We dig into the details. Digital currency regulation. Adam pozen of the Peterson Institute weighs and on whether Central Banks should be issuing their own guidelines on cryptocurrency. Netflixur top story reported thirdquarter earnings on wednesday, the shares stopping in after hours trading after International Growth eased investor worries. The streaming giant also talk to earnings per share projections. New subscribers did fall short of estimates. Revenue went to 5. 2 billion. Bloombergsbring in lucas shaw in los angeles. Shares rising 10 in the postmarket. Is it really the new subscribers overseas that are allaying our concerns . Lucas i think the story is investors were worried netflix was going to have another bad quarter. They disappointed in the second. They added a few million customers, fewer than analysts expected. One analyst i spoke to this week said sentiment was awful. Instead, they come in around expectations. They missed in the u. S. , but were above internationally, and that is where netflix has been telling people their future is. It is a sign that while they are going to have one of their worst years of her in the u. S. , they are going to have their best year ever internationally, because they have shows registering in europe, latin america, asia. In a sign of confidence, netflix is going to start breaking out its subscribers by region, which suggests they now feel confident enough in the numbers to talk about it which they have not previously. Taylor lucas, talk to me about the domestic numbers. They are reversing a decline. Is it enough . Sophie i dont know lucas i dont know. I dont know how concerned people are. Netflix has cleared the 60 million threshold, which is what Ceo Reed Hastings said. He projected 60 million to 90 million in the u. S. That was a while ago. They cleared 60 million, but only at about 2. 7 million this year. They historically have added 5 million year. They say it is because of a price hike, and maybe next year they are up to 3 million or 4 million, but they are facing competition from disney, apple, at t, comcast. I think we are setting into a new reality for netflix in the u. S. , where after years of growing at 5 million year, they settled to three or 4 million. If they can keep that going, they will be ok because they would get to 70 million in the u. S. , which is a pretty good number. They are generating money from each of these customers, so there revenue per customer is up and margins are up because the price increases have worked without costing them too much. Taylor thank you to lucas shaw in los angeles, covering all things netflix. With more, i want to turn over to analyst eric from new york. What was your biggest take away from todays report . Ultimately subscriber growth is slowing in the u. S. They missed slightly on their previous guidance after a negative q2. What this means going into q4 and 2020 is they are not growing as much as they have in the past , partially because half of all households subscribe to netflix at the moment. This is concerning for them, moving into the new reality of competition with disney, at t, apple. Previously Companies Like disney and at t provided a lot of content for netflix and they were partners. Now they are turning into competitors and this is a difficult problem for netflix to solve moving forward. Taylor you bring up the competition. Lets go there. All we heard from the company was next quarter would bring some modest headwinds to the company, given the competition. Themuch can they withstand fact that in the Fourth Quarter they are getting Companies Like apple tv plus, disney coming out . How strong is not competition . Eric there is a lot of excitement around disney in particular. The thing to realize is a lot of these other services, disney, apple, as well as other competitors like amazon that are still very strong, they dont have to turn a profit on streaming video itself. Apple is using their service to sell more iphones, amazon is using it to sell more of everything, and disney is using it to draw people into their entertainment ecosystem. This means netflix has to be more careful on price moving forward. When apple is giving out there apple tv plus service for free with a new device purchase, what this means is netflix is going to have to be more careful moving forward in raising prices, especially if they want to keep their current subscribers. Taylor although the price hikes are trying to help offset the negative cash flow, this is the story we know about the economy. If you look at a chart in the terminal, it is the classic negative cash flow that we see from the company. The Current Quarter has yet to be pulled into that, but it is a negative number. Thats all we need to know. What are you hearing from the company about potentially flatlining to eventually a positive Free Cash Flow scenario . Eric they raised prices to improve profitability as well as cash flow. But subscriber is the base of their business. When we Start Talking about profitability and cash flow, it all starts at the subscriber. If they lose subscribers and their largest market, the u. S. , that is going to be difficult moving forward. I dont think they will lose, but it is going to be difficult to grow moving forward. Lor Companies Like kinsey disney, there is a lot of hype. What company has the best Balance