Electric pickup truck. We will have the latest. First, to our top story. Apple is overhauling how it tests software. Bloomberg has learned the system is changing after a swarm of bugs marred the latest iphone and ipad. The goal is to make it easier to spot problems earlier. This comes one day after President Trumps visit to apples austin, texas factory where ceo tim cook met the president to discuss keeping iphones free from tariffs. Lets bring in tom forte and Bloomberg Technologys mark gurman. What do we know about the software change . Mark apples ios software has been bugging the past few years. What apple is doing is they are going to make it so engineers earlier in the process will determine what is buggy, what is working and what is not working in order to hopefully come up with a much more stable operating system when they ship each september. Taylor tom, i know that you cover the fundamentals of the business. In your opinion when you analyze the company, at what point do you have to start to take a look at these Software Glitches and incorporate them into your analysis . Tom to the point it has a dampening impact on unit sales for the company, when you think about apple, they have had some snafus over time with their technology. It is not unusual for them to have issues with their software. But the challenge here is if you think about both new iphone users and then old iphone users who upgrade to the latest software, it is really part of that feel for the consumer of having the latest and greatest apple technology. So it is definitely something they need to improve. But when it has an impact on unit sales that is when i get real concerned about it. Taylor mark, i am curious, in your opinion, you have seen apple come out with these glitches and have to quickly issue new updates. Is it better to do that, to get out to the customer first, or would you prefer to see them roll it out right the first time . Mark they really dont have an option. They have to introduce it every june and release it every september. To toms point, selling new devices is the most support and thing. The way these new devices are developed is they are built concurrently with software updates. It would be impossible to ship the iphone 11 without ios 13. So they really have no choice. It is not a matter if they should or should not, there is really no option here besides adding fewer features, which of course they are not going to do because the features are what drives sales. Taylor tom, i want to switch gears and talk about tim cooks visit with trump yesterday at apples new factory in austin, texas. If you look at apple and tim cooks relationship with trump, are tim cook and apple doing the right thing by getting in front of the president , getting the president s ear, showing off these factories, even if it is small in apples terms. Tom the answer is absolutely yes. No publicly traded ceo has done a better job of managing the relationship between the company and the president then tim cook has for apple. You see that in the recent tariffs to the extent they adjust to the timing of it, which essentially gave apple an opportunity to sell its new iphones one more time without the full impact of tariffs. I think tim cook has done an amazing job. It is interesting to do a compare and contrast with jeff bezos of amazon. When you look at the contract amazon lost, tim cook is doing a much better job. Apple is doing a great job managing with the president and tim cook is leading that charge. Taylor mark, react to that. Tim cook doing the best of all the big tex ceos . Mark i would agree that he is doing what he needs to do from a bottomline perspective, from a financials perspective. He did get tariffs on the iphone delayed and we will see if this dog and pony show yesterday gets apple a further delay on smartphone products. At the end of the day what they showed yesterday was not new in any way. They framed it as some sort of big launch. It is important to note, everything that we saw yesterday, everything you see on the screen right now has been in place since 2013. So this is not new by any means. This is a sevenyearold existing infrastructure basically portrayed as a new thing. And they are going ahead and thanking the Trump Administration for this. On top of that, this is not the iphone, the ipad, the apple watch. This is apples lowest volume product they sell. The impact this would have had on apples bottom line if this was a tariff product they produced in china would have been so slim anyway. So it is unclear what apple is winning by doing this other than getting in this pr situation with the Trump Administration to prevent tariffs on other products like iphones moving forward, which of course is a smart is this decision but a bad pr move in the interim. Taylor tom, within the pr machine that is apple, is the political savviness of tim cook an undervalued asset . Is that not being reflected in the share price . Tom with the rebound and shares it is hard to indicate what is not in the share price. So i do think the company, again, tim cook at the charge, has done an amazing charge as the Smartphone Market has matured, and starting to diversify his revenue base. You think about what they are doing with all their other hardware devices, including wearables, the watches. When we look at in particular is proprietary content or things they are doing in Financial Services like apple pay and apple card, and also health care. So i do think it is reflected in shares, and it is warranted. They have done an amazing job managing the current administration, and