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First Move with Julia Chatterley
Facebook is Accused of Putting Profits before Public Good, The Chinese Giant Property Management, Evergrande Business may be up for Sale; OPEC+ to Discuss Oil Output in the Face of a Recent Price Spike. Aired 9- 10a ET
Aired October 04, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know.
Whistleblower warnings. Facebook is accused of putting profits before public good.
Evergrande, ever smaller. The Chinese giant's property management business may be up for sale.
And prices pumped. OPEC+ to discuss oil output in the face of a recent price spike.
It's Monday, let's make a move.
A warm welcome once again to FIRST MOVE. We've got another jam-packed show for you this Monday. A Facebook whistleblower stuns and shocks. Crisis
plague, Evergrande thinking outside the box, perhaps, and despite chip shortages, Tesla's quarterly sales are well, like Goldilocks.
And as for stocks, U.S. futures, well, we're under a bit of pressure after Friday's October oomph. Perhaps it's a bit of October oops that we're
seeing in the markets, at least premarket this morning and with good reason, let's be clear.
U.S. Congress still not delivering, it continues its debt ceiling dithering and China's Evergrande crisis, of course, as I've mentioned a couple of
times now, still simmering and we've got the latest on that.
Hong Kong's Hang Seng fell more than two percent to one-year lows as the massive developers fate still hangs in the balance. Evergrande shares were
halted for trading as we anticipate some sort of cash raising deal that could stave off a market default. We have as I mentioned, the latest on
that coming right up.
Tesla is a rare bright spot on Monday, which shares up more than three percent premarket and electrifying, let's call it that third quarter for
Musk and company. The firm delivering more than 240,000 cars to customers. That in fact is an all-time record.
Compare and contrast with some of the legacy U.S. auto giants like GM and Stellantis, both saw big sale declines in the quarter amid the worsening
supply chain crisis. We'll be taking a closer look at the EV landscape with the CEO of Volvo's Polestar unit later in the show. Volvo also announcing
that it will take Polestar public via a SPAC deal.
Plus, the state of the autonomous driving sector with the CEO of industry leader, Aurora. We've got lots of Monday vroom as we rev up to the trading
Let's get to the drivers. Fresh revelations and an expose of financial secrets and offshore dealings published by the International Consortium of
Investigative Journalists, it names dozens of heads of state, public officials, and politicians.
The series of reports are based on nearly 12 million confidential files, referred to as the Pandora Papers.
Clare Sebastian joins us now. And it really is Pandora's Box, Clare, let's be clear, and we're already seeing responses from some of those individuals
whose names have appeared. Talk us through this investigation and what we know so far.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, there's a lot to unpack, Julia. This is a huge investigation. It took the ICIJ more than two years,
more than almost 12 million confidential files, as you say, from 14 offshore service providers, 91 different countries and territories.
But I want to start in Pakistan in particular because this is an area where this is particularly politically sensitive. Don't forget the previous
reporting of this kind known as the Panama Papers actually helped unseat the former Prime Minister Nawaz Sharif.
Now, "The Washington Post" is reporting that what's been found in the Pandora Papers does not implicate his successor, Imran Khan, who of course,
ran as the anti-corruption antidote to his predecessor. But the ICIJ says that it does implicate several people in his inner circle, one of his
ministers, it says a top donor who funded his party, and this is the response from Prime Minister Imran Khan.
He tweeted: "My government will investigate all our citizens mentioned in the Pandora Papers, and if any wrongdoing is established, we will take
appropriate action. I call on the international community," he says, "To treat this grave injustice as similar to the climate change crisis." So he
is clearly sending a message that this will not be tolerated.
But it goes beyond that, over in Jordan, Julia, King Abdullah II -- Jordan's King Abdullah II, some pretty damning allegations here from the
ICIJ, they say that he purchased 14 homes worth more than $106 million in the U.K. and the U.S. through front companies registered in tax havens.
Now obviously on the face of that, that's not illegal. But this is a system now that's being exposed in these papers of the ways that these global
leaders can sort of hide money and move it through these tax havens.
He apparently had lawyers and accountants in Switzerland and the British Virgin Islands, who formed shell companies and made plans to shield his
name from public view.
And now this is what Jordan's Royal Hashemite Court said in response. They said: "It's no secret that His Majesty owns a number of apartments and
residences in the United States and the United Kingdom. This is not unusual nor unusual or improper."
SEBASTIAN: "These properties," they say, "Are not publicized out of security and privacy concerns and not out of secrecy or an attempt to hide
them as these reports have claimed. Any allegations," they say, "That link these private properties to public funds or assistance are baseless and
deliberate attempts to distort facts."
But of course, questions are being asked here, because Jordan, one of the poorest countries in the region, and heavily dependent on international
aid, but it's not obviously, you know, all in in poorer or developing countries.