Sheet to take on a company like netflix, spending 50 Million Dollars a year . Who is in the best position to take on the original, which is netflix . Eric apple and disney are positioned very well. They have lots of money to spend and are both very serious about this. Disney views disney class as the future of the company. Everything works off this new direct to consumer streaming service. Apple as well, iphones are very profitable. If they can create a service that helps them sell more iphones, thats going to be huge for them moving forward. If they view this as a serious area of growth, they will have a lot of money to spend and will continue to spend that money. Netflix is still spending a lot of money to keep up and are not increasing their content spent, so that is a good sign for the future. Taylor thank you for the dig down into netflix earnings. That was eric haggstrom. Ibm also reported earnings on wednesday. They reported revenue that missed the lowest analyst estimates falling nearly 4 in the fifth period of declines. Total revenue was 18 billion. In july, ibm completed the purchase of open Source Software company red hat for 34 billion. Analysts had looked for signs of signs that that megadeal would drive growth. Shares were lower in afterhours trading. The u. S. Ban on huaweis not making a dent in the companys sales. Chinas largest tech Company Reported a 24 Revenue Growth in the first nine months of 2019. Huawei alsos also reported Global Smartphone shipments for 26 in the first three quarters. The company also expects u. S. Export restrictions to reduce annual revenue at its Consumer Devices business by 10 billion. And coming up, tossing out a lifeline. Softbank is said to plan a 5 billion rescue package for wework. We have the details next. Taylor softbank is said to plan a 5 billion rescue for wework, funds coming directly from softbank rather than its vision fund. What do we know so far about this . Ellen this is one of two plans may be in the works that are subject of a lot of discussion going on this week with the wework bored. They are scrambling to figure out how we can keep this company going, when they reported in the past wework was set to run out of money as soon as next month. We have new details on a potential proposal from softbank to invest around 5 billion in the company. That would give them a much larger stake, though not a majority stake. Taylor do we know if this is in lieu of the jp morgan deal, or instead of . Ellen it seems like these are both on the table. They are pretty different. One of the major decisions the board is going to have to deal with this weekend and next is which one is better for the company . Which one is going to provide a better fastforward . The jpm deal is around the same amount of money, 5 billion, but in a complicated debt package. Taylor with the softbank deal, do they get control of the company . Ellen they do not, as we understand, get majority control. Adam neumann, even though he is no longer ceo, is still a board member, still owns a lot of stock. In a transaction like this, the ownership could change, but he still has super voting shares. Softbank could be looking to get nonvoting shares or a combination of different shares. They will be taking on his stake , control not necessarily guaranteed. Taylor what would be the new evaluation . Ellen definitely lower than this 47 billion high water line that came up earlier this year. It seems the ranges are all over the place. It could be as low as under 20, maybe under 10. Taylor we talked a few days ago about the reputation of softbank by putting up this money, what that says about the whole deal that fell through. What is the downside for softbank in this . Ellen if it goes poorly, it could be seen as good money chasing bad. They have already invested more than 10 billion in this company. They are obviously attached to the outcome of what comes out of wework, although this plan makes weworkt is almost like becomes a softbank company, something where they would have a great say installing potentially a new ceo to replace the coceos who came from we work. It could be something where we feel very responsible. The narrative suggests softbank becomes responsible for whether wework ever makes it out. Taylor i have a feeling we will be having you back to have the latest. I want to switch over to bank earnings, bank of america. Shares have been growing after betterthanexpected earningspershare. The company showed its discipline in managing expenses. Here to tell me more about bank of america and the Digital Banking status is chanel he vasek in new york. What do we know about the initiatives from bank of america . Something that wall street realizes about these big banks but i am wondering if Silicon Valley has caught onto is that the banks are under pressure to rake in more money at a time when Interest Rates are low and getting lower. Bank of america is highly exposed to that, so they have to figure out how to bring in more money when their Net Interest Income is under pressure and their expenses are flat. You see a race to figure out how to spend more money, especially on digital initiatives, almost 3 billion quarterly, at a time when their main driver of revenue is under pressure. Taylor it peertopeer payments the way bank of america tried to push forward . Sonali when you look at