it should be positively reflected in price. Taylor what is your best Case Scenario when it comes to tariffs . Tom great question. I will give a quick example of sonos, another company i covered. They indicated they are moving all of their production into malaysia and out of china. I think the base case is you are going to see more companies that will move their manufacturing operations out of china. In the case of apple, apple may never be able to move its smartphone manufacturing out of china, but it may be able to have more Parts Manufacturers move their own supply chains out of china, which could help it avoid some of the tariffs in addition to tim cooks efforts to manage the administration there. Taylor mark, i want to switch gears a little bit as well. We saw some technical glitches when disney had to keep up with passport thieves and hackers. We have had apple tv plus have some glitches when it comes to the rollout of their films. Is apple tv plus prepared to be a Media Company . Mark yes. I think apples infrastructure for video streaming, the Application Development it has had for a number of years has been there. So, i think apple, their Cloud Infrastructure on the consumer side is not normally great, but there have really been no glitches. It has been problemfree in terms of rollouts of new shows. I have seen it myself on apple products, every time a new episode hits on friday at midnight, you get a buzz on your phone it is available and ready to stream. Their experience in the app store and itunes movie rentals has really prepared them for this. Password management has been a big focus for apple for the last two years. Apple tv plus is tied directly into family sharing. You can use tv plus on that subscription either free or for five dollars a month with four other family members. From a technology perspective, tv plus has been problemfree. Taylor that was mark gurman and tom forte. Long anticipated job cuts have begun and wework. They say the cuts will affect 2400 employees, almost 20 of its workforce. Wework is seeking to show a path to profitability. They scrapped an ipo and needed a bailout from softbank stay afloat. Coming up, switching gears. Google has been on the clinical gets in on the political debate. We will break down how they are prepping for the 2020 election, next. And if you like bloomberg news, check us out on the radio. Listen on the bloomberg app, bloomberg. Com, and in the u. S. On sirius xm. This is bloomberg. Taylor twitter is taking steps \taylor twitter is taking steps to improve the health of discussions and interactions on the service. The social media platform will start letting all users revise the tweets they sent. It provides a degree of control which could keep spammers away. It could also hide hateful or inappropriate replies. However, the hidden replies can be revealed by clicking a button. Sticking with social media, google is jumping into the online political ad debate. Google is limiting how political advertisers can target people online. It will no longer allow election ads to be targeted based on political affiliation on google search, youtube, and across the web. Google is also restricting misinformation and blocking deepfakes. This comes as facebook holds strong to its existing policies, that one executive indicated that the company may still limit political ads in the same matter. To discuss is eric newcomer, and kurt wagoner. Break down for me what we know about googles policy and how they differ from facebook and twitter. Kurt you mentioned a few of the restrictions on ad targeting. You can target just democrats or republicans. I think the real important part here is google and facebook both have a product, they are named differently but it allows a politician to upload a bunch of female addresses or phone numbers and target those people on the surface. Will calls a customer match, facebook calls a customer audiences. Google is getting rid of that for political ads. A lot of politicians build these rosters of potential voters and supporters they want to reach continuously. Facebook still offers that right now and that is, in my opinion, the most important targeting element of this whole thing. Taylor eric, if it comes down to google, what will be the impact on some of the campaigns . Eric i think a lot of that is still to be seen. What they can do to sort of work within the rules. But facebook has been sort of in the headlines when you think of political advertising. Obviously it got super tied up in the 2016 election. But google is really important here. They have youtube, and there has been this power to target people out which is what gives Online Advertising its oomph. We will have to see how the campaigns react. As long as facebook is holding out there is a question of whether spending shifts over to where people can still target their audiences. But it is a pretty significant decision. Taylor kurt, eric stole my question. Doesnt it make sense where we just all advertise on facebook because we are not combined or confounded to what we say . Kurt i think that is the approach around uploading these custom audiences. Of course, you are going to the place which still offers that feature, which in this case is facebook and not google. Right now on paper facebook stands to benefit a little bit by googles decision, if a lot of this money that would have gone reveling mortar youtube than google search, because that is a little bit i think more targeted in terms of emails and phone numbers. But if you take that money and say we cannot reach voters in the way we were planning