily want this deal to go through.

And the union does not want the deal go through. And you also had Trump come out saying that he would.

Block the deal.

You know, there's three or four you know, I'm not a election expert, but there's three or four critical states that probably will flip the election. In Pennsylvania's probably.

One of them.

So I guess I'm sort of wondering, knowing that that is the politics of the situation, what was the motivation to bring the deal in the first place.

The motivation is if you look at the US steel market is actually with the Infrastructure Act and Inflation Reduction Act, is actually probably one of the more higher growth steel markets across the world. And Nippon Steel has said that they want to get to one hundred million tons of steel production a year. This was kind of helped them along that goal.

Without them though, could they not do it? And is it because it's just expensive to get it done or is it because the prices are low so their margins are not great?

Not quite falling?

Oh that if the Japanese company Nippon Steel went away, and they you need all this product here in the US to help satisfy all the infrastructure acting the chips act without a buyer, why can't you still just do it on their own?

Is no?

US still can't do it on their own?

Can Okay?

And they have outlined a plan to get there, to improve their assets and build up. You know, they're building another plant in Arkansas, Big River Steel too, which they built you know, but back in August, Cliffs kind of put them in play. Cliffs came in with an offer for thirty five dollars a share, kind of put US steel, you know, said that they had to evaluate strategic alternatives, spent a few months doing this, and then came up with where Nippon was the highest bidder.

So, I guess if you've got these competing bids for it. I mean, what's the expectation for how long this can go on?

Well, it's it's currently under reviewed by SYPHIUS, which is the Committee for Foreign Investment in the US. Syphius deals with national security, so as people said, their deliberations are shrouded in secrecy. So you know, initially, when when we looked at the deal and we saw the union opposition, we said, what they should do is US steal and NIPHN should slow walk the deal locked approval get passed the November fifth election, and then maybe, you know, politicians attentions turn elsewhere.

Is it possible that US steal says all right later and like the and they're just going to go on their own way.

I don't think suareholders would appreciate that appen.

So now they're like, okay, we want to get right right.

I mean the steal, you know, the stock was traded like in the mid twenties, and you got a deal for fifty five dollars a share.

You want to take that, you want to get something. I guess my question is, let's pretend that the the nip On deal falls through. Let's say Cleveland Clips comes back in and rebids, right, and the company's like, all right, I guess we're up for sale. Is the US government going to like that deal? Because that's gonna that's gonna be antitrust concern right.

That's so it's just from national securities to anti trust concerns. And also the other thing one of the areas of anti trust would would come on our scrutiny. US still and clean Cliffs are two of the biggest players to the auto industry, so you have, you know, the auto companies, you know, not happy with the deal there.

So to go back though to the politics of it, just thinking through some of the opposition to the npon bid, because a lot of that had to do with the objection from the steel workers. So if you think of it of an American bidder coming in, do you think that's an easier that's an easier thing for steel workers to accept?

Well, it's you know, Cleveland Cliffs is has a very good relationship with the steel workers union, so that's why the union has been favoring Cleveland Cliffs. In fact, in the in the union agreements, there's a thing called right to bid where if a be under a with the US steel has a contract with the steel union gets acquired by somebody, the union has a right to bid.

Can I just ask, like, what's the fear of a foreign company owning US steel? I mean, they're gonna nip on steel is going to pack it up and move it to.

Japan because Japan is supposed to be like a friendly country like well, and it's.

Not like they're going to like raise prices to the point where they're going to shoot themselves in the foot to like have sales decline. I mean what it's now part of this is jingoistic, is that agreed?

And also Japan is the biggest number the number one a foreign direct investor in the United States. US has over five trillion dollars a foreign direct investment. Japan accounts for fifteen percent of it. It's the biggest foreign direct investor in the United States. So on that it doesn't really make sense either.

Hence just pointing out the whole union politicking of it. Okay, so what do you think actually happens? Best guess?

Best guess I think you got a lots smart people and at both companies.

I think.

I, like I said earlier, I would slow walk the.

Deal and get something.

Passed the elections and see what happens. You're probably going to have to pay the union a little bit more to get them on board. But Nippon still just could deal two to three days ago with the unions in Japan, so obviously they realized the worker landscape of wages are going up.

Oh you know what, I wonder if the financing picture will be a little bit easier if they cancel walk the deal and get it past the election, because looking at the FED dot plot, we could have had a couple of industry cuts by then, so maybe it'll be a bit cheaper.

They have everything all right align you know, companies have you know, signed up to provide them the fifteen billion dollars that don't need to buy all.

