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First Move with Julia Chatterley
President Biden Committed to Defending the Islands Sparking Chinese Anger; The NBA's Boston Celtics Under Fire in China after a Player Comments; Property Giant, Evergrande Makes an Overdue Interest Payment. Aired 9-10a ET
Aired October 22, 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.
Taiwan tensions. President Biden committed to defending the islands sparking Chinese anger.
Tibet taboo. The NBA's Boston Celtics under fire in China after a player comments.
And default diverted. Property giant, Evergrande makes an overdue interest payment.
It's Friday. Let's make a move.
A warm welcome to FIRST MOVE this Friday, and another jam-packed week passes by with President Biden on CNN fighting for his stimulus plans.
Tesla grappling to meet orders for sedans. Netflix results helped by "Squid Game's" stans -- that's millennial for fans by the way. Amazon hiring an
army of Holiday helping hands and great news from toy land, Mattel is meeting demands.
And we'll be speaking to the CEO, Ynon Kreiz later in the show. He is promising plenty of Barbies and Hot Wheels this season even with supply
chain disruptions. In other words, Christmas is not canceled nor is trade today on Wall Street, though I have to say price action relatively muted.
Take a look at that -- and the chips are down in tech land.
Intel sinking after warning of slowing sales due to part shortages. It says the chip crunch won't let up until at least 2023. Wow. The chip dip means
car maker, Renault, will produce 50,000 fewer vehicles this year, too. It has global implications.
And speaking of dips, its mind the gap at Snap. Snapchat's parent company's set to fall some 21 percent -- take a look at that -- warning that Apple's
recent privacy changes could cook its ad sales business. Details on that coming right up.
Meanwhile, green arrows in Europe even as new numbers show business growth there at six-month lows and a pullback, too, in Chinese stocks. Yet
Evergrande, managing to make gains of some four percent. The property developer made a key overseas bond payment that according to reports,
interest has been paid, and this show cannot be delayed.
Let's get to the drivers. The U.S. President has vowed to defend Taiwan in the event of an attack by China. This is a departure from the U.S. policy
of strategic ambiguity on the matter. Take a listen to President Biden's remarks.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: That's why you have -- you know, you hear people saying Biden wants to start a new Cold war with
China. I don't want a Cold War with China. I just want to make China understand that we are not going to step back. We are not going to change
any of our views.
ANDERSON COOPER, CNN HOST, ANDERSON COOPER 360: So you're saying that the United States would come to Taiwan's defense if China attacks?
BIDEN: Yes, we have a commitment to do that.
(END VIDEO CLIP)
CHATTERLEY: John Harwood joins me now. John, strong statement from the President there. Very quickly walked back or at least softened by the White
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: That's right. I don't think President Biden intended to change the policy of strategic ambiguity. I
think what he was trying to do was communicate strength in dealing with China.
Of course, under the Taiwan Relations Act, the United States is committed to assisting Taiwan in its self-defense. It's not the same kind of
commitment that we have, say under NATO, Article V when we treat an attack on any member nation as an attack on the United States.
But what the President was doing at a moment when China is intimidating Taiwan, suggesting that its takeover of Taiwan is inevitable, Biden was
trying to say not so fast, and we are going to be there. We're not abandoning Taiwan. But the reason that the White House walked it back was
the very policy of strategic ambiguity that you mentioned.
CHATTERLEY: And of course, it follows some of the concerns more broadly. And of course, propaganda from China in light of the Afghanistan situation.
So perhaps unsurprising what we saw in both regards here. China, of course, coming straight back and saying, don't send false signals, intentional or
HARWOOD: That's right, and I don't think the President Biden minds too much hostile words from the Chinese. The consistent through line of the
administration's foreign policy has been economically, diplomatically, militarily standing up to China and saying, you know, fulfilling this pivot
to Asia that was talked about during the Obama administration when Joe Biden was Vice President.
HARWOOD: So you had that Australia submarine deal, which was part of that move and we see that across a range of fronts. When President Biden talks
about the coming years as a test of the resiliency and strength and effectiveness of democracy versus authoritarian regimes, he is talking
largely about China and he is trying to say, even as he attempts to pass this domestic program, we have to show we can deliver for our people and
that is how we preserve our strength in the world and in the Asia Pacific and against big rising powers like China.
CHATTERLEY: Yes, I think sometimes strategic ambiguity can extend to action or inaction, in this case.
John Harwood, thank you so much for that, as always.
From Taiwan to another taboo in China, Tibet, a fresh backlash erupted against the NBA after a Boston Celtics player criticized China's President
over the treatment of Tibet as Kristie Lu Stout reports.