bank of america numbers, dell is the most compelling chart, transactions almost doubled from a year ago. However, the users are about the number of users it has do you quantify by the number of users, the number of transactions . People are using it more. It is a weird thing because you have bank of america and j. P. Morgan investing in digital branches at the same time they are investing in technology. It is trying to get consumers in two ways. Taylor you mentioned jp morgan. Jamie dimon talked about this, saying tech is always trying to eat your lunch. It is called american capitalism. We have to stay on our toes to compete. From these earnings from Companies Like b of a at jp morgan, have they done enough to take on the competition . Sonali you see them wanting to pour in the billions of dollars it takes to compete here. When jamie dimon says fintech, we do see record numbers going into the community, but is he talking about these smaller upstarts or the apples and amazons of the world that pose a threat to the banking community, in terms of whether they get into Financial Products or steal talent from the banking industry. Facebook has said they are willing to hire hundreds of engineers in new york. Coaching from the Financial Community is not rare for them to do. Taylor within the discipline express management, we take a look at the right hand side of the income statement. Any sense of what percent of total is going into investments in technology . Sonali let me give you an example in one noninterest expense for bank of america, about 15 billion. You take 3 billion, a little more than a order of the 12 billion they almost spend every year, you have about a fifth of noninterest expense. Jp morgan, bank of america leading the pack because they have big consumer arms that could use more Digital Banking services, which tends to be a leader in all Big Technology that big banks use. Taylor tech and banking, sonali vasek, thanks for joining. With the big names like uber and lift going public, we speak to a ceo who knows a thing or two about ipos. This is bloomberg. Taylor pinterest shares fluctuated on wednesday after a large block of shares one set to change hands overnight. Analysts are saying the deal probably doesnt reflect negative sentiment around the stock ahead of earnings this month. Sources say Goldman Sachs is managing the 4. 68 million share block trade on behalf of an unknown holder. This came the same day that selling restrictions lifted for insiders, and other preipo shareholders. While pinterest is a newly public company, there are still a bunch of private trying to ones make the leap. One such company that may have its eyes on a public debut is snowflake. It sells a cloudbased Data Warehouse service that helps organizations such as netflix store and analyze information. And it is valued at under 4 billion. Joining me from new york is the ceo of snowflake, frank sloopman. Glad to have you here. Let me start with some of the hot ipos that havent gone so well. Eloton whereke peo you think there is a Good Business and they dont do so well. How much of these are micro concerns versus a larger macro concern about the economy . I am personally very fond of peloton. I think they have a good product. The thing we have to focus on is do they have a Good Business . Whether the market is hot or cold from one day to the next is not as important as whether the company has real momentum and can sustain itself over the long haul. I dont have an opinion , butfically on peloton those are the parameters i would watch for for any company that is newly public. You want to blast through your first four quarters and have a good showing. Taylor how does the ipo market feel to you right now . Is it healthy because companies are getting shaken up if they are to profitable, or is it too volatile . I think it is healthy. There should be a high bar. It felt do you frank for a time. I would rather it felt too euphoric for a time. I would rather have investors be critical so when Companies Come to market, the public can be comfortable they are companies that are viable and have been properly vetted. There is nothing worse than companies coming to market, falling apart after an ipo. That is not good for anybody. Taylor how has the environment affected snowflakes plans to go public . It has not affected it at all. We are preparing the company to go public and we will find our window. Milestone, but life continues on right after, so we dont get too excited about it. Taylor would you prefer direct list or an ipo . , direct listing, really is an obvious choice when you do not need to raise money. ,f you do need to raise money then the choice between an ipo and a direct listing is not as obvious. There is a lot of evidence these days for direct listing and doing a private placement ahead of a direct listing. I dont find it that obvious. One of the great things about the ipo process is that it is a real price discovery process, whereas in the private placement, it is hard to know whether you are pricing the company had a market value. We have seen glaring examples where people have either under or overpriced private placements. The experience we have with ipos over decades doing thousands of them is that we are pretty good at discovering that price and having the companies go public in an orderly manner. Taylor i