♪ >> i'm emily chang and this is "the best of bloomberg technology. " 2018 marked twitter first full year of profitability, but supplies investors by reporting daily active users for the first time, the number is even smaller than snap. has goneer mcnamee from one of facebook's biggest supporters to one of its most vocal critics.

his call to action for mark zuckerberg and sheryl sandberg. and tech going public pipeline is picking up. and messaging service files paperwork for its direct listing. first, to our top story. twitter gave a lackluster first quarter sales forecasts reporting tepid user growth, suggesting the changes have not yet attracted a wider audience. but the company didn't start reporting daily active users for million, time, 126 smaller than some might have thought. they also said they would no longer report the number of monthly active users after the first quarter. shares plunged after the report and i caught up with twitters ceo, asking what he has to say to investors. >> we had a record quarter to finish a record year. the highest revenue twitter has ever had. great about our

momentum going into -- going from 2018 into 2019. we are really excited to reaffirm our same priorities were executing as last year as we going to 2019 and we will work hard to deliver great outcomes one day at a time. emily: you made a big change reporting daily active users and you are stopping reporting active monthly users. why do this now? why not a few quarters ago? ned: sure, this has been a long journey for twitter. where we started getting monthly active users at the time of the ipo, but there has been a gradual shift in the company where our priority is really to drive value for people every day. the best way to measure that is by monetizable dau. that is what we are looking at internally to measure success for some time. we have given year-over-year growth rates for it since 2016, but we want everyone aligned on the same metric we go with internally so there is transparency and alignment, so we are all looking at the same measure when it comes to measuring our success.

-- when we think about measuring our success. emily: snap reported 186 million dau's, facebook, 1.5 million. so why should advertisers choose twitter which appears to be the smallest? ned: advertisers come to twitter because we have the most valuable audience when they are most receptive. today's information doesn't change anything, they know what they are getting with a specific objective in mind, whether they are launching a new movie or new phone, if they are advertising during the super bowl to amplify their message. we had 30 of 38 super bowl advertisers on twitter on the day of the super bowl, amplifying their message because that is where they know their customers are. this doesn't change anything from an advertising perspective. we share a number that is different from other companies. all of our are monetized will daily active users. that might be different from how some others look at it. they could be sharing a family of apps or users on a different part of the service that might not see ads.

emily: but you don't know for sure. how do you know what they are sharing? ned: i know what we share, and what we share is the number we are trying to drive. they are all people on twitter, on the app, that is the number we are trying to drive. they can all see ads today. emily: have you seen any increase in advertising or influx of advertisers as a result of the scandals and controversies at facebook? ned: we think about things we can control. if we look at the past couple of years and the recovery we have been driving, it is because of things we are doing better. the service is much better than it used to be for people on it, easier to find the things you are looking for, where there are events and topics, infrastructure that allow you to follow things that might have been harder to find before. for advertisers, we are much more clear. they should come to twitter to launch a new project or service. or when they want to connect with what is happening. i think that clarity has helped us internally. it has helped externally a lot as well. emily: monthly users are declining. this is the number you will stop

reporting, but do you think is -- that the changes you are making to the platform will increase overall monthly users or are you focused on increasing the engagement of daily users? ned: we think the changes we are making to the service ought to grow daily users over time. that is the way we are measuring success. we are not trying to get to people to come to twitter monthly. twitter is a place where newsbreaks. it is a place for conversations around sports and politics and entertainment, and things people care about. if you are coming monthly, we are not doing a good job helping you find value on twitter. when we are making changes, we are thinking how we can get people get value every day. emily: spending is rising 20%. is this a one off or is the cost structure changing? ned: we grew 17% last year, but if you look at the fourth quarter, which represents the hiring we did for the year, where headcount grew 16% over the course of the year, expenses grew 21% in the fourth quarter.