KRISTIE LU STOUT, CNN CORRESPONDENT: There is backlash in China after Enes Kanter of the Boston Celtics criticized Chinese President Xi Jinping and
China's treatment of Tibet.
On Thursday, he shared an almost three-minute video of himself expressing support for a free Tibet while wearing a black and white t-shirt with an
image of the Dalai Lama, its exiled leader.
He described Chinese President Xi Jinping as a brutal dictator and said Tibetan people's basic rights and freedoms are nonexistent. Kanter was
immediately slammed on Chinese social media, a Weibo fan page for the Boston Celtics with over 600,000 followers posted this, quote: "Any
information on the team will cease to appear on this Weibo. Any behavior that undermines the harmony of the nation and the dignity of the
Motherland, we resolutely resist." Unquote.
On Thursday, a Chinese Ministry of Foreign Affairs spokesman said Kanter was trying to get attention while adding this --
(BEGIN VIDEO CLIP)
WANG WENBIN, CHINA'S FOREIGN MINISTRY SPOKESMAN (through translator): We welcome all friends from various countries who are unbiased and uphold an
objective standard to visit Tibet. At the same time, we will never accept attacks that discredit Tibet's development and progress.
(END VIDEO CLIP)
STOUT: As of Friday afternoon, Celtics highlights can be found online in China, but the Kanter backlash comes two years after then Houston Rockets
General Manager Daryl Morey expressed support for the Democracy Movement in Hong Kong, and that prompted the state broadcaster CCTV to stop
broadcasting NBA games and e-commerce sites to remove listings for Rockets' merchandise.
The Kanter controversy also comes after the Wednesday arrival of the Olympic torch in Beijing. China is hosting the Winter Games in February, a
development that has prompted calls for boycotts over China's treatment of Hong Kong Uyghur Muslims in Xinjiang and Tibet.
Kristie Lu Stout, CNN, Hong Kong.
CHATTERLEY: Okay, let's move on. Staying afloat, Chinese property giant, Evergrande reportedly avoided an immediate default with just hours to
spare, but its problems are far from over. Selina Wang has more.
Selina, great to have you with us. Let's be clear. They were already in their 30-day grace period when they made this payment, we believe, but it
does send a key signal to international bond holders that they may be way down the pecking order. But at least for now, they will get their money.
SELINA WANG, CNN CORRESPONDENT: Yes, exactly, Julia. A very encouraging sign for these international investors since prior to this, as you say, the
expectation was that the first priority for Evergrande was to pay off these domestic Chinese investors. But now, it appears that they're trying to
appease international investors as well.
But the key words here in regards to this is that at least for now, Evergrande has avoided default. According to state media, Evergrande has
made an interest payment of $83.5 million on a dollar denominated bond that was actually expired last month.
Now, the 30-day grace period for that payment was set to expire on Saturday, tomorrow, and it was widely expected that Evergrande was going to
miss that payment and tip formally into default. So, this is a surprise positive development. But Evergrande is not even close to being out of the
This essentially is just a buying it a little bit of time. Evergrande still has a string of payments to make on other bonds. In fact, the next major
deadline to avert default is just a week away. And Julia, we still have very little clarity into how they are going to sort through their $300
billion in liabilities, how it's going to raise much needed cash, because so far they have been unsuccessful in trying to sell various assets.
We were just discussing yesterday that even efforts to sell its crown jewel, its Property Services Unit, a deal for that fell through with Hopson
Development, and Evergrande saying they couldn't agree to the terms of the deal.
So officials in China however, various senior officials have been trying to calm the market saying that this Evergrande crisis can be managed, it can
be controlled, but still these fears of contagion across the property sector and the broader economy continue to persist.
We have several other property developers in China that have also said they are struggling to pay off their debts. Now economists tell me, this may not
be China's Lehman moment, but at the very least, this could cause significant short-term pain and more importantly, is a signal of a long
term change of China's growth and economic model that in recent decades has been supercharged by debt and the property sector -- Julia.
CHATTERLEY: Yes, a sigh of relief today. But of course, this is tiny relative to the broader issues for the property giant and the sector as you
point out. We await what happens next week now, too.
Selina Wang, thank you for that. Have a great weekend.
Okay, let's move on again. Snap snapped, the stock plunging 20 percent premarket following third quarter earnings. The firm warned that recent
changes to Apple's privacy policies hurt its advertising business. Paul La Monica joins us with more.
Paul, it's interesting. It's not just the reaction that we saw in Snap that I found interesting, but it was also those that have warned about this,
too. The likes of Facebook and Twitter stock that also fell premarket. Walk us through exactly what happened.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, Snapchat, Snap is the parent company of Snapchat, really stressing that they were caught off guard,
Julia, by these iOS changes, and how significant of a revenue impact they had in the quarter, and that they might have going forward because of what
Apple has done with regards to increased privacy controls.