Right, So banks have broadening out for a second, what is steel demand like right now globally and in the US, and how prices because if you want to find one ticker for steel prices, good luck, it is such a regional market. Yeah, give me the landscape.

No steel prices are you know, what we had was kind of an interesting year. Usually you have steel prices at the beginning of the year increase because of seasonality. Obviously constructions construction is the biggest market summer, it's easier to do construction.

Everybody's buying steel.

What happened is that auto workers strike last year. Everybody held off buying steel because they thought steel prices would really go down because the auto workers strike was rumored to be prolonged. And really what happened is the auto workers strike didn't have as much effect as people thought. Everybody rushed back to the market and really pulled in pricing at the end of last year, so you had kind of that peak of pricing rather than coming in

Hi, Richard, thanks a lot. We super appreciate it. Richard Burg, Bloomberg Intelligence, Senior analyst on US Steel.

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So let's get to the retail sales here. That disappointed and this just goes to my point. I tell everyone I'm on a budget and no one believes me, and yet these sales prove that it's true. Just putting that out there. Jill Blanchard is president of Enterprise Client Solutions over at Advantage At Solutions and she joins US. So I'm looking at Control Group flat for February back out autos, back out gas just up by three tenths. You also

So hello, thanks for having me back. I was listening before Happy Friday Eve. It still continues to be a struggle for consumers out there when we look at things like in consumer package, because the prices are still up six point eight percent.

Versus last year.

The good news is that in the recent Advantage Outlook survey, manufacturers fifty percent said that they don't have plans to increase prices, but we do have a that plan to increase prices on non core items, so think of things like a.

Smaller size package or a low fat version.

Where we really get concerned is with the value priced brands, and so those are the lower price brands that typically compete with like a private brand. Those those brands have increased their prices one point five points higher than a mainstream price or a premium price, and so essentially is the rising of the floor further squeezing consumers.

So it's interesting, you've got the cheaper stuff is getting more expensive, and then you've got continued triflation. It sounds like, so you know, how much more of this can consumers take? Because you know, at the same time you've got an incredibly strong job market, so something's got to give.

I would have thought at some point.

We do see a lot of give actually out there in the form of a few things.

One is trade down right or pare down.

And so we see consumers you know, pairing down whether they're buying a you know, a used luxury car instead of a new luxury car, or they're trying to make meals at home instead of going out, and so we see a lot of shifting in that spending to lower price things. We see consumers buying more private brand boys. They're having a really good day. In fact, to seventy five percent of retailers say that they're number one growth strategy is private brand. We see consumers buying things on promotions,

That is such an interesting point because you've basically described my entire shopping habit for discretionary So I wanted to go to the point of sort of the macro and then the retail. So let's just pretend we get three or four rate cuts this year, right, does a consumer all of a sudden go out and spend a lot? Is their pent up demand in this area that you.

See, No, I don't see. I don't see the consumers going out and spending more. Consumers are going to continue to well, actually they might tick up a little bit on the out of home spending. So think of things like the big ticket items like a car or vacation, a home remodel. That might tick up a little bit, but those are such big priced items that consumers really have been pairing that down or foregoing that in lieu

So I could see a little bit, but not a lot.

So I guess what's next for retail because it doesn't sound like a particularly you know, enthusiastic outlook there for the consumer.

Yeah, I mean both both manufacturers and retailers are really struggling to find a path to win for both of them as well as consumers.

As I said upfront, it's a super challenging environment.

Retailers have to find the right way to promote, and when they all have the same strategy, it's hard to win. And pretty much when you talk to any company out there, they've got a plan to win in an environment that's largely going to be stable flat to down. So they truly have to find a differentiated way to meet that consumer where they need to be met to win, whether that's a differentiated way with products, which is also pretty interesting.

Yeah, I would find it to be so hard, like so much that you have to anticipate and then stock up and then if not, you're looking at eighty eighty five ninety percent discounts, which I love, but can't be good for an investor. Who would you say has a good strategy, Like, what's a good formula to emulate.

You?

Right now? We see consumers.

I talked about consumers pairing down. I think discount retailers are having a really good day and it's making it pretty challenging for mainstream retailers. So mainstream retailers need to look at why consumers are going there.

Is it?

Is it purely priced? Is it the ability to one stop shop? Is it the ability to you know, the the environment of the retailers, So retailers need to look at or is it their online strategy? So lots of different things to look at, But who's winning are largely discount retailers.

You know, could you give us a sense of the bigger picture here for consumers because you know, I've certainly read a lot about consumers moving away from stuff and towards experiences. But everything is so expensive right now, so you know, for you're mentioning that it's the discounters that are winning, but that's a very you know, sort of centraded area in retail.