if you annualize that and add merit increases and other things, new hires as well, we will continue to hire at the same priorities, we will get to the 20% growth, which is what we talked about. this isn't a change. it is a continuation with the same priorities, thinking about health, conversations as a way to drive audience on twitter. our revenue products and sales and the platform we use to deliver trip -- twitter. emily: do you see the 20% number staying the same over several years, or is that an annual thing? ned: well, an annual thing for 2019. we will be aired talk about next year more when we get there. as we make investments in 2019, we are not thinking about this year. we are thinking about hiring people who could have an impact on twitter over a long period of time. and delivering on our purpose. emily: what other product changes are you making that you think will expand the overall audience? ned: i'll give you a couple of examples. one is for the fourth quarter and there are a couple in front

of us. the fourth quarter, we made it easy to switch back and forth between the reverse chronological timeline so you are seeing the latest tweets and one where we use an algorithm to service the most relevant tweets first. that is about transparency. it is about helping you figure out or decide what you want to the in the moment. we are proud of the change we executed fast. emily: and the super bowl. ned: i love to hear that. it was a great use case where you want to hear what people are saying in that moment when a field goal is made or missed and a critical call is made. that had a positive impact we were pleased about not just externally but internally because we could move and try things, and that has great outcomes as a result. when we look ahead, there are a couple of things we think about. first is conversations, we want to make it easier for people to tweet and be a part of a conversation, then events and topics. you follow people, but you care

about a topic or event. that is what brings you to twitter. emily: that was twitter cfo nancy. gal.rg de alphabet posts rockets. gopro has struggled to attract users, but last quarter showed a pickup in sales. we hear from the gopro ceo.

emily: alphabet reported fourth-quarter revenue that beat expectations and heavy spending on the cloud business resulted in thinner profit margins. they addressing rising costs on a conference call. ruth: the key drivers were, first, content acquisition costs, primarily for youtube, mostly for our advertising supported content, in what is a seasonally strong quarter for youtube.

but also for our newer subscription businesses, youtube premium and youtube tv, which have higher cac as a percentage of revenues. emily: some guests join us monday to give us their thoughts. >> margin problem. we saw that even though revenue

in the core advertising business was quite strong and even though revenue in some of the other revenue, which would be things like pixel and google home, actually beat expectations slightly, they just are having to pay more for some of the services that they want to create. i mean, if you believe in the long game here, if you believe that this company is really going to develop over the top services, they are going to have to pay more for them and you have to adjust your model in terms of what they are going to pay for their services, particularly for their partners. i think google really is going to be -- trying to be the video disruptor here, and that's what you're seeing in the numbers, which is a cramping of the operating margins. emily: i spoke to porat before she jumped on the earnings call and i asked specifically about capex. she told me they remain focused on investing for the long-term. we take a disciplined approach to key areas. capex growing at a sizable clip. the primary driver continues to be investing in technical infrastructure to support growth, data centers and machines. this reflects our outlook for global growth in ad, search, youtube, and cloud. sort of echoing, crawford, what you suggested there. but paul, investors are concerned about it. paul: i think they are in the short-term. the market has generally given ruth porat very, very high grades for coming in and really instilling a sense of more certainty as it relates to both their operating expenses and their capex, so, a certain level

of discipline. the three areas where they are investing are very high growth areas, including youtube. internet ad spending on video is the fastest part of internet ad spending. clearly google is a leader there, along with youtube. when you combine that with the cloud, another extremely fast-growing end user business, i think longer-term, most google investors feel very comfortable with google's p&l and capital spending. emily: now, there continues to be questions about how much amazon is now taking a bite out of the digital ad pie. when amazon reported its results, their other revenue category, which is mainly advertising, rocketed up to $10 billion. so, we asked about amazon and how serious a threat amazon is in the conversation with ruth porat. and she said, "whenever you that new -- whenever new inventory is created that attracts consumer interest, advertisers will be interested in advertising against that inventory. the market is continuing to grow

and there is still a tremendous amount that is off-line" crawford, would you say that the pie is growing, or is amazon actually a threat to alphabet? crawford: amazon is absolutely a threat. amazon has got a lot of properties. they're going to be bringing on a tremendous amount of inventory going forward. and if nothing else, the classic law of economics, what does that mean? it means there's going to be more supply for a finite amount of demand. so, what google is going to try to do is they are going to try to create more valuable services where they can potentially offset some of those trends. but, you know, amazon getting into this market, like amazon getting into most people's market, is a threat to google in this space. emily: now, i got a question earlier. why don't investors punish amazon for the pressure on its margins, but punish google in this way? and there's still a lot of data that google doesn't give us about how fast youtube is

growing, how fast is the cloud growing, company diversifying beyond advertising. paul, did we get any hints about how healthy is the cloud business, how healthy is youtube, even though it has a lot of potential? paul: no, you are right, google needs to do a better job of exposure. we have been saying this to them for some time, particularly about youtube. it is about $8 billion or $9 billion of run rate, relatively high-margins. we think it remains a long-term growth story. i agree with crawford that it is requiring a lot of investment, and that is pinching profitability in the near term. but i think this company, historically, alphabet, has gotten the benefit of the doubt from shareholders for making the long-term bets, not just the near term operating expenses. ruth has dialed back some of those crazier, more moon-shop things. they have focused on three areas that can drive growth. and i think most long-term investors will give them the benefit of the doubt.

