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First Move with Julia Chatterley
Djokovic Returns To Training Amid Visa Drama; China Sends 4,000-Plus Students To Quarantine Facilities; UK PM Hit By New Revelations Of Party During Lockdown; Kazakhstan Confirms New Prime Minister; Russian Troops Set To Leave; Markets Fear A Policy Mistake If Fed Tightens Too Quickly; AirAsia Launches Superapp As COVID Shakes Up Travel; Tesla Co-Founder On Recycling Batteries For Electric Cars; Heart Transplant Makes History. Aired 9-10a ET
Aired January 11, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:35]
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from London, I'm Julia Chatterley. This is "FIRST MOVE." And here's your need to know.
Tennis troubles. Australian authorities investigate whether Djokovic lied on his entry form.
Party problems. Boris Johnson faces fresh claims Downing Street broke COVID rules.
And Powell's pricing pitch. The Fed chair says he will tackle inflation if he's given another term.
It's Tuesday. Let's make a move.
(MUSIC PLAYING)
A warm welcome once again to "FIRST MOVE." Live this week from London. As you've seen for new year's change of view. Instead of Times Square station,
I'm seeing Waterloo.
In markets, pace of a tightening has investors all askew. J. Powell speaking before Congress today, a second term they must review.
And in sports, Novak Djokovic hopping out of detention like - you guessed it, a kangaroo. But we're still not sure if an Australian Open title will
be his to pursue. More on all this ahead.
But first, U.S. stocks are creeping higher. Premarket and Europe is in a rally mode. All this after a truly manic Monday that saw the Nasdaq falling
into correction territory. So, we're talking down 10 percent from its recent highs before rallying back to finish the day with slight gains. This
is classic buy on dip behavior. And it was tied at least yesterday to an easing of upward pressure on bond yields. And it was also supported by
comments from JPMorgan suggesting that the tech tumble. But we've seen in those stocks was overdone.
CEO Jamie Dimon, however, warning that the Federal Reserve could raise interest rates more than four times this year to try and tame inflation.
And as we discussed yesterday, analysts may believe that investors for now do not. Fed Chair Jay Powell's testimony before the Senate today is of
course going to be key, too.
Allianz & Gramercy advisor Mohamed El-Erian will be along the show later this hour with his take on the Fed's path and his fears of a market
rattling policy mistake.
OK. Let's get to the drivers.
And the latest serve in Djokovic tennis trials. After the drama in court, Novak Djokovic back on the court as he prepares for the Australian Open
even as nation's immigration minister considers whether to remove him from the country. And in a new twist, the Australian board of forces
investigating whether Djokovic submitted a false travel declaration ahead of his arrival there.
Paula Hancocks is in Melbourne with all the details.
Paula, great to have you with us once again. You promised there's more twists and turns and it seems we have them. Whoever either he or someone
else filled in his immigration form, they said he wouldn't be traveling in the 14 days prior to flying to Australia. His social media account which
captures his travels suggests otherwise. Talk us through what we are seeing today.
PAULA HANCOCKS, CNN CORRESPONDENT: Yeah, Julia. It is another twist that was unexpected. This is a travel declaration which everybody has to fill
out before coming into Australia at this point. You give your details, you give your COVID vaccination status and prove if you have been vaccinated.
Something Novak Djokovic wouldn't have to do as he is unvaccinated. But you also have to say if you are going to be traveling within Australia going to
a different state and what your situation will be the 14 days before.
Now, according to this investigation is ongoing within the Australia Border Force according to a source within that investigation saying that he had
ticked the box, no. Saying he would not be traveling for 14 days before and yet we are seeing on its social media and other photos that, in fact, he
was in both Spain and Serbia in the two weeks before arriving here.
Though it's not clear at this point who filled out this form, whether it was Tennis Australia, the organizers of the tournament, whether it was
Djokovic, himself, or someone within his team. But the fact is, it is an official document. It is an official declaration and there is this
investigation to see if that false information was given.
Now, we don't know also if it was just a simple error of the wrong box ticked. But the fact is Djokovic's situation to stay here in Australia is
tenuous at best at this point. As we know, the immigration minister is still considering whether or not he will personally step in and he will
decide to revoke the visa, himself. Julia?
[09:05:04]
CHATTERLEY: Yeah. And it is not clear whether admitting that he was going to travel to Spain or travel to Serbia would have automatically
disqualified him from coming to Australia or either I believe. But obviously, lying, and as you point out, we don't know whether it was a
simple mistake or what happened. But lying is punishable, I believe, up to 12 months in jail, I read. So, the circus continues.
There is obviously no time limit on how long it takes the immigration minister to decide how he's going to act as far as Djokovic is concerned.
And whether he decides to revoke the visa again. Do we know actually what's being considered under this specific section of the immigration act and
perhaps what isn't in order to make this decision?
