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First Move with Julia Chatterley

The U.S. Asked A Judge To Throw Out Huawei's Lawsuits; Samsung Is Facing Lawsuits Over Its Water Resistant Smartphone Claims; Companies Are Cashing In On Netflix Popular TV Series, "Stranger Things" As It Kicks Off Its Third Season. Aired: 9-10a ET

Aired July 04, 2019 - 09:00   ET

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

ZAIN ASHER, CNN INTERNATIONAL ANCHOR: Coming to you live from New York, I'm Zain Asher, in for Julia Chatterley and here is what you need to know.

Fighting Huawei. The U.S. asked a judge to throw out Huawei's lawsuits. Plus drowned in complaints, Samsung is facing lawsuits over its water

resistant smartphone claims. And there is no stranger danger here, companies are cashing in on Netflix popular TV series, "Stranger Things" as

it kicks off its third season. It is Thursday, and this is FIRST MOVE.

Welcome, everyone to FIRST MOVE. I'm Zain Asher, it is July 4th here in the United States. We are celebrating Independence Day here in America.

Wall Street is closed for the holiday, but all the major indices finished Wednesday's session at record highs. There are a few fireworks when it

comes to overseas trades.

European stocks a little changed overall. Italian stocks are rallying for a second day after the E.U. said it was happy for now with the country's

effort to cut debt.

Asian stocks, meantime finished the session mixed. Friday will be a very, very important day for investors here the United States. The U.S. releases

its latest jobs report which is a crucial piece of information for the Federal Reserve as it debates cutting interest rates and by how much.

We've got ADP numbers yesterday. They came in a little bit lower than expected, about 102,000 jobs added last month. Let's get right to the

drivers now.

The United States says it is hitting back at Huawei over the lawsuit it filed against the government ban. The Department of Justice has asked a

Federal court in Texas to dismiss the Chinese firm's case. Sherisse Pham is following the story. So Sherisse, first of all, just explain to us how

does this lawsuit fit in with the President Trump's announcement on Saturday at the G20 that he is easing restrictions on Huawei. How do the

two fit together?

SHERISSE PHAM, CNN BUSINESS REPORTER: So these are actually two separate issues. This lawsuit that Huawei filed, they filed it back in March. And

it was it was challenging the constitutionality of the National Defense Authorization Act.

And they said because a section of that law specifically named Huawei and banned Federal agencies from selling -- or from buying Huawei equipment,

that it was unconstitutional, but Department of Justice lawyers are saying that is wrong. They are saying that that argument is not only faulty and

outdated, but they're saying that barring Federal agencies from buying Huawei equipment is actually quote, "the logical next step" in protecting

U.S. national security.

Now Huawei has long argued that none of its products pose any kind of a national security risk and they took that case to court. They filed this

lawsuit in a district court in Texas back in March. And now this is obviously not the response that they were hoping for because lawyers are

saying, "Look, you are using arguments from Civil War and Cold War eras and they do not imply to this massive Chinese tech company."

So the part of the NDAA that they're pushing back against is specifically called Section 889. And I want to quote to you from the motion that the

Department of Justice filed overnight they said, "Section 889 does not sentence Huawei to death, imprison it or confiscate its property and

plainly, it does not preclude Huawei from engaging in its chosen profession."

So again, you know, likely not what Huawei was looking for. But to your question earlier, Huawei has much bigger problems to deal with because

since this lawsuit was filed, they were added to a trade blacklist and that happened in May, when the Commerce Department added Huawei to the entity

list and that bars American companies like Google and Micron from selling software and chips to Huawei, and Huawei needs those parts to build its

smartphones and its telecom gear.

Now Trump did change course over the weekend and said that U.S. companies could continue selling or resume selling to Huawei provided it doesn't pose

any kind of national emergency risk as he put it, but Huawei and its suppliers are still really unclear on what those details are. They don't

know when they can start selling to Huawei again and what they can sell to Huawei -- Zain.

ASHER: All right, so there still needs to be some further clarification on that front. Sherisse Pham live for us there. Thank you so much.

Okay, so Samsung is in hot water for putting his phones in sea water. The electronics giant ran advert showing the Galaxy smartphone in oceans and in

pools making it look as though it could actually be used while swimming. Australian regulators say that is certainly misleading and are hitting the

company with a lawsuit.

[09:05:14] ASHER: Hadas Gold has been following this story. So just give us more specifics here. What exactly has Samsung claimed about their

phones and how water resistant are these phones really?

HADAS GOLD, CNN BUSINESS REPORTER: Yes, well, Zain, I'm sure we've all experienced as I myself have lost a phone to water damage, but the

Australian Competition Regulator says that Samsung was advertising its phone as being completely waterproof that you could go underwater, they

would show advertisement since February of 2016, a swimmer underwater using his phone.

They would show advertisements of the phone being used to film one of those shark cages and clearly ocean water. But now, the Australian Competitions

Regulator is filing this lawsuit against Samsung saying that these advertisements were misleading because they actually say that not all of

Samsung's are completely waterproof.