There is a report that's come out of this about the former British Prime Minister, Tony Blair, Julia. According to the BBC, which is one of the
partners on this investigation, the Blair's, Tony and Cherie Blair, his wife avoided paying over $400,000.00 worth in stamp duty, that's a property
tax that you have to pay when you buy a property in the U.K. They did that, according to the BBC, by buying an offshore firm that actually owned this
property, that again, not illegal, but again, not a good look, because of course, when he was Prime Minister, Tony Blair sort of made a big part of
his sort of political agenda was a fairer tax system, raising taxes to fund welfare, and things like that.
This is the response from Cherie Blair that is, according to the BBC, she says, "It is not unusual for a commercial office building to be held in a
corporate vehicle of vendors of such property not to want to dispose of the property separately." She continues, "All of the arrangements were made for
the expressed purpose of bringing the company and the building back into the U.K. tax and regulatory regime where it has remained ever since. All
taxes have been paid ever since and all accounts openly filed in accordance with the law."
Again, not illegal to avoid tax, but all of this is a politically sensitive issue for the people implicated in these reports -- Julia.
CHATTERLEY: There is so much there. I mean, you made the point that this is of course what global tax authorities are looking at. You have to
separate what's legal. And what is illegal. And of course, in many cases, we don't know that yet. And that's going to take further time to
investigate and utilizing these offshore entities is not illegal.
The big question will be, and the investigation obviously will come to this is whether, fraudsters, money launderers, tax evaders are using those for
nefarious purposes. And you have to separate the two.
But I think what it does come down to, Clare, as well is that for wealthier people, they have the ability legally to use these kinds of resources,
whereas for the less wealthy, this is something that they can't use.
SEBASTIAN: Yes, you know, and I think if you look back at the Panama Papers, Julia, it really took years to sort out some of the legal issues
there. Cases I think, is still being filed. People are being convicted this year, even as a result of this.
The political implications of that, as I said, were extreme. You know, in Pakistan, of course, the former Prime Minister, the investigations arising
from the Panama Papers helped unseat him. There were public protests in several countries.
But I think the issue here alongside the legal implications of this other moral ones, we live in a time of global tax reform. And I think the
question that arises from this is, even though these systems that these leaders, these politicians and other people use, even though they are
legal, the question I think is should they be and that is something that is a serious subject of discussion in this global tax reform that's ongoing at
the moment -- Julia.
CHATTERLEY: Yes, take the morals out, tighten up the legislation and the rules surrounding it, and then no one has to make the choice themselves.
Clare Sebastian, thank you so much for that, and to your point, and I agree with you. See you in a few years to discuss the endgame here, of the
Thank you for that.
In Hong Kong, trading in embattled Chinese property giant Evergrande were halted pending a major deal. Chinese state media reporting, a rival real
estate developer is planning to buy a majority stake in Evergrande's property management unit for more than $5 billion.
Steven Jiang is live in Beijing with more. Steven, great to have you with us. What more do we know about this potential deal?
STEVEN JIANG, CNN SENIOR BUREAU CHIEF: Well, Julia, this potential asset sale to Beijing-based for Hong Kong listed Hopson Development is not
entirely surprising given that Evergrande itself revealed in a stock exchange filing last month that was trying to, but failed to sell parts of
this subsidiary and other business units. So it seems now they have finally found a suitable buyer.
Now this potential move, of course, can be seen in different ways. On one hand, of course, it could inject much needed cash to this ailing
conglomerate, and as you said, more than $5 billion of the money. Now, that of course is substantial amount, but still a drop in the bucket given the
total liabilities of the company, of course, over $300 billion.
That's why some analysts are already seeing this kind of transactions, offloading assets may not be sufficient. What the company should focus on
is to get construction going again at its developments, as well as selling its inventory, and of course, the potential pricing of this deal, even at
$5 billion, it represents a 17 percent discount to the listing valuation of this subsidiary as of December 2020.
JIANG: So this, of course, really rekindle broader concerns about China's property sector, which as you know, accounts for more than seven percent of
GDP and the overall economy if Evergrande is liquidated at low prices.
Now, if we look beyond the headlines, though, all of these potential moves really seems to indicate we are not going to see a wholesale government
bailout of Evergrande. Instead, we're going to see more and more of these piecemeal workouts with the government really standing in the back, but
prodding both state-owned and private companies to purchase assets from Evergrande, with a focus on really making payments to or reaching
settlements with individual home buyers and retail investors, because obviously this is very much in line with President Xi Jinping's Common
Prosperity theme in terms of helping the masses.
But also really addressing the government's top priority, which is always maintaining social stability, and these retail investors and the small time
home buyers, of course, are the ones who have been turning up to a protest at Evergrande offices throughout China in the past few weeks -- Julia.
CHATTERLEY: Yes, and the piecemeal sale makes more sense to me as well. I mean, you don't want to just sell the whole thing off even if it goes to a
state-owned enterprise because you're not diversifying the risk among companies either.
