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First Move with Julia Chatterley

Russia: New Ukrainian Drone Attacks on Moscow; Rains Kill 11 People in Beijing, 27 Missing; El-Erian: Bank of Japan has to Exit Policy Carefully; China's New AI Rules Take Effect August 15; Aptera CEO: Efficient Vehicles need to be Aerodynamic; Lauren James Shines in England's 6-1 Win over China. Aired 9-10a ET

Aired August 01, 2023 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[09:00:00]

(COMMERCIAL BREAK)

JULIA CHATTERLEY, CNNI HOST: A warm welcome to "First Move", great to have you with us this Tuesday and coming up over the next hour. Russia under

fire a new wave of drone strikes plague at the Russian Capital plus evacuating the share.

France begins the evacuation of European citizens following last week's coup. We'll have a live report in just a few moments time. Meanwhile,

Beijing soaked a powerful typhoon delivering the heaviest rainfall in a decade, causing floods and landslides.

And grayer clouds over the economic outlook there too new home sales in China dropping more than 30 percent from a year ago with July seeing the

lowest monthly sales in three years, Allianz Chief Economic Adviser Mohamed El-Erian will join us to discuss potential stimulus there and the

challenges the multitude of challenges still facing global central banks.

But some clouds have silver lining. And that's the case on Wall Street where the S&P, now sits at 16 month highs. The majors end during July on a

positive note the NASDAQ in fact the tech heavy sector gaining 4 percent last month alone.

And here is the pre-market picture as investors digest ever more earnings news. Uber just posting its first ever unadjusted operating profit and

raising guidance. Starbucks and Chipmaker AMD sector report after the closing bell today too lots coming up.

And we do begin with the latest from Moscow and another wave of drone strikes over the city the Mayor says several of them were shut down. But

one crashed into a high rise tower the same building in fact, that was struck in a previous attack on Sunday.

And overnight Ukrainian officials reported three Russian drone strikes on the City of Kharkiv in densely populated areas. Fred Pleitgen joins us now.

Fred two observations on this Ukraine, despite Russia's air superiority, still managing to get drones over Moscow and of course, the Russians

seemingly still prove very adept at intercepting and destroying them?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, that's what the Russians say that they managed to intercept and as they put it, foil

this attack. But of course, it is quite remarkable that the city of Moscow faced the drone attack on two -- for the second time, in just three days.

And you know, certainly one of the interesting things that we've been observing in all of this is while the Russians say that this drone attack

was foiled, that these drones apparently hit exactly the same building, or at least one of them hit exactly the same building that was hit just two

days ago.

So with that building, we know that area, the Moscow City is essentially Moscow's financial district. Anybody who knows the City of Moscow knows

there's a bunch of high rise buildings there. I think the place that would be comparable almost to -- in Paris, where you have those high rise

buildings in that one area of Paris, very similar situation there in Moscow fairly close to the city center.

But that building in itself, despite the fact that there's mostly financial companies in that area, that does how some government offices, one of the

being, the economy ministry has an office in there also, the Ministry of Digital Development also has an office apparently in that building as well.

So certainly, it seems as though some government places or at least a building with some government entities in it may have been struck here in

this attack. The Ukrainians for their part are not saying what the target was?

But there was an advisor to the presidential administration of Ukraine who came out that Moscow is getting used to becoming a frontline city in the

war with Ukraine. So certainly the Ukrainians are saying this is something that is not going to stop.

I thought it was quite interesting, because we did hear some residence on some videos after this drone attack took place, saying that some of them

had actually gone to see the aftermath of the last drone attack, which happened on Sunday.

And then all of a sudden heard a loud explosion at once again, so certainly quite troubling for the folks there in Moscow and the Kremlin itself Julia,

also coming out and saying, yes, this is definitely a threat, and certainly something that the Russians say is being addressed.

They said that this last wave of drones that one of them was taken down by air defense system, but one was also taken down as they put it by

electronic countermeasures, which seems as if some sort of electronic suppression of the aircraft that caused it to crash.

But certainly some damage done to that building and certainly also some damage done to the calm of the folks there in Moscow who once again finds

them under fire Julia.

CHATTERLEY: Certainly, Fred Pleitgen thank you for that. And across the border Ukrainian officials say their south eastern counter offensive is

still making steady gains but we know progress is slower than hoped and the concern is that gains could be tough to hold Nick Paton Walsh reports.

[09:05:00]

(BEGIN VIDEOTAPE)

NICK PATON WALSH, CNN CHIEF INTERNATIONAL SECURITY CORRESPONDENT (voice over): The fight so fierce and victory so bitter, there is little left of -

- to defend it from Mykolaiv for troops, no structures, just a dust of a tiny for road village. The first games of Ukraine's renewed full throttle

counter offensive, so small, but symbolic.

