>> rose: welcome to the program. we begin again this evening with politics and talk to mike allen, jonathan chase and dan. >> it was a reminder if you have a normal republican politician on the stage, prosecuting conservative arguments who actually knows what he is talking about, who is calm, understated, self-confident, we would actually be winning this election. most of the arguments he made last night on a range of issues, on iraq, on russia, issue after issue, are not donald trump's positions. so it was sort of disconnected from was' going on at the top of the ticket. but it did remind you how we so lowered our standards, republicans with this nominee, with trump because when you actually have someone normal up there, whether you agree with him on that issue or that issue, he can actually win the argument. >> rose: also this evening we talk about the world of automobiles and fuel with jim lentz, the c.e.o. of toyota

north america. >> that's where artificial intelligence comes in. because we can sim late what will happen, what the car has to react to. because the reality is to try to get to a trillion miles will be impossible. so without artificial intelligence, we don't believe that true full autonomy will be able to be obtained. so we are investing through toyota research about a billion dollars just to develop the artificial intelligence. and the best part about that is what we learn from that, we'll be able to then take in the home. so we'll be able to create robots, we'll be able to create-- we were developing device right now called blade that actually uses gps indoors where we'll be able to map a shopping mall. so someone that is blind will have this around them and has cameras and microphones. and it will actually be able to tell them where stores are, based on the logos of the store,

where elevators are, where rest rooms are. that to us is true mobility. >> rose: politics, cars an autonomous driving when we continue. funding for charlie rose is provided by the following. >> and by bloomberg, a provider of multimedia news and information services worldwide. captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> the sole vice president did he bait took place last night at longwood university in virginia, with only 33 days until the election, mike pence and tim kaine argued their candidate's positions on syria, vladimir putin, abortion and other issues. the consensus among analysts was

that governor pence delivered a stronger performance but struggled to defend donald trump. the secretary of three presidential debates will be this sunday at 9 p.m joining me now from washington, mike allen of "politico," jonathan jay, a columnist for a-- his fourth coming book is called audacity, how barack obama defied his critics and transed america. and dan seenor, an advisor to mitt romney and also peaker paul ryan. i'm pleased to have all of them on this program. let me just begin here in new york. last night, what did that debate tell us about those two men, the republican party and the democratic party and hillary clinton. >> well, on the republican side i think about every republican i foa was saying it was a reminder that if you had a normal, professional republican politician, republican politician on the stage, prosecuting conservative arguments who actually knows

what he is talking about, who is calm, understated, self-confident, we with actually be winning this election. most of the arguments he made iraq, russia, issue afterssues, issue, are not donald trump's positions. so it was sort of disconnected from what is going on at the top of the ticket. but it did remind you how we so lowered our standards. republicans with this nominee, with trump, because when you actually have someone normal up there you whether you agree with him on this issue or that issue, he can actually win the argue. and last night i don't think it has much of a difference ultimately on the outcome of this election, but i do think in the near term, pence won that debate. >> rose: mike allen, what do you think? >> well, it's funny, my funny panelists are up with office dues, dan tweeted that on balance pence did better, john has said that pence was the clear loser because of the easy videotapes, that refutes so much of what he said. the one way that mike pence really scored is he has given donald trump something that we all would like in life, and that is a second chance. that because he had a little bit of a momentum shift, that trump

pence ticket got off the mat a little bit and so the chance for this debate coming up sunday, the townhall debate of washington university in st. louis, a chance for donald trump to maybe learn a thing or two from pence, dan was talking about what his republicans are saying, the other thing that i know his republicans have been saying to him today because i've been hearing it so much is we wish that pence were doing the debate prep for trump. we wish that trump would look at some of what pence did that worked, and take it as his own. >> can i respond to that point that dan made. have i seen a lot of conservatives excited about the fact that pence was prosecuting the case against obama. and they think he won. and in a sense he did because tim kaine wasn't defending obama. he was defending hillary clinton and prosecuting the case against trump. so it was an unopposed casement but the fact is that barack obama is a pretty popular president 57bd there is a

defense you could make against him which is persuasive to most american was elected him twice and still approve of him by high measure t is just not what tim kaine was there to do. >> rose: but the perception is by a number of people other than dan and his fellow republicans. >> right. >> rose: the cnn poll and other places, some focus groups and others, that pence did better than tim kaine last night who it benefits is another question. but you don't share that view even. >> well, i think they're right that as a performer and you know he is a trained talk show host. and he's got that nice baritone and he spoke a little more slowly. so he is a little more of a smooth television performer. so i think he pulled that stuff off more effectively. and as i said, kaine wasn't really rebuttingting a lot of te argument he wanted to make because kaine was there to make different points. >> rose: on a moment of performance for all of you, is it bad debate tactics to

interrupt too shall? >> look, i thought kaine was surprisingly bad last night for the following reason. he tried to do to pence what joe biden did to paul ryan in 2012. constant inturpses, just lobbing everything at him. biden used the word mall arcky, these constant interpretationsing of laughing. i think that kaine can't pull it off like-- bieden can do it graciously. biden does it and he is still that lovable uncle who can get away with doing it. there was something incredibly awkward to the way kaine did it was that it was annoying it wasn't annoying in 2012 when joe bieden was doing it. and i was frustrated because i worked on paul ryan's debate effort. but as a viewer i found kaine annoyk and difficult to watch the way i did to not feel about bieden in 2012. >> chrlie, here is another reason it didn't work for kaine in the way it worked for vice president biden. i have known senator kaine for decades. he was my mayor in richmond. he was my governor. i live in virginia, and now he's my senator.

