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You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple, Cardplay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
I'm Alex Steel alongside Paul Sweeney. This is Bloomberg Intelligence Radio. We bring you all the top news in business and economics and finance with our lends through a Bloomberg Intelligence Analysts. They cover two thousand companies in about one hundred and thirty industries a worldwide. We also take a look at all the stock market action. Take a look at Nvidia, that's stock up by still over nine percent that company, Paul, that's some serious cash. I mean that just like mints.
The money it does, and you know, it's just extraordinary. You think about kind of how they've.
Become really the play on all things AI. I mean they it was a year ago, maybe five quarters ago that they issued that revenue guide increase that just shocked the tech space and talk shocked Wall Street in terms of Wow, this AI spending thing, it is real because we are seeing in videos, seeing it in its order book, and it's just been extraordinary and it's hasn't let up.
And you know, I talked to Tim Steneviek every time these company reports earnings, and he asked me, Paul, do you think these guys are gonna.
Beat and raise?
And I said, I think so until they don't, because I just don't see any end there at least what you hear from the the companies that are making these these orders, like Microsoft, like Amazon. All they talk about is AI AI AI exactly, and they get the chips from in video, So there you go.
I mean, so, yes, more than forty percent of Video's revenue comes from just those guys, right, Microsoft, Meta, Amazon, Alphabet. Okay, so there's some so maybe risk in that you have competitors that are still trying to ramp up their own ability for that. So I guess you're looking at again what we what I like to talk about is a structural versus cyclical trend. The AI is here to stay
is a structural change, a structural trend? Right? Does it mean that eventually this also won't be some kind of cyclical story but we're clearly not there yet.
No, And so when we get the smart people on and we're going to get a smart person on sooners soon as he figures out how to get his microphonnel.
In other ways.
Yeah, yeah, is a competition. I mean you're supposed to be on there a certain time with the Yeah, how hard is that?
You know? So the question is competition. Where's competition?
Yeah, well it's hard. It's expensive to get this stuff out. I think that's the problem.
And also if you don't want to pay over one thousand dollars this year for Nvidio, even though you're optimistic about the future there, what are the derivative plays? There was so.
Many today looking at a company it's not publicly traded and charge the brainschild of a Princeton professor to make it more energy efficient these chips.
Oh sure, but there are a ton of those startups. But it's just a question of actually making the money, that is the question. All right, thanks so much for I don't know. I don't know why I'm thanking John Tucker. Now we do, but I'm gonna go to about those. You're welcome. Su Johan Shabani is Boomberg Intelligence senior semi analysts. I hope he knows more than we do about this?
Does all right?
The stock up ten percent? Can they continue at this point to just continue to beat and raise.
I think in the near term they can definitely demand on most of their products keep running ahead of supply. We don't see any slowing down in terms of purchasing from their customers. In fact, beyond their largest cloud customer, enterprise and consumer intern companies are coming in strong. So we don't see any sort of big risk that says they cannot continue.
So Kunjohn, I was selling Alex and John. When we get smart people on like you yourself, I like to ask the question about competition.
I'm kind of surprised that, you know, in.
Nvidia has this competitive leadership position relative to everybody else. How proprietary is their chip design versus I don't know the AMD's of the world, even in Cisco's. What is the competitive landscape?
Yeah, I mean, look, they were I would say almost two to even arguably three years ahead of everyone, and it's not easy in the chip landscape to catch up. When someone has that kind of a lead, they have actually aggressively gone out and out in it their peers before they were on an eighteen to twenty four month product cycle. Now they are on a twelve month product cycle, so they just keep staying ahead of their combetition. Their
combination is trying to catch up. AMD has made significant progress and now is another second viral alternative in the market. Hence you see that in their significant growth as well. But we don't think at this point there is anyone else who can rival the total system TCO and performance that they have.
I was mentioning earlier that Nvidia gets about forty percent it's revenue from the big four players, Microsoft, Meta Alphabet and Amazon. What kind risk is that, if any?