As you can see on the screen right now, these are some of the advertisements that you saw. It's very clearly a man in a pool. There's

other advertisers that show very clearly a Samsung phone being used underwater, in an ocean.

But the Australian Competition Regulator that not all of the phones were actually suitable for use in all types of water and actually even if you

went on to Samsung's website, it said that some of its phones, specifically the Galaxy S10 should not be used in the beach or at a pool.

And the Australian Regulators are saying that when people went to Samsung and said "Hey, fix my phone, it's under warranty." Samsung, they say did

not adhere to that. Now the phone subject to this case, I want to put a list up on the screen just to see how many phones are subject according to

the Australian Regulator.

They include the S10 E, multiple S10s. The S9, S9 plus, S8, S7 Edge, the Note 9, the A7, A5, -- any of these phones that were manufactured between

2016 and 2019, these are some of Samsung's most popular phones.

Now if this lawsuit is upheld, Samsung could face fines worth millions of dollars because of recent change in the law found that any -- that the

maximum penalty for any violation, you could even consider sort of each advertisement, a violation can be up to $7 million. Samsung is facing some

high fines here.

Now, this comes on the heels of a tough few months for Samsung. If you remember that foldable phone fiasco that some of their new foldable phones

that they sent to reviewers broke and they got some really awful press and they delayed the release of this foldable phone.

But this is another sort of ding in their armor now for Samsung that they're dealing with. Samsung for their part says that they stand by the

marketing and advertising of the water resistance of its smartphones and they plan to fight this lawsuit -- Zane.

ASHER: But as you mentioned, it's been a tough month and few years, I guess for Samsung. Appreciate you joining us, Hadas Gold. Thank you so

much.

Okay, so India's biggest ride hailing firm, Ola has permission to now drive in London. The company will rival Uber in one of the world's largest taxi

markets. Anna Stewart is joining us live now from London.

So it's interesting, you know, Ola, joining the London market. It's a tricky market because it's heavily saturated when it comes to other ride

hailing apps.

And also you have a huge amount of lobbying from taxi drivers in London as well that has made things quite difficult for Uber at times.

ANNA STEWART, CNN REPORTER: You're absolutely right. A real tough market to crack and I think it's really interesting that this company, it's a new

company, Ola did actually did some soft launches in smaller cities around the U.K. very quietly, before making this move in London.

We expect this launch to happen sometime around September. Tricky markets to crack firstly, due to regulation, we've got some the toughest transport

regulation out there. In fact, the London Transport Regulator actually decided not to renew Uber's license just over a year ago, that decision was

overturned in the end.

Bolt, another rival used, it to be called Taxify. That first launched two years ago. It has closed down and closed shop just three days later. That

was also due to licensing problems, but as you say, it has actually already passed this first hurdle, it's already got the license. That is great

news.

Now, the big challenge will be cannot really steal market share from Uber? Because the other rivals haven't really posed much of a threat, yet. Now

Morgan Stanley and researchers says this one could be. The thing about Ola that's different to other rivals, is it has really, really deep pockets.

It's raised nearly $4 billion. It's backed by Softbank, like Uber. So it really could be a threat here.

ASHER: But also, as you mentioned, or as I mentioned earlier, the London market is heavily saturated. It is not just Uber that Ola is going to have

to contend with here.

STEWART: Yes, there's also Kapten, there's also Bolt which used to be called Taxify. But Uber is definitely the dominant player here. And

actually apparently for Uber as a company, overall, London accounts to something between four to eight percent of all ride sharing bookings. So

it's a big deal for Uber.

So what will be interesting is when Ola actually launches sometime in September, I think we can expect to see lower driver take rates, lots of

promotions, driving down those costs, but if Uber tries to match that that is going to take a huge hit on revenue, given how big London is as a market

for Uber.

So it's going to be very interesting. It could be a race to the bottom -- Zain.

[09:10:12] ASHER: All right, Anna Stewart, live for us there. Thank you so much. All right, so these are the stories making headlines around the

world.

In the past hour Russian President Vladimir Putin and Pope Francis have been meeting. There is speculation it's a warm up for a Papal Visit to

Russia, which would be the very first of its kind. One likely topic for discussion is the conflict in Ukraine.

The Pope has previously urged Mr. Putin to make a quote "sincere and great effort to achieve peace."

And the US President's big Independence Day event is stirring up controversy. The "Salute to America" parade will have tanks and military

flyover and a presidential speech. A source tells CNN military chiefs are concerned it will be politicized.

And Netherlands are into Sunday's final of the Women's World Cup often knocking out Sweden. They score the only goal of the game with a sweet

injury time strike into the bottom corner. The Dutch will now face the defending World Cup champions and tournament favorite, the United States.

All right, coming up FIRST MOVE goes to the upside down. Netflix releases season three. Can't wait to watch it. Season Three of its hit show

"Stranger Things." We will take a look at how the streaming giant is cashing in on 1980s nostalgia. That's next.

(COMMERCIAL BREAK)

ASHER: All right, welcome back to FIRST MOVE, everyone. I'm coming to you live from New York, call it a pre-Fourth of July extravaganza.