I would have thought, So, you know.

Is the thought there that retail is just perhaps too big.

That retail too big? Now I think it's more that retail is really varied. So I would say, in response to your question about what does this mean for consumers, consumers behavior today is so drastically different than it used to be in twenty nineteen in terms of.

You know, what we buy, how we buy, and when we buy.

Think of online, think of discount, think of of you know, of.

Being in the.

Home versus outside the home. So the future for consumers is that continued shift, you know, towards more value based living. I'd say one thing that we talk about often is the is the baking aisle. And twenty nineteen in the grocery store that ale gather dust, and now it is the hot spot. Over twenty twenty and twenty twenty one, we actually created a lot of bakers, and today it's really one of the fastest growing aisles in the store.

I did the baking thing before and then during the you were ahead of the curve. I was ahead of the curve, says no one ever.

But what is it the bake? What is it? You bake like a chocolate I happen to love chocolate cake, so I actually.

Have a fantastic chocolate cake recipe that is super east.

I don't want the recipe.

I'm going to give it to you. I'll bake it at some point. But I actually do like baking, like bread and clastants and things like that. But anyway, that was hard to do U during the pandemic before we let you go. So I gotta say, I go out to eat, you know, two adults and a kid, and it's like three hundred dollars. It's bananas. And I'm not talking like a super fancy restaurant, like I'm talking like the neighborhood place. At what point do you think that

Yeah, I'm right right now, out of home food prices are are higher in terms of their increases than in home and so it really is making it challenging for families to do more things outside the home. That has already contributed to increased in home consumption, which will continue to grow if we if we continue to see the outside the home food prices elevate.

That's really interesting because I feel like restaurants are just getting so squeezed. They've got the staffing issues, they've got the food costs, and so consumers just want to break. But you know, cooking at home is has its own challenges and you know, you're mentioning the point about food at home and people are so pressed for time. It's kind of like one of those things, how do you trade that down?

I sometimes feel like the world that we're living in today is so circular, right, So the cost have increased everywhere, and it continues to go to be passed around. Right, So restaurants are paying more for their for their products, for transportation and distribution of the products, for their labor, and they're having to pass as much as they can onto consumers who in turn can't really afford that and are cutting back, and so it continues to have a circular effect on the overall economy.

Well, great stuff, Jill, really appreciate it. Thank you so much. Jill Blanchard, President of Enterprise Client Solutions for Advantage Solutions time other weeker retail sales.

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Blackstone President John Gray was in Rome tough gig attending the Bank of America Global Investor Summit conference, and here was the headline, Time to buy real estate as prices are at bottom, he says, quote the perception so negative, and yet the value decline has occurred. So when you get into this bottoming period, that's when you want to move. Let's get another perspective here. Lisa Nie is managing partner and head of real Estate over at Eisner Amper. She

Well, first of all, thank you for having me. So his perspective is correct. And so what happened when Signature Bank went out and brought its portfolio out to market. The prices were at a really good rate for people to come in and take the opportunities and go purchase all those great assets that were in that portfolio. And so he was one of the companies that went out

I mean, I for one, definitely would not want to disagree with him.

But one question I would have is the whole reason why we're in this commercial real estate crisis is because of the shift to working from home, and so is that crisis over? I mean, it still seems to me that you know, personal anecdote only, but the subway isn't nearly as full as it used to be, even though it's picked up a little bit. I mean, if people are still working from home, there's still quite a lot of risk there for somebody trying to get in at these low prices.

Yeah, so real estate is cyclical, So every asset class goes through its highs and lows. It was retail, now it's we're at the lows of office, we're going to see some inflections and some differentiation within a multifamily as well. And when we look at what work from home concept did. I'm looking around here today and I'm seeing a great

You're getting it for seven.

And so it's just changing how you're looking at office and looking at some of the buildings that are out there in the marketplace, those older buildings that need some adaptive reuse. We're going to need that regardless of where we were in this cycle.

Yeah, and you think there's people out here now, you just wait till the snacks come up around two. It's like a people wait online for that stuff. So to that point, just in terms of the capital being out there, do you notice the bid ask like, have we resolved for that gap yet or is that still to come.

So that it hasn't been resolved.

And what's happening is because of the banks and their underwriting and regulations, they're unable to go in and provide a capital at at a rate that's worthy of the what's being underwritten. So who's coming in the rescue capital, which is people who are opportunistic, So you're going to come in as a preferred equity or a mess lender, or you know, at a higher rate.