but for so many people who were watching last night and the ratings were off from four years ago, but still millions of people catching-- watching, tens of millions of people watching, senator kaine was totally now to them. and it is tough to have the bern be introduced to you and be doing all that interrupting. so he had been prepped to be tough. he had been prepped to be aggressive. he had been prepped to let nothing go. but when are you also trying to shake hands and meet the audience for the first time, that's really tough. and that's why john and dan talk about the style points for pence. you watch him, he was very conscience of that box that he was in. he was talking to the audience. and people said that his mind was on getting a job on fox after this election, clever note that i got said that maybe not so crazy for pence to get a job on fox. and looking ahead to 2020.

he certainly helped himself on those things. and senator kaine scored by, as john has written, compiling a lot of material that now the clinton campaign can use against the trump-pence ticketed. last night on the msnbc late night coverage lawrence o'donnell said on tonight's show he was going to take a lot of clips of pence saying that trump had never said anything. and put it up against video of trump and pence saying it. well, the clinton campaign beat them to it by a day. the clinton campaign now up with a video that is linked in-- or is fixed into john's article where they pair him up. and it's pretty devastating. >> i saw that video. i saw it in john's article. you should get a commission from the clinton campaign, john. look, i think that is effective what they did. this video showing all the things that pence denied about trump when in fact trump had said these things. i don't know how many people

actually see it not nearly as many people watched the debate last night. first impressions matter and i think pence came off better than kaine. and i think he did two other things for trump. one, if people are apprehensive about trump, not just rejecting him like i am, but just apprehensive, concern from republicans there is a concern of republicans that aren't getting behind him. i think pence send a message i'm exhibit a of the kind of person that doned a trump will surround himself with so i can give you reassurance. >> that is not nothing. >> the run decision it was mike pence, and therefore it may be some confident that if he should get elected he will choose people that are qualified. >> and if conservatives are concerned, mike pence is an authentic movement conservative. that said, i do think the denying trump's statements the way jonathan writes about, the way the clinton campaign put that video out today am i don't think that will be a huge problem for pence in the short term. i think it will be in the long-term. if he has aspirations for 2020, whatever he wants to do. it was pretty indisputable. pence was quoting donald trump.

and mike pence was saying donald trump did not say those things. and there's not even gray area. it was-- there is nothing ambiguous about it, it was black and white. i think over time, it did chip away at pence's credibility. >> excuse me, charlie, just real quick on that point, maybe the quote of the evening, vice president biden who gave an interview to countries cuomo on cnn was talking about how governor pence had to constantly defend donald trump. and vice president biden said hell of a way to make a living. >> rose: jonathan, what do you think president obama thinks about all this. and is he anxious to get into the debate because his legacy may very well be at stake? >> well, he clearly realizes that his legacy is at stake at a lot of issues. like take the paris climate accord which was signed today. donald trump is a climate change denier. said it is a chinese hoax, wants

to build as many coal plants as he can and said he will pull out of that agreement as soon as he takes office, and would cause the entire thing to collapse and would cause climate change to run away out of control. that's probably president obama's biggest legacy. so on that, and many other things, he's very aware that he needs hillary clinton to win to safeguard the policies he's put into place. >> rose: and is he girding for action s my question too? i mean is he anxious to get in the fray. >> i think in some ways he is. i thought it was interesting to watch his speech at the democratic convention in the summer. because when he was talking about trump, he was almost breaking up. it was almost as if he couldn't help but laugh at the idea of donald trump as president. and i think people who have that job, do have that reaction. i think he's amused and offended and kind of alarmed at that prospect. so i think for him, it's something that is very near to him. and yes, i do think he would like to mix it up. >> rose: do the three of you disagree with what one friend said to me at the end of last week, the superstar political

tal ent of this campaign season is michelle obama. >> yes. >> sure, we saw that at the convention. we've seen her out on the trail, elsewhere. and charlie, as you know, and as dan and john know, she's been a reluctant public face during much of this administration. but she's been doing so fantastically. and i think that they both, i think that they are united in not just eagerness and the importance of them going out to prosecute the case against trump. they're enjoying it. clearly the president is. charlie, you and i have talked about the fact that he, for one thing, as my friend jim vanderhi poirpts out a little bit, enjoys secretary clinton how it's done, right. and second, he just loves taking it to him. a congressman told me that he was in the limo with president obama and president obama was repeating to him some of his

best lines from that white house correspondent dinner years ago when he got trump, so in a ditter that he stomped out. so the president is enjoying this. >> rose: i. >> i think she's a huge talent. when i watched the democratic debated i watched every night and thought-- . >> rose: just about every single one of these people speaking whether it was joe biden, elizabeth warren, michelle obama, every one of them, i disagree with them, but every one of them would be beating trump by 15, 20 points. the contrast of michelle obama and hillary clinton just in terms of her retail political skills, her oratory skills is just day and night. if she not denied so vemently that she had any reason interest in running for office, i think every democratic campaign committee would be recruiting her to run for something. >> rose: go ahead. >> i agree. she is an extraordinary talented and it is all the more remarkable that she is not a politician. she hasn't spent her life giving these kinds of speeches all over the place.