There are advertisers that are, I think, trying to figure out how do they now try and get their brand name across on social media platforms like
Snapchat, and CEO Evan Spiegel warning that they don't know when this is going to end, they hope it's temporary and that longer term, advertisers
will adjust to the new Apple iOS normal. But right now investors are panicking.
Snap as you point out, shares down about 20 percent premarket. We need to point out though, Snapchat has been one of the best performing stocks in
media this year. Before today, the stock was up more than 50 percent year- to-date. Is this an overreaction because the stock had gone up so dramatically? Perhaps, but as you noted, Facebook and Twitter are getting
hit as well.
CHATTERLEY: Yes, triple digit since the beginning of 2020. You have to look at that longer term chart to appreciate just how well this has done.
And actually you raise a great point, Paul, as always, it sort of overtook the underlying message from the company, which actually seemed pretty good.
I mean, they saw a 23 percent rise year-over-year in daily active users, and if you look at the younger segment, which we know is sort of lucrative
for these kind of social media platforms, relative to Facebook as a platform, we will keep Instagram aside, they are managing to add younger
users, too, unlike Facebook.
LA MONICA: Exactly. There are definite worries about Facebook's old problem, if you will. You know, the fact that people like me and my parents
are the ones sharing pictures of their kids and grandkids on Facebook, but the kids themselves may not be there. Instagram obviously is trying to
fight back. They're owned by Facebook.
But what I find fascinating, Julia, is that we are in a world right now and I see my kids TikTok, TikTok, TikTok -- everyone is talking about that
social media platform. Snapchat has done extremely well, even in a world where TikTok has taken everyone by storm.
So give credit to the company for adding more users, getting the revenue growth to be, you know, at a level that Wall Street likes. It's just maybe
a temporary blip because of these Apple iOS changes, or maybe not and we'll have to see, but I think Snapchat has done an admirable job of really
facing tough competition and holding their own.
CHATTERLEY: Yes. Great point. And Paul, in my eyes, it doesn't matter where you're spreading your pictures and sharing your news. You're cool in
my eyes. Paul La Monica, thank you for that.
Okay, let me bring you up to speed with some of the other stories making headlines around the world.
There's been a tragic death on a film set in New Mexico. Authorities say the actor, Alec Baldwin has fired a prop gun, which killed the movie's
cinematographer. The director was also injured. CNN's Stephanie Elam joins us now on this.
Stephanie, I say it is tragic and I'll say it again. What more do we know so far?
STEPHANIE ELAM, CNN CORRESPONDENT: We don't have a lot of information at this point, Julia. It is truly a tragedy here.
What we understand, according to the Santa Fe County Sheriff's Office is that they got a call around just before 2:00 p.m. local time yesterday, a
9-1-1 call came in saying that there had been a shooting on the set and that they responded to the Bonanza Creek Ranch and that is where they found
two people shot.
We know that the Director of Photography, Halyna Hutchins, she was airlifted to the University of New Mexico Hospital, where she was
ELAM: We also know that the director, Joel Souza, he was taken by ambulance to a hospital. Still not clear yet on his status on whether or
not he's in the hospital or out of the hospital. But we do have a statement that has come from the company that's behind the production of this Western
It's an 1880s Western. It's starring Alec Baldwin. He's also a producer on it. And this is the statement that came from the production where they
said: "The entire cast and crew has been absolutely devastated by today's tragedy and we send our deepest condolences to Halyna's family and loved
ones." This is coming from "The New York Times" reporting this out.
They are also saying that they have halted production for an undetermined time, and that they're fully cooperating with this investigation, and they
will be providing counseling services to everyone who was there on set.
Now as far as the Sheriff's Department is concerned, they are saying that the investigation is continuing. They continue to talk to witnesses and
that no one has been charged in this event. But in a cruel turn of irony here, the movie that they are filming, according to IMDb.com, is about a
13-year-old boy who is accused of accidentally killing a rancher, and he goes on the run with his grandfather, and that is played by Alec Baldwin.
So an accidental murder playing out there, but now, it looks like it's really happened here on the set. We're still looking for more information
on how this firearm could have fired, what could have been inside it. Those questions, we are still hoping to learn more about today -- Julia.
CHATTERLEY: Yes, and our hearts go out to all those involved. Stephanie Elam, thank you for that.