Russia even claimed Monday with constant shelling. It had pushed Ukraine out of it again something these men fresh back from that fight with --

fought all the 10 days of the assault until the Russians finally fled. Here he is a shells rain around in the initial advance.

When you assault under enemy shelling, he says you have nowhere to hide as the hardest part. They've since tried to assault again twice with small

groups. And he fought for here too a scrutiny the town before it where the Russians hit 200 troops in the basements not even leaving the toilet.

So Ukraine attacked with a smaller force. It takes us to where the Russians made their final stand, the school hall and its corridors. There is no love

says the wall. They seem to relish the nothing they brought and left no clues as to why they fought.

WALSH (on camera): One of the hard things for Ukrainians to understand is quite why the Russians are fighting so hard for here. That scrutiny and

more recent victory of -- down the road. Is it that these are their last lines of defense? Well, no. They think there's far more fighting to be

done.

WALSH (voice over): I hope so when we get through their last line of defense, he says then they start to run. For now they still feel there is

something behind them. Yes, we feel support. But we are very, very tired.

There is so much more ahead to come. Ukraine may have put in its reserves now to the fight, but they face the same Russian brutality. The tactics

haven't changed he says they put the Stormy convicts in front with no communications or information.

They stand till the death. I don't understand their motivation or what they're fighting for. Riva (ph) carries a new Russian AK-12 as a trophy as

he describes the gas they used on him. There was chaotic shooting he says to find out where we were then for gas, you don't feel it.

It moves slowly along the ground. I was packing my rucksack when I felt burning on my throat and nose. One mind sapper called -- is busy telling me

how the Russians have started booby trapping mines putting a grenade under an anti-tank mine when he's interrupted. Almost endless the noise of

outgoing fire they are moving but just not sure how much longer for? Nick Paton Walsh CNN, Ukraine.

(END VIDEOTAPE)

CHATTERLEY: And it's been almost a week now, since the military coup in Niger. Now officials in France and Italy say they're preparing to evacuate

their citizens from the nation's capital. French officials also announced they will evacuate embassy staff.

The French Foreign Ministry said that violence and the closure of Niger's airspace leaves French citizens without the ability to leave the country by

their own means. Italy announced a special flight for its nationals wanting to leave too Larry Madowo joins us on this. Larry, what kind of scale of

operation are we talking about? Do we have a sense of numbers of people that are going to be evacuated in this process?

LARRY MADOWO, CNN CORRESPONDENT: Julia the French say they have about several hundred citizens in the country and several hundred more European

citizens that it will be helping to evacuate out of the country.

The Spanish also said that they will be evacuated as citizens they have just above 70 the Germans and the Dutch say they're closely monitoring the

situation. But this action by the French is not surprising.

After Sunday's protests outside of its embassy in Niamey, which the French believe was organized and coordinated by the Military Junta of those

supporting it they, felt that they had no choice but to do this because of this growing anti-friend sentiment in the country.

The French Foreign Ministry says that the first evacuation flight is airborne. It's not clear to us if airborne means its left Paris on its way

to Niamey or its left the Niger on its way back to Paris. At the same time they're saying this operation should be over in about 24 hours.

[09:10:00]

So that's not a big number, considering the number of evacuations. We saw, for instance, out of Sudan when that conflict began there between the RSF

and the army, but this is just the latest escalation in this situation where some Western allies still considered domestic dispute between

President Mohamed Bazoum and the head of the presidential guard whose now declared himself General Tiani as the Leader of the National Council to

safeguard the country?

The Military Junta now running the share have gotten a huge boost from neighboring countries that have also had close in recent years, Burkina

Faso, Mali, and Guinea. Watch what these statements all overnight seemingly coordinated said.

(BEGIN VIDEO CLIP)

COLONEL ABDOULAYE MAIGA, MALLAN INTERIM PRIME MINISTER: Warn that any military intervention against Niger would amount to a declaration of war

against Burkina Faso and Mali. I repeat for warn that any military intervention against Niger would amounts to a declaration of war against

Burkina Faso and Mali. I repeat one last time warn that any military intervention against Niger would amount to a declaration of war against

Burkina Faso and Mali.

RIMTAIBA JEAN EMMANUEL OUEDRAOGO, BURKINA FASO MINISTER OF COMMUNICATION: The transitional governments of Burkina Faso and Mali invite the living

forces to be ready and mobilized to lend a hand to the people of Niger in these dark hours of -- .