All the major U.S. indices actually closed Wednesday's shortened session in record territories. See the green arrows across the board there. It was

the first time the Dow closed at all-time highs since October.

U.S. traders are pausing a breath this holiday and reflecting on the strong gains we've seen so far for the stocks this year. The Dow and the S&P are

both up more than 15 percent. The NASDAQ has soared 23 percent.

Mike Bell joins us live now with his take on the markets. He's the Global Market Strategist for JPMorgan Asset Management. Mike, thank you so much

for being with us.

So here you have the S&P 500 hitting new record highs yesterday despite the fact that you have this potential looming possible sort of trade spat with

Europe and also those ADP numbers we got yesterday came in slightly worse than expected. Walk us through that.

MIKE BELL, GLOBAL MARKET STRATEGIST, JP MORGAN ASSET MANAGEMENT: I think this year has been all about the Fed. So as the markets focused on the

potential for rate cuts coming through, the market is assuming that those rate cuts are going to extend the economic cycle.

So obviously, already the longest expansion in history that it's going to extend it for another year or two. The market is pricing consensus growth

for earnings next year double digit and to us, those numbers seem a little bit high.

You mentioned the ADP number. The payrolls print there with small companies actually now having had net job losses for the last couple of

months in a row. So to me, the risks are a little bit more balanced than the market is currently assuming. And we would be more neutral in equities

at the moment.

[09:15:13] ASHER: And when you think about it, you mentioned it's all about the Fed, when you think about this looming potential rate cut, a lot

of people are talking about the fact that it's going to be 25 basis points.

If the jobs report we're expecting on Friday comes in, not so good. Even worse, in terms of expectations than the ADP report, do you think the Fed

should be cutting rates more?

BELL: I think if payrolls tomorrow, come in sub hundred thousand, that'll then be the third sub hundred thousand month we've had in the last year.

And I think in that environment, the Fed may well feel the need to cut rates by 50 basis points.

If on the other hand, we get a job number tomorrow that's more than a hundred thousand jobs added, then I think we're probably looking at more

like a 25 basis point cut.

ASHER: All right, so earning season is, of course, on the horizon, expectations everywhere being slashed, just the fact that the expectations

are coming in a lot lower. What does that tell you about corporate America's take on global growth, and still fears about tariffs?

BELL: I think the main thing actually that's squeezing earnings at the moment is not so much the trade war, but actually rising wage pressures.

So you're seeing the tight labor markets are feeding through into higher wage growth across the economy, particularly in some of the lower paid

sectors, you're seeing an acceleration in wage growth there now. So in places like retail, for example, leisure, you're seeing wage growth come

through.

And I think particularly for smaller companies that's starting to squeeze margins and the trade concerns that just adds to some of the weakness in

terms of top line growth, as economic growth potentially slows on the back of that.

So getting squeezed both from the top and the bottom in terms of sales, growth and wage growth, putting pressure on corporate profits. And I think

that's going to lead to earnings growth coming in. So not much more than zero probably in the second quarter.

The question is whether we've got reacceleration. The market is assuming that we get a reacceleration in earnings into the end of this year, and

then heading into 20 deliver about 11 percent earnings growth for 2020.

As I say, with the margin pressures building and those potential concerns around trade, that seems too high to us.

ASHER: And actually, as you were speaking there, we just saw a graphic of the 10-year Treasury yields being below two percent. I'm just -- I just

want to get your take on really what that means in terms of fears about global growth, and also expectations about central banks around the world,

boosting stimulus and monetary policy.

BELL: Yes, I think it's being driven by expectations that you're going to see not just rate cuts from the Fed, but globally, a dovish shift from

Central Bank.

So the ECB have come out saying that they're likely to stimulate further, probably with more rate cuts and perhaps restarting QE that also put

downward pressure on the 10-year yield. So I think it's responding to expectations of global stimulus from the central banks.

The key question for equity markets, though, is are we going to see a reacceleration in growth? Are those Central Bank rate cuts and further

stimulus measures going to be sufficient to cause the business surveys such as the manufacturing surveys that have been quite weak in recent months to

pick up?

If they do, then there's a risk that Treasury yields would start to rise from here. On the other hand, if growth continued to deteriorate, and the

Central Bank rate cuts and stimulus weren't sufficient to extend the cycle, then Treasury yields could have quite a lot further to form.

ASHER: Mike Bell, thank you so much. Appreciate you being on the show.

All right. So corporate earnings drive stock valuations or you'd think they'd do, however, Facts Research estimates that earnings as I was talking

about with Mike Bell, the earnings of S&P 500 companies fell in the second quarter year-over-year after dipping in the first three months as well.

They are expected to do so again in the third quarter.

So why are so many stocks trading near record highs? I asked Paul La Monica about this paradox. Take a listen.

PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I think investors right now, Zain, are just so obsessed with this expectation of a Fed rate cut later

this month, and possibly more rate cuts later this year, and they're ignoring the fact that profits were down a little bit in the first quarter

expected to fall in the second quarter, it might even fall again in the third quarter.

The trade war is clearly having an impact on corporate America, but it's party mode on Wall Street because Jerome Powell is probably going to help

everyone out with a rate cut or two.