HANCOCKS: Well, what the immigration minister is looking at, at this point and we have spoken to his office as well. Alex Hawke deciding whether or
not there should be a decision, whether he should personally intervene to revoke this visa.
Now, we know that the judge decided that the procedural issues at the airport meant that what happened there was incorrect and shouldn't have
happened. So, the cancellation of the visa was revoked. But what the minister, himself, is looking at is something more specific.
I mean there were very many different reasons to revoke the visa. One of which is would this cause damage to the people of Australia? Could this
cause disruption to Australia itself? There are many different elements to this that the minister could be considering.
Now, we didn't hear anything this Tuesday. We could hear something Wednesday. The assumption is, of course, they will be waiting to see what
the investigation brings up from the Australian Border Force before making any definitive decision.
The government itself has already been embarrassed by one decision going against its Border Force. So, certainly, they're going to want to make sure
that they have due process, which is what we are being told by the ministry and make sure that they are making this decision, if they do decide to
revoke the visa in the best -- under the best possible conditions and to make sure that it couldn't then be reversed.
CHATTERLEY: Yes. So, board now in Border Force court to keep away of worries who's got one, whose decision is that dominating this current
juncture.
Paul Hancocks, great to have you with us. Thank you for that.
To China now. Another major city is entering strict lockdown. More than 5 million people in the city of Anyang are not allowed to leave their homes
after a COVID outbreak and over 4,000 students from one single school have been put into quarantine facilities. This stunning video shows children in
four hazmat suits climbing into buses. And being sent off to quarantine facilities. We believe.
Selina Wang joins us with the latest.
Selina, stunning images. Just talk about those children first and foremost. I assume they have been tested for COVID, they've been found positive and
then now are off to quarantine.
SELINA WANG, CNN CORRESPONDENT: Yeah, Julia. It is stunning to see thousands of those students in full hazmat suit, loading those buses to go
to quarantine. But, Julia, this is in line with China's zero-COVID strategy. They have been doubling down on it. And it relies on extensive
quarantine measures, lockdowns and mass testing. This video from Anyang city is in China's central Henan province.
After confirming a total of 84 COVID-19 cases, it is now putting its 5.5 million residents into strict lockdown. People are banned leaving their
homes except to get tested for COVID-19.
Now this outbreak in Anyang is linked to a college student who tested positive for Omicron after traveling from Tianjin which is a city hundreds
of miles away from Henan. And that outbreak in Tianjin is especially concerning.
Two authorities in Beijing. This is a city with close proximity to the capital. Just 30 minutes away from Beijing by highspeed rail. This is of
course the host of the Winter Olympics now just weeks away.
In Tianjin, after finding local transmission of Omicron cases. They are now mass testing its 14 million residents. There are 29 residential communities
under strict lockdown. Residents cannot leave the city without special permission. But it's not just in these areas.
We are seeing these local flare-ups and places across China and we are seeing strict reactions in response to each one. We have been discussing
what's happening in Xi'an. They have been under strict lockdown. And its 13 million residents since December 23rd are continuing to see a stream of
complaints and desperate stories of people who are struggling to get basic necessities, food. And people who are struggling to get medical attention.
CHATTERLEY: Selina Wang, great to have you with us. Thank you so much for that report there.
A new nightmare on Downing Street for British Prime Minister Boris Johnson amid revelations of another party held while the country was in lockdown. A
leaked e-mail inviting dozens of staff to a "bring-your-own-booze," quote, event in the garden of No10 in May of 2020. The sender are top aides to
Prime Minister Johnson.
COVID rules at the time banned more than two people from different households meeting outside.
[09:10:01]
Salma Abdelaziz joins us now.
Salma, I've lost counts the number of people on social media showing images of them way, way apart from members of their family, unable to speak to
their elderly parents in care homes. There's a lot of discomfort, I think. And once again, at No10 is a result of this leak.
SALMA ABDELAZIZ, CNN REPORTER: Yeah. Another accusation, Julia, in this dizzying list now of allegations of multiple social gatherings, some taking
place in the summertime garden parties allegedly, others taking place in Christmas all happening in 2020. I think the public has lost count. But the
latest accusation comes in the form of a leaked e-mail.
Now this e-mail shows one of Prime Minister Boris Johnson's top aides inviting about 100 Downing Street staffers to bring their own booze to the
Downing Street garden. Come join us at 6:00 p.m.! Exclamation point. Except here is the issue, Julia.
At the time, the country was under a very strict lockdown. Mixing of households was restricted to only two people. And they had to meet outside.
They had to remain at a distance. The work from - the work guidance was very clear at that point. You should not meet with anyone unless it was
absolutely necessary to meet them face-to-face. That was official guidance at the time. So, of course, here the concern is that this accusation shows
yet another brazen violation of COVID rules by the very people who put those rules in place.
Now, Prime Minister Boris Johnson has refused to comment on this latest accusation on this week e-mail, pending an investigation. But even that
investigation, Julia, is mired in scandal.