COLONEL AMINATA DIALLO, SPOKESPERSON, GUINEA MILITARY JUNTA: The brotherly peoples of Mali, Burkina Faso, and Niger Guinea aspire to more recognition

and respect for their sovereignty.

(END VIDEO CLIP)

MADOWO: Sovereignty is the word you keep hearing again and again in the region. Why are the Military Juntas in Guinea in Burkina Faso and Mali so

aggressively supporting Niger? Because if this military intervention that ECOWAS threatened the regional bloc.

If they were to invade Niger and restore the President Mohamed Bazoum that his government, there's no reason why they can't do the same in Burkina

Faso or in Mali or in Guinea. So this club of coup plotters has to stick together.

They're all suspended from ECOWAS, the regional body; they are all isolated from the rest of the international community. And the only fatality they

have is among them. And they're writing this public wave of anti-French sentiment anti international meddling that exists along the region Julia,

so they had no choice but to do this.

CHATTERLEY: Yes, protecting Niger and themselves or at least the coup plotters and themselves. Larry Madowo, thank you for that. Now, torrential

rain and major flooding in Beijing has led to the deaths of at least 11 people.

That's according to local reports. Extreme weather, including heavy downpours are expected to continue through Thursday raising fears of

further flooding and the potential for further landslides as Marc Stewart reports.

(BEGIN VIDEOTAPE)

MARC STEWART, CNN INTERNATIONAL CORRESPONDENT (voice over): Violent floodwaters race across China after record setting rain destroying roads,

flooding streets, and prompting rescues in the aftermath of Typhoon Doksuri.

QING QUAN, BEIJING RESIDENT: I say it's the first time in my life that I've seen such a scary flood. I haven't seen this before and hence it's scary.

I've lived so long and I've not seen this before.

STEWART (voice over): Near the Capital Beijing the force so fierce the driver is trapped in their car amid the raging water. A rescue worker drops

a line and the driver is hoisted to safety. In Beijing a giant hole sits in front of a newly open Mall. One of the venues from the 2022 Winter Olympic

Games is underwater. And a recently built hotel is damaged according to a state run media outlet.

In some cases, the water is so high it nearly toughs the power lines riverbanks are hovering close to the street and where the water has

receded, a mess is left behind. The flooding is disrupting everyday life. At a Beijing Airport water is flooding the tarmac. Flights are facing

delays, and in some cases trains are at a standstill.

Evacuations are underway in Beijing tourist attractions remain closed as emergency workers do what they can to help family members are looking for

loved ones. A city brought to a standstill as another massive storm lingers in the horizon. Marc Stewart, CNN Tokyo.

(END VIDEOTAPE)

[09:15:00]

CHATTERLEY: Myanmar's ruling Military Junta has pardoned Former Leader Aung San Suu Kyi on five charges. This reduces her lengthy prison sentence down

to after the junta seized power back in 2021. But the 78-year-old still faces decades of detention on other convictions. The Myanmar Supreme Court

is set to hear appeals against her other charges over the next two weeks.

OK, coming up on the show housing sales slump in China. We'll discuss more troubling data and hopes for further stimulus with Economist Mohamed El-

Erian right after this. And later a solar powered car that looks something straight from the future. I'll discuss with the CEO of the California

startup later this hour.

(COMMERCIAL BREAK)

CHATTERLEY: Welcome back to "First Move". China's housing slowdown not over yet. New home sales data taken from hundreds of China's biggest developers

plunged by 33 percent in July compared with a year ago that's actually the steepest monthly decline in a year.

The report comes as the country's biggest property developer Country Garden abruptly pulled an attempt to raise $300 million by issuing new shares in

Hong Kong. Just for context, the property market represents nearly 30 percent of the nation's economy.

And at a time when indicators of manufacturing and services activity is slowing and concerns over youth unemployment and deflationary pressures are

rising. Something else that's rising hopes for stimulus support.

Joining us now is Mohamed El-Erian, Chief Economic Adviser at Allianz and Gramercy Funds. He's also the President of Queens College, Cambridge

University. Mohamed, fantastic to have you on the show as always!

We've got much to discuss but I do want to begin in China, what we're seeing ties with what we're seeing in the survey data, particularly for

manufacturing, it's in contractionary territory, pushing the burden onto the consumer, onto the services sector and ultimately the government?

MOHAMED A. EL-ERIAN, CHIEF ECONOMIC ADVISER AT ALLIANZ AND GRAMERCY FUNDS: Yes, absolutely. In fact, one of the big disappointments of this year is

that the bounce back in China from COVID shutdowns has not been as buoyant as people expected. We knew they had a manufacturing problem.