ASHER: So Paul, the issue of course, as you mentioned, is the trade war. Do you do you anticipate the trade war is actually going to impact tech and

consumer companies as well?

[09:20:10] LA MONICA: Yes, I think those are the two sectors, Zain, that people really have to pay the most attention to, in fact, according to some

data from Facts said, more than half of the earnings warnings that we've already seen for the second quarter have come from the tech and consumer

discretionary sectors. And those are the ones that both import a lot from foreign markets, particularly China, and also are exporting goods to

companies -- the countries like China, India, and you know, Europe, and that's going to be something that keep a very close eye on tech and retail,

could they be squeezed by this trade war?

ASHER: Well, we'll have to pay attention to that. And despite the warnings for second quarter and third quarter earnings, do you think that

whatever happens, things could be reversed or at least improve somewhat by the fourth quarter?

LA MONICA: Yes, that I think is the key right now, Zain. A lot of people I talked to said that, yes, we know the first quarter was not good. The

second quarter is not likely to be much better in the third quarter, it could be weak as well. But if we get trade tension out of the way by the

fourth quarter, and that's when you have the holidays, you have a lot of corporations that are trying to spend what's on their budgets before the

end of the year. That's typically when you get a big surge in profits.

And there is a lot of hope that we're going to have fourth quarter numbers really boost the overall profit picture for the year. I mean, analysts are

still expecting earnings to be up for all of 2019 largely because of expectations of a fourth quarter increase.

ASHER: All right, Paul La Monica. Thank you so much. Appreciate it.

Well, stranger things have happened on Wall Street for sure. But with the markets closed July 4th, Netflix is hoping to suck you into 1985 Hawkins

Indiana. Clare Sebastian joins us live now.

So Clare, I'm a huge "Stranger Things" fan. One thing that upset me is just how long I had to wait between the end of Season Two and the beginning

of Season Three. Literally in that time, in the gap between the two, I have gotten married, gotten pregnant had a baby and my baby is now 10

months. That is how long I had to wait between Season Two and Season Three. Let me tell you that wait was excruciating. Why? Why was the

weight so long?

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Zain, it has been a while. It was just before Halloween in 2017 that the Second Season

dropped. And Netflix addressed this last summer. They said it's a handcrafted show and the creators just needed time to get it right, but

look, it was important for Netflix that they got it right as well.

The streaming was a ramping up. Old media companies like NBC Universal and Disney starting their own services pulling their content off of Netflix.

So Netflix needs its originals like "Stranger Things" to do really well and they are trying to market these shows to improve their cult following in

any way they can.

And in this case of "Stranger Things," this has led to an unusual number of brand partnerships. The way the show is trying reach beyond your TV set or

your computer or your phone into your everyday life. Take a look.

(BEGIN VIDEOTAPE)

SEBASTIAN (voice over): Start with a cherry and some pecans, add whipped cream caramel, and finally a scoop of chocolate ice cream. The result? A

sweet marketing opportunity.

Baskin-Robbins's Upside-Down Sundae is named after the creepy parallel universe in the Netflix hit series "Stranger Things."

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Upside-Down Sundae. "Stranger Things" are happening at Baskin-Robbins.

(END VIDEO CLIP)

SEBASTIAN (voice over): It's one of a new line of treats the ice cream store is rolling out to cash in on the show's third season, which features

a fictional ice cream parlor called Scoops Ahoy.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Ahoy, eh?

UNIDENTIFIED FEMALE: Ahoy.

(END VIDEO CLIP)

SEBASTIAN (voice over): Season Three sees the teenagers from Hawkins, Indiana, take their fight against evil to the quintessential Eighties hang

out, the shopping mall.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What did you think? We're just going to sit in my basement all day, play games for the rest of your lives?

(END VIDEO CLIP)

SEBASTIAN: The real setting, though, has been happening off camera. Netflix says they're partnering with about 75 brands for the "Stranger

Things" launch, an all-out international marketing blitz featuring everything from Nike to Burger King to the Chicago Cubs.

(BEGIN VIDEO CLIP)

PETER SHANKMAN, BRANDING AND SOCIAL MEDIA CONSULTANT: Every network, every website, everyone is looking for those two hours that you have between the

timing at home, put the kid to bed, finish dinner, and watch something.

So anything that Netflix can do to grow that brand recognition and make you remember, "Hey, I should finish the season of `Stranger Things'" is a

benefit.

UNIDENTIFIED MALE: If you love the TV show "Stranger Things," then boy, have we got a LEGO set for you.

(END VIDEO CLIP)

SEBASTIAN (voice over): Many of the brand tie-ins play on the 1980s nostalgia the show is known for.

Netflix even convinced Coke to re-release New Coke, a product which flopped back in 1985 after "Stranger Things" decided to incorporate it into its

plot.

Netflix says no money changed hands in the Coke deal or in many of the show's other branding deals. Instead, Netflix is allowing companies to use

the "Stranger Things" brand in return for a commitment to spend marketing dollars and dish up buzz for the show.

(BEGIN VIDEO CLIP)

SHANKMAN: They don't necessarily care so much about revenue from these deals. They do care about brand awareness, and they do care about

acknowledgment.