want to talk about the fundamentals of your business. You compete with amazon really well. What are you doing right . We are very focused on what we do. We are good partners with amazon, we like working with them. We compete with them as well. We are absolute specialists in what we do. Amazon has many other products. It is not always easy to compete with somebody who is very determined on succeeding in this business, and thats what we are. Taylor talk to me about the new customers you are getting. Are these new customers or are you cannibalizing them from another company . Business, it is in you are always taking somebody elses money. Often times we replace legacy systems, people that want to go to the cloud, that want to have the utility model, the elasticity, the performance at scale, all those good things. They always come from somewhere. There are also projects where there was nothing before. We do new things, but by and large, something gets misplaced by the entry of snowflake. Taylor you previously ran service now. What did that experience of taking them public teach you about current environment . Service now was a terrific experience for us. I took a company in 2007 public as well, so we have the combined experience of those two companies. What is really important is that when a company goes public, you have the philosophy and the momentum to really have a very good showing. First severale quarters post ipo and operationally, it means that you have to be very capable of forecasting your business. Not just at the top line but the bottom line. Cash flow, all those things. That will provide a lot of confidence in the markets. If you cant do that, if you dont have the velocity, the fidelity in forecasting, it gets to be hard being a public company. Thats what throws off the diving of people wanting to go out, going public, being public, things are not going to get easier. Taylor all things on the market, ipo, direct listing, great conversation. Frank slootman, thanks for joining me. Coming up, we hear from adam posen of the Peterson Institute on whether Central Banks should be issuing their own digital currencies. This is bloomberg. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of wireless network, designed to save you money. Switch and save up to 400 a year on your wireless bill. Plus, get 250 back when you buy an eligible phone. Thats simple. Easy. Awesome. Call, click, or visit a store today. Taylor this is bloomberg technology. I am taylor riggs in san francisco. Now to a story we are following in the Digital Currency revolution. On thursday, the g7 will release broad guidelines for regulating digital money. Also up for discussion, if Central Banks should be issuing their currency. Already sweden and china are studying that topic and the bank of canada has launched a formal Research Project that has partnered with other monetary authorities. To discuss in washington, it is the president of Peterson Institute for international economics, adam posen. Adam, first give me your take on yes or no if Central Banks should be involved in Digital Currency. Yes, i think they should be, but in two senses. First, they have got to regulate and keep away regulatory arbitrage that would exploit average people or Small Businesses if you have private currencies that are not regulated. Second, Central Banks should be involved because they can provide efficiencies and safety that make private currencies irrelevant. But third, they should not be getting involved just because it is digital just to save people money. They should not be getting involved to try to drive down negative rates. As governor brainard said at a speech earlier today, those are not really motivations you want to have, and i agree with her. Taylor i want to get to the fed because a lot of international Central Banks have started to weigh in. Is there a risk the fed is moving too slowly on this . I dont think so. I think it is a fair question. You mentioned the peoples bank of china and the swedish bank, which are definitely leaders in this space. Incomehaving a very high economy with a very sophisticated Financial System and population is in position that it can afford to experiment a bit, but also because the bank has a lot of credibility and they are able to keep ahead of the private sector. For the u. S. , if the u. S. Is slower and the Federal Reserve is understandably cautious, i dont think there are any big losses. This is not like a privatesector race, whoever gets there first wins. Taylor you mentioned kaplan and brainard, who have come out with comments saying the fed is actively looking at issues on digital currencies. Governor brainard saying that a currency is not a solution to a zero lower bound. Walk me through that. That is what i made reference to, her remarks, which i agree with. The idea is one argument that a number of theoretically minded economists have made is that if you have a Digital Currency, it is easy for the government or central bank to erode the value of that currency, to inflate it away once it is under government control. The advantage of doing that is not to rip people off, in theory, it is to allow you to go as negative on Interest Rates as you need to be without having to go through the Banking System without having other problems. But i think governor brainard makes an argument, and i