So we shall see, Steven Jiang, live there from Beijing for us. Thank you for that.
Okay, the man who represents the world's airline says fully vaccinated passengers should be allowed to travel internationally without
Willie Walsh, the former head of British Airways owner, IAG, says the risk doesn't exist and questions the ongoing need for older restrictions like
Richard Quest joins me now. Richard, great to have you on the show. That's a pretty bold call. I mean, we know the airline industry is saying, look at
some point, you have to let vaccinated people travel and remove some of these restrictions. But to the point of removing masks? Wowsers.
RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: Yes, I think what Willie Walsh's point is, and here at the Aviation Conference I.A.T.A
in Boston, which is the first time that they've managed to come together as an industry since the pandemic. So there is a lot of relief that at least
they've been able to get here and do some business.
And what Willie's his point is really, essentially, they want to make sure that all the restrictions that have been put in place, eventually and at
the proper time are removed.
Willie Walsh who point to some restrictions that were put in after 9/11 that are no longer relevant, but nobody wants to get rid of them. And
Julia, if you look at the losses of the airline industry, well, obviously 2020 was an absolutely horrendous year for losses. The numbers have just
been shown by Willie Walsh, over $138 billion last year.
Now things are getting better this year. They are only going to lose $52 billion. Next year, maybe $12 billion. But in terms of profits, you're
really looking at '23, '24, and '25 before this industry will make money.
And with that in mind, Willie Walsh said it is time to consider every restriction, whether it's still relevant, and if it's not, get rid of it.
(BEGIN VIDEO CLIP)
WILLIE WALSH, DIRECTOR GENERAL, INTERNATIONAL AIR TRANSPORT ASSOCIATION: We want recognition of the fact that people who are fully vaccinated
shouldn't be restricted when they're traveling internationally. The risk doesn't exist.
So yes, we also need people to recognize that measures that were put in place, and I will accept, may have been reasonable and understandable at
the beginning, are no longer relevant today, and therefore they should be removed.
So you know, if you don't have to wear a mask when you're sitting in a car, why should you have to wear a mask sitting on an airplane? You know, there
comes a point when you have to look at the data and say, it's no longer necessary to take this measure, and therefore which should be removed.
And that's what we want. We want people to reassess the risk and when no longer relevant, to remove the restrictions.
(END VIDEO CLIP)
QUEST: Julia, if you take the industry, the U.S. is growing gangbusters on the domestic market. Asia is still in a terrible situation. Australia is
going to open up sort of mid-November. But the big thing for the industry at the moment is the U.S. opening up to westbound travel, to Europeans, and
to transit travel out of Europe. That is expected in early November.
I can tell you here, CEOs of airlines, Julia, have the closest that you will see to a smile on their faces at the prospect of a normality to
transatlantic travel or something approaching.
CHATTERLEY: Yes, I'm trying not to smile myself. The prospect of being able to go home for Christmas and come back without having to quarantine
somewhere else is highly appealing.
CHATTERLEY: Yes. Richard, thank you very much. I know you've talked about climate too and I'm sure that conversation will continue on "Quest Means
Business" this evening and we look forward to that as well. Thank you for joining us.
QUEST: Thank you.
CHATTERLEY: Okay, putting profits over public good, that accusation against Facebook was made by a whistleblower in a bombshell interview with
CBS "60 Minutes."
(BEGIN VIDEO CLIP)
FRANCES HAUGEN, FACEBOOK WHISTLEBLOWER: One of the consequences of how Facebook is picking out that content today is it is optimizing for content
that gets engagement or reaction. But its own research is showing that content that is hateful, that is divisive, that is polarizing, it is easier
to inspire people to anger than it is to other emotions.
Facebook has realized that if they change the algorithm to be safer, people will spend less time on the site. They'll click on less ads, they'll make
(END VIDEO CLIP)
CHATTERLEY: Facebook calls her claims misleading. Brian Stelter joins me now with more. Brian, fascinating, fascinating documentary on "60 Minutes."
Also, in light of the conversation you had as well with Facebook's Nick Clegg yesterday, and you were debating all of these things, too. And I
think one of the things that cuts to the heart of it was what happened on January 6th, and perhaps the role that Facebook played in being utilized as
a resource for galvanizing some of the anger.
Talk about that exchange in particular, and then we'll talk more broadly about Facebook's own research into the impact that they have.
BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: Yes, there is increasingly consensus of Facebook -- within Facebook, there is this giant, mostly
right-wing rage machine running in the United States, causing more and more resentment and rage and anger and that's the kind of thing that then
propels people to raid the Capitol. Now, that's one example.
But this whistleblower is calling out Facebook around the world citing ethnic violence in Myanmar as another example of Facebook causing strife in
the United States and all around the world.
What is so striking, Julia, is we've heard these criticisms from outsiders for years. We've heard vicious critics of Facebook call the company out.