emily: crawford del pratt and bloomberg's sweeney. gopro beat expectations after the company cut costs and picked up sales during the key holiday shopping season. at the future of their success hinges on new product launches. selina wang cut up at the ceo on thursday. >> where showing growth internationally, which is terrific. significantly in aipac in the fourth quarter. excited we showed consistent results last year, running a predictable business because we turned to product and pricing strategy that we know well. it is great to have that predict ability back in the business. we finished the fourth quarter of 20% in terms of unit year-over-year, so that is terrific momentum. the new positioning is you're

not trying to be relevant to everyone. but have you continue to monetize that same pool of people? reached everybody in the world who can benefit from a gopro. are referringou to is customer segmentation, better understanding who in the world has a problem gopro canceled. it is funny you call it a new strategy, because it is actually our original strategy, how we build the brand and the business , serving very specific customers that would benefit from gopro. public, weoing adjusted our strategy a bit and try to be more relevant from everybody. it turns out it is better business for us to better understand the various customer segments specifically and address their needs with specific product and marketing that resonates with them. >> so in december, gopro said it would be moving u.s.-bound production out of china to avoid potential tariffs. why did you choose mexico as the new location? nick: for several reasons.

there are some cost benefits to moving some of our production to mexico. there's supply chain benefits, and it just makes a lot of sense for many reasons. while the threat of tariffs -- we have not been included on the list, but while the threat of tariffs served as a catalyst to get us thinking about moving production out of china, once we did our homework, it just made a lot of sense on many levels. it is just smart business. tariffs or no tariffs, we are moving our u.s.-bound production to guadalajara. >> walk me through how the cost savings work. without the tariffs, why is it cheaper to be in mexico versus china? nick: because china is getting more expensive to do business in. >> is this something you would have considered without the threat of tariffs? nick: i think we would have eventually gotten there, but not as quickly as we have. >> what other countries were under consideration? nick: malaysia was a consideration, but at the end of the day, mexico has got terrific infrastructure.

for our businesses in the americas, it makes a lot of sense, so we decided to move to mexico. >> camera sales in the asia-pacific region have been growing quite significantly, but can you talk about the china demand as a result of the macroeconomic headwinds? nick: china was more challenging last year, but we still managed to grow 2%, which is great. it is a big opportunity for us in china. china is an expensive place to do business, and it is great to see gopro thriving there. it shows that our go to market strategy and global demand for gopro extends into the chinese market, so there's obviously a lot of opportunity for us there. >> is that a market you will continue to invest and double down in from a marketing perspective? nick: yes, we have sales and marketing offices in china. operations, as well. it is an important hub for us. >> several of gopro's efforts to diversify beyond action cameras have struggled, including the drone business, but the software business seems to be taking off with the cloud plus

subscription, so what is the roadmap for growing that software revenue? nick: gopro serves as a solution for people who want to capture and share experiences. that starts with the camera, but we also need to solve for helping people offload their footage, archive it, access it, get more out of it. gopro plus offers unlimited cloud storage, photo and video content to our customers. it also offers you break it, we replace it damage guarantees. gopro's are used during activities that would otherwise damage other consumer electronics. we want to guarantee our products for our customers and we will be rolling out other features and benefits that excite our customers. for $4.99 a month, plus offers a lot of value and we are seeing strong interest and intend to build on that this year. >> this is an exciting area for investors. you get higher margins on the software side versus the hardware side of the business, so looking out into the future