Originally, the prime minister had tasked his cabinet secretary with probing these multiple social gatherings until it was found that the
cabinet secretary himself had knowledge of a social gathering in his department and had to step aside.
Now that's being handled by a senior civil servant. But you can imagine with or without the investigation, Prime Minister Boris Johnson is simply
losing in the court of public opinion. There was a session in the House of Commons just last hour. And a member of the Labour Party stood up and
essentially accused the prime minister of lying yet again.
There was more talk of those who lost their lives at that period in time. This is May 2020, the height of the pandemic, when many, many people were
separated from their loved ones. So, what we're seeing here is a prime minister who is taking yet another hit to his credibility. Yet another hit
to his reputation at a time when he should be handling the Omicron variant. Julia?
CHATTERLEY: Yeah. I was just Googling actually when Boris himself, the prime minister got - himself got sick with COVID and I believe it was in
April of 2020. So, what, less than a month before this party allegedly took place. Do we know whether the prime minister was there or not? Has he said
anything? Because again, he initially acted with great outrage when these accusations were made about other gatherings.
ABDELAZIZ: This is the larger concern here, Julia. The BBC and local media are reporting that according to eyewitnesses, they have spoken to Prime
Minister Boris Johnson and his wife were at the party.
Now CNN has not independently verified that information. I'm simply telling you what is in the media here today because that's exactly what people are
reacting to. That's exactly why you are seeing the outrage here.
Now the prime minister has said, I cannot comment. There is an investigation. That is ongoing. That is being handled by a senior civil
servant. And I have to let that investigation playout. That's what the prime minister says.
We've also heard again with these multiple gatherings at times, Downing Street saying, look, you are not looking at a party, what you're looking at
is yes, people with wine and cheese. But it's actually a meeting. It's a business meeting.
And it's these types of responses, I think, that have really outraged critics of Prime Minister Boris Johnson, have really outraged as the Labour
Party -- the opposition Labour Party here says, had given that sense that the prime minister is lying yet again and lying publicly about something
that is sort of difficult not to imagine at this point.
We have photographs. We have videos. We have leaked e-mails. We have multiple media reports. And yet the prime minister continues to stay
steadfast, continues to deny his presence, to deny his involvement in this. Again, you can only imagine how much that hits his own ability to lead the
country, his own ability, his reputation, his credibility with the public when he is asking people to follow the rules and there is these accusations
out there that his government wasn't doing that. Julia?
CHATTERLEY: Yeah, Salma. You're laying it out. Tell us how you really feel. Yes, party going on in your own garden.
Salma Abdelaziz, thank you for that.
All right. Let me bring you up to speed as some of the other stories making headlines around the world.
Kazakhstan's parliament has just confirmed a new prime minister. The former prime minister resigned last week amid violent protests that killed more
than 160 people. This as Russian troops who are in the nation to help calm the situation are preparing to withdraw.
Fred Pleitgen has more from Kazakhstan's southern border.
(BEGIN VIDEOTAPE)
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Kazakhstan leadership appears to be trying to show that it's getting the situation in
the country under control. But at the same time also continuing their crackdown on the people who participated in the protests that shook that
country.
[09:15:00]
Now the president of Kazakhstan, Mr. Tokayev, he had his pick for a new prime minister approved by Kazakhstan's parliament on Tuesday. At the same
time, the authorities there also announced that the number of people detained in the wake of those protests had, once again, risen sharply. The
authorities now saying that nearly 10,000 people have been detained. And that number has been continuously steeply rising over the past couple of
days.
The authorities also saying that more than 160 people were kill in those protests. And the vast majority of those, more than 100 people in one town.
And that is the town of Almaty. That of course is also the place where we saw some of the worst violence as those protests were taking place with
rioters in the streets going into government buildings. But at the same time also, Kazakhstani security forces on the ground there as well sweeping
those areas and, in some places, apparently opening fire as well.
Meanwhile, the Kazakhstan government is saying that those international forces that they have called in, of course, led by Russian forces, that
their mission has been complete and that their withdrawal will start in two days. However, that withdrawal is going to take at least 10 days to
complete if things go according to plan.
Fred Pleitgen, CNN, at the Kyrgyz-Kazakhstan border.
(END VIDEOTAPE)
CHATTERLEY: Russia says Monday is first round of security talks with the United States didn't provide significant reason for optimism. Senior
officials met to discuss Russia's troop buildup near Ukraine. But the meeting ended without breakthroughs. The Kremlin says there will be more
talks this week which should give a better idea of where things are going.
The United Nations is requesting $4.4 billion in urgent aid for Afghanistan. It's the largest humanitarian appeal in UN has ever made for a
single nation. It says the money is needed to help 22 million people inside Afghanistan and more than 5 million people who fled to nearby countries.
Still to come here on "FIRST MOVE."