But now this is someone from inside the house saying the exact same things.
And Frances is not the first Facebook whistleblower, but I think she is the loudest to date. She leaked thousands of documents to "The Wall Street
Journal" and provided them to Congress. She is going to be testifying before the Senate tomorrow.
So what is Facebook saying? Well, Nick Clegg, the top spokesman said to me, look, this research, we're going to keep doing this research, we're going
to keep looking for our flaws and trying to fix them. He says, that's a good thing.
(BEGIN VIDEO CLIP)
NICK CLEGG, VICE?PRESIDENT FOR GLOBAL AFFAIRS AND COMMUNICATIONS, FACEBOOK: I think this is a good example of the company doing exactly what I hoped
people would expect we should do, which is not pretending that everything is perfect on social media, it isn't. Researching where there are the
minority of instances where it's not working out right for people, and then trying to fix it as much as we can on our own apps.
(END VIDEO CLIP)
STELTER: So he is trying to concede a little bit, but not giving on the main points. Meanwhile, you've got this whistleblower saying Facebook puts
profit over public safety time and time again. And we're talking about apps that people are frankly addicted to.
You know, the Big Tobacco comparison keeps coming up, Julia, but I think a casino comparison is also apt. They are they're making lots and lots of
money while the rest of us roll the dice, spin the wheel, hope for a fun interaction. And, you know, to see someone from the inside calling this out
in such stark terms does have significant consequences.
CHATTERLEY: Yes, it was a quote that I heard that she when she said, "No one at Facebook is malevolent." Oh, that's good. "The incentives are
I mean, this sort of understatement, but this is what you and I have talked about many times. The incentives are misaligned here and they will continue
to make profits and all the things that we're saying look, is perhaps bad, and detrimental to society about Facebook. It is how it helps them bring
advertisers and how the business model works, ultimately.
But I think one of the things -- and I sort of mentioned it there as well with January 6. It was the fact that they had this civic integrity team
heading into the presidential elections, and then that was dissolved, or as Facebook says, they were absorbed into other teams. But then they were
removing some of the election protection measures as well.
So instead of looking at this as one issue, but it's a cumulative thing across all different nations and other elections and things, it seems like
they did it for a brief period of time to seemingly be able to say they're doing it, and then it was dissolved.
It's like how consistent is there attention to actually taking action to address some of these issues, even acknowledging these issues?
STELTER: Right. It is based on this notion that they are aware of the threats on the platform. They have the ability to turn the volume down, and
they've showed that a couple of times. They can turn the volume down and remove some of the hyper-partisan content and show people less crazy stuff
in their feeds.
But then they allow the volume to be risen again. And the defense from Clegg is always the same, that this is a reflection of human nature. This
is human behavior. This is what people want, you know, that we are a complicated species.
But Facebook is the world's biggest accelerant and there is an increasing consensus about the problems. The question then becomes the solutions and
Facebook says, it is making improvements and it works on, you know, these issues for example, with Instagram with teen girls, working on nudges
remind people to move away from content that makes them feel bad about themselves.
But a little nudge -- a little nudge in the arm is not going to be enough to solve these deep rooted issues.
So where are we going to end up? We're going to end up in a conversation about regulation again, and Facebook claims they want regulation. They
spend millions of dollars on ads in D.C. saying, hey, Congress, hey, please regulate us. Please give us some rules of the road.
That's what the whistleblower says she wants, too, but there's not going to be an agreement on what kinds of regulation, and historically we've seen
businesses try to co-opt the regulatory process to get the rules of the road that they want.
STELTER: So I think, Julia, we're entering another phase of this regulatory conversation, and unclear how it will play out. But you do have
lawmakers now on all sides in multiple countries, all infuriated with what they're hearing about Facebook, and that may be significant.
This is a bipartisan battle right now, and it is happening all over the world.
CHATTERLEY: Yes, I watched that whole conversation with Nick Clegg and you yesterday on your show, which was great, but I did feel like it was a case
of trying to fight a California wildfire with my cup of water here. So I hope regulators were watching it quite frankly and need to step up and do
Brian, great job. Thank you. Brian Stelter there.
CHATTERLEY: All right, still to come here on FIRST MOVE, seizing the EV moment. Volvo offshoot, Polestar announces plans to lift with the race to
deliver electric cars well and truly beefs up.
And of driverless vehicles, startup Aurora promises to put autonomous vehicles on the road by the end of 2023.
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks are still on track for a mostly softer open today, a reversal of the more than one percent gains
for the Dow and the S&P that we saw on Friday.
The NASDAQ rising for the first time in five sessions in fact during Friday's session as 10-year Treasury yields dipped below that pivotal 1.5
Crude prices meanwhile continue to rise after posting their sixth straight week of gains driven by the economic recovery and accelerated demand post
COVID. Natural gas reversing course and trading higher, too. In the meantime, you can see the prices there, all eyes on OPEC+ nations today as
they meet to discuss production hikes.
