Tesla Broadcasts Downbeat Car Sales Estimates in Unusual Move

0:00Hello, I'm Stephen Carroll. I'm in Brussels where many of Europe's biggest decisions get made. And I'm Caroline Hepker in London with the hosts of the Bloomberg Daybreak Europe podcast. We're up early every weekday keeping an eye on what's happening across Europe and around the world. We do it early so the news is fresh, not recycled and so you know what actually matters as the day gets going. From Brussels, I'm following the politics, policy and the people shaping the European Union right now. And from London, I'm looking at what all that means for markets, money and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break.

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1:02Bloomberg Audio Studios, podcasts, radio, news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Craig Trudell joins us now, our global auto czar, because Tesla, which I'm sure Tesla will be at CES and active there and probably has been for, well, a decade and a half now, is expected to deliver a lackluster number of cars. But I don't know how much it matters at a one and a half trillion dollar valuation.

1:45Craig, I'm guessing they could deliver no cars and it wouldn't make much of a difference. Yeah, it's been fascinating to watch because, I mean, just in keeping with this AI theme, you know, on one hand, Tesla has had this hugely, you know, effective run of late with, you know, selling investors on the notion that, you know, speaking of AI, their vehicles are going to be able to drive themselves. On the other hand, you've seen Wall Street sort of get more and more comfortable with the idea that people aren't actually, you know, all that inclined to go out and buy their cars. And, you know, on one hand, you would think that, you know, vehicle sales would kind of move in at least some correlation with the optimism about the self-driving capability that Musk has been promising for years.

2:34And yet we've seen a sort of divergence here, particularly, I would say, you know, in the second half of last year where the stock really took off to the company's credit. They did have a great third quarter, but everyone saw coming that there was going to be a big payback in the fourth quarter once tax credits in the U.S. faded away. So, Craig, that's kind of where I wanted to go. I'd love to get your opinion as we finish out 2025. Where is the industry? I'm talking the Volkswagens, the General Motors, the Teslas. In this transition to EVs, are we stalled here? Are we stalled on hybrids? Are we about to just reload and reaccelerate?

3:10Where are we here? It's really a messy picture because you do have a situation where Chinese manufacturers, by and large, are having much less of an issue selling electric vehicles than the rest of the world. You're seeing incumbents elsewhere in Europe and particularly in the U.S. really struggle to make up lost ground to the likes of Tesla, even as Musk has come back to them a little bit. But particularly with those Chinese companies like BYD, lately, Geely as well, having quite a bit of momentum. And we've seen policymakers sort of answer to this and sort of bow to this reality just in the last few weeks, where in Europe you saw some softening of plans for 2035 to effectively phase out combustion engine vehicle sales.

4:04And, you know, in the U.S., we saw, you know, a really dramatic move out of Ford for them to, you know, sort of put out there that they expect to take almost$20 billion worth of charges tied to unwinding all of, you know, these EV projects, getting rid of the F-150 Lightning. It's really a messy picture for the rest of the industry. Paul loved the F-150 Lightning. Loved the F-150 Lightning. I mean, I loved it, too. But I got to say, I feel like the GMC Sierra, which they're going to keep making, is an incredibly solid project. The Silverado as well. Therein lies the difference between U.S. electric vehicles and Chinese electric vehicles.

4:41Like, I guess there are two, right, Craig? The Chinese subsidize this industry to the tune of hundreds of billions of dollars, whereas the U.S. administration is positioned firmly against EVs. EVs. And, you know, you're paying six figures for an electric vehicle. If I could buy one now, I would buy a Porsche Taycan or maybe the Sierra or maybe a Cayenne, you know. And in China, you're going to pay more like twenty thousand dollars for an electric vehicle. Yeah, I think, you know, to the credit of, you know, these Chinese manufacturers, you have seen a company like BYD try to have, you know, a little bit of a cake and eat it too situation where, to your point, absolutely, they sell a heck of a lot of really, really cheap electric vehicles.

5:26They are also trying to go up market and sell, you know, sort of position actually, you know, relatively new sub brands of vehicles that are performance cars. I don't think they're, you know, by any means moving those in the sorts of volumes that, you know, are in any sort of comparison to what they do, you know, on the lower end. But that being said, absolutely, the level of commitment that we've seen out of China to this project. We haven't seen, you know, from one administration to the next, these wild swings in sort of approach. We absolutely have seen that. Stay with us. More from Bloomberg Intelligence coming up after this.

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6:51Listen on demand wherever you get your podcasts or watch us live on YouTube. Ford Motor Company with probably the news of the year from an American automaker, $20 billion write-down. It's just absolutely massive, especially if you add it on to the billions of dollars in write-downs they've already taken on the EV business. Let's bring in Aaron Keating right now, Cox Automotive. She has been covering this industry for years and has been a guest on my podcast. Oh, Bloomberg's Hot Pursuit with Hannah Elliott. Aaron, what do you think about the move by Ford? Because they have been really spectacularly unsuccessful with EVs.