to, facebook is now probably the best option. Taylor kurt, yesterday when you were discussing and analyzing the story, he said on one hand the Trump Administration in 16 had been very good at this, had used it and was effective at it. Does that continue . Kurt that was part of the big story after 2016, president Trumps Campaign on facebook. Our colleague wrote a really good story last year. She got her hands on internal documents that facebook had reviewed, basically, his performance during the campaign from an ad standpoint. He was testing millions of different ad formats to different people. Really trying to figure out what message works with which group of people and then hammering home those messages to those individuals. That is the whole point of this targeted advertising, is that you can really get very granular and specific. The more they take that away, the harder it will be to really get in on a granular level. Taylor i know it is very early days, we are coming off the democratic debate last night. Any sense and big tech where the majority of ad spending is going and what campaigns democrats and republicans have been utilizing that tool as we ramp up to 2020 . Eric we have seen plenty of examples of Elizabeth Warren spending on facebook to antagonize facebook. There has been concern on the democratic side that trump has gotten out ahead, since he can spend for the whole Republican Party any president torres. He is spending more aggressively than any individual democratic candidate. So i think that is a concern. And you have seen efforts from the democrats, trying to find ways to counterbalance that. But like you said, it is still early. Part of the problem of the democrats having sort of the primaries is they are competing at each other at the moment, while trump has this time to position himself with potential voters. Taylor kurt, we came off a previous segment where we were talking about tim cooks relationship with President Trump. And of all of big tech, he has the best relationship. Where does Mark Zuckerberg stand with a relationship with President Trump . Kurt it is not something they talk about, they being facebook. We just found out today he had dinner with President Trump in d. C. , they had previously had a closeddoor meeting in the oval office. I believe that was about a month before the dinner. So just twice in the last couple months they have met facetoface. But facebook does not talk about this. He is certainly not on tv and the way tim cook was. He is also not being antagonized in the way that jeff bezos of amazon might be. Trump is not attacking Mark Zuckerberg in the same way. So, i imagine he must be somewhere sort of in the middle, but it is telling that facebook does not necessarily want people to know when he is meeting with the president and what they are discussing. Taylor the intersection of technology and politics continues thanks to our bloombergs kurt wagner and eric newcomer. Coming up, earlier this week, at t was downgraded to a cell with a 30 price target. We speak to analyst Craig Moffett on concerns about the company, next. And Bloomberg Technology is livestreaming on twitter. Check us out at technology and follow us on tictoc on twitter. This is bloomberg. Taylor if facebook or any other tech giant wants to start a bank, it should be ready for an army of government minders. The head of the fdic jokes she has 6000 employees and says quote, we could hire 6000 more to regulate the heck out of you. Tech firms have yet to make an incursion into oldschool banking. More common is what Goldman Sachs has done, backing and applebranded credit card and regulators are investigating whether the computer models goldman uses to determine credit limits our bias. At t. A rare sell rating this week as analyst Craig Moffett projects weakness for the company, particularly with falling subscribers and video revenue at the companys Entertainment Group. On top of that, falling ratings at warner media. And there is the upcoming launch of the hbo max streaming service. And is that enough to help the company fight its way back into the streaming wars . Craig moffett of moffitt nathanson joins us over the phone. Craig, i love your 42 page report. I admit id read it cover to cover. What struck me is turner media is about 20 of revenue, and that does include that hbo service. Where does hbo fit in for you in the middle of the streaming wars . Craig hi, taylor. Well, hbo, look, it looks like a really good product if you are a consumer. That is not the issue. And i give them some credit, they have done a very nice job making it a compelling offering. The problem for at t is you are taking three businesses within warner media, that is, you are taking the Turner Networks, you are taking hbo, and you are taking the warner bros. Studio, and you are collapsing them into one business, hbo max. That is a bit of an overstatement, but they are working in that direction. And so, there is a very real risk here that one plus one plus one is going to equal one. And you will have a good hbo business but you will have burned down turner and the tv studio in the process. Taylor an analyst at keybank security says he has been analyzing some of the early data out of hbo, and they were looking at some subscriber losses because of the end of game of thrones. Are you forecasting subscriber losses given the increased competitive environment . Craig the idea that they might have lost some subscribers in their traditional model in advance of this because game of thrones rolled off is probably not a surprise. It is certainly not the main theme of what we are talking about here. What we are talking about here is broader. Lets zoom out for a second. As much trouble as they are having in the warner media business, part of that is a function of just, look, the Turner Networks are in the midst of a Court Cutting cord cutting cycle where distribution of Cable Networks is falling 3. 