Mary Barra on GM’s Partnership With Tesla, and Why Businesses Are Leaving San Francisco 6/8/23

0:01Right now on Fast, Tesla's new charging partner, the EV giant inking a deal with GM to add the automaker to its network of charging stations. Both stocks higher after hours. The details of this tie-up and a live exclusive with GM CEO Mary Barra coming up. Plus, West Coast walk away. A major hotel operator decided to stop paying back loans on two massive hotels in San Francisco. With retailers closing due to crime and office buildings still reeling from the pandemic, is there a path to bring the Bay City back from the brink? And later, the air in the Northeast may be starting to clear, but the insurance industry is hardly breathing a sigh of relief.

0:35A look at the summer fears beyond these Canadian wildfires. All that and a chart of the day from the scrap heap to firing in all cylinders. Is this move too good to be true? I'm Melissa Lee. This is Fast Money. We're live at the NASDAQ MarketSite on the desk tonight. Tim Seymour, Karen Feiderman, Dan Nathan, and Guy Adami. And we start off with that major EV charging partnership between General Motors and Tesla. GM announcing about a half hour ago a special deal to use Tesla's North American charging network and technologies. Tesla and GM shares both getting a boost on the news here. Philip Bowe joins us now with the CNBC exclusive interview.

1:08with GM CEO Mary Barra. Phil. Thank you, Melissa. Let's bring in Mary joining us from Detroit. Mary, I just heard the Twitter Spaces conversation you had with CEO of Tesla, Elon Musk. Why now? Why did you make this decision that it's the smart time to say we're going to go with the Tesla charging standard? Well, Phil, appreciate the opportunity to talk to you today. And it is, you know, really good news from a customer perspective. But when we looked at the situation and looked at, you know, really the North American charging standard, I think from a design and a performance perspective, is better for the customer.

1:45And also when you think about the fact that, you know, Ford, General Motors and Tesla are all now on this charger, every American automaker, I think this goes a long way to getting the right standard for the United States. And I hope others will follow. But I think this is really important because from a General Motors perspective, this almost doubles the amount of chargers that the GM customers will have access to starting, you know, in spring of 24. Mary, did Ford's decision a couple of weeks ago to go with the Tesla standard influence your decision? And by extension, how long do you think it is before ultimately the auto industry and everybody in the EV world says, let's just go with the NACS standard?

2:31Well, I think, again, when you look at the fact that, you know, three pretty large companies are saying that they're committed to that standard, I think that goes a long way for for for others to follow. And I hope that they do. And I hope this does become the North America standard. You know, clearly it's going to have a lot of momentum when you think about, you know, what we've announced and the fact that, you know, we're on plan to have a million EVs for sale in 25. And this will have our first vehicle ready in 25 and then quickly switch over the entire fleet. Importantly, you know, it starts for the consumer, you know, early next year.

3:10So I think when we looked at everything and, you know, good ideas can come from anywhere, Phil. So when we focus on what's best for the customer, what's going to be best for the industry, we thought this was the right move. Mary, you're an engineer, and I know that you've seen a lot of public charging stations in your time. You know what the reports are out there. They're a mess. About 20 percent of the time, people don't even use them because they can't make them work or their credit card doesn't work. What's the problem? How did this become a stumbling point, if you will, for EV adoption in this country?

3:45Well, you know, Phil, I agree with you. When I talk to consumers and I talk to a lot of them and when I see what we have, I mean, there is there is a frustration of, you know, when I get to a charging station, is it going to work and is it going to be available? And then is it going to work? And I think this moves a long way to getting us there. You know, when you look at the reliability of this charger, I think that's another point. But, you know, one of the reasons we have the very strong partnership with Pilot Flying J is the fact that it's going to be the chargers that we'll install there and we'll be talking to them as a key partner on, you know, the standard we think that would be good for them and for General Motors, that there's going to be someone there who immediately knows, is it working?