I mean there have been concerns around it. So there's two good data points that came out of this print. One that concentration did reduce for the very first time, and what we liked it It was not reduced because the cloud guys slowed their purchasing. In fact, those top four guys that are expected to increase their capec spent by forty five percent this year and they are all
lined up to purchase its newest Blackwell products. But what it was good was that the share was taken by strong enterprise demand, which we really like because that is much more diversified and sticky Kunjan.
Let's say I'm at Amazon and I buy one of nvidious chips.
When do I have to replace it? Question?
There's two answers to it. If we were in a normal sector semicharactor cycle like you are in smartphones or PCs, the refreshed time would be longer, so I would say on ideally three to five years. But what's going on right now is all of these customers are just racing against each other, so they cannot afford to stop. So as soon as a newer, better chip is available that they can change, they are going to change.
What would stop all this? Like, we know that AI is going to grow, we know that there will be demand for chips. We know all that. That's a structural shift within the economy. But what makes it cyclical?
I think the first point of cyclicality would be when the demand momentum stops, which we haven't seen no signs of. Look, the supply keeps on coming up, so at some point demand is going to be meeting supply. And after that, if we see any kind of weakness in demand, look, look if the largest cloud providers don't see return on that investment, don't see monetization benefit, don't see their earnings
and revenue grow from these investments. That's when we can start worrying about sort of a cyclical downtown.
All right, So, how else in your universe of semiconductors, how else do you if you play this trend?
Look, it's Nvidia still remains sort of the best pure play AI play in semiconductors. So I don't know why you would want to look elsewhere, but if you were forced to, we also like you know, players like Broadcommon, Marvel when it comes to AI networking, when it comes to the ask chips, which Nvidia's largest customers are designing themselves. So these are the two areas where we see significant growth coming in over the next two years.
All right, Yeah, good, John Sabanni, thanks so much for joining us.
There.
Sabani, senior analyst covering to sevent conductor space for Bloomberg Intelligence. Joining us from San Francisco is right there in Silicon Valley.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Otto 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.
Let's switch gear. Let's get right to our next guys.
Shanna Sissel, president and CEO of ben bond On Capital Management, joining us from Chicago via this zoom thing. Shana, think so much for joining us here. I mean, I guess the story of the day this morning is in Nvidia, another beat and raise.
As the kids say, what did you take away from the earnings last night?
It wasn't the earnings that I was most surprised by. I think we all expected them to be. It was somewhat built into the stock price aftermarket. It didn't move that much. Obviously now it is. But I think that the thing that shoped me most was the ten for one stock split announcement. That surprised me.
Not because.
It's not unusual for a company to want to split in a way that would make their stock price under one hundred dollars again and make them more attractive to retail investors, make it easier for their employees to take advantage of their stock compensation, and a variety of other reasons. But in the world of fractional shares, it's not as necessary, which is why we see so many stocks trading at you know, five six, seven hundred and eight thousand dollars.
I mean Chipolti is like over three thousand dollars. So that actually surprised me the most. But the earnings weren't particularly surprising. Obviously, it was above consensus estimates, but there was a whisper number, and the numbers that they reported were close to that whisper number, And so, you know, I think the probably the real problem here is how
long they can they keep doing this. This is the third straight quorder that they reported greater than two hundred percent year or year revenue growth.
Yeah, and I feel like we've been asking that question for the third straight quarterer too, so you're not alone. I was really struck by a note that came out today. Man, it's time for spring break in video is done. We got nothing going on until June seventh, which is jobs day. It is time for spring break. Do you subscribe to that view?
But I don't. I'm always following the markets. There's always interesting things going on. You know. Obviously, as you said, the next big report is in June, but there's opportunities for here to take a breather. But I think this is a great opportunity to start looking for new opportunities to get into stocks as people are taking a breather, and so I use this time to kind of do my work and figure out what my best ideas are going to be.