7:33At the same time, General Motors has, I can't even count how many. They've got the Hummer, they've got the Sierra, the Silverado, they've got the Chevy Bolt, they've got the Equinox, they've got the Chevy Blazer, they've got all the Cadillac EVs. The list goes on and on and on. Such an incredibly broad offering. Are they losing the same amount of money as Ford was on their Lightning and Mach-E? Well, first of all, it's always great to see you, Matt. Thank you for having me. Hi, Paul. As you can tell, I'm one of the sufferers of the cold and illness that came through the holidays. But yes, I mean, GM does have the breadth and depth of the EV lineup.

8:09So they've been able to diversify the cost across a pretty broad set of vehicles that are available on the market. So sure, they've also noted that they've taken some hits from having to build out their electrified portfolio, but certainly not anything on the level of what Ford has had to do because they've had such limited vehicles that have been available, whether it's the Mach-E or the Ford F-150 Lightning. And the Lightning honestly just didn't do as well as they expected it to do. And so, you know, as they say, even when we're talking about tariffs, the more product you have to spread that cost across, you know, the better you're off you're going to be moving into the future.

8:44And GM seemed to have nailed it as far as having some models that were really attractive to people at good price points. That's where I wanted to go, Erin. Affordability, some of the numbers we hear out there on the average cost of a new car just staggering for most people. What can the industry do, if anything, to address that affordability issue? I mean, honestly, here's the deal. We talked about this a little bit in our fourth quarter call. The cars, you know, the price of vehicles, yes, they've gone up. And we really experienced that huge spike during the pandemic, which kind of level set us at this new call it average transaction price of$50 ,000 per car.

9:20But we are seeing people generally buy more expensive vehicles, the bigger vehicles. So somewhat of this is consumer choice. They're preferring the larger, more expensive vehicles. And another big story is the interest rates. I mean, this is a no-brainer. We've nearly come back to, what, about 36 weeks of income it cost to purchase a car now. Back in 2013, that was 33 weeks of income. But what's really changed over all of these years is that the interest rate has doubled. And so people are extending their loans. We've heard the 100 month loan now. So they're not paying less, they're paying longer.

9:57And in fact, they're paying more in interest over time. But the automotive companies, I think you know how Ford's talking about how they're trying to watch their costs, make better decisions on more profitable models. That's going to help them to at least keep costs down or at least stabilize so that pricing won't continue to go on some sort of stratospheric rise. But we are going to continue to see normal inflationary pressures on cars, just like we see on any other consumer good. By the way, it reminds me, I was in a Dodge dealer last week getting some new shoes on my Dodge Challenger scat pack wide body.

10:31Of course. How's that doing? I've got the naturally aspirated. Sure it does. And I saw that they were offering a 0 % APR on a 36-month financing for their trucks. Obviously, that's going to be a high payment for the short duration. But are you seeing, Aaron, more companies, car makers, finance arms eat it for the consumer to give them lower interest rates? To be fair, I think most of those finance deals are coming in for the well-heeled consumers. I mean, this is the other thing that we talk about in the automotive market is the bifurcated market, right? So it's usually the higher income individuals that are actually feeding our new vehicle market in the first place.

11:10And those are the individuals that are going to have better credit ratings and are likely getting a lot more of those deals. So would I say that the financial arms are eating it? They were certainly when it came to electric vehicles. I think that they're likely finding mostly well-heeled consumers that are able to take advantage of those types of deals. And we're still seeing the lower income quintile just stay out of the new vehicle market, head towards the used vehicle market as they traditionally have. And I think we're just eating into some more of those customers who may have had a chance in the past to enter that new vehicle market are just having to shop down into used vehicles.

11:46By the way, I saw there a Ram with the big Hemi that's coming back, thank goodness. And Ford, you know, they have this blue oval city or whatever they call it in Tennessee. They were going to build their next electric truck there. Now I'm guessing it's going to be a steel-bodied Ford Classic with the big 6.2 liter V8. Bring that back. Bring that back. Maybe a stick shift. What do you expect? wouldn't we love a stick shift we talk about this all the time matt your knowledge of cars always amazes me i do think that they're going to continue to look at yes absolutely what has sold in the past what continues to be popular with the american consumer how do they maintain their base i think the big question for the future is just going to be where are we losing those entry-level customers and it will that be hurting us in a few years from now it won't hurt us now we're going to still have the consumers be able to get into the market and the cars that they like, or I should say vehicles, because we really have very few cars.

