romaine: from bloomberg world headquarters in new york. >> let's take a recap of the markets. it was lower across the board. the russell 2000 one of the worst performers. if you change up the board, the value versus growth and the underperformer as we go back into growth. yields are climbing. romaine: our take for the next

30 minutes is going to be electric vehicles. general motors and toyota bolstering its efforts to secure a key part of the supply chain. how local governments are using these investments as a way to create jobs. >> there is big money hind ev's. hundreds of billions of dollars when you added up. let's start with volkswagen because their plan is more than $100 billion through 2026. we will talk about how that plan will work out. mercedes $45 billion. the rest each more than $30 billion for 2025. romaine: let's bring in ed ludlow who is been our expert in

the ev space. we started off this morning with the news out of volkswagen. not a surprise, but to see some of these numbers, they are eye-popping. a few years ago, a lot of people were saying ev's are not going to be a thing. >> the headline is the capital commitment. the most interesting number was in the last line of the press release. by 2026, only 25% of the cars the volkswagen will sell will be battery electric. just one quarter. it shows the pace of electrification will be slow. the balancing act not just for volkswagen but american companies as well, i have to do this while staying profitable with their existing combustion engine lines. >> it's incredible we're doing this in the middle of the chip shortage as well. , get through this or are the

supply chain issues going to hamper these growth investments? >> ordering through delivery is extending. it grew again in the month of november and it was a shock the system. we thought the bottlenecks or improving. the data seems to suggest otherwise. on volkswagen, the strategy around electrification isn't new. they struggled with a year of supply chain bottlenecks. it's the same problem i just outlined. they were trying to get cars out of factories. while doubling down on electrification process. they want to build more electric vehicles here in the u.s., but the german local and federal government is saying hold on, you guys have a responsibility to do things domestically. there's a geopolitical aspect to this. >> we are talking about this on

a day when you saw massive selloff in ev companies. companies are putting capital to work like this, will the capital continue to come so cheaply? >> it's a great point. the other thing is you now have optionality. for a long time, this was the narrative when tesla was being put on the s&p 500, it was the only game in town. had a situation where bond members -- managers had to sell tesla. now you have the option to put money into rivian or other makers. there is now the decision of whether you put all your eggs in one basket or you invest in the series of these companies that are all doing the same thing. romaine: can we read into this that this is a commitment? talk about the optionality before you came on the air. we had commentary from the ceo of gm saying they were going to

show off on electric blazer at the ces. toyota with a battery plant here. you are seeing legacy carmakers make big commitments. >> when the ford and gm capital commitments came out last year and earlier this year, we all raised our eyebrows and thought this is it. finally legacy auto is catching up. the volkswagen numbers take that to the next level. remember this is also about manufacturing footprint. volkswagen sells 10 million vehicles per year. tesla might sell under one million this year. nameplates that dominate the market globally and it takes a huge commitment. romaine: why haven't we seen more initiative from some of the japanese carmakers and to a certain extent the korean carmakers? >> i find it fascinating toyota being the case study.

they still believe in the plug-in hybrid. over the medium term, consumers will turn to that because they are hesitant about going all in on battery electric. want to experience halfway. or that economics don't add up. toyota vehicles are cheaper. a hybrid strategy has worked for them so far so they are dipping their toes and because you have to maintain sales. you have to maintain the bottom line to fund the longer-term objective. >> ed ludlow, we appreciate it. we want to stick with this. let's go over to gm. their magnet plant in the u.s. bolstering their efforts to secure key parts for electric vehicles. let's bring in our reporter who

is been heading our u.s. metals coverage. i wonder if this is about securing parts or just an expansion? >> one of the points we have been talking about is one of the automakers got taken off guard by the semi conductor shortage. in this case, they are saying 2023, 2024 we are going to start seeing ev's role off the line. they what to make sure they have the stuff to go into that. this is a change in the way you're making automobiles so you need permanent magnets for electric motors. where earth that makes the permanent magnets. these are things they've never had to deal with before and they're are starting to look at the numbers to say 80% of what we consume in the u.s. in terms of refined rare earth only comes out of china. these are the kinds of things they are saying we have to get ahead of this. >> it makes sense in terms of the supply chain issues.