Going forward, Shenna, do your best ideas include small cap stocks?
So right now, small caps have some technical issues they have I think they're in the third longest streak of negative of not reaching a new high, and they have really struggled to get out of the funk that they're in, which is unusual in many ways, and it might be a reflection of some change in market dynamics, especially the concentration and the large caps that MAGS seven kind of
feel and what's driving it. But small caps are interesting because if you look at the data, it's the actively managed and the factor based small cap types of ETFs
and mutual funds that are outperforming and substantially so. So this whole idea that active management is dead and that you don't need active management in your portfolio in order to do well, I think needs to be reconsidered because in a place like small caps, where there's a lot of inefficiencies and opportunities for smart money and those who
are actually doing work on individual names to outperform. I think that, you know, we should reconsider ways that we build portfolios and active management right now is really working in the small cap space.
So where in the small cap space, whether is it sector specific, is it balance sheet specific? Is it a growth value kind of thing?
It's more factor based, so like quality, but even it has to be even higher quality because the active managers are beating the S and P six hundred, which tends to be higher in quality than the Russell two thousand, which tends to be full of a lot of like junk and penny stocks and things of that nature. So we're seeing that in active management. We're seeing it and
the quality factor. You're seeing it in the momentum factor, but you're seeing it more in the factors than in like growth value, in more than.
Style per se.
Hey Shanna, what are you guys doing in fixed income? I mean I can sit in to your treasury and get close to five percent here with no risk?
Do I sit there? Do I go out on the credit curve a little bit?
So we are being focused on alternatives. We're looking more at the private credit and private debt markets. Some interesting opportunities in real estate income and with the advent of interval funds, it allows us the opportunity to gain exposure to those types of credits even for clients that aren't
qualified or credited. So you know, there's a there's a Pender Capital has a real estate debt fund that is an interval fund that allows for you know, the average investor to gain exposure to an area in private credit that was not traditionally available to that space. There's others like that, So for us, that's kind of where we're
playing because that's where the real opportunity lies. You know, rates are kind of volatile right now, and as you said, you can get really good yield and treasuries, but we're seeing a lot of demand in the non traditional credit markets and the non bank lenders because the credit markets after the financial crisis kind of seized up for a
lot of potential potential businesses, small business and such. So the private debt markets have real opportunity to get above average yield with relatively good credit quickly before we.
Let you go, before we let you go. When you look at alternatives like that, that also include like gold, and I say that because man gold has been on a tear like is that part of the portfolio.
Oh, absolutely, Commodity is a part of the portfolio. Gold and copper are really interesting right now. Gold hit all time his yesterday. I would also put crypto in that space, so big point. And you know there's a lot of chatter right now about the probabilities of the spot E ETF being approved this week or next week. I know your colleague Eric Belcunus has been writing a lot about it. So it's one of those things where crypto is also
quite interesting right here. But yeah, those are all alternatives, and those are all things we consider for portfolios.
All right, Thanks Lott, really appreciated. Thank you for jumping on with us. Shana Sissel joining US, President and CEO of a bandy Own Capital Management joining us from Chicago, Illinois.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple card Play and then Broyd Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
We're also keeping our eye on the broader market as well. You're looking at the s and key is barely high up one tenth of one percent. The Nasdaq Shocker is at performing up by six tenths of one percent, really helped by Nvidia at a record high fifty two week high below and past one thousand. So let's get what I'm interested in now is now what? It's not only what's now what for Nvidia, but now what for the broader market? Is tech still going to be responsible for
pushing it higher? Gina Martin Adam's chief equity strategist at Bloomberg Intelligence, joins us now. And you know this comes directly from your guys's note this morning that came out that talked about the importance of tech when it comes to earnings, but how much that importance will still be there in the coming quarters.