5 a year. And the Entertainment Networks are worse. So, turners ratings are down in the high teens to the low 20s, yearoveryear. So you are seeing pressure not only on affiliate sees, but also in advertising. Because they are getting so many fewer eyeballs. So, you are seeing all cons of pressure on these media businesses. Separately, you are seeing a tremendous amount of pressure in the directv business, where they spent 2019 doing everything that they could to keep the wheels on the business by raising prices to offset subscriber declines. Well, what happens when you raise prices in a business that is suffering subscriber declines . Subscriber declines just get worse. So the following year is even harder. So you have all of these building pressures for 2020 and beyond that are, i think in the beginning of next year, going to be too difficult for investors to ignore like they did through most of 2019. Taylor craig, you called the Entertainment Group a cancer. What do they have to do to reverse that . Craig it is awfully hard to see. It would be nice if you just said they are just not managing it very well, and therefore they could manage it better. But this is not issue of the assets not being managed well. This is an issue of it is not a good asset. They paid 67 million for directv just 5. 5 years ago now. And that business is now seeing subscribers falling, at least notionally yearoveryear, by about 13 . But in fact, the decline rate in the most recent quarter annualized is to a decline rate of more than 20 a year of the subscriber base. Revenues obviously fall with subscribers. Margins fall with revenues. So, that is a business that, in addition to having lost Something Like 20 to 25 of the people. Since they bought it, would probably command a multiple less than half of what it was when they bought it. Taylor we will have to leave it there. Still ahead, from beijing, the tension between the u. S. And china. This is bloomberg. When you rest on a leesa hybrid mattress, bedtime is no longer simply the time you go to sleep. Its time to switch off and catch up. Enjoy me time, and we time. 40 winks or 8 hours solid. The leesa hybrid mattress combines two technologies to give you deeper rest and rejuvenation. 1,000 pocket springs provide edge to edge support, responsiveness and comfort, while premium foams relieve pressure. Keep you comfortably cool and limit motion transfer. Leesas hybrid mattress is not only recommended by experts, experts choose to sleep on it too. Try it yourself in any west elm store. Or order online and well ship it to your door so you can try it risk free. The leesa hybrid is american made. Built to last. And, because Everyone Needs a place to rest, we donate tens of thousands ofatesses to those in need. Experience the leesa hybrid mattress. Right now, its on sale. Order today. Go to leesa. Com. Taylor this is Bloomberg Technology. Im taylor riggs in san francisco. Tech pioneer bill gates spoke with bloomberg editorinchief John Micklethwait about a number of issues, among them u. S. China relations, the evolving energy sector, climate change, and if carbon tax will happen in the u. S. Theres no doubt that solar and wind, including offshore wind, will be a huge part of that. Because those are intermittent sources that need, either for 24 hoursources like nuclear, or unbelievable miracle in terms of both transmission and storage is very, very high. You can look at a country like japan, tokyo, 60 gigawatts, you have seven days where you have no wind or sun power at all, so you have to say to yourself, if you are not going to have people freeze to death, what is the source of energy during that sevenday period . The u. S. Midwest, you have long periods where a cold front sits on it and the wind does not blow. It will be a lot of renewables and either a storage miracle or quite a bit of nuclear. The electric source will be almost three times as big, because it will be taking over parts of transport and industrial and heating that historically went to direct hydrocarbon usage. Anyway, people Building Models of that future grid, different universities, people picking their choices, that will be a sign that not only do we have a goal to be there by 2050, but we are debating the paths and very concrete plans. When you see things like the 15 diesel tax and great unrest, the willingness to make the type of change in investment, you can question if it is there, because the free rider problem has never been worse than it is in climate, particularly for middle Income Countries that can appropriately argue that the historical emissions of rich countries mean they get to weight per person. They have as much as we have. You think carbon tax is the way to secure that . You pointed to the political difficulties of that. Do you think that is the fairest way to do it . Bill a way to do it. If you look at the u. S. In particular, i do not think it is likely to happen. Weve had tax credits on renewables. Weve had renewable portfolio standards. You can get there in a way that is less neutral. Theres a variety of regulations and helping nascent sectors. Whats happening in solar and wind is very good. What has happened in the industrial sector in terms of how we make steel and cement, people