[09:25:08] SEBASTIAN (on camera): Now, it's one thing to incorporate brands seamlessly into a show's narrative to get a sense of authenticity

and nostalgia. That was actually part of the vision for "Stranger Things" from the start.

Now, of course, the risk is that all of this ends up going too far and the marketing starts to overwhelm the show itself.

Clare Sebastian, CNN, New York.

(END VIDEOTAPE)

SEBASTIAN: Well, Zain, of course, you and I are far too young to remember 1985 clearly, but the experts do say ...

ASHER: I was two actually.

SEBASTIAN: ... that this nostalgia is key, exactly. The experts say this nostalgia is key as long as the show stays on message and the brand

partnerships are playing into this kind of nostalgia, then they should be okay. It should be something that doesn't overwhelm the creativity of the

show itself.

ASHER: And it's interesting, because Season Two, a lot of people were a little bit disappointed with. What are the expectations for Season Three,

just in terms of -- I mean, there's so much pressure on the creators of "Stranger Things," because it is such a popular show. There's a lot of a

lot at stake here.

SEBASTIAN: There's a lot at stake here, a lot of the action as the piece showed, it looks like it's going to be taking place around this mall that

has led to those opportunities for brands to be part of the show organically.

I will just point out again, Netflix says that they aren't making money from the kind of product placement that you see in this show. It's organic

to the show. It's not something that they're using for revenue.

But this is still you know, kind of a new advertising paradigm that we're existing in and Netflix has consistently denied that it's not moving to an

ad-based system and that it's not going to have an ad-based subscription.

So product placement is one thing, marketing partnerships be it, you know, stores using the show's branding to sell products or partnering with the

characters on adverts is a potential new revenue stream for Netflix because we know that the show, the company rather is burning through cash as it

spends big on content -- Zain.

ASHER: All right, Clare Sebastian live for us, thank you so much. I'm sure we'll both be watching later on today. All right. That's it for

FIRST MOVE. Thank you so much for watching. I'm Zain Asher. Up next on CNN, "The Global Energy Challenge: India."

But first, I'll be back with a quick look at your headlines.

(COMMERCIAL BREAK)

ASHER: Hello everyone, I'm Zain Asher and this is CNN News Now. And we've just got some breaking news into CNN. The Australian student, 29-years-old

Alek Sigley who was detained in North Korea has actually just landed moments ago in Narita Airport in Tokyo.

[09:30:11] ASHER: The 29-year-old Alek Sigley was actually studying and living in Pyongyang when he was reported missing by his family roughly

around June 25th. He went missing for about a week. He was detained for about a week. But Sigley actually told reporters that he was feeling great

when he landed in Beijing earlier today.

As I mentioned, he landed in Tokyo, Narita Airport moments ago. Australia's Prime Minister thanked Sweden for its role in securing his

release. The Swedish diplomats were pivotal in securing Alek Sigley's release.

(BEGIN VIDEO CLIP)

SCOTT MORRISON, AUSTRALIAN PRIME MINISTER: This outcomes demonstrate the value of the discreet behind the scenes work officials in resolving

conflicts in sensitive consular cases in close partnership with other governments.

I'm sure we all could not be more pleased that we not only know where Alek is, but we know he is safe.

(END VIDEO CLIP)

ASHER: The U.S. President's big event planned for American Independence Day is drawing scrutiny. A source tells CNN, military chiefs are concerned

it will be politicized.

The parade in Washington was apparently inspired by France's Bastille Day Parade Mr. Trump saw two years ago and we will have tanks and it will have

tanks and a military flyover.

And as of few minutes ago, Russia's President finished his talks with the Pope in Vatican City. The two men exchange gifts, and Vladimir Putin

presented members of his delegation to the pontiff.

Mr. Putin is due to meet Italy's President later on this hour. All right. That is your CNN News Now. I'm Zain Asher, "The Global Energy Challenge:

India," starts right now.

(BEGIN VIDEOTAPE)

JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR (voice over): Energy, the power behind humanity. Progress at a cost, and still close to a

billion of us are without electricity.

As we aspire for quality, and equality of life, our numbers rise. With each new generation, expectations will demand more efficient power from

greener and cleaner sources.

Meeting innovators and visionaries across some of the world's key economies, I'm on a journey to explore how we can make this critical energy

transition.

DEFTERIOS (on camera): Our very existence may depend on how we face up to the global energy challenge.

DEFTERIOS (voice over): New Delhi, the capital city of India. It is home to more than 20 million people and is one of the world's fastest growing

cities. It has a relentless demand for energy. In fact, the people of this vast nation are among the largest growing energy consumers in the

world.

That is why I'm beginning an energy journey in one of the world's most populous countries. A trip that will take us more than 3,000 kilometers

into the heart of rural India, but it's in New Delhi where we begin with a trip to one of its busy street market.

(BEGIN VIDEO CLIP)

VARUN SIVARAM, ENERGY EXPERT: If I had to pick one word to describe the city, the first choice would be chaos, and the second would be energy.