Yeah. I think it's a critical issue for the market at large because we've been in this really intriguing sort of environment over the course of the last year where tech has sort of almost single handedly held up S and P five hundred earnings. Tech and communications together as sectors, have been the earning stalwarts and the index, while the rest of the index has suffered through some kind of
earnings recession. Intulular, the commodity centric sectors really posting very strong declines, but also healthcare posting double digit clines and earnings over the course of the last year. As we move forward, this sort of onus on technology should lighten up at the very least, and that may get reflected
in the stocks as well. Naturally, when these were the only earners on the index, capital concentrated in those names, concentrated in those themes, and we're already starting to see some evidence that that thematic trade, that tech centric trade, is breaking up. Some of the evidence that we presented in the note this morning. For example, first is Navidia isn't even the top theme stock that we follow right now.
And when we look at all the stocks that are most levered two themes, the stock that has actually performed the best is Seman's Energy. We're seeing physical environment themes generally outperform AI centric themes. Already in twenty twenty four, earnings trends are shifting, and correlations with the market between tech and the rest of the market are also shifting somewhat. So there's a lot of evidence that this is already ocurring in anticipation of that earnings trend shift later this year.
How about valuation, Gina, where are we here kind of post earnings and we've seen the shakeout in kind of earnings estimates and guidance and so on and so forth. What does that mean for you in terms of valuation.
Of this market?
Yeah, I think you have to look at valuations on a sector by sector, stock by stock, industry by industry basis. If you're looking at valuations in the market at large right now, you're also looking at valuations that reflect in earnings recession outside of tech and an expected slow recovery from that recession. You're also looking at valuations that are abnormally skewed toward tech, and tech is the one sector in the index where we can prove that using valuations
as a tactical timing measure is a faulty strategy. So I do think that if you're looking at broad market valuations, you're kind of missing the bigger picture in really unique circumstances. So we do look at sector level valuations, and what you find is there are still quite a few very discounted segments of the US equity market outside of tech and communications, where again capital has concentrated because those were the only earnings grows stories largely in the market over
the course of the last year. So when we look across the landscape of the S and P five hundred, we actually see nearly half of the stacks in the index are training at levels below their media and valuation multiples of the last cycle, the pre pandemic cycle. So that's just one small stat on what's really happening beneath the headline of multiples. Sure everyone will tell you the
S and P five hundred looks expensive. It looks expensive relative to recent pass because of these unique earning circumstances as well as the unique concentration of earnings inside tech and tech specifically.
And that's what happens when we say things like maybe this time is different, like maybe the economy is different this time than it was, say, twenty years ago. Gina. One of my favorite stories of this year has been the outperformance of utilities, And typically if that happens, you're like, ooh, well, investors are going to be really scared because that's where you go, and you're scared and you want higher yield and you don't want to have any growth, et cetera.
Is there possibility for utilities to become a growth sector? As we tie that into the data center AI story.
I think no, no, But is there anything to that at all? I think the reason utilities have outperformed is actually several fold. Yes, there is some optimism with respect to AI, but we're in the process actually of working through our earning sentiment analysis right now, and no utilities companies are mentioning AI as a growth opportunity for them.
So as much as the market has maybe tried to push this narrative, that's really only part of what's impacted the utility stocks. It's important to keep in mind that utilities are very low beta stacks. We did go through a pretty significant corrective process in the month of apriltilblities naturally outperformed that process, so their base was higher coming into May. And then we've had a bond market rally to boot. Utilities are a high rate sensitivity sort of
segment of the market. When bond yields rally, then of course utilities tend to outperform. So there's three reasons why utilities have done well over the last three months. I do think that there's a possibility, certainly that you have some exposure to AI propelling demand for utilities The question then, is how much of that demand ultimately results in pricing power for utilities. And this is a really critical question for this segment. This is a hyper regulated sector, especially
here in the United States. Will they ultimately just get price passed through on a regulated basis or will we actually see real shift in growth in the business model. I don't know, but it seems like the short term answer is not anytime soon.
Hi, Gina, thank you so much for joining us.
As always, Gina Martin Adams us strategist for all the equity stuff for Bloomberg Intelligence.