4:27And I think there's a lot more that can be done to be monitoring. And we're going to be working with all the all the companies that are already in our partnership and comprise the chargers, the 13 ,000 fast chargers that are available for our consumers to make sure that they're improving their reliability and the performance overall, because you're absolutely right. It's so important. And so one other point I want to mention is, you know, we're General Motors is aggregating. So if you have a Chevy Bolt, we're going to have the My Chevy app that will allow all these chargers to be available. You can pick your best route.

4:58You know, we're going to work to make sure that, you know, we can make it easy to pay, easy to reserve. So there's a lot of work to be done. But I agree with you. It has to be done quickly to enable EV adoption. Mary, it's Melissa Lee at the Nasdaq Market Site. How do you share the cost or revenue of the charging network with Elon Musk, with Tesla? And does this mean that you might be partnering in the future? Because Elon Musk has tweeted just recently on the heels of the Ford announcement that he would be willing in the future to license other Tesla technology like full self-driving and autopilot?

5:32Well, I think from a full self-driving perspective, General Motors has crews, and we're already operating level four autonomy in three cities with two more being added. But of course, we're going to always look for ways to be more capital efficient. And this arrangement alone, this collaboration that we're doing nearly doubles the amount of chargers that our GM customers will have access to. And frankly, we think we can save up to$400 million in the original three-quarter of a billion dollars that we allocated to this because we've been able to do it faster and more effectively. And we're really looking for ways that we can be more capital efficient as we go forward.

6:14So if there's other opportunities to partner, we're going to be very open to them. In addition to this collaboration with Tesla, we also have a very important collaboration with Honda as well. So, you know, we're demonstrating that we're going to continue to do that because I think being capital efficient in this environment that will allow us to get the best EVs out to the market is is crucial in this transformation.

6:43Mary, it's Phil. I have one other question for you. We are just a few months away from the UAW contract expiring, and you've heard the comments from Sean Fain, the president of the UAW, basically saying, hey, look, you and the rest of the big three have had big profits over the last several years and that it's time for you guys to, quote unquote, pay up when it comes to the rank and file members who are building GM vehicles. Are you confident you can avoid a strike in the fall, given the rhetoric that's already out there from the UAW? Well, you know, Phil, I think it's important that we actually get to the table and we start to problem solve.

7:24Of course, we have different differences. But, you know, as you talk about record profits, one of the things I'm very proud of is we've shared that with our employees from a profit sharing perspective. So they've done quite well in participating in the success that they're important and vitally important to. When I think about, you know, the men and women of General Motors and the fact that just a few weeks after we shut down, when no one knew what was happening in the world with COVID, they came back, they followed the safety protocols and really, you know, just did a phenomenal job. So I couldn't be more proud of the men and women of General Motors that work in our, whether it's our factories, our warehouses, across the company.

8:06And, you know, we want to make sure that we problem solve. Again, we want to find a solution that's good for our employees, good for the company, because we need to continue to reinvest. And, you know, right now we've made some important announcements about reinvesting in these plants, because I think job security is very important. to do that. The company has to be successful so we can continue to develop new products that customers want to buy. So I look forward to being able to have conversations and work through the issues that we have to get to a successful agreement.

8:40Mary, I've got a question for you regarding Twitter. When you tweeted about the spaces that you're going to do with Elon today, that was the first time that you were back on Twitter since October 27th, I believe the date was when Elon Musk took over. At that time, GM also discontinued advertising on the platform. Are you back on Twitter? Is GM going to continue its advertising? Well, we've been on Twitter, especially for our customers, as they have questions, as they have comments, as they have issues. So we've been on Twitter all along. You know, we're in the process right now of reimagining marketing.

9:13You know, I think it's known that we are in the market to bring in a new head of marketing. And so I think that's a a good question and will be one of my first questions when this new person joins the GM team. So I definitely think it's possible. Mary, thank you for joining us today. GM CEO Mary Barra joining us from Detroit. On a day, Melissa, when this is significant news, you now have two of the largest automakers in this country, especially when it comes to EVs, joining in with the largest EV company, Tesla, and saying that's the charging standard that we're going to go with in the future.