three to five years, what portion of revenue could software subscription services become? nick: it could have a meaningful impact on our gross margins, that's for sure. we're starting to see that. which is terrific. we talked about that on the call yesterday. we have work to do to drive awareness of plus. as we shared previously, awareness of our cloud subscription offering is roughly 20%, 25% amongst our community, so there's a lot of opportunity, a lot of work to do. we have also been doing research to understand what our customers want to see from the plus subscription. we rolled out unlimited cloud storage and increased discounts at gopro.com and have seen a nice uptick in subscriptions for this year, so more planned for this year. emily: that was gopro ceo nick woodman with selina wang. slack up, this messenger

inches closer to going public, filing key paperwork to move ahead. and if you like bloomberg news, check us out on the radio, the app, and on sirius xm. this is bloomberg. ♪

emily: messaging platform slack is moving along with its plans to go public, filing confidential paperwork with regulators. this is just one of several high-profile tech companies on track to hit the public markets in 2019, including uber, lyft, . we discussed of the filing on monday. >> today, slack confidentially filed for a proposed public listing, which is filing speak for a direct listing. so, direct listing, for those of you who are not familiar with this, is essentially when a company lets its shareholders, its employers, and early investors sell their shares on the public markets, but it doesn't go through the traditional ipo process of using

underwriters and big banks of doing a big roadshow. essentially, it allows the early investors to get liquidity without generating more cash for the company, which saves a lot of dilution. emily: this is something that spotify did as well. it is unusual. why is slack going this route? olivia: well, they are going this route for two reasons. mainly because they already have a lot of cash. they are sitting on a lot of cash. and they don't need the marketing or the pr, the publicity, the recognition that comes with a traditional ipo. they really just want to give their early investors and their employees some liquidity. emily: and also they can sell the shares right away. olivia: right. there's no lockup, and the biggest reason is it doesn't create dilution. that is huge for a founder. they don't want to dilute their shares and bring in all this cash that they don't necessarily need. emily: so, what are the risks potentially? olivia: the jury is still really out on this. spotify had a very successful listing.

i mean, their shares as of today were down 6% from the day they opened publicly, but that's normal. you know, i think that some people have said there is a risk the shares could flop on opening day, and you don't have an underwriter to prop up the price of the shares and guarantee it. but if the banks do their job, and there are experienced bankers working on this, they should do a good job leading up to it of really getting the right price for the shares. understanding on the supply side with people are willing to sell for

a government shutdown, another shutdown? i mean, we have been talking a lot on the show about how the initial shutdown stalled things at the sec, could have slowed things down for uber and lyft. we don't know, we don't have any concrete details on whether the process actually slowed down, but it certainly has the potential. olivia: it definitely slowed things down. there's a huge, huge backlog at the sec right now. there is sort of this sense of the boogeyman waiting in the wings. what is going to happen next week? it could delay things even further. we understand that the sec is just proceeding as everything is normal and there is a backlog and they will get through things. i mean, slack has said that it will -- actually, they haven't said this. we understand that slack is planning to aim to go late spring, middle of the year. so, it should not delay things too much if there is another shutdown, unless the shutdown goes on for months and months, in which case everything will be delayed. emily: bloombergs olivia zaleski, and i should mention, bloomberg is an investor in slack. from ally to opponent, we discussed roger mcnamee's new book on what he

calls the facebook catastrophe and the danger he says the social network poses to the world. bloomberg tech is livestreaming on twitter, you can check us out and follow our global breaking news network tictoc on twitter. this is bloomberg. ♪

♪ emily: welcome back to "the best of bloomberg technology." i am emily chang. roger mcnamee was a mentor to mark zuckerberg. now he has gone from back or to local clinic -- vocal critic. --s is what he said "recently facebook has done something truly horrible and i can no longer excuses behavior. it is allowing harm, it has the power to stop the harm.

what it lacks is the intensive to do so.". he joins us from new york to talk about the book. >> with respect to the earnings, it makes total sense that they would've had a blowout quarter. if you are an advertiser, you have to go where the audience is, facebook has the largest audience on earth. it's at products are second to none. , reach trying to a book people with a book about facebook and instagram, there is nothing quite like the advertising on facebook and instagram. it am not surprised they had record earnings. the one thing i would think everyone would know, every fifth or sixth post is an ad. had amore than i would've year ago, twice as many permit and at no -- and i don't know

how many ads you can put in a before terms the experience. there are an awful lot of them. emily: but it is not just about that, it is about user growth. roger: i would like to suggest a tad of skepticism would be appropriate. you may remember eight or nine months ago, they told us they had blocked a billion inauthentic accounts from being formed on facebook? when you are blocking a inauthentic accounts, you have a billion lot of opportunity to let a few through if you need to. facebook also told you in the quarter that for very long, they would stop reporting facebook as a broken-out whether they were going to integrate it with instagram and whatsapp. we also learned that from nielsen, that usage on a per user basis is down, think the number is 20% or something.