The Haitian gang leader is threatening to kill 17 abducted U.S. and Canadian missionaries if his demands aren't met. He made the claim in a
video released on Thursday. The captors have demanded $1 million per hostage. U.S. officials say they're in constant contact with the Haitian
Queen Elizabeth II is back at Windsor Castle and will spend Friday mostly resting according to Royal sources. The Queen spoke Wednesday night in
hospital for what Buckingham Palace called preliminary investigations.
Okay, still to come here on FIRST MOVE. Child's play toymaker Mattel overcome supplies now to stock U.S. shelves with Barbies and Hot Wheels
just in time for the Holiday season.
And speaking of Hot Wheels, the spectacular secondhand success of Mexican used car startup, Kavak. We've got the leaders of both. Stay with us.
CHATTERLEY: Welcome back to FIRST MOVE. No Friday fusion on Wall Street. Flat price action for the Dow and the S&P in aggregate, but a Friday fumble
in tech as you can see.
Slowdown concerns there add sell woes for Snap, Twitter, and Facebook, too and chip shortage streams. At Intel shares of all of these companies on
track for losses. Take a look at that. Remember IBM also fell 10 percent Thursday hit by a business spending pullback in Cloud.
Now, rising bond yields not helping the tech picture either. U.S. government 10-year yields softer today, but they've been inching towards
that 1.7 percent.
European bond rates, meanwhile, that reflect the level of inflation. They're called inflation break-evens, they've risen to more than 10-year
highs. That's a real concern over there, too.
In the meantime, WeWork executives singing a Beatles tune this Friday, maybe you can guess it, we can work it out. Yes. Shares of the office
sharing firm rising some 13 percent plus after going public in a $9 billion SPAC deal. That's a special purpose acquisition deal two years after that
failed IPO attempt.
The Federal Reserve meanwhile, not ready to let it be. The U.S. Central bank wants to get back to basics of banning officials and staff from owning
direct shares of companies and individual bonds after revelations that top Fed officials were trading securities ahead of key policy decisions. Wow.
Now, speaking of working things out, here is an early festive promise from toymaker, Mattel. "There will be plenty of toys under trees this Holiday,"
quote. Good tidings for investors and their offspring, too, so confident says Mattel that the Holiday season will be a happy one. But it's raised
its revenue forecast saying sales will rise 15 percent, and the key to its success, solving the supply chain puzzle in a way that makes it look like
And joining us now is Ynon Kreiz, he is the CEO of Mattel. Fantastic to have you with us. I think investors were braced for the worst based on
these supply challenges and you gave them beyond the best. You must be pleased with this quarter.
YNON KREIZ, CEO, MATTEL: Yes, Julia. This was another strong quarter for Mattel with continued consumer demand for our products. We achieved growth
and gained market share for five consecutive quarters. We expect to continue growing for the balance of the year, gain market share, and have a
strong Holiday season as you said.
We are on track, in fact, to achieve our highest full year growth rate in decades and just raise guidance for the third time this year. Our results
really show that the Mattel team continues to perform at a high level, and the company is on a clear path to improve profitability and accelerate top
CHATTERLEY: I listened to the earnings call yesterday and the explanation of how you managed the supply chain, as you said, this has been a process
of many quarters now. But specifically with the supply chain challenges, it sounded like a military operation, quite frankly.
The procurement of raw materials, the shifting of production between countries, accessing additional port capacity and freight capacity, too.
This was, I think, a lesson in critical path analysis. Talk us through how you manage this.
KREIZ: Yes, this is really where our scale, expertise, and flexible model -- supply chain model -- that we restructured over the last three years is
playing to our advantage and make us ready for the Holiday season.
You know, we did anticipate short supply and longer lead times. We factored that into our planning. We took very specific methodical actions, and it is
really a tribute to the strength of the team and the capabilities that we have around the world.
We were fortunate to be ahead of it. It's not that we did not see challenges. It's not that we were not disrupted, but we were able to work
through the challenges and achieve such a great quarter and position the company for growth in the fourth quarter.
CHATTERLEY: Do you think it's going to get worse, Ynon, because to your point, it did hurt profitability slightly in terms of your -- in terms of
your margins. And I know the team were discussing sort of freight rate increases of around 35 percent, and now, you're saying 50 percent
increases. How long do you expect this to go on for?
KREIZ: You know, it remains volatile and hard to predict. We continue to work closely with our retail partners in trying to meet strong demand --
strong demand for our product. And then in spite of these challenges, we did raise guidance. We do expect to continue growing for the balance of the
year and try to meet as much of the demand as we can.