9:51Melissa, back to you. Phil, thank you. Phil LeBeau. And our thanks, of course, to Mary Barra as well, the CEO of GM. A real positive here. We're seeing the stock higher in the after-hours session. As it should be. I mean, I think that I listened to the spaces. I thought it was very elegant, actually. I thought it's a really, it makes sense for both sides. I think it's actually more generous of Tesla because they, I don't think they necessarily need that. They already are the standard. I think it's more important for GM. And so I don't know. Good for them. They're just trying to knock down all the obstacles to getting an EV.

10:28Yeah, I think it's also opportunistic by Tesla. I mean, they're going to get access to billion dollars of federal funding that was going to go towards building out EV stations. I mean, they're not doing this for free and their EV charging stations now across Europe are probably going to also get a similar bid to that capacity. And I think it's great for Tesla. The interesting dynamic here is, as you think about conversions of technologies and you think about common standards, GM and Ford can only get pulled up in the valuation dynamic. In other words, what their businesses are worth and or Tesla can get pulled down.

11:04And I realize you can't just immediately make that transference onto multiples. But there's no question that at some point, they're all moving together. And this is why we get to this place where Tesla is an auto company. And so what should you be paying for this company? Clearly a massive lead. And then there's the other side of this that just gets into EV. And what kind of capacity do these guys have to really build out all this stuff, lithium, et cetera, supplies? It's a fascinating time. It's interesting. I mean, Tesla's up 60 percent from its post earnings low. And again, you know, I thought that earnings call was not particularly great.

11:37I thought the margin detail was not particularly great. I think some of the competitive situations, let's say outside North America, weren't particularly great. But the fact that that stock has gained hundreds of billions of dollars in market cap in just a month and a half, I mean, I want to almost broaden that out a little bit and just say we're seeing a lot of really crazy stuff. The stock sold off for fundamental reasons, to Tim's point, because people were looking at some of the valuations in and around their competition. And now to have this sort of run, and I look at the way this stock traded today, and just so you know.

12:07I mean, I took a lot of my position off post earnings. OK, and I started coming back into it. This is on the short side in Tesla. And today I got back into the office and I started doing it again today. And it just was right in my face. And it really felt like somebody knew that this was coming. I just want to be really, really clear about this, especially on a day like yesterday when we saw all those major Nasdaq names sell off three percent. And this thing was up two and a half percent and kept on going. There's like some fishy sort of stuff going on in this name right now because it's not trading on fundamentals.

12:35Again, it is a three quarter of a trillion market cap company again. But some of the technicals, I'd just say on the stock, I mean, it got through the 200 day. If you look at this move, especially this after hours move, it's kind of punctuated a move through that downtrend from November of 21 that it's been fighting up against multiple times. And this kind of takes it through it. So the technicals continue to be very strong. Guy, is this better for Tesla stock or for GM stock? I think it's better for GM stock, but I can understand why people would flock to Tesla. Listen, I thought, you know, we've been talking about it.

13:08First, I want to say I've been wrong, but thought$2.25 to$2.30 would be resistance. We're clearly through that now. And Tim's point about breaking through that resistance is spot on. But I think GM, I mean, the tremendous savings I would imagine would be incurred by GM. Mary Barrett just spoke to it. And now you can make a case that the$43 level that we traded to in February should be within sort of earshot here. And, you know, it's not that far away. Evaluation is compelling, which it clearly has been for a number of years for GM and Ford. And you start to get some momentum and some money put in these stocks.

13:41I think$43 is not that unrealistic given the market we're seeing right now. Yeah, this looks like the after-hour session highs here. I mean, Dan had mentioned raw materials. So let's say adoption is much easier now because they're part of this great charging network. They've signed, GM has signed all sorts of agreements with miners. Yeah, they're set. lithium and cobalt, et cetera. Right. Are they ready to go? Do we just clear the last hurdle for GM? Well, they're at 100 percent capacity to do two million units on EV in terms of nickel and lithium through 25. You know, I don't even are they going to do that many units?

