Tesla's CEO warned warned of more hits to the carmaker's already-shrinking profitability, and that it will have to keep lowering the prices of its EVs if interest rates continue to rise. Defiance ETFs CIO Sylvia Jablonski joins Caroline Hyde to discuss on "Bloomberg Technology."

Las Cimas, Building II

Musk warns of more blows to Tesla's profitability

Were you upended by this still focus on volume over profit or had you anticipated. So I anticipated that the earnings announcement call was sort of go like this. There was so much focus on what will profit margins look like when you take out kind of the tax credits and you know different types of incentives coupled with the lowering of prices. And you know the street didn't like it. But I actually thought it was a great call. And I would have said that there's actually cause for the stock to rally. You know what Elon Musk is doing is is continuing to corner the EV market by making EV vehicles accessible. You know there is a volume gain here. So while you're sacrificing some margin in the near term you're increasing you know capacity to produce more vehicles interest in purchasing vehicles because they're affordable. And really you know taking that stake while everybody else is trying to catch up. I also think that you know he has enough of kind of you know shots to fire here. He has the cyber truck coming out and that's arguably going to be an expensive type of vehicle that people seem to be really seeking and waiting for. And you know so when you have days like this when when a stock like Tesla kind of falls precipitously in one day from you know what looks like bad news but is actually really good news. And then you know the other EV makers fall in line with it. I mean this in my mind is a great kind of dollar cost averaging day on you know the top EV stocks. OK. So buying in on the weakness buying even though it's still priced at what 80 times forward earnings. How do you vindicate that valuation. Are you the person who's also in this idea of a robo taxi. The idea that ultimately there's a big bump in valuation. I am and you have to be right. You have to be if you're buying this stock at those valuations. It's a fair point. But there is a whole lot of evidence that you know the R&D is moving there in the right direction. Of course you know investors want everything to happen more quickly than it usually does. But this is very much a growth stock. You know they're they're working on things that do not yet exist. And this is what you want when you invest in innovation the future of EV. So there's a few things. One the EV market was 14 percent of sales globally. That's projected to be 30 percent by 26 percent. We know that Tesla has 60 percent of the market now that shrinks but they get more orders more volume. So I think they continue to kind of benefit there. Number two is the new vehicle the Cybertruck. Number three is you know that you mentioned the dojo before the potential for AI. They're they're self kind of driving database data center computer. The technology looks like it's kind of being set up to support them. And I think the robo taxi thing if anyone is going to get it done it will be Tesla. And I know we have no reason to believe that he's not going to get it done. So what about the global nature of this company. Of course they're talking about perhaps having to slow down on some of the factory output as they update them. Of course they've got exposure in Berlin here in the U.S. but also China. And I noted that B.Y.D. Lee Auto really managing to ramp up their own deliveries at the moment. What's competition like globally. Yeah. And I think that you know when you're investing in the EV space this sort of makes the argument for having a basket a lot of all of these names. Right. Because you want the test you want Tesla. And then you also want who is the Tesla of China. Right. Is that expanding. Is that the auto. And it's good to kind of have that broad based diversification. I think the answer is that these are all going to be winners. You know that the piece of the entire pie of EV again is growing globally. Right. We talked about that 14 percent going to 30 percent. So massive upside for anyone who sort of gets it right in terms of Tesla. The fact that they're talking about building a factory that's larger than Volkswagen and BMW. And you know Germany the home of German autos which is like you know I mean the Michigan of Europe is just mind boggling to me. So that tells you that the demand will continue there and the opportunity for car sales continues there. There's some amazing stats out there. If you look at EV sales last year in China 50 percent of EV sold or 50 percent of cars sold were EVs in the Nordics though. It was 89 percent of all vehicles sold in Europe. That number is closer to 60 percent. So you know he's he's following the line of interest there at a time where macro headwinds are still there. Just let's round out this conversation a little bit with where Elon Musk started this focus on interest rates still rising and the impact on the consumer. How are you feeling about the macro picture right now. Yeah I'm actually a little more bullish on the macro picture. And you know we've talked earlier before about some of my my stock picks that were getting crushed last year in 2022 with with interest rates rising on the tech space. And I think that that's playing out now. You know there was a bear market last year in tech interest rates were rising and now we're coming to the end of that. So I am in the camp of we if we get another hike or two. OK. It's it's it's sort of manageable. We're already there. I think that you know the economy has withstood a major recession. Perhaps you get a soft landing. But in terms of rates specifically towards EV or other goods and services you know I don't see prices necessarily kind of coming down. But inflation is coming down. Prices will probably stabilize and it will become you know kind of easier to borrow money to produce more vehicles to you know take on debt for innovation for growth companies. So I think we have some range around volatility. It'll be kind of a slower year into the year end. But if earnings hold up then I think the rally continues.