She does, she does it all. We appreciate getting some of her time.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecar Play 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 playing Bloomberg eleven thirty.
Staying on the auto kind of theme here.
Joel Lavington joins us here he covers He's the director of credit research for Bloomberg Intelligence.
He does it all. One of the research areas he covers is the automobile industry. And Joel, thanks so much for joining us here in studio.
You guys are gonna have a concert a conference next week in New York City focusing on the auto business.
Tell us about that. What are you guys doing?
It's sure, Paul, thank you so much for having us. It's gonna be a great conference next Thursday. Everybody please come out to one twenty.
Park for the show.
We're gonna be talking about things like auto loans and have delinquencies which are as high as they were in the Great Depression.
Gregscuse me? The Great Recession? Where are they headed?
And what does it mean that when Tesla cuts its prices by thirty five percent? What does it mean for your residual values and your ability to buy a new car with the average price of forty eight thousand dollars.
And of course we'll have the rating agencies there.
We'll have valuation views from JP Morgan, from Merrill Lynch and from credit site.
So it should be a great, great afternoon for everybody.
First of all, I want to point out he brought me swag. Oh let's see in the radio studio. It is a hat. Autopalooza twenty twenty four, Bloomberg intelligence on the back, I love me swag. For those of you on radio, sorry, but for those of you on YouTube you can check out my goods back. The problem is is that I like terrible in hats.
Oh you look right?
No, yeah, no, trust me. This is this is a joke in my family that I ever, but my husband looks great in hats. Why are delinquencies so bad right now?
Sure?
Well, you know, twenty five percent of loans right now alex cost one thousand dollars or more a month. And so if you're thinking about your average consumer that makes about sixty five thousand dollars, that's your average household a forty eight thousand dollars car with one thousand dollars plus loan. And then you know, like eighteen percent of the loans that are outstanding, Paul have a negative sixty two hundred
dollars equity value. Because prices, particularly for EV's have been coming down so much, so it really puts you in a spot where you're paying for something that is already underwater. So why continue tends to be the question, and I think that's the key reason why you're starting to see seeing these numbers rise despite unemployment levels that are quite low.
So what's the feeling in the auto industry, jol about kind of where we are on this transition to evs.
We seem to have hit a little bit.
Of a bump in the road here, and I'm not sure if it's just a little pothole or if it's something much bigger. What are the companies saying, What are the investors that you talk to, what are they.
Saying to me?
I think it's actually much bigger than what people think. I think you're going to see more R and D and CAPEX being cut and reduced. And I think you're really seeing a recycling of capital usage where you're investing in evs into an unknown project with unknown returns, whereas when you're socks traded three or four times PE, why
not go buy the shares or give more dividends. And I think you're seeing the shift in capital allocation from capex and growth from evs because most consumers don't want them, right BI Survey after survey tells you around the globe that people are not that interested in owning EU.
Are they not interested owning evs because of the costs they politically they don't link this whole green energy thing.
They're just not good vehicles. Why don't they want them?
Cost is a huge factor, you know at the beginning, when you have people that will buy whatever the latest and greatest technology is.
That's great and they can afford that.
But a one hundred and twenty thousand dollars Mercedes is not going to work for the average person like myself, And so you have issues there with price, which is what Tesla has been trying to do to solve that, right, and that creates different sorts of issues.
I think the other thing is infrastructure. There's just not enough.
And if you think about your typical consumer, perhaps in the Midwest, they go on long trips and they want three four or five hundred miles of guaranteed road and you just can't get that with the infrastructure that you have today.
And this is just also sort of the wrong time, Like if we just pair that with auto delinquencies, we haven't seen this since the Great Recession, Like that's not the right time to then try and convince people to buy a car whose base price is sixty.
Grand, especially because you can get into something better like a hybrid or better venege than a pure better value.
Or like cheaper and sold as the same.