obviously she has public speaking experience but this isn't her avocation, this isn't her field and yet she's so incredibly effective at it, its' pretty astonishing. >> rose: she was en reluctant about him getting too it after he lost that congressional race. let's look ahead to sunday night. what do-- what does donald trump have to do in this this debate or is it too late? >> mike? >> no, it's not too late. and this townhall fore mat could well play to donald trump's strengths. i can tell that you his team says that they're happier to have regular people as you say, regular people asking the questions as opposed to a moderator. he did well in the townhall fore mat in the republican primaries. but and the reason that dan ken certify this, the republicans are so worried about this debate and are not particularly, i will tell you, not particularly bullish about the fact that we're going to have a totally new trump on sunday night, is

they're worried about him overreacting. they're worried about just as he took the bait which could be the title of a book about this debate cycle, the fact that he kept taking the bait from secretary clinton, people close to him are worried about him doing that with the questioners in st. louis and coming off as too hot. >> rose: what do we foa about his presentation. >> yeah, i think that people around him is are trying to get him to prepare like mike hence-- pence did and not prepare like he did for his first debate. many of us all say at what point will donald trump truly change. when will the pivot actually count. >> we know the answer. >> it was at the convention, no, no, the lead up to the first debate, no, the lead up to the second debate. we're five weeks out, four and a half weeks out. he's campaigned basically, mine us some mini interpretations, he's campaigned the same way for this election. it's the way he has operated in public life for the last four debate-- decades. the idea he will change now in

such a dramatic fashion given how easily his butt ons are pushed. and i don't necessarily think a town haul with-- hall with quote unquoalt regular people is a fore mat for him. i think it is an awkward situation, my experience for candidates preparing for that, it is among the most difficult to prepare for, you don't know who to look at, who to respond to. the questions can come out of left field. if you have a regular journalist motd rating, you can pretty easily predict what the questions are going to be. when you have people just coming with their every day complaints and concerns, you can get anything. and i'm just-- so i just think he's campaigned one way. he hasn't changed this fore mat has all sorts of sort of variables that he can't actually truly plan for. i have a hard time believing this is the debate that he turns it around. >> rose: as hillary clinton said, there is no new donald trurp and others have said that. >> real quick, charlie. i told you the great quote that says it all, someone said if there is one guy that is not changing it is a 70 year old billionaire.

and donald trump thinks that this has worked for him, and quote that someone involved in preparing for this debate told me, mike, don't forget, there is a difference between prep sessions and prep occurring. so they are having sessions. they had three sessions before, but that doesn't mean that donald trump is internalizing it or changing his approach to life in this weak interim. >> can i make a point about that. and i'm very much accepting dan here who i know is not supporting trump in anyway. but i have seen so many republicans talk about donald trump's inability, unwillingness to do basic presentation for the debate as if it is merely a problem of getting through the campaign. as opposed to a complete disqualification for the presidency. a lack of attention span, a lack of interesting facts and knowledge and just refusing to take this job seriously. i think the conclusion republicans should be taking is this man should not be

president. not we need to do a better job of fooling the republican to thinking he should be president. >> i agree. i think the way a candidate runs for president is often a window. i think the organization they build, how they themselves manage it, how they deal with surprises, it is very much sort of a simulation for being president. not a perfect spimlation. >> but it's a window. >> rose: what does that say about mitt romney. >> i think romney would have been a good president. he ran a losing campaign. but he wasn't donald trump. but bama and-- barack obama in 2012 was a vulnerable candidate. >> i'm not sure he was as vulnerable as people think. >> because of the constituency he had. >> he had a massive demographic advantage. the economy, the perception was the economy was actually starting to come back. incumbent presidents rare leigh get thrown out of office when they are running for a second term. i think obama ran a better campaign that romney. i think romney ran a good

campaign and could have been president. i don't think donald trump is a, running a good campaign or b could be president. and i think we're just constantly reminded of this including a few nights ago. >> rose: mike? >> and charlie, to agree with john's point, "the washington post" as you know day fantastic biography book about trump that came out in august. and the most interesting sentence in that whole book, the authors mark fisher, mike grannish went to see trump at trump tower. and one of the most fascinating things he told them, that as this process moved along, as he kept winning, he was thinking about reading a book about a president. but didn't have time. >> rose: there is also the announcement this week that al gore will be out campaigning for hillary clinton on issues especially like climb climate. >> yeah, you know, that's been just the understated issue of the entire campaign cycle. i don't think any of the debate moderators in any of the very numerous republican debates brought up climate change a single time as far as i can