(END VIDEO CLIP)

DEFTERIOS (voice over): Thirty-year-old Varun Sivaram, gets India's energy challenge. Born in the United States to Indian immigrants, the Stanford-

educated Rhode scholar is an energy expert, who has packed his bags and moved to be at the heart of these energy transition.

(BEGIN VIDEO CLIP)

DEFTERIOS (on camera): Is India the right place to delve in first for us?

SIVARAM: I couldn't think of a better country around the world, not a single country around the world where you don't have a more exciting or

more challenging energy transition.

Look, here in India, 300 million people are going to enter India's cities by 2050. Three quarters of the building stock in 2040 hasn't been built

yet, and there's this enormous transition going on now, or so we hope, from coal to a renewable energy.

India is the place to be, and it's also the place we must be because as that climate change continues to ravage the planet, and developing

countries in particular, it's going to be nations like Indian with rapid emissions growth, that have to step up, slow their growth and also protect

their people from what climate change is going to do.

DEFTERIOS: People love a challenge, but is this a grave challenge in India? Insurmountable challenge in your view?

SIVARAM: I wouldn't call it insurmountable, it's great, absolutely, but I wouldn't call it insurmountable, otherwise I would not be here. India's

emissions are growing very rapidly, it's also the world fastest growing major economy over the last five years.

So it's trying to do three things all at once. It's trying to power it's rapidly growing economy, it's trying to control its rapidly growing

emissions.

[09:35:06] SIVARAM: Nine out of 10 of the most polluted cities in the world are in India. And third, it's trying to protect the country from

what climate change is about to do. It's going to bring droughts, it's going to bring natural disasters, these three things in parallel, powering

the country, controlling its emissions, and adapting to climate change are very difficult to do all at once, but it's not insurmountable.

(END VIDEO CLIP)

DEFTERIOS (voice over): India is among the countries most vulnerable to climate change. Intense heat waves during the summer months have become

the norm. It's the third largest emitter of greenhouse gases.

(BEGIN VIDEO CLIP)

SUNITA NARAIN, DIRECTOR GENERAL, CENTER FOR SCIENCE AND ENVIRONMENT: We are not backing from the challenge, we are not running away. We have large

numbers of people in this country who recognize the fact that, yes, climate change is here, because our crops are suffering, we are finding freak

weather more and more.

We know the pain of climate change, but we also know that we cannot be the victims of climate change. We cannot today be asked to be also the only

solution to climate change.

(END VIDEO CLIP)

DEFTERIOS (voice over): But there is another major environmental issue affecting this country. Air pollution. With India having the majority of

the most polluted cities in the world, New Delhi has emerged as one of the most dire on earth. Hazardous air engulfs it on a daily basis.

(BEGIN VIDEO CLIP)

AJAY MATHUR, DIRECTOR GENERAL, THE ENERGY AND RESOURCE INSTITUTE: In the last three, years I've started having a permanent cough. That just tells

you the cause of living and working in the polluted city. Do we have to clean it up? Yes.

And in each city, the reason for pollution is somewhat different, but ultimately, it's about industrial power stations, it's about

transportation, it's about construction and demolition ways.

NARAIN: The City of Delhi is to the outraged at the level of pollution. Right now, our pollution levels are high, because we have high sunlight, we

have ozone levels that are high, but in winter is when you really see the force of pollution, because that is when inversion takes place.

We are trying, we are working on it, it's a tough challenge, because it's an energy challenge.

(END VIDEO CLIP)

DEFTERIOS (voice over): New Delhi has made some efforts. Heavy polluting, coal-fired power plants within 100 kilometers of the city have been closed,

and all public transport vehicles have switched to cleaner, compressed natural gas, but it hasn't been enough.

The reason, India's sheer growing demand for energy, a demand that set to double over the next decade.

(BEGIN VIDEO CLIP)

NARAIN: It's a challenge where we have to deliver basic energy to millions of people. Just think of the fact that there are millions of households

still which cook their food on biomass, which means that poor women are exposed to extremely polluted air, because they can't afford clean energy.

That is the level of energy poverty we have.

(END VIDEO CLIP)

DEFTERIOS (voice over): To witness firsthand what's driving the increasing energy demand, we've come to an air conditioner production facility outside

of New Delhi. More than 12,000 units roll off the production line at two of LG's plant every day. They expect to sell more than one million units

this year alone.

(BEGIN VIDEO CLIP)

MATHUR: The single largest increase in electricity demand is coming from air conditioning. As people become richer, they buy more air conditioners,

but the problem that this does is, that it leads to peaks in electricity demand.

In the City of Delhi, we have now started to see that the largest amount of electricity is used at 11:00 at night on hot, humid nights. Why? Because

that is when each one of us are going to bed and switch on our air conditioners.

Now, this is when only six percent of Indians, and ten percent of Indians in Delhi have air conditioners. I shudder to think what will happen to the

demand profile as more and more people get air conditioning.

(END VIDEO CLIP)

DEFTERIOS (voice over): Demand for electricity is set to explode, with the current population of 1.3 billion, in a matter of years, India is set to

overtake China as the most populous country in the world.