have gotten excited about the low hanging fruit. Electric cars thats the easy part. You still have to do the grid, but various things, including industrial, are very, very difficult. Nuclear, you know, you get one million times as much energy per reaction as you do burning hydrocarbons, so its very advantaged if you do the design right. I cannot say for sure it would succeed, but it would be good in this innovation portfolio. We have to have a lot of bets, knowing that some of them will not succeed. You think you have come up with a new design which would be safer and more efficient . Or designhe computer, is amazing. Art design is amazing. Its beautiful, because you can simulate earthquakes, volcanoes, planes crashing into it all sorts of things that none of these Nuclear Plants could you do any of that, and you could show that your costs and inherent safety are very, very strong. We need to build a demo plant at one point, and we plan to do that in china. The u. S. Government decided that we should not do that, and so now, the backup plan is we will try to build that demo plant in the United States. It is not an easy endeavor, but none of the paths to climate success are riskfree. We will come back to u. S. And china in a second. But how frustrating is that vie w . You put all this money into setting up this technology, and the Trump Administration stopped. Bill it is frustrating, because ive gone for decades meeting with every secretary of energy, who had encouraged us, and the u. S. Government had created an agreement, because you need explicit permission to do this type of collaboration. So it was a surprise when that was withdrawn, and it meant a of a lot of things were done. It was a setback, in the best case a fiveyear delay. In the worst case, its completely collapsed. The big theme of this conference has been china and america. Earlier someone said we are in the foothills of a cold war. As long as i have known you, you have been a passionate advocate of engagement with china. How do you view the Current Situation . Bill even more passionate about the value of engagement than ever. The last few years have seen a lot of voices arguing against that, even arguing in some extreme cases for socalled decoupling. I think it is a benefit that there is interdependence. The fact that we have tourists from japan, debt from china, students from china, we have companies that do research in china, apple is the tech company that actually sells the only tech company that actually sells a lot of products in china. That interdependence can lead to more dialogue, more mutual understanding, so to have people argue against that is definitely a concern. Taylor that was bill gates, cochairman of the bill and Melinda Gates foundation. The new Economy Forum is being organized by Bloomberg Media group, a division of bloomberg lp, the Parent Company of bloomberg news. Also at the new Economy Forum, we caught up with microns president and ceo. He told bloombergs manus cranny how the company handles business with china amid trade tensions. What i can tell you is i am here in beijing, and certainly this is developing slowly. I do not have anything particular to share with you. Manus have you had conversations with wilbur ross . How do you describe the conversations you are having with u. S. Officials . What i will tell you is we are a very large, global company. We are always engaging in conversations with governments around the globe, and of course we have been in touch with the u. S. Administration on an ongoing basis over the years. Certainly in recent times as well. Our business in china is certainly important to us. As part of that, we have definitely manus would you say these conversations are constructive . Absolutely. Manus one thing i was reading a little more about what is going on here in china. States are putting about 29 billion into getting this country selfsufficient. Is that, perhaps, a bigger threat than the interim trade war . Selfsufficiency for Technology Supremacy is number one on the agenda . What i will tell you is that memory and storage products are extremely important when you look at the trends today for 5g, iot, autonomous, clout computing, and in this backdrop with our technology innovation, the products we bring to customers here in china, we are really a valued partner to those customers. Of course, micron has a rich history of 40 years. Tremendous amount of innovation from the company. We are used to competition all around the globe. We, of course, continue to focus on bringing new products and new technologies to customers around the globe, including the ones here in china. Manus there are challenges therein from a production point of view. You have to deal with the reality of the trade war. What i want to get a sense is how much additional production are you taking out of america, and moving it to other Global Centers . Have you done that this year . Do you anticipate doing some of that next year . We actually have manufacturing of our leadingedge flash products around the globe. In u. S. , we have not taken any manufacturing out of the u. S. Ouract, our center Fabrication Center in manassas, virginia is the center of excellence of Automotive Products for us. We have a very well diversified Global Manufacturing footprint. Our supply chain is very resilient, very adaptive and agile, and certainly in these recent times where there have been challenges on the global trade front, we have shown that we have been pretty resilient in terms of addressing the challenges and moving on. Continuing to bring value to