FRANCINE: GOOD MORNING.
WELCOME "BLOOMBERG U.K." HIGHER COSTS, FIERCE
COMPETITION. AS A SWITCH TO ELECTRIC,
BRITAIN FALLS FURTHER BEHIND IN THE RACE TO BUILD CDS. ANOTHER COULD BE BECAUSE THE
PLAYERS TRADED CARDS DURING THE EVE YOU -- TRADED DURING -- CARMAKER SAINT THE DEAL --
CARMAKERS SAY THIS WILL RULE OUT LIBRARIES. >> IT INVOLVES THE AUTOMOTIVE
INDUSTRY. WE HAVE MOSTLY HAD THE SAME
ABILITY TO TRADE WITH EUROPE BUT IT IS MORE COMPLICATED AND
DOES COST MORE. THERE IS ALWAYS DOUBLE IN THE
DETAIL AND ONE IS THAT HE IS STARTING FOR NEXT YEAR. EVEN WORSE, THERE IS A RULES OF
ORIGIN CLAUSE THAT SAY A CERTAIN PERSON HAS TO BE FROM
EUROPE. THE AMOUNT OF SUPPLY BANKS
MEANS IT IT -- IT IS UNLIKELY. FRANCINE: U.K.
GOVERNMENT HAS TOLD BLOOMBERG THAT THEY ARE WORKING WITH
PEOPLE THE AND UV ROLES. >> IT IS TRADING NOW.
WE HAVE A FREE TRADE AGREEMENT WITH THEM.
TOOLS OF ORIGIN, COMMISSIONS DO NOT WORK WELL WITH RISING
PRICES. THIS IS NOT A EU PROBLEM, THIS
IS A U.K., EU PROBLEM. THE TRADE IS UP FOR REVIEW AND
2025. WHAT ARE YOU LOOKING TO TAKE IN
ADVANCE OF THAT? FRANCINE:
THAT HAPPEN JUST OVER A WEEK AGO AND THERE HAVE BEEN NO
BREAKTHROUGHS. SOME 70,000 PEOPLE ARE NOT
BREWING THE AUTOMOTIVE INDUSTRY. LET'S DISCUSS ALL OF THIS WITH
BLOOMBERG'S WILBUR -- BLOOMBERG'S CORRESPONDENCE.
THANK YOU, BOTH, JOINING US. TO ME THAT SEEMS LIKE A
NIGHTMARE. TO DEAL WITH THIS AND THE
WRITING. I THINK THIS IS A CLASSIC OF
THE IRONY TO GET OUT OF THE EU, LED TO SMOOTH OVER THE SAME
COMPLICATIONS. THIS IS WHAT PRECIPITATED THE
DESIRE TO LEAVE THE EU. THIS WAS A MATTER OF LEAVING A
CUSTOMS UNION THAT MAY TRADE SO -- SOBER AND UNCOMPLICATED.
THEY BECAME MUCH MORE COMPLICATED AND IT WILL BE
COSTLY. THERE IS A QUESTION ON, WHERE
DO YOU WANT TO PLACE YOUR INVESTMENT?
LOW COST, MEDIUM INVESTMENT. WHY WOULD THEY AGREE TO THIS IN
THE FIRST PLACE? A LOT HAS CHANGED. >> ALTHOUGH WE EXPORT 50% TO
THE EU, IT IS AN ISSUE FOR BOTH SIDES.
SETTLEMENT MEANS WE SHOULD BE WINNING THIS. >> HOW MUCH DOES THIS HAVE TO
DO WITH COSTS COMING UP. ? 40% IS THE BATTERY ITSELF. ONLY AFTER WE TRANSITION OVER
THE NEXT TWO YEARS. FRANCINE: THE ELEGANCE OF OUR CAR
EXPERTS, WHITE SHARK -- WHITE SHIRT.
WHEN YOU GO BACK TO COSTS, THESE ARE NOT GOING TO GO WELL
ANYTIME SOON. >> I THINK THERE IS A ENERGY
CRISIS. THIS IS A CASE WHERE WHERE YOU
ARE GOING TO LOCALIZED PRODUCTION IS A BIG QUESTION.