AirAsia's digital business takes flight. The CEO on his ambitions for the superapp and the outlook to travel in 2020.
And from working with Elon Musk to powering the vehicles of tomorrow. We speak to the co-founder of Tesla about his latest adventure. Stay with us.
That's all coming up.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "FIRST MOVE" here in London. It's almost time for tea or in my case, coffee.
On Wall Street investors, they are feeling less than carefree after a day of stunning volatility. U.S. futures telling lower meanwhile.
[09:20:00]
All this after Monday's wild price swings. These all-tech stocks dropped more than 2.5 percent overall, only to rally back sharply and close with
gains, a pause in the relentless rise of 10-year bond yields, in particular, helping give tech the room to move higher perhaps on Monday.
Yields have risen to levels not seen since the start of the 2020 lockdown as investors begin pricing in more aggressive Federal Reserve tightening to
help battle rising prices.
Polls in fact show Americans are now more concerned about rising prices than they are about COVID. Fed Chair Powell will surely be forced to play
up the Feds inflation fighting efforts during second term confirmation hearings in Washington today. The market's big fear, a Fed policy mistake
if officials pulled support too quickly.
Mohamed El-Erian joins us now. He's the advisor at Allianz and Gramercy Funds. And also, president of Queens' College, Cambridge University.
Mohamed, great to have you on the show as always.
Can't help but feel long gone is that patient on pricing, Powell. And we're going to hear that today. And we've already seen a statement that reflects
that. But the markets have already been reacting to the most recent Fed minutes and the timetable for support and retrenchment has accelerated.
MOHAMED EL-ERIAN, ADVISOR, ALLIANZ, GRAMERCY FUNDS: Oh, absolutely, Julia. We saw a massive move in consensus in the last few days. The average
analyst on Wall Street now expects four rate hikes this year, expects the ending of asset purchases and in addition, expects the Fed to start
contracting its balance sheet. So, it is night and day in terms of where expectations are for Fed policy between now and just a month ago.
CHATTERLEY: I mean, this is what you were warning about for months and months and months. You said if we left this too late, there was going to
have to be a point where suddenly the Fed had three major policy news to do, whether it's raising rates, it's ending the asset purchases and then
it's reducing the balance sheet. And we're sort of seeing what you saw in a crystal ball months ago.
EL-ERIAN: And it's sad because this was predictable. And now we risk bunching up three contraction monetary measures at a time when the other
things in terms of headwinds to the economy. This was avoidable. The problem is that the Fed was in love with this notion of transitory
inflation for so long that it missed one window after the other. And now, it has to play what they are calling in the U.S. hurry-up offense. Which
means you have to get a lot of stuff done. But the risk of a mistake goes up when you are rushing like this.
CHATTERLEY: Do you think the discussions were being had at the Federal Reserve even behind the scenes and some part of this is communication and
how they were communicating it to the market because the markets got so used to the intrinsic support that's been provided that they were worried
about spooking, particularly given the uncertainty with COVID is at the backdrop?
EL-ERIAN: Yeah. I think that's an element. They remember what happened in 2013 with the so-called taper tantrum, where the market got very upset with
this notion that the Fed was trying to reduce its support. They remember how Chair Powell had to do a very embarrassing U-turn in 2019.
So, I suspect that had something to do with it. The problem now is that you risk upsetting markets even more. So basically, what the Fed did, it gave
markets an amazing 2021, third straight year of double digit return in exchange for more uncertain outlook for the economy, policy and the markets
in 2022.
CHATTERLEY: Could the investor behavior aspect of this is crucially important, and you and I have discussed it many times, riding the wave and
surfing the slushing liquidity that we have seen now for years and the fear of missing out. Do you think that based on what we're seeing in terms of
what the Federal Reserve is saying it now has to do, what the data is telling us the economy can withstand but also the idea of this buy the dip
mentality that investors have been in for so long. Can that survive based on what we're seeing everywhere else?
EL-ERIAN: So, it certainly was there yesterday. It was an amazing day yesterday.
CHATTERLEY: Right.
EL-ERIAN: Because as you pointed out, we were down over 2 percent in the Nasdaq. People were talking about a correction at 10 percent move. And next
thing we know, we close higher on the day.
The buy the dip mentality is still there. And it will remain there because people want to see Fed action. They know that the Fed hasn't had the
stomach to go through with things in the past. And there are quite a few people on Wall Street that still believe that the Fed will not be able to
go through it. The problem is inflation. And if we get a 7 percent print tomorrow, the Fed will be in a very difficult position.
CHATTERLEY: How do they handle this, Mohamed? Do they have to be brave?
EL-ERIAN: They've got to be brave. It's a little bit like a parent with a child, where the child has got way too many sweets.
CHATTERLEY: Oh, here we go.
EL-ERIAN: At some point, they have to take it away. And there will be a tantrum. But you've got - you've got - I mean the alternative is worse.