We knew they had a housing problem. But what today's data show is that the consumer are starting to become more risk averse, the consumer is engaging

less with the economy starting with property.

[09:20:00]

And that is of where we worry because it is the service sector that is supposed to be the engine of growth when housing and manufacturing are

struggling.

CHATTERLEY: I mean some part of that is government engineered. You can hope for more stimulus support from the government. But it's tough to reduce

sectors that they've deliberately tried to deflate or take some of the steam out like the property sector and you have this overhang I think from

the pandemic and cautiousness within the consumer. How do you unwind both of those things or tackle both of those things?

EL-ERIAN: So you're absolutely right. And it speaks to the bigger issue, which is that China that no longer has a potent growth model. China is no

longer an economy where the government can step in and inject lots of stimulus and hope that kick starts an activity that they can step away.

They're worried about pockets of leverage and over indebtedness in housing. And also they no longer having the global economy as it tailwind. The

global economy has become a headwind. So what do they need to do, they need to accelerate that domestic structural reforms.

And that means letting go politically, so that the bottom up can become the source of growth. And that's why economics and politics start becoming

inconsistent with each other.

CHATTERLEY: It's also where mistakes happen, as we've seen in the past, and they end up taking even more control back through volatility that it

creates, compared to what we've seen in the past Mohamed, how big of a problem is this for the rest of the world? There the growth, rebound

disappointments, the potential, perhaps for what you're suggesting, and the uncertain volatility that it may create.

EL-ERIAN: So on the surface, it's not as big of a concern, and you only need to cite two metrics. One is what's been happening to oil and commodity

prices. They have gone up strongly in July, despite signs of a weaker China. And two, look at how well as you cited earlier, we've done in U.S.

equities.

So on the surface it appears that China is less important, having said that, look at what's happening to manufacturing in Asia as a whole. Japan

and Taiwan issued their indicators showing contraction. So I think it's much more regional than it is global but China still matters.

And China matters because people were hoping that it would be the engine of growth this year, as Europe and the U.S. slowdown to get rid of the

inflation problems.

CHATTERLEY: Yes, and policy, Central Banking has been a delicate and difficult dance, I think for many months, wherever you look in the world,

quite frankly. But you wrote recently. And I want to sort of shift gears and look at this about perhaps who has the biggest challenge at this

present time between Japan, which is having fun and games.

The United States, which we've talked about a lot, and also the Bank of England, and what with the weakest growth and the highest inflation rates

in the G7. You said actually, the Bank of England has perhaps the most difficult challenge managing the situation today.

EL-ERIAN: It certainly does compare to the Federal Reserve and to the European Central Bank. Why? Because it's dealing with structural problems

and not getting enough help from the government. So it starts with a much high inflation rate 7.9 percent. It has a lot of real wage resistance wages

are growing at 7 percent.

And in addition to that, it doesn't have the flexible economy that the U.S. has, or the trade that the euro zone has. So when you look at the task of

the Bank of England is much harder. The one that is equally difficult is the Bank of Japan, but the Bank of Japan has more time.

Why is the Bank of Japan difficult? Because they have to get out of an increasingly unsustainable policy of reducing artificially interest rates.

And that is a very difficult policy to exit from. And it has to be done very carefully. So Central Bank challenges are not over as yet.

CHATTERLEY: I won't I'll talk to you again about the Japanese Central Bank because I have a question on that too. But just for the Bank of England, I

think the challenge that they've got is now that they have to tolerate higher inflation than they would like or they kick on and continue to raise

interest rates.

And there's certainly I think noise or fear that what you create there is real concern, tension issues in the mortgage market in particular, Mohamed,

how concerned are you by the risks surrounding specifically the mortgage market in the U.K.?

[09:25:00]

EL-ERIAN: So we've seen it again today housing numbers are really worrisome and that's not surprising because mortgage rates have shot up in a very

meaningful way and people are rolling off their mortgages, because the average length of a mortgage in the U.K. is much less than the U.S.

And that's the dilemma for the Bank of England, is it continuous going it alone, which means hiking at least two more times, it risks in mortgage

crisis. If however, it doesn't continue, it risks inflation, as you said, higher for longer. The real solution is for the government to come and help

on the supply side, and enhanced supply. And the government has spoken to that but the action so far have fallen short of what's needed.

CHATTERLEY: And then if we weave in Japan, and you said they have the sort of luxury, perhaps have a little bit more time to react, but what we saw in

the past week was them providing a little bit more flexibility over where interest rates can go. And then of course, as you would expect, investors

tested them to see what they really meant.