As I leave New Delhi, I'm struck by the daunting challenges facing this developing country. How to deliver more energy to its growing masses? But

also address its dirty energy sources. Toxic air pollution, and escalating CO2 emissions. Well, my next destination provide me with some answers.

A train and car ride several hours later, and I'm in the coal capital of India, Singrauli. Here, in the northern coalfields, open cast mines that

run for kilometers on and dominate the landscape.

[09:40:10] DEFTERIOS (on camera): It's extraordinary because the sheer size of it is mind-boggling.

DEFTERIOS (voice over): A massive 70 percent of this country's electricity now comes from coal, almost double the amount used by the rest of the

world. This is a 24 hour, seven days a week, 365 days a year operation.

(BEGIN VIDEO CLIP)

PRABHAT KUMAR SINHA, CHAIRMAN AND MANAGING DIRECTOR, NORTHERN COALFIELDS LIMITED: The coal is abundantly available here. There is a total, I think

of more than 12 billion tons of coal lying here. It can continue up to more than 40 years.

(END VIDEO CLIP)

DEFTERIOS (voice over): Coal is the world oldest and dirtiest energy source. It has powered the Industrial Revolution. But today, it's being

targeted as one of the chief villains of global warning.

Singrauli has eight coal power plants producing enough electricity every day to power 16 million homes.

DEFTERIOS (on camera): It is just staggering the scale of this operation, there are 58 wagons on each train filled to the brim with coal and there

are up to 80 trains delivering to power plants in this area.

DEFTERIOS (voice over): The skies throughout Singrauli are covered in a thick dark haze. At times, in the distance, you can barely make out the

coal fired chimney stacks.

(BEGIN VIDEO CLIP)

DEFTERIOS (on camera) Is India behind in what other countries are doing to deal with climate change?

SIHNA: It is behind it, but we are trying our best to make it up. In this area, you are seeing -- we have heard that it is a critically polluted

area, but it's not due to the coal mining only. We are supplying the coal to the power houses also.

DEFTERIOS: As we do the interview, you can see the air quality here.

SINHA: Yes, yes.

DEFTERIOS: It's critical.

SINHA: It's critical. It is critical.

(END VIDEO CLIP)

DEFTERIOS (voice over): Apart from the coal mines and plants, up to one million people live in Singrauli. Ruta Kahar, her husband and three

children have been trying to survive in the midst of the pollution for several years.

(BEGIN VIDEO CLIP)

RUTA KAHAR, SINGRAULI RESIDENT (through translator): We are unable to carry out any family activities, we have problems drinking water, we have

stomach complications, children are impacted too because of the coal. The coal dust gets into the house, it gets deposited on to our food, there is a

lot of difficulty.

(END VIDEO CLIP)

DEFTERIOS (voice over): Despite just getting access to electricity, Ruta still cooks using highly polluting wood.

In what has been seen as a huge success, Prime Minister Narendra Modi's government says it has brought electricity to tens of millions of rural

Indians. But while many villages have been connected, many individual houses have yet to be linked up, and many are too poor to afford it.

(BEGIN VIDEO CLIP)

DILIP KUMAR NAMDEO, SINGRAULI BUSINESSMAN (through translator): There are 400 people in this village and everybody is affected, everyone here is

below the poverty line, ever since this coal production came into existence, it has given rise to a lot of health problems. We've complained

about this several times, but nobody has paid heed to what we have said.

(END VIDEO CLIP)

DEFTERIOS (voice over): According to the Health Effects Institute, 1.2 million deaths were caused in India in 2017 due to air pollution. Northern

Coal Fields Limited says, mitigation measures are being introduced to try and reduce the pollution.

Waters being sprayed on the coal fields to decrease the spread of dust, thousands of trucks that ferry coal to the plants will be phased out in

favor of trains.

Old power stations are being decommissioned and replaced with newer less damaging plants, which claim to lessen the emissions entering the

atmosphere, but it's clearly not enough.

(BEGIN VIDEO CLIP)

DEFTERIOS (on camera): Coal is worldwide a major contributor to CO2 emissions. This must be a major concern personally and for the company.

SINHA: We are making all efforts, we are leaving no stone unturned for environment pollution control. I am sure that this will be taken care of

in the near future. We are trying our best, sir.

(END VIDEO CLIP)

DEFTERIOS (voice over): However, the production of coal is not set to cease here anytime soon. In fact there are plans for it to increase by 20

percent between now and 2024. All to meet this country's sheer demand for energy.

When we come back, I travel to a state that is a shining example of what India needs to do to embrace clean energy.

(COMMERCIAL BREAK)

[09:47:34] DEFTERIOS (voice over): Telangana is one of 29 states in India. It's almost the size of Greece and home to 40 million people. Its capital

Hyderabad has become a tech hub. When it comes to power, it's a microcosm of the country's energy transformation, and how it plans to tackle air

pollution and rising CO2 emissions.

That is why I've come here to find out if the changes taking place can be replicated across the country.

Five years ago, the state had daily power cuts.