remember. and it didn't come up in either the first two presidential debates either. but it's probably the most important issue of the entire cycle. >> rose: well, not only that, as president obama calls it, an national security issue and the most important threat to the united states over the long-term. >> it's-- you don't have words to express how important climate change is in maintaining and continuing the progress of the paris climate agreement. it's just been totally frustratingly absent. i think it's a problem in the republican party which just won't engage on this issue whatsoever. but it's also a problem of the news media that just won't present the issue before the voters in the way it deserves. >> i disagree with jonathan on some of the things he said about the actual issue. but as a political matter, i think the reason you have al gore coming out, the reason you had hillary clinton bring it up as an issue in the first debate is because they're trying to motivate certain segments of the obama coalition that are, i wouldn't say unmotd vaited by

not highly motivated, the mirl enyals, so climate change is an issue that you can speak directly to young people. and if they don't beat trump among millenials by massive numbers, they're not going to win the election. and that is the most important part of trump-- of gore coming out tomorrow. >> rose: when i asked an earlier question, i said about the second debate, and if he doesn't, i meant to say, i meant for you to interpret what i said as not that it's too late now, for him, but if, in fact, this debate is the last best clans for him, donald trump, to change the momentum of this thing, will in fact if he fails to make a difference in this debate coming up on sunday, his road is much harder. >> charlie. that's exactly. so and he has one thing he needs to do in this debailt and it's the thing that i told you he needed to do in the first debate and he didn't. and that is he needs to come off as a plausible commander in chief. he has to pass the commander in chief test. you watch frank luntz's focus

groups. you go around and you ask people for one word to describe the candidates and they talk about hill rae clinton, and it is all very critical words. undecided voters get to trump, they are also equally critical but they want change. and this is a change environment for all the reasons that dan said at the very top, that a more conventional republican would be in such good shape, donald trump came across as someone who could be commander in chief, that you could trust, there would be-- there is a potential, tremendous potential for him to have a higher ceiling. but so far he's been in that 38%, to 42% band and he's not going to break out of it. if people can't imagine him in the oval office. >> personality and behavior have prevented him from making the change argument that is just out there to be made in this campaign. >> i think voters in a change election tend to be very

tolerant of the imperfections of a candidate if that candidate is the change candidate. in other words, they're willing to tolerate a lot, if they believe that candidate is the vessel for change. and running against hillary clinton who exudes the status quo they would tolerate a lot of the republican nominee. >> i disagree. >> i think trump is a bridge too far. i think trump is actually the temperment issue, the fact that you cannot-- many republicans can't imagine him in the situation room, are terrified by that imagement can't imagine him in the oval office is what is giving people pause. >> jonathan. >> so i don't think that's actually what the electorate is up to right now. i don't think that's right. look, the president, his approval ratings are somewhere from about 52 to 58% depending on the follows-- polls. the problem is that the democratic candidate is very, ver personally unpopular and grew increasingly so during the campaign. i don't think there is a huge clammerring for change. there is a distrust for her and those are different things. >> there is a distrust of her and high wrong track numbers.

>> but the voters-- a wrong track for decades there is almost always high wrong track numbers. >> but it is not even close. >> those numbers dnt prove anything. they don't corelate to any actual desire to change parties. people have studied this and looked at any correlation between those numbers and behavior and it just doesn't exist. that number is not useful. >> other than the president's personal popularity, which i agree. >> job approval rating. >> job approval rating. >> this electorate, this electorate is open to a change. clearly or donald trump wouldn't even be where is he. why is donald trump performing the way he is performing. >> for the reason i gave you which is hillary clinton is personally untrusted. >> also because she's a proxy for the status quo. >> no, i am not disagrees. i'm not suggesting i know anything more than anybody. i do think there is within a significant portion of the working class of america, men and women who are working and without college educations, but hardworking who fight the wars and pay the taxes and all of

that. there is a dissatisfaction with washington. this year. >> you are talking about the white working class, right? >> the nonwhite working classes heavily democratic and heavily supportive of the democratic nominee. yes, you are talking, are you right about the white working class but that has been a republican constituency for a long time. >> let me raise one last issue. and it goes back to frank luntz, frank luntz found out in the polling that he did among those people that he sampled in the focus group, that when the meters suggested this to him. people are less concerned about donald trump's taxes than they are about hillary clinton's emails. are we expecting anything to happen for this julian assange or whoever it is on the email front that might have an impact on this election? is there buzz, is there talk, is there any reason to believe that something will come along that will be an october surprise? >> i'm sceptical am i mean what he came up with in the last couple of days didn't wow. >> at all. >> if he does have anything that

exceeds, provides more shock value than is already out there, i'm dubious. and i do think the tax issue say major problem over time. the more clinton-- she hasn't had a debate where she could actually say we now have a window into your tax returns. that wasn't the case in the first debate. now in front of a massive audience she can make that point. i don't care what you think, republican, democrat, working class, wealthy, whatever. the notion that someone has gotten away with making massive amounteds of money and not paying any taxes seems offensive to some, deeply like of offer. and i think i''s going to be a problem for trump over time. >> on that point too, i want both of you in washington to come in on that. on that point, the argument is made that what angers most americans, less than whether he paid taxes or legally used tax escapes, is the fact that the way he treated people who work for him. and the fact that he wouldn't pay them and they had real problems and a lot of testimony about people who said they weren't paid for their labor.