And so those interest rates, if you're that.

Really discerned investor, is going to be very good for you, but it's not going to be great for the owners and they're not going to get their cash flow back. So the rates right now for the rescue is really really high, So we're not at that time. Well, we've seen some preferred equity coming in between eighteen and twenty percent. That's very Remember those are for some distress deals that might need that rescuing and they just don't want to get back the properties.

What's it going to take to broaden this out? But YEWND non rescue deals.

What's it going to take?

So it's we have to wait to see, as you mentioned before, what the Feds are going to be doing later in the year where interest rates are going to be who's going to be providing that capital? Is it going to be the banks getting back into the market. So once if the banks go back in and they're at a better point where we can pencil out.

Some deals, it could take.

It could just be a wait and see approach. Also, there's not a lot of trading going on, so people really don't have the true understanding what valuations are right now. So time's going to tell, and we really don't know where we're going to end up in the long term because consumer behavior is still so different than any one has anticipated in the past.

So let's broaden out then and talk about say reshoring, onshoring, near shoring, all that stuff and logistics we were supposed to see like a ton of data centers, build, a ton of logistics, and then a ton of factories built. Are we still seeing all of those three things happen?

So I love the fact that you brought up the concept near shoring, which is now Canada and Mexico really is coming in because so it's going to really change the landscape of where those industry and those warehouses were being built before they were built on the East and West coast. Now you're going to see them having to be built northern and southern because that's where the cheaper containers are going to be able to be brought in. Because so Mexico, which was our largest importer export of

It's interesting.

Can we shift gears a little bit to talk to us about a subject very near to my heart, which is residential realize, Oh, yes.

We always go there.

We always go there.

We just take out an ad, you know, looking.

She's looking to buy. It's not the best process.

I might have a house, help me out, don't's get a house?

Some long house applies coming online? Okay, cheap though, there you go.

So what's the outlook? What am I looking for here? So I think you have it?

Spot on is so the people who have the homes would be looking to go. We have no place to go to to sell, and so for us to replace our homes is there's no place for us to go at a low cost of capital. And so that's why that housing market is so difficult and why pricing is

Don't know where our next home is going to be.

And that's not helping your story at all.

So I'm yeah, she pain, she feels your.

Pain on it and a three twenty five, I think we're staying put.

Really, yeah, we can't replace it.

That's that's really what My mortgage is higher. My toll bills are higher than my mortgage.

But that's a reflection how you feel about your toll bills.

No, it's it's true though, no, I know it's true, but I.

Also feel like you like to complain about toll.

Bills, which is like a complain about everything.

That's also fair. All Right, Lisa, thanks a lot, really great stuff. Definitely come back. Love that conversation. Lisa Nee, managing partner and head of real estate over at Eisner Amper.

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Let's go now to Tesla. So that stock is down by another three percent. Let me just let me just see if I can pull up how bad it's been for Tesla, because I gotta say it has not been very good. The news from yesterday, of course, as well as Fargo con Langen says it'll be zero growth in sales volume for the ev maker this year. So can you be a company that's growth company if you have no growth in sales? And that stock has just really had a tough run of it, down eighteen percent just

Oh?

I'm I tend to be more optimistic about the company. I really like the stuff they're doing behind the scenes with AI with full self driving, the optimist robot. I think the company is pretty much set up vertically integrated to actually succeed, So I'm not as negative. But there is a valley right that the company's going through right now. The problem is, you know, where is the bottom.

Of that valley?

Because prices for their cars just keeps coming down. You know.

One of the issues that Elon Musk has faced with Tesla is what he gets out of cutting prices. And I wondered if you could talk a little bit about what you think he's going to be able to earn if he thinks that he's going to be able to institute more if he thinks he's gonna be able to get more sales with lowering prices.

Yeah, I think so.

I mean, the you know, pricing is pretty elastic. I think he will get some sales. The question is is how far and how much price cutting can he do from now on? Well, their gross margins are still in the mid teens. They still have room. I think relative to the legacy automakers, their margins are still relatively healthy. The issue is China. China's hype competitive market. Their main

So here's my question. I hear that it's not as desperate as maybe Wells Fargo is saying, but we're still looking at an estimated price startings multiple at fifty four times, So is it worth that much based on everything we've just talked about, do we need to rewrate that in a more significant way?

We do.

I think we're in a cycle where we're going to see some rerating. But long term, what I'm really excited about is the company is actually very vertically integrated. They're actually behaving like an Apple where they're trying to create an ecosystem. We haven't seen it yet, but it's an

I don't.