And then they said, OK, fine, we're going to add a supplementary bond buying program to try and manage that and bring those rates back down. The

problem is none of these things are mutually exclusive. Bond markets around the world are connected by the investors that invest in these products.

How worried are you by a sort of mismanagement of what we see in Japan having an impact on particularly the U.K., but other nations as well.

EL-ERIAN: It's something that we should all worry about. Because if it's mishandled, and I say if, because the Japanese could handle it well, but if

it's mishandled, we will feel it in two ways. First, an upward pressure on government bond yields across the world, like you say they are all

interconnected.

So if Japan loses control of its government bond market, this will put upward pressure on interest rates around the world. Second is the concern

that the Japanese investors hold a lot of foreign securities. And if they incur losses on the domestic holdings, as interest rates go up, and prices

come down, then they'll be forced to sell.

So you would get not only the price effect, but you would also get the quantity effect. That's what people are worried about. It is not a done

deal by any stretch of the imagination. But what the last few days have told us, as you point out, is be careful of the muddled middle.

You cannot get stuck in a situation whereby you signal one thing. And then when the market test you, you go back to doing what you used to be doing

before, you've got to have a strategic commitment and move forward. And hopefully, the Japanese authorities understand that because otherwise this

muddled middle will end up really hurting them.

CHATTERLEY: I think the muddled middle is a perfect phrase for quite frankly, where we've been in policy all over the world for a number of

years now, particularly where monetary policy is concerned. Never mind anything else. Wrap this up. What does this mean for investors, Mohamed?

A lot of people think now looking at as the Federal Reserve has now echoed what you've been saying now for many months, and then they're not expecting

a recession in the United States. But stocks have had a great year. I think so far. I'm sure investors now wondering what happen for the rest of the

year.

EL-ERIAN: I mean they've had a wonderful year. If you look at the U.S., the S&P is up almost 20 percent, five straight months of gains, if you were

lucky enough to be in the NASDAQ. That's over up over 30 percent. I don't think anybody in the beginning of the year thought we would have these

gains.

Look, I say it's very simple. There is reason to still be optimistic short term, however, the longer term is really uncertain. So you may want to take

some chips off the table here, you've had a wonderful run. There may be some more short term gains, but one has to recognize that the longer term

is on still uncertain, economically, financially, socially and institutionally.

So you may want to take some chips off the table here after what has been a wonderful seven months.

CHATTERLEY: Yes, be grateful for what you've achieved this year and don't get greedy. Mohamed, always a pleasure to have you on the show sir, thank

you so much.

EL-ERIAN: Thank you.

CHATTERLEY: Mohamed El-Erian, Chief Economic Adviser at Allianz and Gramercy Funds. OK, stay with CNN coming up two months after the industry

itself raised fears of an AI Armageddon. China is announcing rules of engagement. We'll explore next.

(COMMERCIAL BREAK)

[09:30:00]

CHATTERLEY: Welcome back to "First Move", Wall Street's first day of trade for August is now underway in stocks opening lower is a busy earnings week

continues Qualcomm and Shopify set to report on Wednesday, followed by the big guns Apple and Amazon on Thursday.

And then on Friday to the U.S. jobs report for July. Let's give a look at what we're seeing in terms of some of the big players today right now

shares of UBER under a bit of pressure it posted its first ever on adjusted operating profit in the latest quarter and offered solid guidance though

revenues disappointed slightly context on this one, perhaps it's important it's up 85 percent year to date.

So UBER had one heck of a recovery this year. HSBC also gaining after profits doubled, nearly doubled in the second quarter, the bank also

raising its outlook for the rest of the year citing higher interest rates. Now China is set to implement new guardrails for the use of artificial

intelligence driven models like ChatGPT being built in the country.

Now many of them focus on traditional measures like transparency, discrimination and intellectual property protections. Others are uniquely

Chinese focusing on things like adherence to socialist values. The new rules come into effect in two weeks' time, and Kristie Lu Stout has more.

(BEGIN VIDEOTAPE)

KRISTIE LU STOUT, CNN CORRESPONDENT (voice over): Meet Xi Jiajia, a virtual idol powered by artificial intelligence to sell burgers in China,

McDonald's hired Jiajia to interact with Chinese customers. The U.S. may be curbing AI chip exports to China but the nation is fast becoming an AI

powerhouse.

The country is home to top tech firms leading the AI charge like Alibaba, Huawei, Tencent and Baidu creator of Xi Jiajia boasts that its Chatbot

Ernie has beaten open AI's ChatGPT on several metrics. At the state back world AI conference in July, billionaire entrepreneur Elon Musk praised

China's AI prowess.

UNIDENTIFIED MALE: China will have very strong AI capability is my prediction.