what about the cost benefit analysis? this can't come all that she for them. >> it's changing a lot of how you're doing these things. at one time, i was asking why can't a big company like caterpillar start making electric machines? they said you are assuming that the lines we have can just be changed. maybe we could change things, or maybe we would have to completely change the way it's done. the automakers are saying the same thing. we have to invest in this, we also have to figure out what it's going to look like on the horizon. i had a conversation with a source asking were starting to see the demand hit in the base metals. they said not entirely. this is something you might have to wait until 2023 or even 2024 to see it and that speaks to the vehicles themselves. romaine: from an environmental

perspective, there's a reason why a lot of this is made in china. there's an environmental cost of getting these materials. in the u.s., we try to position ourselves at being at the forefront of cleaner materials. in order to create a clean vehicle, you have to use dirty chemicals. >> this is a question that the producers and automakers are asking. average citizens said i don't really want a mine in my backyard, send it elsewhere. how do we onshore the supply chains, have domestic sourcing so we don't run into a chip shortage? romaine: with the magnets, there's a mine in california. we had the ceo on an they said they can do it in a way that's more environmentally friendly. >> going to be tough not only in

cereals, we are talking steel makers, copper producers and smelters. electric arc furnaces, steel produces. you the cleanest on the planet, but you are still a massive polluter. to get a net zero, not only do you have to have completely renewable energy to power the mill, but you have to spend billions of dollars in the carbon capture technology and these are going to spread out to all of these other companies. permanent magnets, it's great that you going to start doing it in the united states, but these environmental questions will be at the top of the list for all investors. >> the shift to ev's being clean instead of drilling for oil, when you think about the input costs into the battery, the companies that you cover are they even talking about that? >> yes, because their investors

are asking about it. we have seen that in 2021. you ask any of the companies what kind of questions they are getting, they say environmental questions. everyone is wondering what's the trade-off. you get a clean electric vehicle with no carbon emissions, but in order to get there, how are you going to clean up your act at the mine and in the smelting process? these are the questions that companies are trying to figure out. it's probably not going to be something they can do on their own. we will have to see massive amounts of government investment as well. these are right at the heart of all these discussions. romaine: at some point, you try to balance it all out. joe giving us a little bit of insight into the deal between gm

and mp. toyota planning to break ground on its first u.s. battery plant. we are going to speak about that to the mayor of greensboro coming up. this is bloomberg. ♪

romaine: we are focused today on the billions of dollars behind the growth of electric vehicles. toyota committing to build its first battery plant in the u.s.. this is a big deal for the folks

in north carolina. taylor: they talked about some of the net migration down to maybe some of the carolinas. you talk about businesses and investing and where they are finding the labor, how they are helping to better control their supply chain. on the outskirts of greensboro, north carolina is where toyota is going. how are they thinking about controlling their battery, taking on ev's and investing in their own supply chain. then what that means for that town. in greensboro, north carolina. let's talk to the mayor. there's hundred and 26 miles when you talk about the state and the key logistics hubs. i'm curious as to how these conversations come up. d have to offer incentives or are they desperate to invest and

you open your doors? >> they are making a huge investment, but any big project comes along with incentives. we think we had a good incentive package, but keep in mind we got to know toyota about four years ago when they came looking at this mega site. ultimately, they chose to go to alabama, but we continue to make improvements and we were able to land this great project. >> i wonder what those improvements look like and whether they are attracting other companies like toyota to make a similar move? >> they absolutely are. we had a big announcement about a year ago. we have other exciting announcements in the pipeline. we know that smaller businesses who plan on supporting these anchor tenants are looking at greensboro and surrounding counties. romaine: one we look at look to vehicles and the components,