Thing relative from a green standpoint, certainly better than a pure ice engine, where you could probably double your mileage, pay a lower dollar amount and feel like you're doing something for the you know, for the Earth. And so I think that's really why you're starting to see a huge ramp up in hybrid sales across the platforms.
Cask a really dumb question about Tesla. So I've been using a lot of Tesla's to get into the office. Like Uber has a green car thing, what I've noticed is like the size looks exactly the same, but inside I feel like I'm in a hotel room. It's like huge. Is that because Elon Musk takes out all the stuff that's in a regular internal combustion engine car.
The design and the compactness of their battery has done a tremendous job, and much like Lucid has. Lucid of course was founded by the former designer for Teslas, so they've done a great job of like re designing the insides of a vehicle. And that's why it feels so much more roomier than you get because the battery essentially is pushed lower and the truck or the front is pushed forward so you get more space, and they also have more of a curved dome on the on the roof.
Have you been in one? Like, yes, have you noticed it? I feel like so much favor.
Yeah, now do you think about it?
Yeah?
But I mean I drove the thanks to Matt Miller, the four f one fifty lightning the electric version. That now is you like, Yeah, I'm not a pickup truck driver because I'm an investment banker. I don't do that and I don't do electric, but boy, it was an awesome car, awesome vehicle.
So what's the feeling, Joel. Is hybrid's going to be kind of where we settle out? Do you think or?
Like?
Like I asked the BCG guys right, and the auto guy there says he thinks in ten years forty percent of sales will be evs.
Does that sound reasonable?
I would take the under on that.
Take the under on that, yeah, And I you know, I think it doesn't really help. It really doesn't help anybody until the technology is stronger and the cost is lower on the battery side to really make an effective car and an effective price. And I think you'll be seeing that ramp up in part because the Chinese are coming, and the Chinese can make a.
Profit at ten thousand dollars.
They're not coming now because we have the don't we have like tariffs on them on something like that.
We do, and that is a huge concern, really more for the Europeans than for the US. Four and GM don't make a lot of money in China, but when you think about Volkswagen, or you think about Mercedes or BMW, that's about a thirty five percent of their business is based in China. So it's really the tariffs that are going back and forth or being discussed with between China and Europe and Europe and China. That's really where the sticking point is going to be in the near term for these autos.
So going back to the autopalooza that you're going to have and you have rating agencies there, it sounds very cool rating agencies and cool maybe not usually what you say, but you nevertheless, what is going to be your forecast, Like what kind of forecasts are you looking at for the charge offs for the delinquencies? How are you thinking about that for the medium term?
Yeah, well, I think what's really going to be great there is Cox Automotive that experience are going to be coming in and talking about what electrification means for finance companies.
I know that doesn't particularly sound.
Cool, but really you have seen a perfect performance or near perfect performance out of electric cars, and at least the slides that they've shown me tell me that that is not the case any longer. And in fact, it's going to be a lot worse than ice engines. And so people that we're betting on evs holding their residual values I think are going to be in for a bad surprise, whether it's the finance companies or people that own abs securities that have a lot of EVS in them.
So I think they'll be able to provide a lot of detail next Thursday.
All right, Joel, thank you so much for joining us.
Joe Levington, he runs all the credit research for Bloomberg Intelligence, also covers the audio industry in his spare time.
Autopoalooser.
Get the Auto industry together in New York City for Bloomberg Intelligence Investor Conference Thursday one twenty, Park Avenue Next Thursday.
You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on applecard Play 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.
This is the perfect time to check in with Matt Miller, the exceedingly overworked Matt Miller, who joins his here in our Bloomberg studio here at some shade.
Sarcasm is the lowest form of wit.
Paulley, all Right, what do you guys? I mean, you've got your You are so into this auto gig.
You've got a podcast with our good friend Hannah Elliott tell us about it.
Yeah, and we have some amazing guests. So you're just talking to Michael Barr. He has a podcast, The Business of Sports, and this weekend is one of the most iconic races in motorsports, his Charlot Speedway, the Indy five.