what doesn't matter so much, other than people have changed their behavior. you saw this in the 2018 midterms. the effectiveness of disinformation was radically reduced with at least a portion of the facebook audience. that was really encouraging. i look at these things and i go, i understand why the stock is up, the problems i am talking about are not rear-looking, they are forward-looking. we need to address them. emily: you are suggesting facebook could be not shutting down as many fake accounts. roger: i am not suggesting anything. i am saying you cannot exclude that. facebook has automated systems for getting rid of hate speech. what they define as the pitch has a large influence on the percentage of successful capture. we cannot audit is a black box. facebook has huge incentives to make the numbers appear to be rising.

all it would say is, if you look at their past behavior, what is the argument for taking the number at face value? i don't see it. emily: right. so facebook released a statement about your criticism saying we take criticism seriously over the past two years we have fundamentally changed how we operate to better protect the safety and security of people using facebook. ? > the reality is roger mcnamee has not been involved in facebook for a decade. roger: it is demonstrably true that i haven't been involved for at least nine years to get . but let's look at the front of the area i am an analyst. i don't need to be on the inside to observe. they are saying that they are protecting users. but last week, apple expelled facebook for a day and google as well, for having research applications that they tried to sneak into the app store through a private world.

portal.vate and those apps were spying on the users who use them including a significant percentage of minors under the age of 18. i would not call that protecting users. the prior week, facebook had a legal case accusing it apparently without conflict of encouraging children to spend lots of money on purchases and games. in some cases come up to thousands of dollars on their parents credit cards. tthey knew this was going on but they tried to pretend that that was not a problem. i would say those are two disturbing things. emily: right. roger: also last week, facebook --ked off for a public opublica from doing an audit of facebook's website -- they were just making sure facebook was doing a complete job -- they stop letting them to

do that. also last week, snopes give up working with facebook and said they are impossible to work with. i would suggest that facebook is not making progress in a material way. and there are real issues that affect facebook and others, speakers, say smart smart radio devices come with what televisions, smart cards, which suggests the problems we have today with privacy are tiny compared to what are coming when you put alexa-based devices into your house. with: roger, i sat down sheryl sandberg last week and asked, why should anyone trust facebook, or trust her? listen to what she had to say. >> it has been a challenging time for facebook. we need to earn back people's trust with the steps we take. we have changed our profitability because we want to

take the hard steps to protect people on the platform. and you see what happens with elections come up midterms around the world accounts, , decreasing the distribution of fake news. these are hard and ongoing problems, but we are determined to do the hard work and keep >> roger,o riyadh facebook is hired thousands of people to double down on safety and security. they say they have changed the algorithm in the newsfeed to change toward more personal news rather than world news. i know that none of that is enough for you. if it is not enough, what should facebook be doing, and if facebook not be doing it come up what should the government be doing? or the users? roger: here is the way i think about the problem. i have studied this for three years, to try to understand why this stuff happens on facebook to remember, am still a shareholder. this was one of the crowning

achievements of a long, long career. i am proud of facebook and it bothers me that this is not going well. it is not in my economic interest to be a critic. i am convinced that the business model is the problem. it is a problem with facebook, and it is a problem with google. they essentially have an advertising business model that depends on monopolizing the attention and manipulating the attention of the user. in order to do that, the algorithms are tuned to focus on emotional things that trigger outrage, fear, or tickle people with rewards of some kind. in, when you are doing that for long enough, people first develop a habit, then they develop an addiction. and once they develop an addiction, they are vulnerable to manipulation by bad actors on the outside. mcnamee, cofounder of elevation partners and author of "zuck." the coldells us what

snap means for climate change, next. plus, automakers are spending more money on electric cars. what is infrastructure in place to meet growing demand? this is bloomberg. ♪

emily: the midwest faced a brutal arctic/in mid-january, and mr. trump jumped at the chance to take a jab at global warming, tweeting "in the midwest, temperatures are reaching -60 degrees, the coldest ever reported. what the [beep] is going on with global warming? please come back fast, we need