Rob Thummel joins us now. He is Portfolio Manager at Tortoise Capital. Rob, great to have you on the show and good to see you.
Can you just explain before we get to OPEC+ what are we seeing in the energy markets whether it's for crude prices, Brent oil or the natural gas
price spikes that we've seen too?
ROB THUMMEL, PORTFOLIO MANAGER, TORTOISE CAPITAL. Yes, hi, Julia. Good to see you. So broadly globally, obviously, we've seen the global economy
rebound. And so, you've seen global energy demand really pick up significantly. So you've seen significant increases in the need for all
commodities, including, as you mentioned, crude oil and natural gas.
The challenge for the energy market or the world actually is there is -- the supply has been restrained. The U.S. is no longer drilling for oil and
gas as much as they have been in the past. And so as the demand has increased, there's been less supply added to the market. Inventories have
So we go into the winter season with really low levels of natural gas that is used to heat our homes throughout the winter. And then we've got crude
oil inventories that are actually lower as well.
So we've got a got a really interesting set up and a lot of uncertain times on the supply side, as it relates to the global energy markets.
CHATTERLEY: I mean, to your point, it's global and there is so much going on. And we seem to be talking on a daily basis about the challenges of
supply of shortages and of rising prices and the pressure that that is putting on consumers as well during this recovery.
Currently, OPEC, let's bring it to them, they've said or plan to add an additional 400,000 barrels per day of new oil supply each month into 2022.
What is the prospect of them coming together today and saying, maybe we can massage this a little bit, increase our supply a little bit more and ease
some of the pressure on prices that we're seeing.
THUMMEL: Yes, so that's a very good question and OPEC is meeting as we speak, and there are varying reports on alternatives that they're
considering. There have been some who said they're not even going to add any supply to the market.
Now going back, though, as you highlighted, OPEC's plan has been to add 400,000 barrels a day, every single month through the end of 2022. But they
meet every month and have been deciding if they want to reevaluate that. They seem to be reevaluating that because oil is more just a transportation
fuel. Jet fuel has been rising and that's increased demand for oil.
But in general, the expectation is, there's plenty of oil out there right now. And then next year, we might be in an oil surplus. And so that's why
OPEC is evaluating, should we be adding more oil to the market right now?
And so it'll be interesting to see what OPEC decides, but there is plenty of oil out there. There is plenty of available capacity. So from an oil
perspective, I think, you know, oil prices will probably stabilize right around the levels that they are currently.
CHATTERLEY: I was going to ask you how sensitive we are to supply, irrespective of how much actual supply it would mean if they decide to
change or not. How sensitive even just to one month, if they say look, we'll add a little bit more just to be helpful for help's sake, and we'll
see the price react.
And I guess the most important question is, do we spike higher, if they don't?
THUMMEL: Yes, it appears so. You know, oil prices, as you highlighted are spiking a little bit this morning on that news that OPEC may not add any
more additional production in November, and then may back off that 400,000, up a percent half or so. So I think the market would be surprised by that.
Yes, if OPEC decides to no longer add supply to the market, because I guess I should be clear, OPEC is really the key driver here. They are the
organization that has the ability to quickly add oil supply to the market if it's needed. And the market seems to be indicating that the market needs
more supplies and where prices are. So if they don't add supply, yes, the price is going to probably continue to higher from here.
CHATTERLEY: Yes, but the challenge, of course, and you've already pointed to it is if we do see an easing of demand as we head towards the backend of
the year, or at least into next year. Have they sort of overdone it with the increasing supply in the short term? It is always the delicate
What about the United States, because clearly, United States is hearing from consumers that are saying, look, we're paying more and more to drive
our cars or to transport goods around the country.
But adding drill capacity takes time and it takes capital investment. How do the shale guys respond to what we're seeing?
THUMMEL: Yes, no, that's a very good question and that is the biggest change, Julia, from the past that you know, most people aren't aware of. So
the U.S., because of shale oil actually, it increased the supply globally of oil and natural gas, all commodities, basically predominantly oil and
natural gas, though, and that had helped really keep prices -- commodity prices very, very low for a long period of time.
Shale is still around, but we've entered the new era of shale and that era of shale is as you highlight, not as much capital spending and what that
means is not as much production growth. And that means less supply coming from the U.S.
As U.S. oil and gas producers focus on really one thing, they focus on returning cash to the shareholders, no longer are they focused on
production growth and growing production, they are focused on getting cash back to the shareholders.
And so that means less growth, less capital spending, and so you're going to have these markets that are probably going to be a little more sensitive
to the supply demand fundamentals at this point in time because shale is not going to be there to really fill any supply gap probably for an
extended period of time.
CHATTERLEY: Yes, that being rewarded for discipline so why not behave while you're being rewarded for it? But of course the implications are
there in the market as we see it.