CHATTERLEY: You raised guidance, but you're also pretty honest and said, look, you're raising prices for some of your retailers, too. I know, it's
difficult, but do you have any sense of to what extent they are able to pass on those price increases, or they're having to warehouse them
KREIZ: You know, it is something that we do very thoughtfully. When we raise price, we always think about quality and value for consumers. We do
expect that the combination of pricing and cost savings on our side over time will more than exceed the impact of the cost inflation on our product.
But it is something that you see worldwide, obviously, not just in the toy industry, but across the board.
There is inflation out there and people are trying to mitigate for that impact, but we always do that very thoughtfully and we have the consumer in
CHATTERLEY: Let's talk about the exciting things. I want you to talk about toys.
You won the global licensing rights to the Disney and Pixar's "Lightyear" which is of course, the origin story of Buzz Lightyear in "Toy Story"
that's going to hit in 2022, I believe, and I think it's going to be very toy friendly for you guys.
KREIZ: That's right. We expanded the relationship with Disney for the Pixar movie "Lightyear." It's the origin story, as we say of Buzz Lightyear
and it is expected to be very toyetic, very playful. It's going to be a great movie, and we expect to enjoy that together with our fans and
consumers with a great product and a lot of innovation around the franchise.
CHATTERLEY: And I know you've had a long relationship with Tesla, too. And on the 15th of October, you launched a make your own version of the cyber-
truck. I think we've got pictures of this complete with the smashed window, of course, when they launched it, and they were throwing things at the
supposedly unbreakable window. And of course it broke -- 3,283 pieces, I believe, how is that selling?
KREIZ: It is great. I mean, everything we do with our partners is -- with that, you know, trying to be culturally relevant, timely, and always with a
clear brand purpose. We're seeing a strong demand for our vehicle category. In fact, our Hot Wheels, which is our flagship brand is on its way to
achieve its fourth highest record year of sales for four consecutive years.
KREIZ: So it's -- this is a 50-plus-year-old brand that is still thriving and continue to break its own record now on its way for the fourth
CHATTERLEY: And top toy this Christmas, your prediction?
KREIZ: You know, the Barbie Dream House is always a classic. This time, we're introducing a new Dream House which is going to be just incredible.
We also have some great product for Hot Wheels, and watch out for the Masters of the Universe Master Verse figures, which are going to be a lot
CHATTERLEY: Masters of the Universe action. And I mean, I've talked a lot about toys, but you have a lot going on as well. You're involved in movie
production as well, just to help promote some of the brands as you've said that have been so critical for the company going forward and expanding your
What can we look forward to in 2022? What are you most excited about?
KREIZ: Well, we have a lot of activity around the content side. We have 30 movies in development. We have a lot of shows on the Mattel Television,
which is also thriving. We launched eight shows this year alone. We have 13 more in production and over 30 in development.
We also just recently launched the Barbie Radio in partnership with iHeartMedia and Warner Music, and we are also expanding our digital gaming
activities with new games that are largely mobile games, console games. We're growing our NFT presence with different digital experiences and we
are really looking for ways to capture the full value from our incredible catalogue of franchises.
In addition to what we do on the toy side of the company, this is not to promote the sale of more toys, this is in addition, this is an accretive
business for the company in addition to what we do on the toy aisle.
CHATTERLEY: Yes, lots of different verticals here going on. Ynon, great to chat with you. I know you're a busy man, so we will let you go and you
certainly sound as well by that. Ynon Kreiz there, the CEO of Mattel.
KREIZ: Thank you, Julia.
CHATTERLEY: Always great to chat with you. Thank you.
KREIZ: Thank you.
CHATTERLEY: The market open is next. Stay with us.
CHATTERLEY: Welcome back to FIRST MOVE. The last opening bell of the week has sounded on Wall Street and we've got a softer picture for stocks
overall. Tech under performing with the height of the tech earnings season just ahead. Facebook, Apple, Amazon, and Alphabet all set to report next
The S&P chalked up its first record close since early September on Thursday. It's on track for a third straight week of gains overall.
American Express results in the meantime helping advance the push case for continued economic strength even in the face of rising inflation and supply
chain pressures. AmEx seeing increased spending for business and entertainment, spending at restaurants was quote, "noticeably resilient."
Overall card member spending rising almost 20 percent, as long as they're paying it back.
My next guest has turned a struggle to buy a car into Mexico's first ever unicorn. Kavak is a one-stop shop for used car ownership in a market that
was previously informal, limited, and rife with fraud. When it comes to growth, the order of the day seems to be twice the size every few months.
It has managed to double its valuation, its staff, and its revenues, and the business is expanding across Latin America with rumors even of an IPO
Carlos Garcia Ottati is the CEO of Kavak and he joins us now from Mexico City. Carlos, fantastic to have you on the show. I think in order to
understand how and why your business is growing so dramatically, we need to understand the challenges of buying a car and car ownership where you began
in Mexico. Talk us through it.