14:14What's that? Through or in 25? From now through 25. They've been delaying. I mean, this this is this is great for them. And I think it's better for GM than it is for Tesla, but they're talking about 2025, right? So that's... No, but you can use an adapter, like, starting pretty soon. And there's some, like, literally plug-in adapters. You can start using this. You know, one of the things that's really interesting is that ChargePoint, which is the biggest actual... Loser. A huge loser. Well, listen, can I tell you something? When I had the Ford Mach-E, and I loved that car, ChargePoint... You could get nowhere.

14:47No, it was a disaster. And when Phil just said that about getting to those stations, needing that sort of thing, it was really bad. I wonder how Tesla customers are going to feel, especially in very dense populated areas where they rely on these superchargers. It was part of the selling point. It was definitely part of this ecosystem that would draw you to that when they start seeing Ford Priuses pull up or Ford. It's not going to cause them to not buy a Tesla in the future because if they've switched to another automaker, they'll face the same line. Well, my point is, it seemed like the only game in town for a long time.

15:19And now there's going to be a lot of other options to do that. And a lot of people in America have affiliations with Ford and GM and that sort of thing. So I guess my point is, is a lot of these charging stations are super packed as it is. Right. And so unless they keep up with the building of these stations, it's going to be a hard thing that, listen, maybe ChargePoint goes under and maybe Tesla takes them all over and that's going to be a huge business for them. I just don't know the economics of the business right now. Well, we don't know the exact economics, but that's why I'm curious from your question about what will what is the deal?

15:47Right. So they're not getting a free ride completely, but I think they could end up, I mean, this could be good for Tesla if GMs and Ford, you know, take a lot of the cost burden and create more capacity for everyone, including Tesla. Yeah. Charge point, by the way, is down 38 percent over the past 12 months and is down more than 2 percent in the after our session. Coming up, AI on the sly. We're checking in on some not so obvious ways to play the hottest new trend, how two old tech names are getting in on the action next. Plus some fast movers catching our traders eyes. Casinos folding while analysts get bullish on Wayfair.

16:19How should you be trading these names when Fast Money returns?

16:28Welcome back to Fast Money. It isn't just mega caps like NVIDIA, Alphabet, and Microsoft getting in on the AI rally. Legacy tech names like Oracle and Adobe each surging more than 30 percent this year. Adobe gaining nearly 5 percent today after announcing plants offer its generative AI tool Firefly to large business customers, and Oracle jumping 2 percent today's session. Hovering near all-time highs, the software company building AI into its core offerings with analysts expecting continued integration into its application suites. Dan, you're talking about this on the call today. Yeah, interesting because both these companies report next week and I think they're going to be in focus in a market right now where we were, you know, focused on the trillion dollar sorts of names and how they're kind of leveraging at least some of the themes in this little bit of a bubble right here.

17:09And Adobe is interesting to me. On May 22nd, the company put out a press release talking about some of their offerings in generative AI and how they're going to be working through a lot of their offerings. And the stock just went parabolic. I mean, just look at the chart there. You can see what happened here. And on a day like today, I mean, listen, this is all great news. And I mean, a company like Adobe should, and they already, they've been working on machine. That's kind of my point. Like, this stuff is all here. So the press release is the thing that actually causes investors to say, oh, this stock's much cheaper than some of its peers, that sort of thing.

17:37And that's what they're rushing into. So, again, just understand that things that go up in a straight line often tend to discount a lot of future sort of fundamental sort of news. And so, you know, I'm not buying here. It does look cheap-ish, and they're doing the right things across their platform. Guy Oracle? I think you can stay with it. I mean, I understand why you'd be inclined to pull the ripcord here. It's been a pretty dramatic move. And we just traded to the levels, the prior all-time high from December of 21. But basically trading just a wee bit higher than a market multiple. You probably have 13 % earnings growth.

