Disruptive trends that will transform the auto industry


Us let's shift gears to the auto market we got Tesla I'm very much in the forefront yesterday at with an incredible surge in share price then today we're seeing an incredible plunge on the other side of Ford shares down more than ten percent one point now nine point nine percent declines General Motors kind of hanging in there with so little decline after being up earlier this comes on the heels of reports that show what the challenges for an industry under profound transformation joining us now David Welch Detroit bureau chief for Bloomberg news to David can we start with Ford because this is now being compared to a company with the lan must like problems without the eleven must but level of belief and faith from shareholders really is I mean if you if you will and were also was three years ago they couldn't get the hose out on time they had some quality issues with their SUV the model X. every planet you on most put out there would be six twelve months off schedule they were kind of refurbishing some of the assembled cars out in the yard it's not quite that bad it forward but they've got an explorer that they state they can't get out on time event all kinds of production issues there this shouldn't be happening at a company like for one of the advantages that the established automakers were supposed to have over Tess was that they they have vehicles new models out out of pure muscle memory it just happened there were occasional gap circadian room in and we still have been recalls but they didn't have stuff like this and and so this is one of Ford's problems sales of warranty costs ticket TTL fifty two on their profits in the quarter so these are all these are all very bad things it should just be general execution and things of that this just smoothly happen for a company like Ford so what is the thinking behind this focus on Ford but those production problems as blocking and tackling issues we thinks cause them here because again you're right a company like a Ford it's you know been doing this for so long should have this part down displaying incorrectly why this is happening CO active said told journalists that he had every confidence they can they can get their execution back somewhere in there they just took their eye off the ball on this thing and who accused the things to happen right we had a big recall a few years ago from Toyota with the GM ignition switch issue so the big companies are not immune to this sort of thing but this is kind of more even more basic just getting a new model particularly important one like the X. four out the door on time to dealers and customers post explain it other than the it's a big gap on their part so putting Tesla side because it's been a it's sort of round trip consider not round trip I mean it's it's off with a bunch today after yesterday's run away gains in the share price there is a question is this the best bet if somebody wants to wager on the future of autos as a tech item as also a E. sort of vehicle so to speak for the electrical battery which is going to be key in any kind of new economy is that the best bed or their other auto companies that are investing similarly with similar success in the electric battery industry of burning question and if you look at Tess of right now the market is saying that if the tech company attacks started to grow the company and if they've got the best technology when it comes to work for vehicles in the moment it's hard to argue the phased out the bad their cars have the longest range which means they can go the furthest on a single charge they also have a really good electric motor we we did a piece last year I would again insanely mineral tore down a model three and really ripped apart the battery the orchard motoring and he said they have is for the best electric drive system any compared to GM BMW know if these other companies I think we'll we'll catch up in terms of battery performance and and they'll get there the other thing that also has that was brand the pencil branded extremely powerful it's almost a cold and then may also have been doing other things that are tech related in their cars that set them apart they have over the air updates that can actually boost the speed of the vehicle with the model three they had heaters in the rear seats and didn't tell anybody and then one day they just turn them on with an over the air update and awaited customers by saying guess what Germany receipts space so we've been doing stuff like that that really does make the car smartphone and I think it would scare me if I'm running one of the big conventional car companies is that houses cars have become the iPhone of yeah or if your vehicles and until somebody else comes up with an android type of of rival to what Tess was doing I think they're going to rule the roost it's a great analogy that kind of brings it into focus here David wells Detroit bureau chief Bloomberg news on the phone from our Detroit bureau talking about that numbers coming out of Detroit today Ford again that down about nine and a half nine did have ten percent Tesla also down about thirteen fourteen percent give me a little bit of some of that surge we've seen over the past a six seven days in particular just amazing so again this is a transformative time for the auto industry is David was mentioning as the electric technology electric vehicle technology is developed and obviously is today was mentioning Tesla has that brand has that first mover advantage reminds me a little bit of Netflix what it did to the traditional media business having it first mover advantage having that brand the traditional companies here the traditional car companies need to figure out a way to prohibit their company to compete in this New World a

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