That's the trouble, is that you can - there is no better alternative.
[09:25:03]
CHATTERLEY: Yeah. We've discussed in the past. You end up with false teeth if are you not careful. And no one wants that at this stage particularly as
a child. What is it going to mean for other assets? I think when we talk about a tightening interest rate regime, particularly in the United States.
You have to look at other areas in the world like emerging markets, still struggling with COVID, in many cases less vaccinated than the developed
markets. We've also got the calculation that you have to make over China and what their growth profile looks like. What about for the rest of the
world, Mohamed, what are you thinking there?
EL-ERIAN: So, I think the IMF warning was very clear yesterday and I agree with it.
CHATTERLEY: Right.
EL-ERIAN: Which is this is going to be a difficult global environment. Global growth is slowing. China is slowing. And in addition, you have the
possibility of financial condition tightening. So individual countries are going to have to do their homework and try to build as much resilience as
possible. You know it's hard to be a good house in a difficult neighborhood and the neighborhood is getting more difficult this year.
CHATTERLEY: So, the only thing we guarantee this year is greater volatility? Do you think the markets overall and I'm talking stocks, and
you can make it broader if you like, end up higher on the year overall? Because traditionally, after a good year like we saw last year, you do tend
to see gains?
EL-ERIAN: Yeah. And that shows you how distorted everything is. There is a possibility that stocks will end up higher why because every other asset
class is less attractive. So, even if you start with the presumption that you're going to reduce stocks, the other asset classes have gotten so
distorted.
That is not clear where you will go. Will you go into cash when inflation eats 7 percent of your value? Will you go into bonds that are most
vulnerable to a Fed increasing rates? So, in relative terms, we call it the cleanest, dirty shirt. It is not a clean shirt but it's cleaner than the
other dirty shirts.
CHATTERLEY: They're higher and higher at the risk curve, which brings challenges of its own. What about assets that deprive on the premise that
this easing money is going to continue forever, crypto, for example?
EL-ERIAN: Yeah, crypto is tricky, Julia, because crypto has support in terms of people who believe inflation is a problem. And crypto can maintain
its real value.
CHATTERLEY: Right.
EL-ERIAN: But there are other assets that have gone up for no other reason than liquidity and they're going to be at risk.
CHATTERLEY: Best advice for investors as we push through 2022?
EL-ERIAN: Buckle up and ask yourself a simple mistake. If I end up making - - ask yourself a simple question. If I end up making a mistake, what mistake can I not afford to make? And make sure that you are not positioned
in a way that is vulnerable to that mistake. Because the outlook is uncertain, and it's going to be quite volatile.
CHATTERLEY: Only put at risk what you can afford to lose.
EL-ERIAN: Correct. And make sure that - that you don't end up doing the wrong thing at the wrong time. Because volatile markets tend to bring the
worst out of us in terms of behavioral mistakes.
CHATTERLEY: Yes, humbling. As my first boss at Morgan Stanley used to say, prepare to be humbled. Mohamed El-Erian, thank you so much.
EL-ERIAN: Thank you, Julia.
CHATTERLEY: Mohamed El-Erian in there, advisor at Allianz and Gramercy and the president of Queen's College Cambridge. Happy New Year, sir. Great to
chat to you.
EL-ERIAN: And to you. Thank you.
CHATTERLEY: The market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:31:37]
CHATTERLEY: Welcome back to "FIRST MOVE."
And another unsettled start to the U.S. trading day. Tech stocks opening lower after Monday's sharp mid-session bounce. Investors I think are going
to be a little bit cautious today too, ahead of the Fed Chair Jay Powell's congressional testimony.
The prospect of less Fed support, also hitting riskier assets like growth stocks and crypto to bitcoin. As you can see there on the screen, falling
below $40,000 per bitcoin for the first time since September in yesterday's trading session, that was Monday. Bitcoin now down some 40 percent from
recent highs, turning lower. As you can see, slightly in recent trade today.
But change is in the air for a low-cost airline AirAsia. The pandemic rewrote the rules of travel and pushed the carrier into plenty of new
ventures. Among others, a parcel delivery service, a food app, and a superapp. And now, it's even considering a new name.
Joining us now is Tony Fernandes, CEO of AirAsia.
Tony, always great to have you on the show.
I mean, it's been an incredibly challenging two years. It's also been a changer -- a period of transition for you as a company, raising money,
future proofing, I think you've called it in the past. Are you going to change the name, too?
TONY FERNANDES, CEO, AIRASIA: Yes. Firstly, Happy New Year. And great to be on the show, Julia.
Yes, it's been an incredibly tough two years. But rather than put our heads on the sand, we kind of restructured the airline and waiting for boarders
and the like to open. And we kind of updating our brand to go and do some very exciting digital businesses which are doing well. At the same time, we
raised enough capital for our airline to see us through this period and have started raising capital at our digital businesses. So, you know, not
all bad. It has been very tough, but we seem to be coming out of it.