Rob, great to get your wisdom as always. Rob Thummel there, Portfolio Manager at Tortoise Capital. Great to chat with you.
The market opens next. Stay with us.
CHATTERLEY: Welcome back to FIRST MOVE, and as expected, a softer start to the U.S. stock trading week. The issues that sparked some pretty sizable
losses for stocks in September continue to weigh on sentiment.
We are just two weeks away from what appears to be a crucial debt ceiling deadline. Friday's U.S. jobs report could be strong enough to allow the
Federal Reserve to begin pulling back on some pandemic era stimulus. The question is, will they? And add to the growing uncertainty over the fate of
the Federal Reserve Chair Jay Powell on whether he'll be reappointed for another term.
Then we've got third quarter earnings season beginning in the United States and beyond soon. Profits are expected to come in strong, but what will
companies say about the outlook for the future? That's going to be key as we see inflation continuing to rise, and the-everything shortage continues
-- assuming I can say it.
Tesla, meanwhile, rallying in early trade. As we mentioned earlier, Musk and company announcing over the weekend that they delivered more than
200,000 new vehicles in the third quarter. Record results as the company definitely navigates the chip shortage.
Not all that long ago, meanwhile, Polestar was known for tuning combustion engines. Since then, it's recast itself as a luxury electric carmaker with
big expansion plans.
The joint venture between Volvo and China's Geely is the latest EV maker going public, announcing a Special Purpose Acquisition Company merger with
an estimated value of $20 billion.
And just in case you hadn't noticed, actor Leonardo DiCaprio is among the investors.
CHATTERLEY: Thomas Ingenlath is CEO of Polestar and he joins us now.
Thomas, fantastic to have you on the show and congratulations on the future going public. You know what makes you unique among some of the other EV
companies that we've seen go public in this way -- Lucid, Nikola, Lordstown -- is that you've actually bought a car to market. You're actually bringing
in money for cars, and this is an important distinction, isn't it? Welcome.
THOMAS INGENLATH, CEO, POLESTAR: Good morning, Julia. Yes, right, you know, we met three years ago when we launched the brand, 2019.
CHATTERLEY: I remember that.
INGENLATH: And, you know, of course, since then, we developed the company. We have two cars out now, the Polestar 1, the Polestar 2. We will deliver
around 29,000 cars to customers this year. So, there is revenue that our cars deliver to customers.
Our showrooms up and running. We have a service network of 500 service places for our customers. I think that is just simply that much more of a
CHATTERLEY: I mean, talk to me about in addition to, as you've said, you've already got service stations up, you've got cars on the road, you're
also planning three new electric vehicles by 2025. The showrooms and servicing of the cars that you sell is going to be independent, I believe
of Volvo, too.
So when I look at your -- and I mentioned it in the introduction, your expansion plans, I sort of understand why you need to raise money and raise
INGENLATH: Yes, you're right. We have now really strong expansion ahead of us. Three new cars in three years, 30 markets in 2023 up and running. This,
of course, is quite a big growth. It's very unheard of for a startup.
And on one hand, why we managed that from operations is of course, because we are using, tapping into existing network, manufacturing network. We can
use existing logistics for spare parts and all that, then of course, it's a big advantage of Polestar tapping into weather bar that we have through the
Nevertheless, an expansion like that costs money, and of course, having the access to capital market. And of course, having found a great, experienced
partner in doing that respect, is, of course, a great flexible opportunity for Polestar for the next era.
CHATTERLEY: You know, it's quite fascinating. I was trying to do math on this over the weekend, and you're planning to ramp up car sales by just shy
of a factor of 30 times by 2025. Tell me where in the world you're going to be selling these cars? Can you give us a sense of where you're expecting to
see greatest demand?
And I guess tied to that, who is a Polestar customer in your mind? Who specifically are you selling to?
INGENLATH: About the math, it is tenfold, 29,000 cars in '21, this year. That's where we are very good on target on delivering that. So ramping up
to 2025 to 290,000 cars, it's exactly 10 times.
So still, I mean if it's not 30, ten times it's still a steep ramp up, so I would not have less respect for that growth.
It comes out of three things. I mean one hand, we talked about the three cars coming so that's just simply having a product portfolio then of four
cars by '25, which is of course one of the factors to be able to do that.
The other thing is we are operating already today in three continents. We will have 30 markets which is of course, big, big times -- Europe, here we
are very, very strong. We are ramping up this year in the U.S. from four spaces that we had in the beginning. These are the showrooms to 25
showrooms and we have more plans for '22 coming.
So U.S. will play a big role. We will be producing in the U.S. the Polestar 3 of U.S. customers, and of course Asia Pacific. This year we opening up in
South Korea, we are in Australia, New Zealand.