certainly would make the argument, that it is destabilizing to the Financial System. It causes people to want to move their money out. It may cause runs on various institutions, if not the currency, and ultimately there are other ways of achieving your monetary goals than trying to go negative with rates. So that particular piece of the argument i think should be killed, and killed soon. Taylor does the issue of Digital Currency need to be a central bank issue, a department of the treasury issue, or a congressional regulation issue . That is a really astute question. It is astute for two reasons. First is because it is a Public Interest to determine what is the value you are trying to serve by putting this in place, and that frankly should not be up to the fed to decide. Second, because right now we dont really have an appropriate regulator or supervisor in the u. S. System, the fed can regulate interbank payments in a limited way, but there is nobody in theory the Financial Stability Oversight Committee could take in, if they decided this was systemic. So i think it is not so much the treasury, this is a legislative issue. I would like to see Congress Talk about and legislate what goals they think digital money should serve for the u. S. Public. Taylor one individual who has an opinion on that is david marcus, who heads up Facebooks Libra cryptocurrency. We spoke with him yesterday. He did say that government is sort of holding back regulation. Take a listen. For these types of letters to be circulated for anything that is an idea, a project, and telling people you should not explore innovation in a project, at a time when not only here in this country but around the world the core of our Financial System has not evolved much in the last 15 years and consumers around the world are paying the price for it. I think we should ask ourselves whether this is the right approach if we want to lower costs and lower the barriers of access for Financial Services for all the people who deserve so much better in the world. Taylor what do you make of those comments . Somebody is talking their book. It is very nice to make an appeal to lowering costs and financial inclusion. Financial inclusion can be much better served by various legal changes. For example, we have treasury direct, we have direct deposit for government payments, a number of ways we can restrict Check Cashing fees and other fees. There are a number of things we can do to do financial inclusion, and that is just in the u. S. , let alone around the world. The key thing is to get people to know your customer ids. That was the great leap forward in india, and we have also seen stories when that is done badly, people get cut out. This is serious, but has nothing to do with libra. It has to do with a public commitment to having ids for people and giving value to those and not abusing the information that goes with those ids. All of those i would not be willing to trust with some profit center, self oriented, privacy ignoring company as opposed to a government that is wellregulated. Even then, the government would have to be watched. Finally, it is not just about driving down costs. Again, poor people are exploited in the u. S. Because of their lack of access to banking and the payment system. There are ways to fix that. The main reason you want to move to Digital Currency is to create efficiencies in the economy to prevent people from getting circuited and getting their privacy and finances ripped off. It is not mainly to save cost. Taylor adam posen of the Peterson Institute, thank you for joining me. Now, sticking with cryptocurrency, but a much darker side of the technology. U. S. And korean Authorities Say they broke up one of the Worlds Largest markets for child pornography. Prosecutors say the suspect operated in a darknet market that accepted bitcoin and distributed more than one million sexually explicit videos involving children. Joining me to discuss in washington is jamil jaffer, Vice President of ironnet cybersecurity. First, talk to me a little bit about the ins and outs of this story and using bitcoin to be able to trace and find the suspect. Of course, the whole effort with bitcoin has been to anonymize transactions and allow people to engage in assured transactions where it is not known who they are. Of course, what happened here was the police, the irs in particular, working with the Criminal Division of the justice department, were able to deanonymize these transactions and identify the 23yearold south korean man who is hosting over a million downloads, 250,000 individual files, almost half of which had never been seen before. The scale of the exploitation of Young Children is exploding and bitcoin is enabling this. Now we are using bitcoin to identify these people, track them down, and put them in jail. Over 300 arrests in this case alone. Taylor you took me exactly where i want to go. Bitcoin gets a bad rap for instances like this, but if we it towards also use catching the bad guys, cracking down on illegal activities, couldnt we also make the case that in this instance bitcoin is helping . Obviously what happened here is the government was able to undermine the nature of bitcoin, the anonymous nature of it, to identify these folks. It is unclear how they did that. One way you might think is a lot of people have different