CARLOS GARCIA OTTATI, CEO, KAVAK: Of, course, Julia. I'm very happy to be here. Buying or selling a car in Latin America is a real struggle. It's
very different from what you see in the U.S. and other markets. Ninety percent of all transactions happen in an informal way outside of the
dealership and these leads to a lot of fraud.
To give you an idea, out of every transaction -- out of every 10 transactions, four end up in fraud and this fraud could be going from
tragedies, to being killed, kidnapped, to losing a significant part of your investment. I myself, you know, before I started the business, bought and
sold a car and was defrauded in both processes and that led to me to start and go back and we built a product would basically fundamentally deal with
that fraud and also deal with a typical lemon issue that you find in the used car market.
But what's more important about the market in the Latin America is that it has not penetrated at all. In the U.S., out of 10 people, seven own cars.
In Latin America, it is closer to two and the risk thing behind this is because all of these fraud doesn't create the confidence for the banking
institutions to finance these assets.
OTTATI: So, financing penetration, very low, only five percent of used cars are being financed, and the opportunity that we're tackling is, of
course, dealing and making sure that customers don't deal with fraud, but we're also providing access to financing.
So what we're really excited about is putting people in cars that would not have that alternative in any other scenario, and pushing the middle class
up to financing this asset that is really transformational for our communities.
CHATTERLEY: I mean, I read that you described yourself as if Spotify, Amazon, Toyota, and Citibank had a child, your firm would be born. So
modesty is not required.
But I went on your website to have a look at how it works, and it's very interesting. I mean, you can scroll over a car and see where some of the
blemishes or the dents are on the car. Talk to me about how you help people understand, one, the car that they're going for, perhaps some of the
challenges, the history of the car. And then the crucial part, as you mentioned, the access to finance, how you provide that and how people
without credit history actually manage to get financing on your website or via your website.
OTTATI: Of course. So the first thing that we do is that we buy every single car from peers. We don't buy cars at auction, and we inspect every
single car and make sure that that car is in a condition that we can turn around and sell it to another user. And what we do is once we buy that car,
we recondition that car, and we map every single thing about that car and put it live into our application so people can have a complete transparent
view onto what they're getting into.
And we provide all the warranties necessary for you to buy that car. So we provide years of warranty. We provide a return policy, a seven-day return
policy if you don't like the car, and that makes it very easy for somebody to come in into our application or website and choose a car and know that
they're going to buy a car that has the best price to quality relationship, and that there's going to be a company there, making sure that if anything
goes wrong, we're there to stand by our product.
With that, you can also go into our application or website and apply for a loan in seconds, and we'll pre-approve your loan in a couple of minutes.
And if you like your loan, you can just use it to purchase this car.
But what's more important about our product is that, LatAm, very different from other parts of the world, mobile penetration is really high. It is
actually twice as tight than what you see in the U.S., so our main product is our application where you come in, you have this ecosystem of things
that you can do related to your mobility into your financial health.
So, you can not only just buy a car with one click or sell a car with one click, you can do a maintenance warranty with one click. You can mortgage
your car if you need some money and you want to have your car with you, you can just mortgage it there with one click or pay your tickets, do
everything, you know, related to your car.
So what we're trying to do is build this ecosystem where you can just with one click do anything related to your car, both from a financing
perspective, and also from a mobility perspective.
CHATTERLEY: Do you have to be banked? Do you have to have a bank account in order to get credit here? Because I know this is -- I mean, there is
obviously far higher people in Brazil than other areas. But what if you don't have a bank account here, but you obviously make payments from your
mobile phone, for example? Can they still get access to credit?
OTTATI: Of course. That's the beauty about being banked by the car. And in Latin America, 80 percent of people are not banked, so you know, we are of
course, we are serving everybody, every single customer but the customer that really inspires us is that customer that has never owned a car before
that uses public transportation that takes him a couple of hours to commute every day in a very unsafe environment.
What we're trying to achieve is you know, get those people that never had access to a car into a car so they can motivate themselves to improve and
to have a better life and that's the customer that we are actually excited about because Kavak is not only the first time that they actually buy a
car, but you know, we know that we can get them to improve their life just by giving them a tool that is so important in our regions like a car.
CHATTERLEY: Yes. I mean, I know it is early days and you're in expansion mode, but are you profitable? Because it costs a lot of money to hire at
the rate you're hiring and make sure you're getting the right people particularly where safety is concerned on these vehicles.