Hundred, The Indy five hundred.
I even kind of knew that.
This weekend, so a lot of people are getting their RVs driving out to Indianapolis and Hannah and I spoke with Catherine.
Legg, who is gonna be one of the drivers.
She had an amazing qualifying session a couple of days ago. She was doing an average speed of two hundred and thirty miles per hour and she hit the wall, but she did not take her foot off the gas pedal.
Never lift.
One of my favorite automotive phrases. So she's she's on the podcast this week and it's really interesting. But we have an amazing line of guests coming up. Next week. We're going to talk with Zach Brown, who's the team principal for McLaren in Formula one.
One of the most watched sporting leagues in the world.
Then tell me and then the week after that, I just snagged Tom Wagner.
He runs Nighthead Capital.
So everyone knows they own Hertz and they had the whole Tesla thing, but they also own Singer, which is a Porsche customizer. I guess you could say a Porsche restomat outfit in La that's very famous. You can pick one of those up for about a million bucks if you wait long enough. And they also own Revology, which does replicas or reproductions. They prefer of the nineteen sixty
eight Mustang down in Florida. They have licensing deal with Ford and they do an entirely new vehicle from the frame up, but it looks exactly like a nineteen sixty eight Mustang with modern day performance.
Yeah so an amazing business.
He also owned is a soccer team, So I guess Tom Kean would care Birmingham I think yeah, no, uh and a couple of.
Worlds a player racing teams.
Yeah.
So I'm pretty excited about Hot Pursuit right now. We have a pretty good lineup.
Good that sounds really fun.
Do you ever listen?
Yeah?
Okay, what was the last topic?
It were cars? I follow her, come.
On Elliott on social and what a life she leads. She's all over the globe.
Literally today she's at Lake Como perfect.
Why wouldn't you be in Italy right for the Villadesta some kind of concourse delgo.
And you get that gig.
Uh.
Well, Hannah's much better at it, you know.
She she prefers like the high end luxury market, the supercars and hyper cars. She knows all the millionaires and billionaires that do the collections. I like, like a Dodge muscle car or a Chevy truck. You know, I'm more salt of the earth when it.
Comes to seems like a perfect combination exactly.
Well, we span the whole gamut and we often disagree, but we have a lot of respect for each other.
So it's podcast.
Yeah, sure, okay, all listen. So what what are you driving right now?
I actually last week I was in the Fiat five hundred, the tiny little compact car, the electric electric version of that.
It's actually pretty.
Roomy on the interior, and I enjoyed driving it. I mean, it's not the right vehicle unless you're only gonna go like maximum five or ten miles, right because it's a tiny, little sort of city car, but it really really cool and all the ladies in my hometown loved it and h And this week I'm I'm gonna test drive the new Mercedes E class, the four fifties, so it's got the inline six. I'm pretty excited about that. But I'm
most excited about the Mustangs that are coming up. I've been promised by four that I'm gonna get to drive the new Mustang dark Horse, and I'm so pumped to.
Try that out. Are you talking about I see John?
I see John.
No, he's not talking.
So the Mustang, Uh, you know, they came out the new Mustang last year. It's kind of a beefier, brawnier, more muscular shape.
And it's the last of the big muscle cars.
They They finished making the Dodge Challenger last year. They don't make that anymore.
Would you own? I bought one.
I bought one of the last call versions. Yeah, the RT scatpack wide body.
I knew that.
And and they finished making the Camaro, so GM and Chrysler, Dodge or whatever you want to call it.
They're out of the muscle car business.
Mustang is the only American sort of muscle car you can see anymore.
Like, uh, this seems like they made a mistake because I don't think those muscle cars are going away.
I don't think evs are going to take over the world like we thought as recently as a year ago.
Yeah, I think they did it a little bit too early. They closed down production a little too early.
But you still have can you have like hybrid muscle cars?