identities online. If you are able to access large porpoises large corpuses of breached data, you might be able to deanonymize data that way. If people use common email addresses, that might be one way. The nature of bitcoin is anonymous, but also permanent and a detailed record of who transacted with whom. When you find one bad actor, you can trace their entire network of activity, identify he wills transacted with them, and if you can deanonymize, that is hugely powerful. The same way the federal government used a Metadata Program to identify terrorists back in the day. Taylor generally this is how the irs, the fed, can track a bad actor. They can be able to find it and once you find one, you can find everyone else within illegal activity. Exactly. Now we have 330 people. If they were smart, they would figure out who these people have in common. These are people in child pornography, trading on this website. That had a huge amount of images. Who else are they transacting with a lot . Maybe those people are involved also. You can see people who transacted with known bad sites. Anonymousricky, de asian. Identify the location. If you can do that at scale and speed, that is powerful. There are companies out there in this business. Those Companies May be poised to do Something Interesting based on the capability to deanonymize. Taylor any sense that regulation would help, or bad actors will always find a way . I am skeptical of regulation because of the fastmoving nature of the technology. It is hard for regulators to keep up. Laws have a hard time keeping up. You look at the hearings on facebook on capitol hill and you are appalled at the level of knowledge of members of congress, and some of these are young members, and it is still hard for them to keep up. It is hard to imagine regulators keeping up. That said, in child pornography the government has to get aggressive, work with industry, partner and identify these people. Because whether it is a child pornographer tomorrow are a terrorist the next day, we need to identify these people and put them in jail. Taylor wonderful points being made. Jamil jaffer of ironnet, thanks for joining me. Coming up, we hear from bill gates on the role government needs to play in regulating technology. This is bloomberg. Taylor tuesday nights democratic president ial debate featured candidates weighing in on the issues facing tech and society, and they had plenty to say. Using a 20th century antitrust framework will not work. We need new solutions and a new toolkit. I am not willing to give up and let a handful of monopolies dominate our economy and our democracy. Its time to fight back. I agree with senator warren that in fact monopolies have to be dealt with. They either have to be broken up or regulated. Right now we treat them functionally as a utility, when they are more akin to a publisher. Senator warren, i was surprised you did not agree with me that on this subject of what should be the rules around Corporate Responsibility for these big tech companies, when i called on twitter to suspend Donald Trumps account, that you did not agree, and i urge you to join me. If we are going to talk seriously about breaking up big tech, we should ask if people are taking money from the big tech executives. Taylor joining me in new york to discuss, bloombergs eric newcomer, who covers the intersection of tech and politics. How much was big tech under attack . Eric it is a total freeforall. Everybody knows they should be mad at tech, but i dont think they all agree exactly what should be done about that public anger. It is everything from antitrust to privacy to election interference and one idea after another, so a lot of different ideas thrown at the wall there. Taylor who had one of the more realistic plans, in your idea, a real actionable solution . Eric Elizabeth Warren has put out a specific plan that calls for breaking up google, facebook, and amazon. That is a pretty drastic proposal, but it is fairly specific. On the other hand, Kamala Harris is really pushing this idea on warren to push trump off twitter, which seems to be trying to empower a tech company, taking on more responsibility, where warren has been pushing for the government to step in and sort of humble these tech giants. Taylor there is also a lot of debate about removing President Trump from twitter and removing his account. What are those claims . Eric i think there are a lot of people that worry any head of state could post some threat of war or something truly dangerous, and twitter, just like it looks through peoples tweets to decide if they cross certain lines, should apply the same rules to a president , specifically donald trump. Thats what, harris was talking about. The counterargument is he is sort of the ultimate public figure. For a company to step in on what a president can say is a super controversial idea. Taylor then we push forward to 2020. A lot of discussion on Election Security. Is facebook the only target when it comes to Election Security . Eric facebook, twitter, google all play a part getting information to the public, so it is not just facebook, but there is the history there. They have control of not only facebook but instagram and whatsapp, facebook messenger, so facebook is central. I think there isnt a lot of confidence that the problems of 2016 have been cleaned