CHATTERLEY: And the name change?
FERNANDES: Well, I don't want to say too much about it just yet because we're going through shareholders' approval, which is on the 27th. But very
briefly, it's kind of trying to tell the world that we're much more than just an airline. When AirAsia Group is much more than just the range of the
airline, but people can't get away from the airline. So, we kind of want to tell people there is a lot more in our company than just AirAsia.
CHATTERLEY: Yeah. And we will talk of more about that too. That was a nice springboard for what else you've got going on.
But let's talk about the immediate future for the airline industry and recovery. We were seeing some form of recovery and then Omicron hit. And I
think people got a little bit nervous. What do you anticipate over the coming months in terms of recovery? And do you think we can get full
recovery without the removal of PCR tests? Because I know you feel very strongly about this too.
FERNANDES: Yeah. I mean, I think -- well, this time last year, I didn't have any planes flying, so there is some light. We've got domestic doing
very well in a lot of countries. And we were beginning to have some vaccinated traveled the planes and then Omicron came. But it's not all bad.
I mean, you can see in the U.S., in Europe and South Africa. And now closer to home, the Philippines, where there is also a massive surge, doesn't
create as many deaths or hospitalizations. And as it goes up, peaks and then start to go down.
So, I'm beginning to think this could be the beginning of the end. We have had many false starts. But here's hoping that we can get back. And I think
then the next stage is how do we reopen travel without burdening travelers? You see the U.S. and the UK now removing entry level PCR tests.
[09:35:05]
And so, I think more lateral flow testing. So, I think that will eventually come into Asia. Asia is definitely more conservative. But I am hoping that
you know people are beginning to start talking about pandemic and living with it. We have the Pfizer and Merck pills coming and boosters seem to be
doing their job. So, a few, you know, rough spots in the next six months. But I do think this is the beginning of the end.
CHATTERLEY: I was going to ask you, time horizon there, because your region does tend to be more conservative. Do you think it takes perhaps another
six months before they start to loosen some of those sorts of logistical challenges of the PCR tests and things, too?
FERNANDES: Yeah. I mean, I think, you know if Omicron is all over the community, why do we even bother with PCR tests because you know one
tourist comes in with Omicron but the whole of the country has it. Then it becomes logical. And I think people are beginning to look at that thinking.
There are some hard cases. You know, Japan has zero entry. Hong Kong has very draconian kind of enforcement. But I do feel a sense that more and
more governments are looking at. You know we've had enough. And it's time to move forward and live with this.
CHATTERLEY: Yes, certain parts of your business and I'll ask you this very quickly and then we'll talk about the other things have said. You need a
vaccine, then you can fly, it's OK. Can you ever imagine a situation where the whole of AirAsia turns around and says, unless you have a vaccine, you
are not flying with our airline?
FERNANDES: Well, right now, in parts, I'll likely do say that because --
CHATTERLEY: I know.
FERNANDES: -- many of the public want that.
The reality is, if you don't have a vaccine, you don't really get into any other countries anyway. And so, you know, we also have very, very high
levels of vaccinations. So, I think it's inevitable. You recently seen what's happening in Australia.
But, you know, hopefully the pills will give people who don't feel comfortable with vaccines an alternative as well. It does seem odd. But you
know we have to get back to where we were. And it seems vaccine seem to be the only solution right now. The Omicron seems to be in some cases, another
form of vaccine.
CHATTERLEY: Yeah. To your point, we do have to find a path back to some form of normality.
All right. Let's talk about some of the other parts of the business and your work on the superapp. Because as you said, you are raising money. You
are investing lots of money in these different parts of the business. What are we seeing and for those that perhaps are looking at holiday options and
flight options and some of the other products that you offer, the logistics business as well? What are you seeing in terms of numbers and activity?
FERNANDES: Yeah. I mean, I think the first thing for us, was it was hard to persuade people that you know a large airline such as ourselves can be
nimble and compete with young tech companies. But I think now that is beginning to change very quickly. And they see that our strong brand, very
low costs and a huge amount of data. Airline data is incredibly valuable in terms of (INAUDIBLE). And there's also a higher spend.
Investors are beginning to see, oh, there is something here. So, we've split our company to three bits. The superapp, which has travel, delivery
and fintech. And then we have a very strong logistics business. I'll start there.
Obviously, one of the benefits of COVID is cargo has really been at record highs. Obviously, with some of the supply issues, more and more customers
are looking to airfreight as opposed to sea freight. It's all logistical problems in the ports and the difference between sea cost and air cost is
narrowing.
On top of that, you got e-commerce and a lot of cross-border commerce now happening. So, we're a major beneficiary of that. We're taking freighters
now to where we never thought we would.
And obviously, our business is being filled up. And you know, technology has allowed the logistics business to be just like the airline business,
allowed the small man to get into it as well and start selling goods from a smaller house in Malaysia all over the world.