>> charlie, here is so many of these stories. one that i read recently was a family business that had supplied pianos to the casinos in atlantic city. you do hear so many of those stories. the other thing that i think bothers people about "the new york times" story is losing a billion dollars. like that doesn't seem like a good idea either. on the emails, charlie, private conversations among democrats in washington, can i tell you that they are worried. but charlie, it is a fact that more has been hacked than has leaked. >> exactly. >> and therein lies risk. >> rose: we will come back one more time on the notion, i just think there is a general sense of despair about washington and ef everywhere you go, whoever you listen to, talks about the impact of gridlock. whoever gets the blame, who gets the blame is the establishment in washington. and i do think that that is an element of the desire for change. and that there is a change election. we may not have candidates that satisfy the criteria for change,

but there is a demand for change. >> well, public opinion turns sharply sceptical of all major institutions around vietnam and watergate and that's largely been true with the exception of a few periods, we rally around the flag after 9/11 and so on. so that's just the basic landscape but i don't see any characteristics that say people want a change in parties, want a change in administrations. i agree with you that hillary clinton has perception problems. and when the news media focuses on scandals real or imagined, around her, that was the period in the election when she plummeted and drew close to a tie with donald trump f something like that happens between now and the election, this election could get tight again. so i agree with that. but i think we have different causes in mind for what is the source of her vulnerability. >> and so therefore what do you think she has to do, jonathan? >> i think she has to avoid providing any material that

could be gris for the news 34edia and if any come up she has to deal with it in the quickest, most open, most transparent way possible to avoid giving the news media an excuse for more scandal coverage which is what sunk her briefly a couple weeks ago. >> rose: on that, thank you so much. great to see you dan, great to see you jonathan, great to see you mike. >> good night, charl qulee. >> we'll be right back, stay with us. >> jim lentz sheer, the c.e.o. of toyota motor north america. the automotive industry has undergone tremendous shifts in recent years. autonomous driving, artificial intelligence, a development of sustainable fuel technologies. they're all changing the role of cars in you are every day lives. earlier this year toyota announced a new partnership with uber to collaborate on new mobility services. we want to talk about all of that and i'm pleased to jim lentz at this table. welcome. >> thank you. >> i want you to help us understand, where is the automobile industry today and we can figure out where toyota fits in that.

but when you look at what we think offing a the auto industry, we understand how technology is delivering up driverless cars. and we know of the demands for energy efficiency. we know of the global differences. and the global markets that are producing larger and larger middle classes, all of that. >> well, it's interesting. i have been doing this for 34 years now. and the business used to be relatively easy. you try to forecast what is the market going to be, where is the economy, where are interest rates. how is consumer confidence. how big is the market, how many are going to be cars, how many are going to be trucks. but that really changed today because you still need to do all that but now you have to throw in fuel price. you have to decide what kind of engines should we be building. as you mentioned, not just internal gas engines, hybrids, plug in hybrids, fuel cells, evst all of that. beyond that it is what happens with safety and autonomous driving.

and that's just kind of the traditional way of looking at our business. but today you've got to look at what do we do with micromobility. so things like how do we help people get from their home to public transportation, to their office and back. you know, what happens with personal mobilitiment because we believe that mobility is important for all. so people that have different disabilities, you know, how can we use the technology that we're developing for autonomy and put it into mot orized wheelchairs or put it into aids for the blind. so all of that. and on top of that, you have to think about how people consume transportation into the future. whether it's ride sharing or car sharing. so it's a really, really complex environment. >> rose: on the last point, how do people consume transportation? i mean do auto companies have to say to themselves, we're looking at a future in which there will be declining number of people in terms of percentages who will

own their own car. >> difficult to say right now. and i will tell you why. i may be an outliar in this, but if you look at why ride sharing, and ride sharing is the predominant sharing in the u.s. compared to car sharing in europe. but it really developed out of again y. again gen y came out of school, they were hammered by the recession, they had college debt and they really created this sharing economy. so the question becomes, what happened s as their life stages change. as they begin to have families. as they move back out of the cities. they're not moving too the suburbs the way our parents might have. but what happens to their driving needs. because they're really the ones that have driven this sharing environment. and we're seeing now that last year almost 30% of total industry sales were to the millenial generation. 30. we think it will be 40% by next year.