STOUT (voice over): China has become one of the first countries in the world to regulate the technology that powers popular services like ChatGPT.

In July, it unveiled interim rules to manage generative AI, seeing it needs to be aligned with the core values of socialism.

ANGELA ZHANG, CHINESE LAW PROFESSOR AT THE UNIVERSITY OF HONG KONG: The Chinese government is trying to ensure that the use and application of AI

will be aligned with its own set of moral principles that underscores its political and social stability. The government not only placed a burden on

the service providers, but also on the users of AI services.

STOUT (voice over): In January, China's new rules against deep fake technologies came into effect. Chinese authorities have detained people for

allegedly using generative AI to commit fraud and create fake news.

STOUT (on camera): And while China is moving fast to regulate the industry, some critics warn that it may not be equipped to avoid an AI disaster.

BILL DREXEL, ASSOCIATE FELLOW FOR TECHNOLOGY & NATIONAL SECURITY PROGRAM AT CNAS: Most societies kind of learned from disasters. But the PRC has a kind

of propaganda machine that makes it hard to do that where there's a sort of disaster amnesia. There's a kind of a chronic culture of crisis

mismanagement in authoritarian regimes generally, and China's no exception.

STOUT (voice over): Drexel says China's zero COVID policy as a recent example of crisis mismanagement. But the danger posed by AI is not limited

to one country, top technologists the world over including China have signed this petition to warn of the risk of human extinction from AI.

SAM ALTMAN, CEO OF OPENAI: as these systems get very, very powerful. That does require special concern and it has global impact, so it also requires

global co-operation.

STOUT (voice over): China's new AI rules have a provision to encourage participation and global standard setting,

ZHANG: They are very keen to take part in shaping global regulation of AI.

STOUT (voice over): For now, Beijing is steering its own AI future with a heavy hand to encourage Chinese tech success and ensure that artificial

intelligence will not undermine this state. Kristie Lu Stout, CNN, Hong Kong.

(END VIDEOTAPE)

CHATTERLEY: OK, coming up after the break, fancy driving this solar powered spaceship style three wheeler, Aptera, the firm behind it is up next.

(COMMERCIAL BREAK)

[09:40:00]

CHATTERLEY: Welcome back to "First Move" and to a car conversation that could have been lifted from the pages of a sci-fi novel, the Aptera's solar

electric car is being developed by a startup in California, the land of sunshine. And for people who drive 65 kilometers a day or less, they say it

won't cost a cent.

They also promised a full charge of the battery can let you travel up to 1600 kilometers. Now 40,000 people have signed up to buy but they may have

a wait. Just to give you a sense in July, the phone completed wind tunnel tests in Italy. Now we'll discuss the design intended to produce the lowest

drag coefficient among all production passenger vehicles.

Aptera claims it's three times more efficient than a Tesla Model S. Now as you can imagine the cash burn probably almost as hot as the sun. And that's

what every car maker tells us on "First Move". Aptera is using a novel way to address that by crowd funding for the money it needs.

And Chris Anthony is Aptera's CEO and he joins us now. Wow, Chris, we have a lot to discuss. Give us the strongest selling point and why 40,000 people

have decided they want to buy this in future.

CHRIS ANTHONY, CEO OF APTERA: Well, the Aptera is brutal execution on first principles engineering starts with aerodynamics, lightweight and super-

efficient powertrain that can get you over 1600 kilometers of range in one direction. And I think the vehicle looks unique. It looks like the future.

And I think people are drawn to solutions that can really make the world a better place and Aptera's it.

CHATTERLEY: And what's the Naught-to-sixty? The first question I get asked when I talk about cars.

ANTHONY: 0 to 100 kilometers an hour in four seconds, because it's so lightweight it really zips around.

CHATTERLEY: OK, perfect. And as you and I mentioned in the introduction there, obviously there is the opportunity to charge this if you want to.

But if people are not traveling that far, and if they're just doing short distances. This one's on solar energy.

ANTHONY: Yes, we have Tesla Supercharger access, and the base vehicle acts just like any other electric vehicle really. The cool thing about Aptera is

because it's so efficient we actually have solar panels on the top that can trickle charge the battery every time it's out in the sun. You get about

60, 65 kilometers a day of free power just from the sun, if you leave it outside.

CHATTERLEY: What if it's not sunny? What if it's just daylight?

ANTHONY: Yes, in Southern California, we get, you know, 16,000 kilometers a year free driving, if you live in a more dreary place, like the U.K. or

Boston or Seattle, that may be closer to 12,000 kilometers a free driving a year. But that's still a pretty impactful amount.