12:38But are some of the automakers starting to work their way out of that entry level vehicle in the future? Stay with us. More from Bloomberg Intelligence coming up after this.

12:51You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Let's stick with energy, but get into nuclear because AI data centers have been driving, obviously, a surge in demand for power. And Centris Energy says it's expanding its uranium enrichment manufacturing in the great state of Ohio, calling it a consequential transformation. We have the CEO of Centris joining us now, Amir Vexler. So, Amir, first off, tell us big picture.

13:30You know, like Dan Ives always says demand for AI is 12 to 1 compared to the amounts of chips out there. I'm not sure exactly what he means, but what about demand for power? How high is it compared to what we can supply now? Well, good morning, everyone. Yeah, so we, from our perspective, for those of you who are not familiar with Centris, Centris is a uranium enrichment company. Most of the nuclear reactors in the world require uranium enrichment. We are the only American technology, American-owned company, and we're the only ones that are not majority state-owned. To your question about energy, it has been really quite fascinating to watch what has happened in the past year.

14:17The demand has been hugely associated with AI. But let's not forget the demand out there for nuclear fuel and what we're dealing with. You know, for us, AI is just a top up. I mean, we have a base case assumption that really majority of it does not include AI growth. I mean, we're seeing a lot of commercial nuclear growth and we're seeing a lot of growth in national security in the United States and a lot of demand for for enrichment of uranium for that. Amir, President Trump signed an executive order in May calling for the U.S. to speed up production of enriched uranium. Are you seeing that practically in the marketplace these days?

14:58Is that impacting your business? Oh, absolutely. I think one of the best things that happened to us in the recent history is the focus that the president, in fact, has put on the uranium enrichment side of the fuel cycle. It is the largest constraint, in my view, in the entire fuel cycle and the ability to power the existing reactors and the future reactors. And so, absolutely, we see a lot of activity. So much so in that we have announced a few weeks ago that we are commencing the construction, fabrication of uranium centrifuges in our facility in Ohio. And by the way, we, sorry, in Oak Ridge, Tennessee.

15:39By the way, we're headquartered in Bethesda, and we operate two plants, one in Tennessee and one in Ohio, where the enrichment is done. I'm here for the holidays in Toronto, so you see the beautiful skyline of Toronto right behind me. But we are based out of Bethesda and the United States. Why choose my home state of Ohio? You're located right there. Look, if I'm driving from Columbus past Chillicothe down to Ashland, you're right in the middle there in Piketon. Why do you choose that location? Oh, we go way back in that facility. That facility was originally constructed for a demonstration program of some of the centrifuges that we worked on with the Department of Energy.

16:24I mean, the ability of somebody to get into the uranium business, the uranium enrichment business, the barriers to entry is almost insurmountable. So, I mean, that's a great question. I mean, we've been working on our technology for decades in collaboration with the Department of Energy. And that was one of the original facilities where we have installed some of our demo cascades and centrifuges. In the past two years, we have built a demo cascade that has been producing HALU, which is a high-assay, low-enriched uranium. It's a slightly more enriched uranium that is meant to power advanced reactors.

17:03And that's where we've been operating that cascade from. That's where we've been enriching it from. So our huge buildout is going to happen in that facility. Not sure I can exactly answer why Ohio was picked for that, but we love the area. We have some real talent in that area, and we're able to attract some real talent in Tennessee as well. I mean, I was just wondering if the Scioto River has anything to do with it, because it runs right through Piketon there. That's a good question. I may have to consult with some of the historians in the company. Hey, Amir, one technology that's got my attention here as we think about powering this AI revolution is small modular reactors, small nuclear reactors.

17:44Talk to us about that technology and what do you think of it? My personal opinion is it is exciting. I think it's fantastic. There's a lot of companies here in the United States that are developing really exciting new technologies to make the reactors more efficient, more productive, safer. My personal opinion is it really does not matter to Centris. Centris is obviously cheering everybody on. We want large reactors to win. We want small reactors to win. We want advanced reactors to win. But at the end of the day, the enrichment will be required for that growth. You know, maybe more specifically to your question, I mean, I would love to see a world where we have a real balanced build out of large reactors.

18:31And I think you heard President Trump announce that there's going to be build out of the Westinghouse AP1000s. And we're also hearing that there's quite a few advanced reactors, small modular reactor companies that are very close to demonstrating their capability and being able to start putting power on the grid and not too long from now. So my personal view is it's exciting. Where it comes from, it matters not to centrists. We're cheering everybody on. Amir, what about transportation? I'm just curious about the logistics. I'm sure you don't put it in the back of an F-150 and truck it off to Three Mile Island.