So, Teleport, our logistics company has an excellent future. Our superapp, where we are now beginning to see the demand is huge. People want to
travel. Domestic travels at record levels. And tech has enabled us to offer huge kind of travel range of options. And then we've gotten into ride
hailing and food delivery, which has been incredible. And finally --
CHATTERLEY: How many active users? How many active users on the superapp?
FERNANDES: We have about 30 million at the moment and on any one day it can be as high as 10 million. The beauty of this is that we are now seeing
something we never expected. 50 percent of users are actually users who never flew in AirAsia. So that's a huge bonus. It's kind of an Amazon
moment when they went from books to other things. People are now seeing that when it comes to AirAsia not just for flights. And people have been
flying with us. So, that's a really encouraging sign.
[09:40:05]
CHATTERLEY: We shall continue to track your progress. And keep us posted on the name change if and when it happens.
FERNANDES: Thank you very much.
CHATTERLEY: Great to chat. Congratulations by the way on your daughter. You posted about your daughter on social media.
She is so cute.
FERNANDES: She is very cute.
CHATTERLEY: Yes, congratulation.
FERNANDES: It's kind of like restarting the airlines. It's having kids for the second round, better.
CHATTERLEY: Yes. Fun and games.
Tony Fernandes, CEO of AirAsia. Thank you, sir.
FERNANDES: Thank you.
CHATTERLEY: OK. Still ahead, batteries are included. But at what costs? With precious metals and precious supply, we speak to the co-founder of
Tesla about how to meet the demand for battery parts in the future. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "FIRST MOVE."
And heading straight into the fast lane. The popularity of electric cars is surging like never before. One study suggests battery electric vehicles
sales will reach a market share of 60 percent in Western Europe alone by 2030. The key word there actually was battery. And making sure the supply
of key metals like cobalt and lithium can meet demand.
In fact, a study by Linklaters suggests up to $45 billion may need to be invested in mining capacity by 2025 just to meet the demand of EV vehicles.
JB Straubel is working to meet those demands. He's the Tesla co-founder and he's now the CEO of Redwood Materials which recycles lithium-ion batteries
for electric vehicles, among other things.
JB, fantastic to have you on the show. You know when I've read what you guys are doing, I had a hallelujah moment because I've never understood how
all these carmakers are going to fulfill all their promises, the EV vehicles and the demand that they're talking about seeing without - seeing
more mining in some of the least stable parts of the world. You have a solution.
JB STRAUBEL, CEO AND CO-FOUNDER, REDWOOD MATERIALS: Well, thanks for having me. It's great to be here.
And I - I really do believe that this can be a key part of the solution for how we will meet the supply chain needs for all of these new electric
vehicles and batteries.
CHATTERLEY: You know, are there automakers out there today that are announcing EV production promises that have zero hope of fulfilling those
promises without a fundamental change in what we're doing, whether it's more recycling or more mining as we've suggested? What's your view?
STRAUBEL: I think it's going to be quite challenging. For a lot of the automakers kind of coming into this a bit late.
[09:45:02]
And you know the market is making a dramatic, you know, shift - the demand shift toward EVs is phenomenal to see. It's inspiring to see. But you know
securing enough supply of both batteries and all the components that go into them is going to be quite challenging.
I think, you may see a version of the semiconductor shortage. You know kind of a 2.0 version of that coming in a few years as you know so many new
automakers ramp up their EV production.
CHATTERLEY: OK. So, you saw this and as I mentioned in the introduction, you're working at Tesla. You went full time at Redwood Materials from 2019.
Just explain what you guys are doing more precisely and where your operations stand today.
STRAUBEL: Well, Redwood Materials is a sustainable battery materials company. So, you know we focus on building a closed loop ecosystem for
lithium-ion batteries. Simply put, we recycle old lithium-ion batteries you know of all different types, both automotive, but also consumer electronics
or lawn mowers. We take the materials out of those batteries, refine them, extract them. And then we manufacture them into new components that can go
directly back into battery manufacture.
CHATTERLEY: So, you can recover more than 95 percent of the critical materials from the recycled batteries. So, lithium, copper, nickel, cobalt.
Which sounds great. But how much of the battery then that you use is made of recycled parts? What's that percent that passed on effectively?
STRAUBEL: Batteries are amazing because they are so recyclable. As you said, you know more than 90 percent of the materials - those critical
materials in the battery can be reused many, many times without degradation. You know, today the batteries that you know we buy and put
into your products admittedly have still a pretty small, recycled material content. But this is changing fast. And I think people are really realizing
the benefits of having a high recycled material content both in terms of the environmental footprint of the batteries, but also the costs of those
materials.
CHATTERLEY: Right.
STRAUBEL: Yeah.
CHATTERLEY: I'm sorry to interrupt you. I was going to say, to what percent of batteries that are created today is recycled material? And where do you
see that percentage going? Because to your point, surely this is going to be a critical piece of bringing the costs down and making electric vehicles
more accessible to the masses?