Britain's opposition Labour Party won a parliamentary seat in northern England on Friday (May 3) and control of several councils, inflicting heavy losses on the governing Conservatives to pile more pressure on Prime Minister Rishi Sunak.

London

U.K.'s Labour claims big early win over Conservatives

Turkey has announced that it is halting trade with Israel, worth $7 billion a year, until a permanent ceasefire and humanitarian aid are secured in Gaza. Israel denounced the decision as breaking trade agreements.

Ankara

Turkey to stop trade with Israel until Gaza ceasefire

Media watchdog group Reporters Without Borders warned of declining government support for press freedom as it unveiled its annual world rankings on Friday, highlighting Argentina among the countries where the situation has deteriorated.

Paris

States doing less to support press freedom, says watchdog

Arizona's Democratic governor signed a bill overturning an 1864 law banning abortion, a month after the state's supreme court said the Civil War-era rule was valid.

Arizona

Arizona governor signs bill repealing 1864 abortion ban

U.S. President Joe Biden said that both freedom of speech and the rule of law must be respected in protests at college campuses over Israel's war in Gaza. In response to a reporter's question, Biden said that the campus protests had not forced him to reconsider his policies in the Middle East.

Washington

Biden breaks silence on protests at University Campuses

From suspensions to expulsions to criminal charges, college students across the U.S. involved in these pro-Palestinian protests could face life-changing consequences. Some are demanding amnesty for these protesters.

New York

More than 1,000 student protesters arrested across U.S.

English voters are heading to polling stations to pick mayors, councilors and a new lawmaker in the last electoral test for British Prime Minister Rishi Sunak before a national vote later this year.

Voters head to polls in last test for U.K.'s Sunak

The US State Department accused Russia of having used a chemical weapon against Ukrainian forces in violation of the Chemical Weapons Convention, while also announcing fresh sanctions against Moscow. In addition to the chemical agent chloropicrin, Russia also used "riot control agents (tear gas) as a method of warfare in Ukraine, also in violation of the CWC," the department said in a factsheet.

Zaporizhzhia

Ukraine Invasion

U.S. accuses Russia of using chemical weapons in Ukraine

There are grave concerns for Perth brothers Jake and Callum Robinson who are missing on a surf trip in Mexico's Baja region. The pair have failed to arrive at their accommodation and are not responding to contact from their families.

Council of the City of Sydney

Grave fears for brothers missing on Mexico surf trip

Federal Treasurer Jim Chalmers has kept open the prospect of tax incentives in the budget as business warned that changes to foreign investment laws. It comes amid criticism that budget spending could prompt further inflation and prompt rate rises.

Government hints at further tax incentives in Budget

Colombian President Gustavo Petro says his country will break diplomatic relations with Israel. He's criticised Israel's conduct since the start of the war on Gaza. Petro requested to join South Africa's case at the International Court of Justice accusing Israel of genocide.

Bogotá

Israel-Gaza War

Colombia ends diplomatic relations with Israel

U.S. Secretary of State Antony Blinken met Israeli Prime Minister Benjamin Netanyahu on Wednesday, pushing to get more aid into Gaza, while urging Hamas to accept a deal that would halt fighting and bring some hostages home from the enclave.