19:06So how do you move enriched uranium around? Yeah, so it depends on what state the enriched uranium is in. typically post-enrichment activities. It is in uranium hexafluoride state, which is sort of like a gaseous form. And this is so tightly regulated by the NRC and the DOT. There are licensed containers that are designed and have been tested in a series of stress tests to make sure that all transportation of uranium is done safely and the public is protected. And quite honestly, the transportation is very standard. It's been happening for decades and decades now. And it's been happening in maritimes.

19:51It's been happening on the roads and highways and on rails. It's a licensed activity. And there's licensed containers that have been tested and stress tested for that. Stay with us. More from Bloomberg Intelligence coming up after this.

20:07You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. Let's talk now about one of the biggest deals of 2025 or at least, I guess, agreed to deal. Hasn't been closed, obviously, yet. And that's the battle over Warner Brothers. Paul, this is one you've followed closely. Have you, by the way, have you bought or sold Warner Brothers yourself? I did with AOL paper back in 2000, 2001. I knew you'd been involved in that.

20:44And I love this deal also because it's one that President Trump had previously killed. Remember when AT &T? Yep. One of the By Warner Brothers. He's got an interest in it now, it appears. He said, no, the DOJ, they sued the DOJ and they actually got it done. But then AT &T was like, wait, this was a bad idea. So then they got rid of it. And now it's up for grabs again. And Netflix, that was the agreed deal to buy Warner Brothers Paramount, of course, in with the hostile offer. So let's talk about how this works out, how it changes the media landscape, the future of streaming, bundling, movies, etc.

21:22Paul Larby joins us to break it down. He's the CEO of Bango. Bango is a global tech company that enables providers to reach more paying customers through global partnerships. I guess that's corporate speak. I looked on the website and I guess I could just... Paul, tell me about this. I could go to you and say, I want this, that, and the other streaming service. You bundle it for me, and I just pay you. Yeah, not directly through us. In fact, we enable other brands to do that. So if you're a Verizon customer, for example, and you're getting Netflix and HBO Max together as part of a package, we're the technology that provides that.

21:55So we enable anybody who has a subscription service like Netflix or even through to AI-based services to basically resell it through a channel. And our product for that is called the Digital Vending Machine, and so we're that technology partner that sits in the middle. So most people will be using us, but without actually ever heard of who we are. Paul, what do people like yourselves in the industry, in the media industry, in the streaming business, how are you guys viewing this Warner Brothers potential deal going on out there? Yeah, I think it's really interesting. I think certainly the streaming landscape potentially brings together the first and the fourth largest sort of streaming service.

22:28And that can sound quite dominating. But actually, if you look at the number of streaming services we have, it actually potentially solves a customer. And, you know, something like 30 percent of people have four or more different video streaming services. And if you watch sports, then you probably have five or six because those tend to be more spread across different services. And all our Bangor data shows that customers are crying out for simplification and consolidation. And that's sort of what we've been doing. So it's always bringing these two together makes a lot of sense for a consumer perspective.

22:56I think it needs to sort of be put in perspective. We're bringing these two together. The question is sort of what follows after that? Because I think the last thing we want to do is recreate, in fact, what Netflix disrupted, which was that big cable TV package. So you don't want to end up with one streaming service that is so expensive. It just looks like the cable packages used to look like sort of five or ten years ago. By the way, if you were, Paul, in charge of the FTC and you had to look at the streaming universe, obviously Netflix and HBO and Prime are in there. Would you also include YouTube and Instagram and what's the Chinese one?

23:31TikTok. Would you include all those as well? Yeah, for sure. And I think the media landscape is traditionally evolving. And we've talked about things like, you know, the death of sort of live TV for some for some time now. And live TV has really become now to a point where it's sort of news, big social events where maybe there's a voting element, something like, you know, the Oscars or the Golden Globe Awards or sports. and really sort of really live TV sort of relegated down to those. And the people that really will survive in this media landscape are the people that embrace these sort of changes.

24:01And likewise, we've seen the evolution of sort of short-form content that can sit alongside some of the more well-produced, longer-form sort of content. So the companies that are going to survive in this really are all sort of coming together, and it's really the innovative ones that adopt the live events that make sense, the short-form content, alongside the more traditional video entertainment content, that are basically the companies that will ultimately survive and be successful. And I think that's where Netflix have shown sort of great innovation in sort of bringing all these different elements together.

24:30Do you worry, Paul, about movie theaters all going broke because everything gets streamed and kids just consume content on their tiny little screens in their bedrooms with the door double locked so mom and dad don't come in? I mean, what about the big screen? Yeah, no, I think that's an interesting thing. And Netflix historically have gone for sort of more niche or limited cinema releases to get sort of prestige or to qualify for sort of awards. I know they've committed to extending and not taking all of the new content, should the acquisition be successful, directly to streaming and still preserving those theatrical releases.