18:09I think about 12 % or 13 % of the overall revenues now are from cloud. And you saw cloud growth last quarter grow 45 % year over year. So there's a lot to like here, especially if you're looking for, in my opinion, a reasonable valuation stock that's in a space that everybody seems to love. And the valuation is, you know, we talk about it all the time. You know, back to Adobe, which has been such a big winner over the years until it wasn't. You know, if you look at some of the upgrades we've seen, and they're not really playing around with the AI numbers. They're playing around with the MAU growth, which actually just got up to 20 percent or so.

18:42Their digital media, which is 73 percent of sales, is actually looking pretty strong here. It's at 25 times 2024 if I'm looking at a couple of reports that I'm looking at here. So it's not crazy expensive. Oracle never is. And it's just interesting you look at the overall market as much as we talk about six stocks. Software companies have been very much a part of whatever we're calling this move. And obviously, Adobe is ahead of the line. Where are you on software? You had been short at one point. Yeah, I covered some of it. I'm still short a little bit. I mean, I think it was a little bit of a Fed play, right, interest rates and just valuations being high.

19:18But I'm still short a little bit of it, though. Just one thing on AI, you know, I am long in video, which is the pick and shovel. But also Google is a really, really inexpensive way to be playing the same thing. Yeah, really quickly, when you just said like these cloud names, I mean, that was the last bubble that we had. It was metaverse. I mean, think about how those names corrected because they were supposed to benefit from this new sort of consumption that we're having work from home, school from home. That's because metaverse collapsed, right? I mean, that's a big part. Really, that was an enterprise thing.

19:46It was also a consumer facing thing. I mean, think about the slack. Think about the zoom. I mean, there's a lot of things. So I'm just saying, like, just remember, people like I mean, history is rhyming here. OK, but if you think of the zoom valuation. Yeah, I just didn't mean it as a one off. I think as a monolith, I know you like to use that term. I mean, SaaS was one of the biggest bubbles that we've seen in tech in the last five years. And on average, most of those names, not the totality of the market cap because it's concentrated among a handful of names, but most of those names have been more than cut in half, and they're probably down 60%, 70 % across the board from their 2021 highs.

20:18There is a lot more fast money to come. Here's what's coming up next. You got to know when to hold them and not when to buy them. That's the call one analyst is making on a pair of casino stocks. Why, he's starting to hedge his bets. Next. Plus, putting the good in home goods. Wayfair rallying on some positive calls out of Wall Street. So recline and put your feet on the ottoman. The furniture trade is next. You're watching Fast Money, live from the NASDAQ market site in Times Square. We're back right after this.

21:02Welcome back to Fast Money, a pair of casino stocks claiming your call of the day. Jeffries downgrading both Las Vegas Sands and Wynn to a hold from a buy, saying the bull and bear cases are more balanced now and that the Macau recovery is well understood by the market. Analysts noting that upside remains for the companies but recommended owning without adding. Is that where you think we are, Tim? It's similar to what I've been doing. I've been long Vegas Sands for a year. I was early and then it's actually been good to be patient, especially with the recovery in Macau. I've been selling upside calls around 65.

21:32When I hear owning without adding, that sounds like someone that's selling calls. So it's almost like this is my report. And I kind of buy it. They identify the things that I think are still the reasons to hold it, which is we're still early in Macau. Their Singapore business is crushing it. And I think the valuation still is very cheap relative to its history. Yeah. Do you have to be a believer in the Chinese recovery guy, which has shown signs of sputtering? certainly not reflected in China's stock market, in order to be a believer in SANS, Wynn, etc. I think to a certain extent, absolutely.

22:03They're also talking about building another airport in Las Vegas due to the amount of traffic. So there's a Vegas story here as well that I don't think people fully, at least not comprehend, but take into consideration, I should say. I understand why people would say it's strictly a Macau story. It's not. I'll say this about Wynn quickly. They still have a$114 price target, so it's still reasonable upside. But stocks in a basically nine year downtrend. You go back to, I think, February of 2014, it was 240 something. And we're still in this downtrend, despite the fact that we've had a significant move higher.