The EV market, you know when you look at the EV market, it is very much all around the world growing and we want to participate in that and of course
that is why we are launching that product portfolio exactly in these segments where it matters, to SUVs, a really gorgeous GT. These are the
segments where you see in the premium of course, that is where the luxury premium segment is very rapidly changing now from combustion engine to
CHATTERLEY: Yes. And the buyer? Because you know I have to say, I look at some of the images of these cars and I know you come from a design
background as well at Volvo and I can see the similarities. So are you sort of planning to lure Volvo customers into buying sportier, sexier Polestar
car or are these potentially new customers entirely perhaps taken stolen from a Tesla for example. Like, who is a Polestar customer?
INGENLATH: You know, our Scandinavian design is of course, it is Scandinavian. But this is where indeed, BMW, Mercedes, and Audi customers
as much attracted to that great design as Tesla customer might be.
So design indeed is our differentiator, sustainability as well, something that we take really, really serious and dear to our heart. The question
about you know, electric is not just enough you really have to look into the CO2 burn of the car and really bring that to zero.
No, it's really having an offer in the luxury premium segment that is that much more sporty, that much more extrovert, that much more daring as well
than you would find it with the Volvo brand.
CHATTERLEY: Extrovert. Thomas, it's great to chat with you. We will speak again soon. And congratulations again on the announcement. Thomas Ingenlath
there, the CEO of Polestar.
INGENLATH: Well, a pleasure, Julia. Bye-bye.
CHATTERLEY: Thank you. Okay, up next, driving change. Polestar says the car for the future is high tech and electric. My next guest days, its
driver will be, too. The CEO of Aurora on its driverless technology, next.
CHATTERLEY: Software and sensors may replace human drivers sooner than you think. Self-driving startup, Aurora, plans to have autonomous trucks on the
road by late 2023 without a safety driver in sight. Drivers-less passenger cars will follow a year later according to their plans.
The company's virtual driver is made up of sensors and software, which are integrated into existing vehicles. FedEx, Toyota and truck maker, Packer
are among the big names currently testing its technology.
Joining us now is Chris Urmson. He is the CEO of Aurora. Chris, fantastic to have you on the show. Just explain what makes your technology unique.
CHRIS URMSON, CEO, AURORA: Yes, well thanks for having us. Well, what we're building at Aurora is the Aurora driver and it's this combination of
software, hardware, things like the sensors of a computer and then the awkward services to support that.
And for us really, the thing that makes it unique is the experience that we have as a team. Many of our folks have been working in this this nascent
industry for a long time and the approach we take to safety, to make sure that the Aurora driver can be trusted on the road.
CHATTERLEY: Yes, I mean you mentioned it. You have people that have been pulled from autopilot work at Tesla, obviously yourself came from Waymo,
which was Google's self-driving car project as well. And, of course, Uber expertise as well. So you can combine all three.
You've said it, and I've read it in some of the releases that you've put out, you have three sensors -- the LIDAR, the radar, and the cameras, and
that that's actually the only way that you guys believe this can be safely deployed, the autonomous driving technology can be deployed. How does that
compare to some of your competitors that are working in this space?
URMSON: Yes, I think the vast majority of people in the space believe as we do that you need to use a combination of different sensors to see the
world safely and really hear that the thinking is that we're trying to build something that's incredibly safe on the road. And to do that, you
want it to be robust and so let's use the different modes.
Cameras can see color, for example. LIDAR, particularly our first LIDAR can see long range, and it can see precisely the shape of the world. Radar can
penetrate things that maybe we couldn't see through with our human eyes. And so by bringing the three together, you can actually get to a point
where you can trust the vehicle to drive safely on the road.
CHATTERLEY: I mean, we've been talking about autonomous driving technology, it seems for years, and certainly on this show for the last
three. And one of the things that always comes down to is data. You simply need to get those road miles in, check the data, understand how the system
I also read that you, by the end of this year, will have driven on the road equivalent of nine billion miles. Is that correct? And how much data is
URMSON: Yes, so for us, one of the really -- the deep insights we had coming into building Aurora was that you weren't going to get there by just
brute force driving in the physical world.
And so we've invested to build world class simulation technology that allows us to both simulate how the vehicle interacts with other vehicles,
but simulate exactly the way that energy moves through the world so that we can model our LIDAR, model our radar and model our camera, and that allows
us to have really, really high quality confidence that our system when we put it on the road, it's going to work well.
For example, when we started developing the ability for the vehicle to turn left across traffic, we did over two million simulations, two million left
turns in the computer before we ever let the vehicle try that in the real world and that gave us confidence again that it was going to work the way
we wanted it to.
CHATTERLEY: Yes, I mean, it's quite fascinating, isn't it? I expect that logistics perhaps is easier to deal with than transporting consumers, which
is why you're saying look, we're going to be able to remove the safety drivers by the end of 2023 for the trucks, and then a little bit later for
But just in practice, because at a time when we're talking about truck driver shortages in a lot of developed nations around the world, the United
States or the U.K., I think a lot of people looked to this and thought, wow, this is incredible and it is coming incredibly quickly.