I don't think we're there yet.

I want to pick up on your point, you know that we don't think we're that we're there yet because I feel like there might be more to come from analysts, potentially more people souring on Tessa.

But do you agree on that or what's your expectation for the coming core I do.

I do. If you look at consensus earning, the range is very wide. I think there's still still very bollish people out there, bullish analysts out there that's going to have to bring down earnings to more a little bit more realistic to the current growth rate that we're seeing, especially in the US market.

When do you think we then get to the valley? And what is the vale?

I think the I think one thing that we have to keep track of, and that's what we're doing as well, is a slowdown in price cuts. You know, we may be starting to see that at the moment because price cutting, the additional sales from price cutting is actually shrinking. That gap is shrinking, So I do see it. We're closer to that than maybe six months ago. So hopefully, you know, by midyear, second half the year, we can see some relief in price cutting.

Talk a little bit about Tesla's margins, because we've got some analysis. It says that Tesla aims to slash production costs by about fifty percent, but maybe that's going to be wind up being more about like thirty three percent.

What do you think about that?

Yeah, I think their target.

I think their target of fifty percent is a stretch target, especially as you know, as they ramp up the model too. This is the fifty percent that they're referring to, and cost cutting is really on their next generation of vehicles, the model too, and you know, they've done a huge, significant revolutionary change to how they built vehicles. You know, you haven't seen that since Toyota introduced the lean manufacturing in nineteen fifties. So the cutting price cutting of fifty

So, Steve, I was interested in what you said about Apple in terms of sort of being all things to all people in one area. Right, So does that mean and I know that Apple is a harbor company, but they really want to be a services company, Like they want that to take up a lot of their space in terms of earnings and their revenue. Right makes sense?

Right?

Do you think the Tesla's going to do the same thing? Like they're going to get you know, your solar panel and they're going to get services from that. And I appreciate the tests is a little bit different than your battery storage and then your car, Like is that the company's going to be in twenty years?

I you know, if you look at all the things that they do, right, the solar panel you just mentioned, the Starlink satellite system, you know those all can be connected where you know, I can imagine where Tesla not only you know, you have the uber or lift model that you know, robotaxi model, but you know, these cars are actually carrying heavy, high capacity batteries that you know, it can be moved around, redistribute power around, and you

Can you talk a little bit more about demand for electric vehicles? And part of the thing I'm wondering about is if you see that Tesla is going to need a very particular policy environment in order to see sales continuing to pick up, and you know, in particular we've got the election coming up, a potential change of administration. Is there anything to think about there for what that would mean for Tesla?

Actually, I think Tesla have a unique benefit where they're actually a very global company already, Like they have a third of sales in the US, third in Asia, mostly China, and then third in Europe, so they're very diversified regionally, So I don't think they really need any specific policy push from the US, you know, with their model to their next gen vehicle coming out in twenty twenty twenty five and twenty twenty six, that will really resonate to

Hybrids. Is hybrid is going to be a consistent thorn in tesla side or we think we overcome that.

I think the world's gonna see a mix of powertrain to really get to kind of net zero emissions. So I think in the US, I think, you know, plug in hybrids will play a bigger role, potentially bigger role. But I think the rest of the world we're going to see, you know, significant growth in Southeast Asia, Southeast Asia, continued growth in China, Europe. You're kind of between the US and Asia. I think there's still a big enough space,

See, we're gonna leave it there. Steve Mann, Bloomberg Intelligence Automotive Analysts joining us. Really good stuff. Okay, so I know you're in the market to buy home, but what would it take you to buy a Tesla or an ev Hibar.

I think the charging situation is just too horrible, Like there's just not enough around anywhere in New York City.

Well, no, I take that back.

There's a lot of man Henan, but you get to the out of Burrows and it gets a lot more tricky.

There is a lot coming up in Brooklyn, like you can see dedicated charging spots. But I'm also in Parkslope, so that would make a lot more sense. But I wonder too, is that we put so much emphasis on the evs and we missed the hybrid there. And I feel like we're all playing a little bit of catchup because you can make an argument that while John Tucker waits for his hydrogen car, that you know a hybrid makes good sense.

Yeah, I'm not disagreeing with you, right, just don't have any money, so I'm spending so much on my bathroom.

Oh yeah, Well you've got to pick your poison.

Don't you.

That's true. One big purchase in the house, you do in the.

Bath environmentally friendly bathroom.

Well, it's gonna be a This could be really tough to get that fixed.

Yeah, that's true. No floating toilets, no floating sings. I'm really glad we work that out.

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