so what impact does that have on this sharing type environment. and on top of that, if you look at gen z, those are 17 and younger, pretty short wheel base to look at the data but 95% are getting driver's license in the first two years. 19-- . >> rose: so between the year they are qualified which used to be age 16 wks so it's 16 years old, 95% are getting a license by 16. and if you ask them will they own a car, 90% say that they will own a car by age 19. so the challenge becomes with this ride sharing car sharing, is is this generational, or is this something that is just in its infancy and going to peak. so you know, as a manufacturer, is you have to be involved. the good news is so far they are not driving flying carpets. they're still driving cars so there is still a business for that. and the reality is, the more car sharing that is done, the more miles will be on the cars and the shorter the turn cycle will

be. so there is still good business to be had for manufacturers. but we've got to understand it. >> then the question also comes is what kind of cars. when you look at that, and your daitd says to you, about with kind of hybrid or whatever kind of fuel we're going to be using. >> for all cars or just for the ride share. >> well, for all cars. >> for all cars it's thering. if you look at all hybrids plug in hybrids, fuel cells and electric vehicles. >> right. >> it's about two and a half percent of the total industry. >> rose: two and a half. >> two and a half, two and a half. it was almost four percent. >> rose: so that is fossil fuel driven. >> yes, yes. and there are about 70 of those name plates chasing two and a half percent of the market. so if you look at the passenger car side there are 50 passenger cars in that pile, prius is by far the biggest player. we sell about 11,000 a month.

the rest of those name plates average about 450 a month. if you look at the truck side where rav4 is the biggest, if you pull rav out, he had sell 3500 a month, the rest sell 135 a month. if you look at pure electrics, it's .5 percent of the industry. so the question is, how quickly will that grow. how much can regulation kind of lead consumers in that direction without getting too far ahead of us. >> rose: and what would cat lyze it? what would dramically increase the velocity. >> fuel price. >> rose: fuel price goes through the roof. >> there is a direct correlation between fuel price and the adoption of these new technologies. customers still get a pencil out and calculate what is my payback for paying for this additional technology. >> rose: and if they can't figure it out, if fuel price makes it an attractive

alternative. >> yeah. today fuel price is-- . >> rose: it will go down, foo, three dollars. >> yeah. >> rose. >> does this affect, and this is the big question, that often is asked of auto companies. are you putting enough research into creating alternative fuel. >> we are. i mean if you look at hybrids of which we're 70% of the market. >> rose: right. >> and prius is how much of that. >> prius is 70% of the market. >> rose: 70%. >> 70%, or hybrid. so we've sold roughly 8 million of them globally. so we have a pretty good understanding of the market. we started the research on that product actually back in 1992. so we started researching hybrids and fuel cells because our view of the world was that we were tbing to hit peak oil it was going to be sometime around 2025. hybrid was be able to squeeze

oil for a certain period of time. but the next move was going to be hydrogen. we were fairly ak rate on what was happening with hybrids. the challenge is technology has now allowed us to find a lot more oil and get a lot more oil out of the grounds. >> rose: fracking and everything else. >> fracking and deep water drilling and everything else. >> rose: technology has enabled us to drill and find more fuel than we ever imagined. >> yeah. >> rose: so when is crisis come? or do he-- it's just been pushed back to. >> i think it's been pushed back. >> rose: or forward, whichever it is. >> but the challenge. >> rose: to a time uncertain. >> to time uncertain. and the challenge becomes if gas lien stays low, $2, $2.50, sometime into the future, it is going to be difficult for us to convince customers to buy this alternative fuel. if you look at evs today, probably the biggest seller in the mainstream market has about 18,000 dollaring of incentive on

it today. so they actually sell at a discount to their gas counterparts in the market place. so that's the challenge. >> rose: that includes hybrids. >> just straight evs. >> yeah, yeah. >> rose: what is a straight ev for you. >> we had a rav4 ev. we sold about 3,000 of them, went out of production about two years ago. so today we are betting that the next generation did what we feel is a better battery and that is hydrogen. >> rose: then lithium. >> so we are selling fuel cells in california and it basically san ev it is an electric vehicle that produces electricity, as opposed to carrying around big heavy battery. >> battery is a game, isn't it. >> yeah. >> i mean i think it just built a huge plant out in nevada.

>> he has you look sceptical. >> we just have a different view of the purpose of evs. we believe that electronic vehicles have their purpose in this shorter rang micropossible ility. so vehicles that may travel 50 miles which much smaller, much lighter, much lower costing but we think that vehicles that travel 250, or 300 mile rang are better being hydrogen vehicles. so our hydrogen vehicle today goes a little over 300 miles. it reveuls if three to five minutes, very much like gasoline. you done have large charge periods. and you don't have the rang anxiety. the chamging is we have to rebuilt that. >> you have to do it by anybody else i think california has done

the most in that regard. they have funding of about 200 million in grants. there are about 21 stations today. they will be roughly 30 by the end of this year. probably about 50 by the end of next year. and to service 10,000 fuel cells on the road you need around 70 stations in the right elections. so it's doable but it's a little behind. >> what do you say to those who say look, this is a problem not just in terms of the availability of fossil fuels or the cost of fossil fuels. st also a question of the climate and climate change and we have to do something about it and one of the principal po leutders is cars. >> we are part of the problem. >> right. >> but that's why we had the foresight to develop hybrids. plug in hybrids that will get over a hundred miles per gallon so we can stretch that out. but the real solution we think long-term is hydrogen. there is a lot of hydrogen available. today it's basically created

from natural gas by stripping carbonout. 234 time we'll be able to create green hydrogen. so the hydrogen that goes in will be carbonfree. and the exhaust is nothing but water vapor. so to us that is the holy grail, that is the ultimate. >> rose: do you make all of the components of your cars. >> yeah. >> rose: everything, are you not subcontracting it out. >> not in the case of fuel rose: and you assemble them mostly in the united states. >> the fuel cells are coming out of japan because the volume is so small. >> rose: so in terms of the market in kleina just take one place, and the emerging middle class there and in other places, are their test tastes the same or does it differ because of culture-- cultural differences and economic circumstances. >> it's very interesting in china. so it's the largest market in the world for cars. >> right. >> rose: it's in excess of 20 million vehicles. primarily has been the top one or two percent.