administrator andrew wheeler, and he agrees with the president. >> global warming is certainly occurring. i think there are still some issues as far as the extent and how much any individual weather event, but the important thing we are doing is following the law that congress passed, the clean-air act, which tells us what we can and can't do, and supreme court decisions. under my leadership, we are following the statutes the congress has passed as well as the recommendation of the courts . emily: but does the cold give you pause about the validity of global warming? >> a special i don't think you can look at one weather event, you have to look at the models over a number of years and not focus on one weather event. emily: so do you think your conclusion might be flawed? i thinkn't say that you there is variability in climate data that people don't realize.

emily: at your confirmation hearing, you said you were 8-9 on a 10 point scale concern about climate change. some would look at the actions the epa has taken thus far as retreating from regulating carbon dioxide emissions. how do you square that? are you retreating from the fight? >> no, the obama administration put forth regulations for the electric sector, the clean power went. it never actually took effect. we have a clean energy role that does follow the law and it will be upheld by the courts and will lead to 34% reduction in co2 over the lifetime of the regulation. so we are moving forward, we are making cuts in co2. 2005 was the high water mark for the united states, but it has down.

it is a global issue and the president recognizes that which is why he pulled out of the paris climate accord. it was not a global solution. we need a global solution to address that issue, and we don't want to unilaterally disarm our economy or other economies -- while other economies around the road are not doing what they are required. emily: what are you doing to educate yourself? enter: i have -- theew: we have updates from noaa agency. we have several more scheduled to and were also getting regular updates from our staff. emily: so if not paris, what is better? >> something that will bring china and other emerging markets to the table for real reductions. . emily: my conversation with epa acting administrator andrew wheeler. meantime, by 2030, electric car sales are expected to surge to $30 million worldwide -- 230 million cars worldwide.

more thany provides 1000 public charging stations for electric cars across 34 states. in the first half of 2018, the companies network charged more than 42 million miles. i sat down with the ceo to discuss the future of electrification. >> i feel like we are at an inflection point. car companies have announced her hundred billion dollars that they are investing. in a will be 60 new models few years. it is going from boutique-small to mainstream, and consumers are going to love it. everyone i know who drives an ev loves driving up to . i think what car companies have in mind is that the cost has to b competitive, and there has to be charging infrastructure everywhere. emily: tesla is in the lead here, where are you seeing competition from others?

there third made it quarter target, everybody said, oh my goodness. everybody.y worry what we see here in the united states is so much progress. general motors is great, nissan has been around a long time. gm and nissan have over 200 mile cars that are affordable. that is big. fort hunt historically. in a laggard and is now ford is -- ford had historically in a laggard that now it is making electric vehicles. i don't know of any serious car company in the world that is not investing in this. emily: when do think we will start fully relying on charging stations? >> a few years. we are to have a million electric vehicles on the road in the united states. we suspect it will probably be 6

million or 7 million in the next five years or so, which means -- bloomberg energy finance says it will be 10% of sales in 2025, but on the inflection point of he s curve, you could be looking at 20% of sales by 2023 historically, most people who bought an electric vehicle charge it at home. now we are seeing people who live and an apartment saying that they want to charge quickly. with the rise of the ride-share and ride-hailing economy, where millennials don't want cars but do ridesharing all the time, drivers of these cars like uber and lift, they need to charge quickly and the need to charge from home. will electric trucks hit the scene and how will infrastructure change to support that? >> electric trucks -- i would

say that a light-duty vehicles are a couple years ahead of the trucks. i just came from your bloomberg conference, and there were a number of truck companies that have talked about it. they said, we placed an order thousand, so the experiments are beginning. , all of years, fleets them will be relying exclusively on electrification. emily: how do you compare the road ahead in u.s. market to china? what is the next five years look like in both countries? : fascinatingly, the chinese are moving really quickly. the difference in policy settings is what might make china move even faster. some say that right now it is even money. we could win or china could win. but if the chinese government puts the policies in place to accelerate the market, then fully come at there are some people who would expect 70% of

could bes in china electric vehicles by no one 2030. thinks the u.s. market will move that fast. it has to do with creating policy reasons for the manufacturing to go ahead fast. emily: what are the risks you see to tesla, which is in the lead in this market in particular? over the next few years, what where are the biggest challenges? cathy: the market is growing so quickly. the market for non-luxury vehicles. there is going to be a lot of market entrance. i think that tesla will have to compete with them and compete on cost. they have got beautiful, beautiful vehicles. but look at the vehicles that kia and nissan and others are bringing to the market. they will compete with tesla, which is great. emily: good for you. cathy: exactly. emily: my interview there with the ev-go ceo. that does it.