IT IS A HUGE PART OF THE VALUE OF ELECTRIC VEHICLES.
WE HAVE A LACK OF REPRODUCTION IN THE U.K.
AND NOT A WHOLE LOT OF REASON TO INVEST WHEN PRODUCTION IS
HIGHER. IT IS DIFFICULT TO PROCURE
LABOR. THERE ARE A LOT OF COMPLICATIONS HERE, BIG, HEAVY
COMPETITIONS. >> HOW MUCH OF THIS IS BECAUSE
OF THE AUTOMOTIVE INDUSTRY AND HOW MUCH OF IT IS A STRUGGLE
OVERALL OR ANY U.K. MANUFACTURING IN THE U.K.. >> IN SPEAKING WITH HOMEWORK
RECENTLY, HE TALKS ABOUT THIS ISSUE AND THE CHALLENGES OF
IMMIGRATION, FINDING PEOPLE TO WORK IN FACTORIES. I THINK U.K. HAS A LOT GOING FOR IT AND THAT
IT HAS THIS HISTORY OF MANUFACTURING A LOT OF CARS, IT
IS A QUESTION ON WHETHER OR NOT THIS EXPERTISE IS ENOUGH TO
MAKE UP FOR ANOTHER ACCESS. THIS IS THE REASON WHY SO MANY
MEMBERS HAVE BEEN MOVING ELSEWHERE. FRANCINE:
HOW DO YOU REVIVE THIS? DO YOU WRITE ABOUT THIS EVERY
DAY, AS DO YOU, WHEN YOU LOOK AT THE BULL PRINT.
DOES THE HAVE TO START WITH BULLPENS OR IS IT U.K.
INVESTMENT. 30% COMES FROM THE SIDE.
THERE IS PRODUCTION IN PLACE. IF SPECULATION IS CORRECT, THE
NEXT PROBLEM WILL COME TO THAT U.K.? THAT WOULD BE A MASSIVE
POSITIVE. ANNA: FRANCINE: -- FRANCINE: THEY ARE LOOKING AT DOING AN
AGREEMENT WITH THE U.K.. HOW MUCH OF A STRUGGLE IS IT IF
IT DOES NOT COME THROUGH? ANNA: THEY DO -- >> THEY DO NEED
THESE BATTERIES. IT WILL BECOME AN ISSUE.
THEY WILL SELL TO EUROPE IN THE FUTURE. FRANCINE:
DO THEY NEED THIS DEAL FOR BATTERIES IN AUTOMOTIVE OR DO
THEY NEED TO IT SAYS IS OPEN FOR BUSINESS. >> A BIT OF BOTH.
SUBSIDY IS KEY. THERE HAVE SOME BIG -- HAVE
BEEN SOME BIG HEADLINES. SUBSIDY IS KEY. U.K.
GOVERNMENT HAS TO BANK BUSINESSES IN TERMS OF BANK
REDUCTION. FRANCINE: IS IT LOOKING GOOD?
WE HAVE A GOVERNMENT THAT IS IN NATURE BE'S TUITION. THEY HAVE TO FIGHT A LOT OF
FIRES. >>
INDUSTRIAL POLICY IS SOMETHING WE HAVE HEARD FROM MAKERS AND
CURRENTS. IT LACKS POLICY TO JUSTIFY
KEEPING PRODUCTION HERE, ESPECIALLY IN LIGHT OF THE ACT
THAT RAISED THE STAKES AND WILL FORCE THE HAND OF THE
GOVERNMENT TO STEP UP AND SAVE THE INDUSTRY. FRANCINE:
AT THE SAME TIME, THE INDUSTRY THAT WAS REALLY DULL HAS NOT
RECOVERED. >> I DO THINK THERE IS A PLACE
FOR COMPANIES LIKE ASTON MARTIN, SO WE CAN RETAIN.
I HEARD THEM TALKING ABOUT BEING ABLE TO TAP VOLKSWAGEN'S
SUPPLY CHAIN. THAT WOULD APPLY TO RULES OF
ORIGIN AND HELP WITH THE THRESHOLDS.