our customers around the globe. Taylor that was microns president and ceo. The new Economy Forum is founded by Bloomberg Media group, a division of bloomberg lp, the Parent Company of bloomberg news. And coming up, an fcc commissioner says other countries are making strides in 5g and the u. S. Risks falling behind without a master plan. Thats next. This is bloomberg. Taylor more on the race to advance 5g networks. Fcc commissioner Jessica Rosenworcel thinks there are many ways to make 5g services available, but both the fcc and Government Administration are still figuring out ways to make that happen. She spoke to bloomberg earlier. As we move to 5g, we are going to need more airwaves to power that next generation of wireless services, and some of those airwaves are in a really sweet spot known as midband airwaves. That band you are talking about is right there. The fcc allocated those airwaves to a lot of Satellite Services, and we may have offered so much of those airwaves to Satellite Services that they could return some of them now and make them available for new terrestrial uses for wireless, and that is what is at issue here. What is the best way to make that happen . For a while, the fcc was exploring a private sale of those airwaves, but increasingly, it has started to look legally complicated, hard to do, and capitol hill has been involved and suggested we should do this through a public auction. As a result, the fcc chairman has announced he would prefer a public auction next year, and we are going to work with folks on capitol hill to see if we can do just that. Turning to one other dispute that came up, the six gigabits dispute. Wifi and broadband on one side versus utilities who say they need that spectrum for emergency communication. What is that dispute about . Again, our airwaves are getting complicated. When you have an existing use and you propose new uses, there tends to be friction. You are seeing that here. Unlicensed spectrum or wifi is an important part of our economy. We are looking for places to grow wifi, and six gigahertz band is definitely one of the places we would like to do it, because it is adjacent to existing unlicensed spectrum use for wifi. There are, however, utilities that rely on that band, so we will have to figure out how we might be able to do both more unlicensed wifi while protecting utility activities from unreasonable interference. The fcc started a proceeding on that, but it is admittedly a heated one. We are still having discussions about it and also looking at other places for wifi to go, including the 5. 9 gigahertz band which is nearby. Give us a sense about the extent to which partisan politics enters into this. Democrats and republicans are both commissioners on the fcc. President trump said it is a priority for the country to go into 5g. How much of this is a republicandemocrat issue, how much are republicans and democrats basically united on the goal of advancing 5g as fast as we can . I think youve got it. We are united on the goal, but we want the United States to lead this technology. But when it comes to tactics, we might differ. Im the senior democrat at the agency, and i think when i look at the administration right now, we dont have a master plan for 5g service. In fact, you saw leadership from the senate the National Security advisor in the white house just this week say we need a master plan when it comes to 5g. We dont have one. We have the fcc fighting with the department of commerce over airwaves, fighting with the department of transportation over airwaves, and we have the president tweeting out that he has asked tim cook for assistance with 5g. This is not a master plan, and we need one. Other economies around the world are making strides, and we dont want to fall behind. Taylor that was fcc commissioner Jessica Rosenworcel. And still ahead, teslas ev lineup is about to get a new addition. We bring you the details of the new secret vehicle. Thats next. This is bloomberg. Taylor after months of secrecy, tesla is getting set to unveil its electric pickup truck late on thursday. Until now, the only glimpse the public had of the vehicle was a cryptic looking tweet from ceo elon musk. For more details on what to expect, lets head to detroit, where bloomberg auto reporter Chester Dawson joins us. Chester, why trucks . Chester its a good question. Elon musk has been talking about it for years, and its one of the more anticipated items to come out of teslas skunk works, but its a very lucrative market. The detroit three make most of their money from pickups, particularly ford motor, who has the bestselling pickup. If you are an automaker, theres some bragging rights, but it also is a big profit generator. Taylor its a big profit generator, but also a closely held loyal, loyal, loyal market. I think you had in the story that about 92 of that market share is owned by the detroit three. How does tesla plan to make inroads . Chester we dont quite know yet. It does sound like the vehicle is going to look a little different than your traditional truck, although we will find out later tonight. But the company has been pretty successful in the sedan market of creating buzz around its vehicles, a new market. Really, nobody is in the electric truck space yet, so they might have an advantage because of their prowess in electric cars, but as you say, 90 of the truck market is kind of locked up by the detroit three. It will be a big fight and very interesting to watch. Taylor do you think buyers of these vehicles would be tesla lovers or truck lovers . Chester thats a good