Especially when people are paying, you know $6 a gallon for fuel in the U.S. for free transportation. You know, the Aptera is a very interesting

proposition for people.

CHATTERLEY: Who's the customer? It's a unique design. We're just looking at the pictures now. And I'm sure a number of our viewers will be like, hmm,

you know, we're comparing it to the relative efficiency of a Tesla, as you say, but it looks pretty different.

ANTHONY: Yes, we started with the engineering of the vehicle to make the most efficient thing possible. We didn't really start with a market segment

or a focus group or we wanted to get into you know, crossover SUV with 16 cup holders, we solve the equation for vehicle efficiency.

And that equation looks like the Aptera most vehicles on the road today use 60 to 70 percent of their fuel, just pushing air out of the way at highway

speeds. So if you want to have a really efficient vehicle, it's got to look very different. It's got to be super aerodynamic, next biggest losses from

weight rolling resistance, and then powertrain losses.

So, we solve those three equations and we get something that gets over 350 miles per gallon equivalent.

CHATTERLEY: And it's just a two seater, just to be clear.

ANTHONY: Two seater side by side and you got plenty of storage in the back you can put a couple of mountain bikes back there seven foot surfboard, you

actually have a camping kit where you put a tent over the back and you can actually camp in the Aptera you can drive 200 miles to your favorite

camping location. Camp for a week and actually come back with more energy in your Aptera than you left with.

CHATTERLEY: OK, eagle eyed viewers they will have spotted a price. What's the price of this on the road?

ANTHONY: The base vehicle is about $26,000 that gets you at 250 miles range.

[09:45:00]

And then you can go get options on the drive train and the battery pack to get you all the way up to 1000 miles range 1600 kilometers range and that

cost around $45,000.

CHATTERLEY: OK, so the key now is when is it going to be on the road available for people to buy? And, as I mentioned it as we have in the

introduction, and the conversation that we always have with people building new cars or innovating is that it's a cash burn business.

Talk to me about crowd funding to raise money, why go that route? Why not have conversations with a bank or big investors? Why such small sums of

money?

ANTHONY: Yes, we have over 16,000 investors in Aptera now. It's the most successful crowd funding in history. And we're putting that money to good

use to get the first validation vehicles done by the end of this year, and hopefully start delivering vehicles to customers by next summer.

But crowd funding has been just amazing for us. It's a tool where you can invest in innovative companies early on, I would have loved to invest in

early Tesla, early Google. But you know, a decade ago, it just wasn't available. It's a recent proposition that Congress passed legislation to

allow for this type of crowd funding.

And we think it's exciting that people can buy into equity, and Aptera and kind of take the journey with us into making transportation solar powered,

and making the world a cleaner, greener place for transportation.

CHATTERLEY: Say, but you also have to protect these people to some degree and provide some kind of return. Are you saying that you did this because

you wanted the opportunity to give people the opportunity to invest in an innovative early stage company versus going to a bank and perhaps getting

more stable money, for example, expensive perhaps?

ANTHONY: Yes, we think that being able to invest early and great ideas like this. It's amazing for many reasons for people. And for us, it gives us

more flexibility in how we raise the money. We don't have to take on onerous terms that might come from a VC or an investment bank.

And we're able to grow the company, you know, kind of on our terms built by the people, for the people not built by the banks. So I think it's an

amazing proposition for people to be able to invest in amazing ideas like era and other things.

CHATTERLEY: And how much have you raised?

ANTHONY: We raised about $90 million from the crowd. And we raised another $20 million privately.

CHATTERLEY: And there's a pause at the moment, you're talking to the SEC, I know about, I think changes of documentation between accredited investors

and not accredited investors. Obviously, that depends on the individual's wealth, whether they're considered accredited or otherwise.

Chris, can you explain that? And can you just confirm to me that as you're taking this crowd funding money, you the earlier investors, and some of the

owners of the business aren't sort of taking their money out? Is this purely going to build the car?

ANTHONY: Yes, the earliest investors in Aptera invested 20 cents a share. We've gone through successive crowd funding rounds. Now we're selling

equity at 10.50 a share. But our crowd funding has been so successful we keep reaching the cap for our annual limit, which is 75 million a year.

So we have to re-file with the SEC to raise that cap. So we can kind of do a rolling 75 million a year. So the unaccredited round is paused right now.

But it should be opened in the next couple of weeks. But we can always take accredited investors under Reg D application. And you know, that's kind of

limitless, we can raise as much money as we want for from accredited investors.

CHATTERLEY: Cool. And just to reiterate, none of you guys have taken any money out. You guys are all still in there.