OTTATI: For sure. You know, we started in Latin America where capital was scarce, so the first few years, we needed to build a sustainable business
and we run with amazing economics.
It works -- expanding heavily, you know, where today in Mexico, Brazil, and Argentina, we're going to expand across Latin America in the next 12 months
and we're also expanding outside of LatAm in to other emerging markets where we believe that we face similar problems.
OTTATI: So we have markets that are more mature that are profitable, markets that were just coming in that are not profitable, where we're
investing. We do run with very healthy economics.
CHATTERLEY: Very quickly, because I have about 10 seconds. Are you going to IPO as well? I've seen rumors that you could be IPO-ing as early as next
-- the first quarter of next year.
OTTATI: It's not a core priority for us to become a public company in the long run. You know, it's going to make a lot of sense for us to evaluate
these alternatives and we're evaluating everything. But right now, our core focus is on expanding our product to more users and making sure that we do
a good job at that.
CHATTERLEY: Customers first, Carlos, great to chat with you. Thank you so much, and congratulations, because this certainly is groundbreaking. CEO of
Kavak there, great to chat with you.
OTTATI: Thank you.
CHATTERLEY: More to come on FIRST MOVE. See you after the break.
CHATTERLEY: Welcome back to FIRST MOVE.
As Formula One revs up for this weekend's big race here in the United States, one team wants to win the biggest competition of all, the race to
be carbon neutral.
Last week, Williams Racing promised its carbon footprint will be net positive by 2030, and I asked, CEO Jost Capito why going green is such a
high priority for the brand.
JOST CAPITO, CEO, WILLIAMS RACING: We want to transform Williams Racing on the track to get more successful, but also off the track, and there, the
sustainability strategy is a major part of that.
CHATTERLEY: Who's going to actually help you measure your footprint and just in terms of practically how you're going to be achieving this. What's
the game plan?
CAPITO: Yes, we define various actions up to the year 2030. We have various activities that we have in the company, but we also have a quite a
bit of land, in the area of the company and around where we do like biodiversity stewardship.
Of course, it is reducing energy consumption using renewable energy. It's about more efficient travel for the team around the world and it is also
sustainable car design. This is on one side is the sport; on the other side, especially Williams, has a long heritage of implementing Formula One
technology into other industry areas and one good example is in the past that based on the Formula One aerodynamics, we worked with the supermarket
chain to have more efficient fridges, where you don't have the sliding doors, but having an air shield that has been developed by Formula One
aerodynamics is and that reduce the energy consumption by 30 percent of these fridges.
So as Formula One is at the pinnacle of technology, it's not just developing the more sustainable technology for the Formula One and for the
cars, but the technology that gets developed also implement that and offer that to other areas of the industry.
CHATTERLEY: Yes. I love that. I love that the innovation that takes place in Formula One can have practical use and transformative practical use
actually out in the real world. And in that vein, I think it's why we all sat up when Formula One said, hey, by 2025, we're going to have a hundred
percent sustainable fuel. So net zero CO2 emissions, but no change in performance.
What do you make of that? And do you believe that we can get there by 2025? It seems fast.
CAPITO: It is -- you know that the Formula One and FIA, they are discussing with your engine regulations that achieve that, and I think the
engine manufacturers are very interested in this. And in addition to the manufacturers who are in right now, based on this strategy, and based on
this effort, there are more car manufacturers who are interested to join Formula One because they can show their standard of technology going
CHATTERLEY: You said you wouldn't have taken this job if you didn't think Williams could win again. How long does it take? Can you give us any sense?
CAPITO: That's a good question. I've been in motorsports since I was three years, and this is now nearly -- it is 60 years, so -- and I'm highly
competitive -- I am highly competitive. I wouldn't go anywhere where I couldn't win.
But the sustainability strategy was at my heart as well when I took the job. It was very important for me when I took the job and I was very much
aligned with Dorilton Capital, the owners.
It's difficult to say what the timing is. I think we've moved a bit on already this year, more than we expected. Next year, there are new
regulations on the chassis. So everybody will have a complete new car, and then we go from there.
But I think we have everything in place that we can make it really to the front of a grid. When it is, it's difficult to say. We are not facing a
competition that somebody stands still, everything is moving, developing all the time and we have to get ourselves in the position that we can
develop faster than our competitors. And I think we are on a good way to do this and it's step by step.
But yes, but the year when we want to fight for the championship is quite difficult to say.
CHATTERLEY: I'll definitely be watching Formula One this weekend and fingers crossed, we can get sustainable fuel by 2025.
Okay, up next, get me out of here, Australia is lifting its travel curbs and the airline, Qantas is barely keeping up with the rush for flights out.