question. I think, at least initially, most expect them to be tesla lovers, but longerterm, they are going to need to crack into that broader market, you know, where the japanese have struggled for years trying to reach truck buyers who are very loyal and want a lot of performance out of their vehicles. Even people who do not take their truck and use it to tow things or move lumber or other things, they want to feel as if the truck could do that. It really is a performance heavy market, and tesla is going to have to show that the truck can not only show up, but put up. Taylor i wonder if now is the right time. Analysts were so happy when tesla finally was able to turn a profit. Now they will be investing more in trucks and in a factory to build the trucks. It is now really the right time . Chester that is a good question. They have this new model y crossover they are just about to launch. There is a lot of talk about the tesla semitruck, a much larger vehicle. I think it is kind of almost like an amazon. Com thing, where tesla wants to flood the zone to get as many products out there as soon as it can and try to lock up whatever advantage there is to being an early mover in the market for electric pickup trucks and other vehicles, but it does raise questions for investors about how they will be able to generate profit sustainably. Obviously, they get a big chunk of the early market, that is a good sign, but it is an open question as to whether they need to be moving as fast as they are. Taylor on the questions of profitability, we know the model three was a volume over margin story. As well within the composition mix of tesla that the truck would be in the category of fewer, but higher margins . Chester i think that is right. Musk himself has downplayed the idea that this is going to be a huge volume vehicle, at least at the outset. Its true that for highend trucks i mean, like the ford raptor, that type of vehicle sells for close to six figures. In that area of the market, it really is a matter of margin over volume. It sounds like the truck from tesla will be more like the model s and x than the model three. Taylor thanks for joining. The sixth season of formula e kicks off this weekend in saudi arabia, where the slickest and fastest all electric vehicles will battle outside riyadh in a race lasting 45 minutes and one lap, and it will all be powered by a Company Based more than 8000 miles away. Bloombergs ed ludlow explains. Ed zero to 60 in 2. 8 seconds, with a top speed of 174 miles per hour, and all from an electric motor. This is formula e. The all electric cousin of formula one. When the street racing series started in 2014, the cars could not complete the race on a single charge, but since last season, that has changed, and it is thanks to this battery pack, built by a California Company called lucid. Proprietaryr expertise, particularly in model and thermal control, in structural analyses, in packaging. We tested it and we actually manufacture it here in this very building, at our headquarters in silicon valley. Ed season five in 2018 was the first time lucid supplied batteries, but under their arrangement, their involvement was confidential and they relabeled as a socalled battery partner of racing giant mclaren. Lucid is taking the spotlight this year and will continue to do so until their contract expires after season eight in 2021. What can formula e fans expect . Bloomberg got an exclusive look under the hood of lucids latest battery designs. They say the shape and inhouse Management Software is what will help the team go the distance, but for lucid, the formula e deal is actually just a small part of a much bigger plan. It generates a modest revenue. The real reason we are doing this is to demonstrate that we have worldclass technology which will find its way into our forthcoming road car. Ed the lucid air is a luxury ev designed to compete with the likes of tesla and porsches electric offerings. Production of the vehicle will not likely begin until the end of 2020, but in the meantime, engineers are building prototypes and small batches in their newer factories. The focus has been on making the battery pack as efficient and lightweight as possible. Ds newrg says luci battery pack has 40 density compared to the closest consumer ev. What lucid has done is they have made them incredibly light and increased Energy Density beyond what is commercially available at the moment. You can transfer this technology to commercial electric vehicles , it could give them a Real Advantage when compared to other evs on the market. Ed lucid says there is potential to sell the battery pack to other partners on the market. For now, they hope their work in formula e helps them capture the ev market in 2020. Ed ludlow, bloomberg news. Taylor that does it for this edition of Bloomberg Technology, and Bloomberg Technology is livestreaming on twitter. Check us out technology and follow our Global News Network at tictoc on twitter. This is bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone wifi up there . Uhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your local xfinity store today. The following is a paid program. The opinions and views expressed do not reflect those of bloomberg, its affiliates, or its employees. Following is a paid presentation brought to you by rare collectibles tv. Toin a letter dated back december 27, 1904, to the secretary of treasury, president Theodore Roosevelt wrote a short to sentence letter. This was in typical Theodore Roosevelt bravado style. 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