STRAUBEL: Today that percentage is very small. I would say single digit percent at best for batteries across the board. You know, we're
demonstrating and showing that you can make batteries that have very high percentage though and still have extremely good performance, exceptional
life. So, I see this eventually you are going to be the vast majority of materials that are going into batteries that will be recycled in the
future.
CHATTERLEY: What is that going to mean for price, JB?
STRAUBEL: Well, I think this is you know one of the key reasons to do this. You know normally, people think of recycling as a sustainability and
environmental solution, which it is. But it also can dramatically reduce the price of those materials. It's cheaper for us today even at these small
scales to recycle and reuse those materials. So over time, you know, I am confident this can be one of the biggest cost reduction levers you know for
new lithium-ion batteries as recycling becomes a larger percent of their materials.
CHATTERLEY: Elon Musk once said that without you, Tesla wouldn't exist. Is he - is he being kind or is that correct?
STRAUBEL: Well, Tesla is an amazing adventure. You know, I had such a fun time there, helping build everything with the team, but it is a wonderful
team. And part of the joy of being there for so long, you know, was the caliber of the engineers and the people that made up that group.
You know I still root for the Tesla team every single day. I love the mission. I love the company.
I think we all need to root for them for the sake of deployment in the future. But I am excited now to work on problems and solve what I think is
really a foundational problem for the whole electric ecosystem, broader than even just Tesla, you know, these things need to get figured out if
we're going to transition to those high percentages you mentioned at the beginning.
CHATTERLEY: I know. I was only asking, because I was going to ask you whether if he has promised to give you all his recycling business over the
next 10 to 15 years in some of these Tesla require battery replacements?
STRAUBEL: Well, we're happy to -
CHATTERLEY: You'll work on it.
STRAUBEL: -- with vehicles, you know whether it's you know Ford vehicle or a Tesla battery or a consumer battery. They can all be recycled in a very
similar way.
CHATTERLEY: Yeah. The opportunities are broad here. What about the costs of doing this, JB? What's the path for you guys to profitability and how much
are you investing at this stage? Because surely some part of this as well is ramping up your operations in these early days?
[09:50:00]
STRAUBEL: It is - it is a big investment. You know, we're investing several billions of dollars into both our recycling operations and also our
manufacturing operations to remake those battery components other than materials. And that's necessary to fully close the loop on these materials.
However, as you noted, the investments that have to go into mining new materials are equal really significant. So unfortunately, there is not
really, you know, free pathway through this. You know it's going to take new capital and investments, whether it's into recycling and
remanufacturing as well as into new mining capacity and facilities.
CHATTERLEY: You know a lot of the battery manufacturers at this point in time at least are based in China, Japan, South Korea, for example. How do
you see that shifting, too? Because particularly as we are talking more electric vehicles in the West and Europe and the United States, do we see
some of that re-shored, the battery production? Because this is also going to be a critical element, I think, in who is most able and focused on the
recycling aspect of this, too?
STRAUBEL: Yeah. It's a great point. And I do believe that we will see you know more of that supply chain, you know, spreading out globally and being
a bit more diverse. You know, it has grown, obviously, from you know within Asia. And that's where a lot of those industries started and matured.
But as the world overall you know shifts toward electrification, you know, we have to diversify you know that supply chain. You know, just the cost
and the environmental impact of moving those materials all around the world from Asia is quite extreme. It also creates a lot more disruption - you
know possibilities and risks.
So, you know a key part of this, I think recycling does enable this. It's using the resources that are already brought to those you know countries
and regions where the demand is and reusing them in the same location. So that once we make a battery in North America, we can keep those materials
in North America.
CHATTERLEY: Right. Yeah. And it ensures the supply chain, too, not just for materials, but access to the products as well.
JB, fascinating to chat to you. Thank you so much for joining us on the show. And we'll stay in touch.
STRAUBEL: Thank you.
CHATTERLEY: JB Straubel there. Thank you, sir.
All right. Up next, not a story for the fainthearted, a medical history is made as man receives a heart transplant from, well, stay watching to find
out.
(COMMERCIAL BREAK)
CHATTERLEY: And finally, on "FIRST MOVE."
A medical first. An American man is said to be doing well after surgeons transplanted a pig's heart. The 57-year-old had a terminal heart disease,
and the genetically modified heart was the only possible option.
[09:55:00]
Before the transplant, the genes that caused the human body to reject pig organs were actually removed from the heart. And human genes that help the
immune system were added.
Doctors will continue to monitor the patient for a few more weeks. Fingers crossed for him and what incredible progress in medical science.
OK. 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
@jchatterleycnn.
In the meantime, stay safe. And I'll be back with you in a few moments time for "Connect the World." Stay with us.
(COMMERCIAL BREAK)
[10:00:00]
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