CHATTERLEY: Welcome back to FIRST MOVE. Who says food trucks have to be on land? One Dubai entrepreneur is delivering groceries to vessels on the
water around the city, and doing so in a sustainable way. Anna Stewart has the latest "Think Big."
ANNA STEWART, CNN REPORTER (voice over): It's like your everyday shop. Shelves packed with snacks, sunscreen, swimming goggles. But here, all-
hands on deck is literally the case.
It's called an Aqua Pod and it offers everything needed for a summer day on the water in Dubai.
AHMED YOUSSEF, CO-FOUNDER, AQUATIC ARCHITECTS DESIGN STUDIO: So the big idea behind the Aqua Pod is to bridge the gap between the onshore living
which has been living on mainland and the offshore living and to have a self-sustaining or sustainable community out at sea.
STEWART (voice over): For four years, Ahmed Youssef has been building floating pods that can provide all kinds of services. This supermarket can
serve customers that float through and hop aboard, or it can deliver through an app specially designed for customers at sea.
YOUSSEF: The application itself is also customized for the marine environment and therefore the kind of address it takes from the customer is
their boat name, the boat number, and this is how we can find it easily at sea and fulfill the orders.
STEWART (voice over); Ahmed is a serial entrepreneur, he also launched a burger joint and a lounge that expands.
YOUSSEF: The Aqua Pod Lounge is expanding, which gives it 25 percent more space to its interior, and as you can see now, the sofas are actually
stepping out of the Aqua Pods.
STEWART (voice over): When floating offshore, the pods must work off grid and that means on the roof, solar panels. Below deck, desalination tanks
produce fresh water, and overboard, the container collects floating trash from the sea.
YOUSSEF: It's also safeguarding the environment and that's what makes the Aqua Pod a development that is completely different from a normal boat or a
STEWART (voice over): According to the company, the Aqua Pod supermarket serves up to 50 different boats on peak days. For groceries, Ahmed's
sustainable pods are quite an attraction, and he has bigger plans, from floating homes to sport centers, and entire mobile communities.
He might have a reason, with a quarter of a billion in the world vulnerable to rising sea levels, self-sufficient sea fairing structures could help.
YOUSSEF: Getting your power sources from the sea, getting direct access to abundant water source from the sea, these are all very important aspects to
cities that are looking to always have the capacity to find different alternatives and solutions to adapt to the ever changing economy,
environment, and developments.
STEWART (voice over): In the meantime, Ahmed keeps afloat and is now fishing for new customers in fresh waters.
Anna Stewart, CNN.
CHATTERLEY: And finally on FIRST MOVE, after 18 long months of some of the strictest travel curbs in the world, Australians are more than ready to
take flight. The only challenge is, there aren't enough planes to take them as yet, at least. Qantas is ramping up its schedule furiously saying the
demand for seats after the restrictions lift is enormous as Angus Watson reports.
ANGUS WATSON, CNN PRODUCER: Australia's national carrier, Qantas, announcing Friday ramping up of its international offering to coincide with
Australia's relaxation of strict border rules that's kept the country shut off from the world since the beginning of the pandemic.
As of November 1, Australians allowed to travel out of the country freely and return through Sydney without having to quarantine. That's allowed
Qantas to bring back staff members laid off since the beginning of the pandemic here in Australia, bring its contingent back up to 22,000 staff
members based here.
It's allowed it to put on new flights to places like South Africa, Fiji, and Thailand through the end of this year and into 2022 and bring back its
A380s now in storage in California.
On Friday, Alan Joyce saying it's an end the darkest days for Qantas.
ALAN JOYCE, CEO, QANTAS: This 20 months is probably the darkest period in Qantas's 100-year history. It's meant that we've had to ground aircraft,
stand down people, and restructure the business. But there is not light at the end of the tunnel.
WATSON: Yet to come is an announcement from the Australian government as to when tourists will be allowed to enter Australia, of course, this new
offering from Qantas can only be sustained for so long by Australians wanting to travel overseas. They are going to need some assurances soon as
to when tourists can travel here, too.
Speaking Friday alongside Qantas CEO, Alan Joyce, Prime Minister Scott Morrison said that that that can only happen when thousands of Australians
around the world stranded through the pandemic have had the chance to return home to Australia safely.
Angus Watson, CNN, Sydney.
CHATTERLEY: Yes, another sign that the economy cannot switch back on overnight.
That's it for the show. If you've missed any of our interviews today, they will be on my Twitter and Instagram pages shortly. You can search
In the meantime, that's it for the show. Stay safe. Have a wonderful weekend.
"Connect the World" with Becky Anderson is next. I'll see you next week.