ANTHONY: Oh, yes we hope to take the company public as we start production. And I think that's an amazing proposition for all our 16,000 investors.

Everybody wants to see the day when we're publicly traded, and we have the capital to grow the company effectively and make new vehicles not just this

three wheeled vehicle.

But others for you know, package delivery, food delivery, more commercial applications, possibly a five seater in the future. So it's an exciting

time to launch this vehicle. And it's an exciting time to have all these investors in support. And, you know, we're looking forward to delivering

our first vehicles here in about a year.

CHATTERLEY: Yes. Watch out Elon Musk. Chris, love your ambition. Come back and talk to us soon please. Well, I'm interested to track progress, great

to chat to you.

ANTHONY: Thank you so much.

CHATTERLEY: Chris Anthony there, CEO of Aptera. Thank you. All right, coming up on "First Move", seven goals in one big match, China faces

England of the World Cup. Which of the two powerhouses is advancing? Find out next.

(COMMERCIAL BREAK)

[09:50:00]

CHATTERLEY: Welcome back to "First Move", and to the latest from the Women's World Cup, England dominating China with six goals. There's no bias

on this show. But hurray, the line is ended China's journey at the group stage for the first time ever. Meanwhile the United States devise a late

scan narrowly reaching the knockout stages.

Patrick Snell joins me now oh, Patrick, somebody did that deliberately. So I have to ask you about the U.S.A. first -- .

PATRICK SNELL, CNN WORLD SPORT: No bias ever right, Julia?

CHATTERLEY: Never.

SNELL: I hear you. Let's start OK then let's start with team U.S.A. They are already world champions. They did survive one big scare on Tuesday. No

question about that. Let's get straight to it 91 minutes on the clock against tournament debutants Portugal, what a chance this is for Ana

Capeta.

If this goes in valleys, Portugal who advanced and the U.S.A. go out upon fine margins, the U.S.A. eventually advancing, but not really is one huge

scale. Let's hear from some very relieved Team U.S.A. perspective now.

(BEGIN VIDEO CLIP)

ALEX MORGAN, 2-TIME WOMEN'S WORLD CUP CHAMPION: It's tough to be second, we want it to go through first. I mean, this team gave everything we just

didn't put the ball in the back of the net. And in the last few minutes, we just had to hold it down, we got to get the result and move on.

MEGAN RAPINCE, PLAYING IN HER FINAL WOMEN'S WORLD CUP: They got their World Cup on the line. We had our World Cup on the line. So of course those

moments are going to be intense. We're thrilled to be going on to the next stage. It's exactly what we wanted out of this match ultimately is to have

another one. So on to the round of 16. I'm excited to see who we play.

(END VIDEO CLIP)

SNELL: Could well be Sweden. All right, let's check in on who won the group and that would be the Netherlands, Julia, emphatic seven nil winners over

Vietnam earlier today. I really stand out performance from the team but in particular as May, broke to score not one, but two fantastic goals of the

highest caliber.

Look at the swerve and position she puts on her shots. They're fantastic in the Netherlands who in the group by two points, Team U.S.A. and second

place and they don't like playing second fiddle to anyone, Julia.

CHATTERLEY: What a wonderful goal that second one especially. OK, so now is the moment with huge apologies to our beloved Chinese viewers and football

lovers in particular. Let's talk about England's goals, yes.

SNELL: Yes, absolutely superb performance from the reigning European champion showing all their class the Lionesses got off to a really good

start in this one and they just kept building on it. Take about Lauren James who could well always to be one of the breakout stars out this

Women's World Cup six one England over China in Adelaide earlier two wonderful goals.

From Lauren James he plays a club football for Chelsea three assists as well as a sterling finish from absolutely fantastic. England will play

Nigeria next, by the way in the round of 16. And remember, she also scored the game winner against Denmark in the previous round of games absolutely

superb England emphatic winners, Julia.

CHATTERLEY: No bias.

SNELL: Never.

[09:55:00]

CHATTERLEY: Never, Patrick Snell, thank you. I'm finally on "First Move". Please bear with me and check out this video. Rumors and Conspiracy

theories have been swirling on social media thanks to this viral video from a zoo in Eastern China. Now, this is supposed to be a sunbed standing on

its hind legs and appears to be waving at the crowd.

Now some people believe it's actually a person in a costume. So the zoo has officially denied the claims and it says people just don't understand that

this is actually how bears behave. Fun fact some bears are the world's smallest species of bear. And I don't know watch that video back.

Rewind this and watch it back. I have my own views, something weird about that. And that's it for the show. "Connect the World" is up next. I'll see

you tomorrow.

(COMMERCIAL BREAK)

[10:00:00]

END