That's not really like the point The point of a muscle car is kind of a small vehicle, rear wheel drive, big motor and like dumb analog is the point of a muscle car.
But if we're gonna keep the muscle car like over the next sixty eighty years.
Yes, so that is what that is what Dodge is trying to do.
They're trying to make electric or hybrid versions of they haven't come out with it yet, but the Challenger and the charger, so they.
Do want that. But the muscle car fans might want that.
The buyers of these products are very averse to electric like anything ev if you.
Go on the forums, they don't like.
On the other hand, Ferrari is just about to open up its first all electric factory, so okay, they're not muscle car makers, but you know.
Again, typically it's not gonna sell. I just don't see it.
That's the sound that you'll okay.
I'm with you, I'm with you, I Alex I think is on the right track. That's what.
They don't have any other choice, right because because of the cafe regulations, they can't make a six point four leader naturally aspirated V eight anymore. It's just too polluting. So they're trying to do anything else they can. The problem is that the market just isn't there yet.
And I ask a quick Tesla question, is Elon must focus on selling cars or selling or doing the autonomous driving.
I mean you'd have to ask elon Musk.
ANSWER's yes, and space and battery stores.
Yeah, well exactly.
Well, they're not focusing on the number of cars that they're selling now. He seems to be really committed to autonomous driving from point.
I mean, yeah, he's focused on so many different things, right, and a lot of investors are concerned that he's not as focused as he should be on their specific thing.
So like like Folkswagen Ford, as you know, unless three years they've made big announcements, big investments in EV and billions of dollars of loss dollars of losses where we've we've seen Ford pull back.
I mean, we've seen a lot of the companies pull back right and say we're gonna go this.
Yeah, I think they just lost too much money.
They've obviously been regulated into and you know, socially cajoled towards this EV thing, and they've all made the big bet that can't be unmade.
Like it's too late to turn around.
They're all headed towards evs, but they do have the ability to take their foot off the accelerator in terms of how many straight evs they make and head more towards hybrids because that's what the consumer wants. The consumer wants the hybrid. You can drive around town electric power only emitting zero CO two from your tailpipe, but when you need to go on a longer trip, the range extending internal combustion engine kicks in and you don't have to like wait at broken chargers to get more power.
So I think they're all pivoting back towards hybrids. But yeah, they've already sunk so much into the battery power, the electrification, you know, the software, they can't turn back around.
And so here's also my question talking about like the nuts and the bolts of the stuff. And this is where it gets to my world. So when you have these tariffs on like things that you need to build those cars on China, but the price to buy them in North America is so much higher, what are these
guys gonna do? Are they gonna pay thirty percent more to get graph fyighte from Canada or are they just gonna wait for China to import that graph Bite to Mexico and then they're gonna get it for a lot cheaper.
You know, first of all, I don't know the answer, but I would guess that at some point the government is going to have to step in and help because I agree with you, the administration has regulated them into this path.
They have no other choice.
On the other hand, consumers can't afford to pay, you know, forty five thousand dollars for an electric car when the IC equivalent is twenty five thousand dollars. You know, they've got the seventy five hundred dollars credit, But you're gonna have to either give more. I mean, especially if you've got these protectionist tariffs that are gonna drive prices even higher. They've already cost so much inflation, and they're gonna continue
to inflate prices at the government level. So the consumer, if it's gonna be able to keep up, is gonna have to get a little bit more help from Uncle Sam. That means all of us are gonna have to pay even more taxes than we already do.
And plus John Tucker has to play the congestion pricing to come into Mintown, Manhattan.
Which is a no.
If I were Tucker, I would definitely charge that to work. Like he comes in here at midnight. At two o'clock in the morning, we keep telling his commute has to be subsidiential.
We keep telling him that, yes, you're not allowed.
I don't know why you murder yourself, you know, I mean, we all love our bosses, But.
All right, all right, Matt Miller, thanks so much. He's got the podcast. He does everything for Bloomberg Radio and TV.
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