so it is not even making its way to the middle class yet. especially for the type of quality cars that we produce that the big three produce or even the big suppliers that china produce. but it's interesting. their tastes are now changing. almost the exact same as american tastes. so passenger cars are now kind of falling out of vogue. >> rose: passenger cars. >> yes. and they want suvs. >> do they really? >> suvs, small suvs are very, very popular now and that just happened in the last couple of years. very much like america. >> rose: how do you explain that? >> it's difficult. i know they do like to emulate many things that happen in america. >> rose: it is amazing. there is a story in the paper just yesterday or today maybe. you know, about the wealthiest man in china. you know he really wants to dominate the movie business, globally. >> because they now are the number one market for movies in

the world. >> yeah. >> rose: and if you are number one market for anything, selling cars will you have a powerful incentive to be dominant. >> yeah. that's exactly right. it's an interesting industry. it's very much like the u.s. industry was at the turn of the early 1900st. there are probably 200 manufacturers of vehicles in china today. so there will be massive koition at some point in time. and they will end up with a very, very strong, dommestically produced car industry. that will be big competition for all of us on a glon all basis. >> rose: how soon will that be? >> i think it will be awhile. some of their vehicles in south america, you see some of their vehicles in eastern europe, some in europe. nothing yet in the u.s we're a pretty tough nut to crack over here. very, very stringent regulations on safety. >> we have the highest, we had the most stringent emission standards or is it something in

scandinavia or something. >> scandinavia, especially like norway is really going all electric. but in terms of diesels as an example, ours are much stronger than even what europe is. i think on gas engines europe may be a little bit stronger than we are. but in total we've got really, really tough emissions. >> rose: if you are a car dealer, how do you make money? what is it, for example, it ain't the markup on the car, i don't think. >> no, it's not. you make money by taking great care of customers. and that is cliche. >> rose: customer loyalty. >> it's all about customer loyalty. it's about taking great care of your customer so they come back and buy cashes again. >> rose: and the family does. >> and the family does and their trade ins you. you come back for service on the cars. it is really all about creating loyalty with customers. >> rose: i said at the beginning i want to talk about the automobile industry and where st. where are sports cars? is that simply a-- what do they

say? >> they're falling down a hair. so if you look at convertibles as an example. they are less than 1 percent of the market today. much smaller. sports cars by themselves, they tend to be extremely hot the first two years they're in the market place. and then they have a rapid decay for the rest of their lifecycle. so it's a tough business to be in. >> rose: pickups in america, big item. ford f-150. >> still number one. >> biggest single selling vehicle. >> yes, yes. >> rose: is it big in other markets. >> no, it's-- canada as well. but it's a nofort american phenomenon. >> rose: wow. >> and they are extremely strong. >> rose: how do you explain that? >> i think it's-- i think it's image. i think automobiles represent freedom for a lot of people. and especially as you go into the west. it's kind of like having a horse. >> rose: yes, it is. >> it's still that freedom, you know. >> rose: it's a little bit like that in the south too. >> very much so.

>> rose: so toyota, so how are you going to-- first of all, toyota, and i don't have this recall. but you know you have had some problems in terms of that have been-- that went to the heart of toyota's image. >> yes. >> rose: what have you learned about brand protecting brand, rebuilding brand, making sure that you recapture. >> it was a difficult lesson for us. you about i can tell you the three primary things we learned. number one is make sure you listen your customers. not just hear their slois but really listen what they are telling you. number two is be transparent. be transparent with information within the company, and information outside the company to regulators and everyone else. and number three, be quick about it. that was a tough lesson. >> listen and respond. >> listen and respond but can i del you today as a result of that, we are a much stronger

company. we are stronger, we're much closer to our dealer body. because they live through this as much as we did. and i think our loyalty is stronger to our customers today as a result of that. >> is buy american an advantage for general motors or ford against toyota, or does toyota simply seem like an international car company, a global car company? and if they provide a better car, then you know. >> depends on the buyer's mindset. so today 71% of what we manufacture in northed america is sold in north america. so cars like camries, the number one parts of any vehicle sold in united states, more so than if f-150. it depends. consumers that are predisposed to purchase imports will purchase an import regardless of where it's built.