Can it interact with other vehicles seamlessly on the road as well? Because I do feel like as a driver myself, if I saw a vehicle driving past me that
had no driver, I'd be nervous.
URMSON: Yes, I think you hit on really one of the real -- the incredible value proposition here is that, the technology we're building can fix that
shortfall of human drivers that we have. In the U.S., we're short 60,000 drivers today and by the end of the decade, we expect to be short 160,000.
And so we expect the Aurora driver to come to market and support and work adjacent to the human driven vehicles that are out there. And yes, it has
to work on the road with other people.
URMSON: You know, we are not going to build special roads for this, certainly in heavy times. So it has to be able to learn what it's like to
drive like a person, and that's really one of the -- again, core technologies we're building at Aurora, it is this machine learning
framework that allows us to go and drive the vehicles on the road, see how our trained professionals would do it and then have the vehicle extrapolate
from that how we should drive on the road well.
CHATTERLEY: And have regulators and other drivers on board as well and comfortable with this, too? Are you confident of that timetable?
URMSON: Yes, we're working very hard towards that timetable. We think it's reasonable. We work with regulators and policymakers today. It's been,
again, one of things I think we do well at Aurora is talk with the folks, our partners in government. So they understand what our approach is. They
understand the value and they understand the challenges and in that way, together we can see the social and societal change we think needs to happen
CHATTERLEY: Chris, I have a million more questions for you. But the most important one and I have about 20 seconds, cost? What is it? What's the
cost per truck or the cost per car of adopting this technology?
URMSON: Yes, so today it's a prototype and so our vehicles are comparatively expensive, but we expect to deliver this to market with the
same kind of total cost of ownership that a truck company faces today.
CHATTERLEY: Wow. Okay, we shall continue this conversation. You've answered about half the questions. Always the way. Great to chat with you.
Thank you. Chris Urmson there, the CEO of Aurora. We will speak soon.
You're watching FIRST MOVE. More to come.
CHATTERLEY: Welcome back to FIRST MOVE. All this week, we will be looking at the years of planning that have gone into delivering Expo 2020. The
World Fair has been around for more than 170 years and almost eight years ago, Dubai won the right to host this year's event. It's the first time the
fair is being held in the Arab world.
Now, amid a global pandemic. It's open to the public.
UNIDENTIFIED MALE: I hereby declare Dubai as winner with the right to host Expo 2020.
UNIDENTIFIED FEMALE: When it was announced, the feeling of pride is was indescribable.
UNIDENTIFIED MALE: I could see the city -- the entire city feel different really.
People were smiling, were happy, just really, really a celebration. It was so many mixed emotions.
ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT (voice over): As celebrations continued across Dubai, attention quickly turned to finding a
location to host a massive global event.
UNIDENTIFIED MALE: A few years ago this site was sent with a single camel farm on it.
GIOKOS (voice over): From a desert oasis to building a vast new city, Ahmed al Khatib set about overseeing every aspect of its construction.
AHMED AL KHATIB, CHIEF DEVELOPMENT AND DELIVERY OFFICER, EXPO 2020 DUBAI: This is the biggest I will be doing in my life. We have 23,000 workers
working on site. We have about 45 tower cranes. Also we have moved around five million cubic meters of sand.
GIOKOS (voice over): Making it a success would be an enormous task. Hundreds of buildings needed to be constructed, posing numerous engineering
and architectural challenges.
AL KHATIB: In less than five years, we just like transformed to a city that has everything that anybody in the world wishes for. It's a city that
is worth twice the size of Monaco. It's just the scale of it.
GIOKOS (voice over): With key messages and clear aims, Dubai has set about bringing the world together by hosting 192 countries.
MARJAN FARAIDOONI, CHIEF EXPERIENCE OFFICER, EXPO 2020 DUBAI: The overall theme of the Expo is connecting minds, creating the future with the focus
on the themes of mobility, opportunity and sustainability.
GIOKOS (voice over): Expo 2020 is aiming to focus on sustainability more than any other World Fair in history. And over the next six months, the
latest innovations around this theme will be showcased to the event's millions of visitors.
Eleni Giokos, CNN Expo 2020, Dubai.
CHATTERLEY: And finally here on FIRST MOVE, "No Time to Die," I'll tell you what, there is no time to count the millions pouring in at the box
office. Daniel Craig's final outing as 007 took in $119 million over the weekend, and it's not even out in the United States or China yet.
In the United Kingdom, it grossed more in a weekend than any other "Bond" movie in the franchise. I have to re-read that to make sure I was making
sense. What an explosive end to Craig's 007 career. Congratulations to him.
That's it for the show. If you've missed any of our interviews today, they will be on my Twitter and Instagram pages. You can search for
In the meantime, that's it. Stay safe.
"Connect the World" with Max Foster is next.
We'll see you tomorrow.