up. Have been cleaned up this time around. Bloomberg technologys Taylor Bloomberg technologys eric newcomer, thanks for joining me. It is not just president ial hopefuls debating tech regulation. David rubenstein sat down with bill gates to get his thoughts on the hot button topic. David the Largest Companies in the world today are Technology Companies. Apple, facebook, google, microsoft, and so forth. You worry that there is too much power and data in the hands of these Technology Companies and are you surprised the government has not done more than they have done today about this . Mr. Gates technology has become so central that the government has to think, ok, what does that mean about elections, what does that mean about bullying, what does that mean about wiretapping authorities that let you find out whats going on financially . Or drug money laundering, things like that. Yes, the government needs to get involved. For the early years at microsoft, i bragged to people that i didnt have an office in washington, d. C. Eventually i came to regret that statement. Now the Technology Companies, partly because of the lesson of microsoft of course, they could have seen that lesson through at t or ibm or kodak or a lot of innovators they are very engaged. There will be more regulation of the tech sector, things like privacy. There should be at some point federal regulation that relates to that. The fact that now this is the way people consume media has really brought it into a realm that we need to shape it so the benefits outweigh the negatives. Taylor that was bill gates speaking with David Rubenstein on peertopeer. As a reminder, tune in to the full interview where the two dive into a wide range of topics, including making Climate Change a bipartisan issue. Still ahead, volvo announces a bold new all electric vehicle. We hear from the ceo, next. This is bloomberg. Taylor volvo is entering a new space. The european automaker has unveiled plans for its first all electric vehicle. Its goal is to cut the Carbon Footprint on each car by 40 by 2025. Volvo ceo Hakan Samuelsson spoke with bloombergs shery ahn and amanda lang. From day one, it will be profitable, but with the very low volumes, you have to understand the cost level will be higher, so it might be a lower profit margin initially. But i think what counts is more midterm, and we believe an ev car will have a higher value for the consumer and long term is absolutely the right thing to do. When you talk about subsidizing the charging cost, how did you come to that as a decision to help push this car . It is really not related to the all electric cars. We will promote the sales of the socalled plug in hybrid, a parttime electric car. That is very important that you charge that and not just fill in gas and drive it as a conventional car. We follow this very closely, monitoring the car. Right now it is around 40 of Customers Using it electric 40 of the time and we want really to incentivize customers to charge it even more. Thats why we say firstyear electricity is included in the price of the car when you buy a plugin hybrid from volvo. Where will these cars be made . Will they be affected by tariffs . They are made in charleston, some of the others are made in tucson. I would say there is no connection to tariffs. Tariffs is really a problem for us for electric cars, plugin, or conventional. Our Global Production system is based on some cars will be in one location and trade high volumes locally. If we have trade restriction and are forced to build all cars locally, there will be additional cost for our consumers, so we hope that will not be the case. We have seen the Chinese Government reduce subsidies for new energy vehicles. Are you at all concerned about ev demand within china . Yes, the subsidies have gone down, and it is always helpful with government to support introducing a new technology. On the other hand, we believe if electric cars are going to fly longterm, they have to be sold to customers who are ready to pay for it. It has to be an attractive product, competitive on the free market. Otherwise you have to have subsidiesse temporary will not help the climate. Thats why we are so sure about that. Want to participate, we need to do it with attractive products for the free market. As you move beyond those subsidies, you want to get to volume. Is china the market for you . Will there be mass purchases of these kinds of vehicles there . I think all markets, on the west coast of the u. S. , for example, is a big market for electric cars. But also in europe, there is an appetite for electric cars. I think so far the interest in china has been largely based on the incentives, but i think chinas market will pick up and see the beauty of the electric car. It is also based on having somewhere to charge the car overnight. It is very difficult if you park the car on the street in a big city. I think those customers will be the last one going electric. Taylor that was volvo ceo Hakan Samuelsson. That does it for this edition of bloomberg technology. Isbloomberg technology livestreaming on twitter. Check us out technology and be sure to follow our global breaking news network on twitter. This is bloomberg. Announcer the following is a paid presentation brought to you by rare collectibles tv. 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