YOU DO NOT NECESSARILY NEED LOCALIZED REPRODUCTION HERE.
FRANCINE: IT IS AMAZING. 780,000 -- 780 MILLION PEOPLE. U.K.
WANTS TO BE HYBRID BY 2030 AND COMPLETELY ELECTRIC BY 2035.
THAT IS A HUGE AMOUNT OF CARSON NEEDS TO BE MADE AND THEN
DRIVEN. >> YES.
WE HAVE ALREADY SEEN SOME. IN TERMS OF MARKET SHARE, IT IS
ABOUT 13%. WE ARE STILL A LONG WAY AWAY
FROM THIS BEING AN ISSUE. THE SECOND PART, WE NEED BETTER
BATTERY SUPPLIES. IT IS THE PUZZLE HOLDING
TRANSITION BACK. FRANCINE: THAT SEEMS HARD.
YOU NEED THE COPPER AND MATERIAL TO MAKE IT. HOW LONG DOES IT TAKE TO PUT
THESE CHARGING STATIONS IN PLACE? >> IT TAKES A LONG TIME.
VERY EXPENSIVE. GLOBALLY, 2.7, YOU NEED TO MAKE
GOVERNMENT TARGET. A LONG WAY TO GO.
PROBABLY 150 THOUSAND CHARGES. HOPEFULLY THAT WILL SICK UP.
FRANCINE: THE CALL FOR ACTION FROM THE
GOVERNMENT. >> IT IS LONG OVERDUE.
I DO THINK SOME OF THE WARNINGS WE HAVE HEARD RECENTLY, ONE
SILVER LINING WILL WAKE UP LEADERS TO THE SAME IDEA THAT
THEY CANNOT ALLOW THE INDUSTRY TO LANGUISH. AND TO REPLACE IT IN PLACES
LIKE FRANCE AND THE REST OF EUROPE. FRANCINE:
IMPORTANT CONVERSATION. THANK YOU FOR JOINING US. SPEAKING OF IN DEBT --
INDUSTRIAL, COMING IN A LITTLE HIGHER THAN EXPECTED,
PRELIMINARY WAS I AM POINT 46.9. THAT IS A VERY LATEST FORECAST
FROM THE BANK OF ENGLAND. COMING UP, WE TALK MORE ABOUT
THE STATE OF OUR ELECTRIC VEHICLE AND WHY THE U.K.
IS BEING OVERTAKEN BY OTHERS. FRANCINE:
ECONOMICS, POLITICS, FINANCE. THIS IS "BLOOMBERG U.K."
I AM FRANCINE LACQUA, HERE IN LONDON.
WELCOME TO OUR DEEP DIVE OF THE CAR INDUSTRY, ELECTRIC VEHICLES
IN PARTICULAR. JOINING ME NOW IS A DATA GUY. YOU TRACK AND MEASURE WHERE THE
BLIND SPOTS OF THE U.K. GOVERNMENT ARE.
HOW ARE YOU DOING IN ELECTRIFYING SOME OF THE
BATTERIES IN THE ELECTRIC INDUSTRY? >> THE MORNING. IN TERMS OF U.K.
GOVERNMENT, WE ARE NOT DOING WELL.
WE ACTUALLY LACK SOME BATTERY POLICY SO FAR. WE LOOK AT OTHER COUNTRIES,
GERMANY, HUNGARY, HAVE BEEN DOING VERY WELL.
AT THE GLOBAL REGIONS AS WELL. FRANCINE:
IS IT TOO LATE AND IS IT A LACK OF CAPITAL?
WE KNOW BILL GATES WAS GIVING A LOT OF MONEY TO TRY TO GET THIS
DONE. OR, IS THIS GOVERNMENT POLICY?
CASPAR: IT IS NOT TOO LATE. U.K. GOVERNMENT NEEDS TO SHOW
SUPPORT FOR THE BATTERY SUPPLY CHAIN.
WITHIN EUROPE, ALL OF THE FOCUS HAS BEEN DOWNSTREAM.
ALSO, WE NEED TO THINK ABOUT THE UPSTREAM.
WHERE ARE YOU GOING TO GET THOSE MINERALS FROM?