those that are predisposed to only purchase domestics, in their mind domestics mean domestic name plates. so you've got these two camps on each end. so that group that you can influence is a relatively small group in the middle. you have simply consolidated everything in plano texans-- texas. >> yes, sirness, in the process of. >> a little best west of dallas and a little bit east of fort worth. >> yes, we have the campuses under construction. we're in temporary facilities now with about a thousand people. we'll start moving probably spring of next year. and the move will be complete by probably october. >> rose: what is the most biggest challenge for you? >> today? >> yeah. >> rose. >> probably what keeps me up at night is forcast the price of fuel. >> rose: probably for the airline industry too. >> because it's difficult. we have to make decisions three years out on capacities. so if gas is $2 a gallon, people are going to buy certain

vehicles. it's $4, they will buy others. so it's really tough. and can i tell you for the finance company, a lot of vehicles are leased today. they have to forecast out probably 7 years what the price is going to be. >> rose: take 2016. how many cars will you manufacturer for the year-- whatever the model year is. >> in north america, roughly two million. >> rose: will you manufacture two million. >> yeah, north america. >> rose: how many will you sell? >> about 2.5. so about $500,000 will come from japan or other areas. so we're predominantly a north american company these days. >> rose: let me just talk about technology. >> yes. >> rose: more and more technology is pouring too cars. we all know that. and we're talking about give me a sense of the landscape of that, because we also know that at least i think it would be 50% of deaths on the highway are caused by distractions. >> it's huge. it's huge today. >> rose: is it a big number

like that. >> i think it's pretty close to that. so autonomous driving is kind of the helly grail because the goal, eventually, is to develop cars such that they cannot be involved in an accident. now obviously that's going to take some time. and we feel that it's going to evolve. so he with think the first step along the way is what we call guardian angel. and that's where you are still driving your car, you have control of your car. >> rose: with your hands on the steering wheel. >> hands on the steering wheel. so you are driving just as you normally would. but there are sensors on the car, whether it's radar, cameras. other types of sensors. that it will sense if you are about to make a mistake. you are going to pull in front of another car. you are going to pull off the road somewhere. and the car will take corrective action. and not allow you to get into that accident. now in time, and in time i mean probably post 2025, we will have full autonomy in cars. >> rose: that's eight years.

>> yes, and if you filling if it starts in eight years, it may be 2050 before all the cars on the road have that technology. so that's a long way down the road but at some point in time, 2050. you will have cars that will not be involved in accidents. >> and you won't have to be driving them. >> you won't have to be driving them. but we are firm believers that people still have joy of driving. so we will develop cars that first and fore most are this guardian angel, eventually full autonomy but customers will be able to choose what they want to do. >> when will we have guardian angel. >> i think guardian angel will be available probably about 2020. so it's right around the corner. >> rose: how are you using artificial intelligence? because autonomous driving is going to need a lot of data. >> yes. and i think you said to me a trillion miles before you can fully make sure and be confident. >> yes. >> you have to put it through a trillion mile test and that's a

long time. >> yeah. that's where artificial intelligence domes in. because we can sim late what will happen, what the car has to react to. because the reality is, to try to get to a trillion miles will be impossible. so without artificial intelligence, we don't believe that true full autonomy will be able to be obtained. so we are investing through toyota research about a billion dollars just to develop the artificial intelligence. and the best part about that is what we learn from that, we will be able to then take in the home. so we'll be able to create robots. we'll be able to create-- we were developing a device right now called blade that actually uses gps indoors where we will be able to map a shopping mall. so if someone that is blind will have this around them it has cam a did shall did cameras and microphones and it will be able to tell them where stores are based on the logos of the store.

where elevators are, where rest rooms are. that to us is true mobility. >> it's also a new definition of what you do as a company. >> st. >> this mobility, period. almost. >> yeah. >> you are becoming something other than a car company. >> i think we have to. >> you are becoming a mobility company. >> i think that's important. especially if you look at the generational shifts and changes that we're going to have, it's been led in japan primarily because they have a population that's much older than the rest of the world. but as us boomers age over time, this type of thing will be critical for us. we have that freedom of mobility, whether it's through our autonomous car, whether it's through you know devices that can help us be mobile in our homes. whether we have mobile assisted robots. all of that will be critical for us to be able to maintain our freedom. >> rose: great to you have here, thank you. >> thank you. >> rose: jim lentz, c.e.o. of toyota north america. thank you for joining us.

see you next time. for more about this program and earlier episodes visit us online at pbs.org and charlie rose.com. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org

>> rose: funding for "charlie rose" has been provided by: >> and by bloomberg, a provider of multimedia news and information services worldwide. >> tomorrow on the pbs newshour, where the candidates stand

♪here the candidates stand with tyler mathisen .usine trading tips. the supreme c hears an insider trading case for the first ti in two decades and the outcome could change the way cases are prosecuted. classified secrets. the fbi arrests a national securi agency contractor on charges he stole top-secret documents. and shares of the firm he works for fell sharply. know your options. with all of the talk of fake accounts and record atm fees, what alternatives do you have to a traditio? those stories and more, tonight on "nightly bu for wednesday, october 5th. good evening, everyone. i'm sue herera. tyler math i a recipe for gains. two thingsap