batteries and whatnot, a lot of that is starting to come to the u.s.. do you see in general and on shoring of manufacturing. things that over the past decades have been farmed out to asia and latin america? is there enough appetite for that for other officials out there to bring this back to the united states? >> absolutely. i think we have seen the importance of investing in ourselves domestically and i know that based on the looks that our chamber of commerce is getting that definitely, we have more people looking in our area that we have in many years. we have really built up a quality-of-life to attract people to a good midsized city who want to get away from larger cities. taylor: i am curious how you can ensure these companies who are investing, that you can provide the labor? how do you ensure that you also

have the right talent that companies are confident that you will make your into the barn -- end of the bargain? >> it is a reasonable -- regional project, not just the city of greensboro. we offer through our community colleges to train people specifically for the jobs they need. we will go out and hire instructors to make sure we can provide an employer with the type of talent they're looking for. >> when i think about infrastructure investment, greensboro is so close to so many highways and also the center of other forms of more public transit. as the mayor, i wonder what kinds of investment you think are important at this time? public transit, or investment in electric vehicles which you may not see payoff for a long time in terms of affordability? >> i don't think it's either or. we have to look at both

independently and make the best investment that we can. we have made strong investments in infrastructure. randolph county has made investments. we have some of the best road systems right here in guilford county. when we have a large employer like this, we know we can work on the mass transit to make sure that people have the ability to get to work. romaine: there's is now a lot of competition out there about various cities trying to position themselves to be alternatives to places where we sit like new york and los angeles. they say come to our city, you will have a better quality of life, and we have great jobs and universities. are you seeing more competition? north carolina, you guys were out in front of this years ago. we are seeing a lot of places down south saying they are better.

>> i think that we are a midsized city with big city amenities. we just opened up a $90 million performing arts center. great broadway series, wonderful music, a coliseum that is one of the largest in the country. we're just finishing our greenway. we have wonderful amenities, great colleges and universities, seven universities within our region. we have an awful lot to offer. good affordability. >> that is one of the complaints about new york or san francisco is it's so tied to the capital markets whether it be finance or the dot com bubble, that when there's a pullback the city feels it. are you worried about the logistics in autos and the future of technology that you are too tied to those industries? >> i think we learned our lesson

. historically, we were tied to tobacco, furniture, and textiles. you know were all of those are right now. we are definitely diversifying. we appreciate our small and medium-sized businesses. as a community, you can't put one industry -- all of your eggs in one basket or industry. we learned that lesson. >> my colleagues have brought up a good point that it's not the creation of batteries are so esg friendly themselves, how do you control for any environmental externalities that might arise from a new plant being built? >> they are a large user and will have to pretreat their -- that comes out of the plant before it makes it to our sewage plant. there is a double book. i think we have a good plan and we will be able to work that with that toyota. >> we appreciate it.

nancy vaughn, the mayor of greensboro, north carolina. former president trump has said that he is losing his bid to shield the january 6 records and an appeals court. again, unable to shield january 6 records in an appeals court. we will continue to bring you those headlines as we get them. we will be back in a moment with final thoughts. this is bloomberg. ♪

romaine: we are a couple of minutes away from the end of the show. we talked about ev's and the money being poured into it.

volkswagen making a big commitment. the ceo of gm talking about a potential electric chevy blazer. >> one of my favorite conversations was talking about the environmental impacts ev's are having, but the input costs and companies need to understand those environmental impacts as we get to the final product. >> it's not all environmentally friendly. with a big selloff, it could be expensive ahead. romaine: a couple of years ago, you wanted to buy an electric car, you had one option. now, all of the big automakers are in it and startups trying to ramp up production. we have some options. >> we have some options. get us out of here. >> bloomberg technology is up next.

>> have a great evening. this is bloomberg. ♪

>> the, heart of where innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology." with emily chang. emily: hospital admissions jump, booster shot recommendations expand, and the omicron variant continues to spread. we will have a virus update.

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