WE WILL PROBABLY NOT BE SELF-SUFFICIENT, SO NOW
THINKING ABOUT PARTNERSHIPS. FRANCINE:
YOU HAVE TO GROW THIS IN-HOUSE? TO HAVE TO HAVE U.K. TECHNOLOGY?
WE HAVE TOP UNIVERSITIES, SO WE COULD BE ABLE TO DO THIS. OR DO YOU PAY FOR THIS FACTOR?
CASPAR: IT DEFINITELY TRACKS. SELF-MONITORING.
THERE ARE SOME ANNOYING COMPANIES ALREADY WHICH COULD
SUPPLY WATER TO EVERY GLOBAL REGION. NEED TO BANK ON THOSE
COMPANIES. IT IS VERY CHALLENGING TO GET
TO THAT QUALITY. ALSO, HOMEGROWN TALENT AS WELL.
U.K. COMPANIES ARE LOOKING TO DEVELOP THAT BATTERY TECH.
FRANCINE: COPPER, CERTAIN PARTS OF IRON,
THINGS THAT THE BRITISH COMPANIES DO.
GLENCORE IS VERY PRIVY TO THE SPACE. YOU HAVE GHP.
IS THAT A MISSED OPPORTUNITY TO DO THESE DEALS OR DOES IT NOT
MAKE A DIFFERENCE WHERE THEY ARE LISTED? CASPAR: IT PROBABLY DOES NOT MATTER
BECAUSE THESE CRITICAL MINERALS WILL BE IN SUCH SHORT SUPPLY.
YOU GET MANY DIFFERENT TYPES OF COMPANIES. FRANCINE:
MANY -- MAINLY CHINA, RIGHT? CASPAR: YES.
BUT THAT IS THE REFINED MINERAL. YOU NEED OTHER MINERALS. PHOSPHATE, IT IS VERY IMPORTANT
TO ENSURE YOU CAN SUPPORT THE INDUSTRY IN ACQUIRING THOSE
MINERALS, OR YOU CAN ATTRACT COMPANIES THAT BUY THEM AND
ENSURE THEY ARE GOING INTO THE REGION. FRANCINE: WE ARE DEALING WITH THE
INFLATION REDUCTION ACT. A LOT OF INVESTMENT GOING INTO
GREENING THE STATESIDE. YOU HAVE TO BE BETTER AND MORE
BOLD TO MAKE SURE IT COMES HERE? CASPAR: YES.
IT IS AT A SCALE WE HAVE NOT SEEN BEFORE. POTENTIALLY TRILLIONS OF
DOLLARS IN SUPPORT FOR THE FULL BATTERY SUPPLY CHAIN.
IT DOES UP THE ANTE. IT IS PROBABLY NOT TOO LATE.
SOMETHING NEEDS TO HAPPEN IN THE VERY NEAR FUTURE TO MAKE
SURE IT IS NOT TOO LATE AND WE DO NOT LOSE THOSE EXISTING JOBS
HEARD FRANCINE: -- EXISTING JOBS. FRANCINE: ARE WE STILL IN THE INFANCY OF
THE EB BATTERY? CASPAR: WE ARE STILL AT THE BOTTOM OF
THE HOCKEY STICK CURVE. THERE IS STILL TIME.
SOMETHING LIKE 25% BEYOND THE DECADE.
THERE IS A LOT OF SCOPE TO BUILD THE ON THE AND THE
TIMEFRAME. IT BECOMES MORE CHALLENGING AS
TIME GOES ON AND THEY BECOME STICKY RELATIONSHIPS BETWEEN
CARMAKERS AND THE BATTERIES. FRANCINE: IT IS ALSO TECHNOLOGY.
HOW MUCH IS TECHNOLOGY CHANGING? THE WHOLE ECOSYSTEM, HOW MUCH
OF A QUESTION MARK DOESN'T HAVE? CASPAR:
IT IS CHANGING EVERY DAY. IT CHANGES VERY QUICKLY.