up, things are not turning out as promised. let's next. this is bloomberg.

emily: foxconn says it still plans to build a manufacturing plant in the state of wisconsin, creating as many as 13,000 well-paying jobs for wisconsin workers. as early as 2022. but many underground say, this is simply not happening. carrbergs alstom wrote about it, and we caught up with him on wednesday. >> for the past couple of months, we have been talking to people on the ground at foxconn. about the early operations there. so far, the big differences are that they say things are not living up to promises, the pay

has been low, workers feel expendable, foxconn is making an aggressive push toward more automation, meaning their roles could be obsolete in coming years. people say training is an issue. indeed, in one case, a worker nearly had his finger sliced off on the production line. so, there has been a jarring disparity between what was promised by the president and some of the jobs that are being doled out to residents of wisconsin right now. emily: there are some issues that have developed in the last few weeks, whereby one assistant of the chair of foxconn, actually said the company was reconsidering some of its plans. which plans exactly? austin: that has been the constant refrain throughout the past year or so, ever since the deal was decided to riyadh it is actually gone through a ton of changes. first they were going to build a massive factory and then they scale down the operations. as you know a couple of days ago, they said, we are not going

to build a factory, then they flip-flopped again after president trump had a phone call with the chairman. the bigger issue is that a lot of people don't know what they are actually building in wisconsin. they have made a lot of commitments to their contracts, but they are not actually sticking to the plans. a lot of sources that we talked to for the story says that the plans internally at the company at both the headquarters and the factory in mount pleasant wisconsin factory felt a market -- felt amorphous and ever-changing. emily: one senator had this to say. >> the environment keeps changing. there is all kinds of uncertainty. what business is always want is certain and stable of business environment as possible. markets change. apple reported less demand for their products and that obviously affects the equation. but in general, all the incentives that were given by governor walker were prospective. emily: is this because of apple? austin: it is partly because of

apple that there has been pressure on the company, the global market conditions, some of the trade issues, but let's remind the senator, they missed their maximum first-year hiring targets by about 82 per's end. the shady 2%. they ended the year with only 178 full-time workers. that is far short of the 1040 they committed to hiring at the end of that threshold. the company can certainly afford to hire more workers, it is not just because of soft and iphone sales. the larger issue of what the senator is implying is that there is no risk for the state because they will not give any subsidies unless the company lives up to its hiring and its investment spent. that is partly true, but the truth is that they have already invested a lot of money, in man-hours and commitments to infrastructure costs. hundreds of millions of dollars have already been spent. this sort of myth there isn't any risk or cost to taxpayers

already is simply not true. emily: the bigger picture, what does it mean for global manufacturing and the supply-chain? austin: i think the larger issue is the romanticized notion that president trump has talked about and made a key campaign pledge, and he talked about it at the state of the union last night. it is more challenging to bring that back to the u.s. than a lot of people anticipated. at least the proponents. it would be fantastic to create more blue-collar jobs, but the truth is, it's really challenging, not just economically when you are competing against china and mexico, but the larger issue is that it is hard to replicate that supply chain stateside. a lot of that network is set up in asia, where -- and mainland china, where foxconn has most of its manufacturing operations. that is why, when you have that network, it is easy to build things like iphones. so trying to replicate that here in wisconsin will be a huge challenge. not just because of the lack of supply, but also the lack of talent pool. emily: has the president

commented on the situation in particular, recently? austin: the participate in no story. one administration official did tell me that the president and the white house would be "disappointed" if foxconn reduces its investments in wisconsin. any reductions they would be disappointed with. emily: that was bloomberg's austin carr. that does it for this edition of "the best of bloomberg technology year ago tune in every day at 5:00 in new york, 8:00 p.m. in san francisco. be sure to follow our global breaking news network, tictoc on twitter. this is bloomberg. ♪

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