Jerusalem

Blinken pushes for sustained aid into Gaza during Israel trip

Police in Georgia fired teargas and rubber bullets at protesters demonstrating against a bill that would require organizations – including media and NGOs – that receive more than 20 percent of their funding from abroad to register as agents "pursuing the interests of a foreign power." The bill has been dubbed the "Russian law" by its detractors.

Tbilisi

Thousands protest against Georgia's 'foreign influence' bill

A diplomatic push is underway to reach a ceasefire in Gaza, with the U.S. exerting pressure on Hamas to agree to Israel's terms. But Israeli Prime Minister Benjamin Netanyahu has vowed to attack Rafah in southern Gaza, whether there's a ceasefire or not.

Netanyahu vows to invade Rafah 'with or without' ceasefire deal

Qantas has apologised to customers after its app exposed personal passenger data. The airline blames a technical disruption and says the data breach was not a cyber security incident.

Qantas app data breach exposes customer data

The International Court of Justice has ruled against issuing emergency measures over German arms sales to Israel as requested by Nicaragua, which had argued that there was a serious risk of genocide in Gaza amid Israel’s assault on the Palestinian territory.

The Hague

ICJ rejects measures over German arms exports to Israel

New York police have entered Columbia University and arrested protesters barricaded inside a building who have been calling on the New York school to divest itself from companies associated with Israel.

Police enter Columbia University, arrest protesters

A smiling and healthy-looking King Charles returned to public duties on Tuesday (April 30) for the first time since he was diagnosed in February with cancer, paying a visit to a treatment center for the disease in London.

King Charles returns to public duties, visits cancer center

A 14-year-old boy is dead and multiple people injured after a daylight sword attack in Hainault, in east London. The alleged attacker tasered and arrested by Police shortly afterwards.

Hainault

Teenage boy killed in London sword attack

Brittany Higgins has failed in a bid to delay a defamation trial brought against her by Senator Linda Reynolds over social media posts made in July last year. Fiancé David Sharaz, also named in the case, calling for the Senator to drop the case.

Canberra

Brittany Higgins fails in bid to delay defamation trial

Since taking office four months ago, Argentina's new president Javier Milei has slashed public employment in an effort to cut the country's deficit. So far, 24,000 people have been let go, and Milei has said he wants that figure to hit 70,000, about 10 percent of overall government employees.

Buenos Aires

Argentina's Milei slashes 24,000 government jobs

A Russian missile attack on an educational institution in a popular seafront park in the Ukrainian Black Sea port of Odesa killed at least five people and injured 32, local officials said. Odesa has been a frequent target of Russian missile and drone attacks, particular port infrastructure.

Odesa

Russian missile attack kills five in Ukraine's Odesa

Scotland's leader Humza Yousaf resigned, further opening the door to the UK opposition Labour Party regaining ground in its former Scottish heartlands during a national election expected to be held later this year.

Edinburgh

Scotland's First Minister Humza Yousaf quits

A 17-year-old girl charged with the stabbing murder of her 10-year-old sister in a suburb of Lake Macquarie in New South Wales will remain in custody.

Lake Macquarie

Teenager faces court over murder of 10-year-old sister

Columbia University began suspending pro-Palestinian activists who refused to dismantle a tent encampment on its New York City campus after the Ivy League school declared a stalemate in talks seeking to end the polarizing protest.

Columbia University suspends pro-Palestinian protesters

The debris from a missile that landed in the Ukrainian city of Kharkiv on Jan. 2 was from a North Korean Hwasong-11 series ballistic missile, United Nations sanctions monitors told a Security Council committee in a report seen by Reuters on Monday (April 29).

Kharkiv

U.N. experts say North Korea missile landed in Kharkiv

Columbia University's president said that talks with pro-Palestinian activists over a protest encampment on the Ivy League campus in New York City had reached an impasse and urged demonstrators to voluntarily disperse or face suspension.