IT IS CHANGING WITH CONSUMER NEEDS. THERE IS STILL A LOT OF SCOPE
IN REUSING THE VEHICLES. YOU ALWAYS HAVE ONE EYE ON THE
FUTURE. FRANCINE: LOOKING AT THE DATA, CONSUMERS
WANT THIS. THEY WILL RENT BY THE CAR AS
LONG AS THEY HAVE INFRASTRUCTURE. CASPAR:
INFRASTRUCTURE IS IMPORTANT. THERE'S ALSO RANGED ANXIETY.
PEAK LITHIUM PRICES WERE 10 TIMES WHERE THEY WERE BEFORE
THE PANDEMIC. IT IS ALSO BEING ABLE TO BUILD
OUT THAT SCALE TO KEEP COSTS LOW TO MAINTAIN THE SCHEDULE
FOR ELECTRIC VEHICLES. FRANCINE: THANK YOU SO MUCH.
CASPAR RAWLES, CHIEF INVESTOR DATA.
COMING UP, WE WILL ASK WHAT THE EU IS DOING DIFFERENTLY FROM
THE U.K. TO GET AHEAD IN THE EB BATTLE.
THAT IS UP NEXT. THIS IS BLOOMBERG. ♪ FRANCINE:
ECONOMICS, POLITICS, FINANCE. THIS IS "BLOOMBERG U.K."
I AM FRANCINE LACQUA, HERE IN LONDON. U.K. AUTO INDUSTRY THREATENED BY
BREXIT AND AT RISK OF FALLING BEHIND. WHILE THE U.K. IS ONLY WITH A HANDFUL OF
BATTERY FIELDS. LET'S BRING IN ELIZABETH. WHY DOES EUROPE SEEM TO BE SO
AHEAD OF THE U.K. WHEN IT COMES TO BATTERIES?
ELIZABETH: THEY HAVE BEEN DISTRACTED FOR
YEARS BECAUSE OF BREXIT. SUCCESSIVE TRANSPORT OF
MINISTERS. THERE HAS NOT REALLY BEEN MUCH
OF A LINE ON DEVELOPING POLICY. WHEN YOU COMPARE THAT TO
EUROPE, YOU HAVE TO LOOK BACK TO ABOUT 2019 -- 2018 WITH THIS
RACE TO TRY AND CLOSE THE HUGE GAP. THAT REALLY STARTED TO TAKE
SHAPE. FRANCE AND GERMANY FORMED AN
ALLIANCE. THE WHOLE THING BECAME A BIGGER
ISSUE, EVEN IN GERMANY. A PUSH TO BUILD BIGGER BATTERY
PLANTS. THEN IT REACH THE EU AND EVERYTHING STARTED TAKING SHAPE.
I AM BILLY STARTED TO SEE -- I AM JUST SEEING THE FRUITS OF
THESE. JUST THIS WEEK, MERCEDES AND
TOU THAO ARE IN THE FIRST STAGES. THIS MAKES THINGS LOOK GOOD
VERSUS THE U.K., ELSEWHERE, A CHEF.
THERE'S STILL A LOT TO BE DONE. FRANCINE:
FINAL THOUGHT, POST-BREXIT TRADE RULES.
THEY HAVE BEEN CALLED A LOOSE -- LOSE/LOSE SITUATION.
WHY CANNOT THE TWO SIDES WORK TOWARDS A SOLUTION? ELIZABETH:
EUROPEAN SUPPLY CHAIN IS NOT READY. IN TERMS OF TRYING TO FIND A
DEAL, THE CAR INDUSTRY IS VERY MUCH UNITED INTO PUSHING OUT
THE THRESHOLDS. FROM THE U.K., WE HAVE HEARD
THE SAME. WHILE WE HAVE HAD SILENT SO
FAR, IT IS STILL PART OF THE EU COMMISSION. I CANNOT SPECULATE ON THEIR
READINESS TO REOPEN THE DEAL ON THIS. THERE ARE A LOT OF SMALLER
STATES IN THE EU THEM I WANT TO BENEFIT FROM A MULTIBILLION
DOLLAR INVESTMENT. FRANCINE: THANK YOU SO MUCH. BE SURE TO SUBSCRIBE TO
BLOOMBERG'S "IN THE CITY"