(BEGIN VIDEO CLIP)

AJAY MISRA, SPECIAL CHIEF SECRETARY, ENERGY DEPARTMENT: The agricultural or the rural Telangana was getting power only for four to five hours per

day. Then, in the city and surrounding, the industry was witnessing two days in a week, there was no power supply for the industry. Since January

2018, 24/7 electricity is being provided to the people of Telangana.

(END VIDEO CLIP)

DEFTERIOS (voice over): The state government has invested big in a non- fossil fuel energy sources, especially solar. Today, it is the second

largest producer of solar energy in the country.

(BEGIN VIDEO CLIP)

SUMANT SINHA, CHAIRMAN AND MANAGING DIRECTOR, RENEWED POWER LIMITED: When Mr. Modi became Prime Minister in 2014, at that time, we had about 20,000

megawatts of both wind and solar installed. And at that point, he set a target of getting at the end of -- by the end of 2022, almost 175,000

megawatts of wind and solar installed which is an eight times growth in the next eight years, and that is actually quite remarkable.

It is almost China-esque in its thought process in terms of setting a very large target and trying to work towards getting there.

(END VIDEO CLIP)

DEFTERIOS (voice over): India is a perfect location for solar power, as it receives twice as much sunshine as Europe. It has led to renewed power,

becoming the largest independent producer of clean energy in India. Currently producing about one percent of the country's electricity.

(BEGIN VIDEO CLIP)

SINHA: The great news is that the cost of renewable energy which is really what is going to replace coal over time has come down quite dramatically,

and so now renewable energy is about 30 to 40 percent cheaper then thermal energy. And so that really begins to provide the foundation for these

transition to happen, from thermal, into renewables.

(END VIDEO CLIP)

DEFTERIOS (voice over): But there is a problem with solar. The sun does not shine all day. Battery storage is very expensive and you currently

can't store solar energy for a long period of time.

(BEGIN VIDEO CLIP)

[09:50:07] SINHA: I think storage is going to become cheaper as we go forward, and so the cost of solar, plus storage will end up eventually

becoming cheaper, or at least on par, with other sources of energy like coal. And that is really when you at least, blur the tipping point of

renewable energy.

(END VIDEO CLIP)

DEFTERIOS (voice over): India has set a target for 40 percent of its electricity to be from non-fossil fuel sources by 2030, but despite rapid

growth in the renewable sector, it is still not enough to meet the country's thirst for energy.

(BEGIN VIDEO CLIP)

SINHA: I think that, over the next 12 years or 13 years, India's energy demand is going to double from where we are right now. Because you're

going at about six to seven percent every year. And a large part of that incremental demand will be met through renewable energy sources.

But the reality is that even if you meet 50 percent of the new incremental demand from renewable energy, the balance of 50 percent also has to be met

from somewhere.

It's unlikely to be hydro or nuclear or even gas, and therefore, the slack is going to be picked up by coal.

(END VIDEO CLIP)

DEFTERIOS (voice over): Telangana is already achieving 40 percent of its electricity from a mix of renewables. The remainder, 60 percent it's from

coal, some of which is sourced through a warrant of underground mines. To see how this works, I'm venturing underground, 300 meters deep underground,

in fact.

Down here, it's like another city of hundreds of workers, beavering away around the clock in search for the black gold. In these mines, production

is also being ramped up to meet the escalating demand for energy.

(BEGIN VIDEO CLIP)

MISRA: In addition to what we have today, approximately 10,000 megawatts, in the next four years we will be adding approximately 9,000 megawatts of

thermal or waste energy.

Of late, we have gone far from what is called super critical technology for thermal power projects, which has very low level of emission and damage to

the environment. We have done that for more than a hundred years going to the present rate where we have to take advantage of that.

(END VIDEO CLIP)

DEFTERIOS (voice over): To counter the dangerous emissions and pollution from coal, one billion trees have been planted in this state over the last

five years, and they have big plans they want to cover a third of this territory.

(BEGIN VIDEO CLIP)

MISRA: It is called "Haritha haaram" which in English would mean green garland. All these 12,000 village local bodies which are called punjabs

are mandated to have a nursery each minimum for the greening of the state will become a movement in this place. Through legislation and also

involvement of the local people and the participants.

(END VIDEO CLIP)

DEFTERIOS (voice over): Air pollution and emissions are being tackled on the streets, too. Electric buses are being introduced and the state has

big plans to become the electric vehicle capital of India.

(BEGIN VIDEO CLIP)

RAJA GAYAM, FOUNDER AND CEO OF GAYAM MOTORWORKS: Telangana has all the resources to develop as a center of electric vehicle revolution. So the

government has brought in various incubators which is encouraging innovation among startups.

I think we got very good feedback.

(END VIDEO CLIP)

DEFTERIOS (voice over): In 2015, the Gayam brothers develop their first electric tuk-tuk. A three wheeler that's very popular on the streets of

India. Today, they have sold thousands across the country, and the world, and have Amazon, Ikea, and Uber among their clients.

(BEGIN VIDEO CLIP)

GAYAM: One of the reasons why most of the corporates adopt our vehicle is it's not just environmentally friendly, but it's also very economical.

So the operational cost for a three wheeler, for an electric three wheeler is only about one seventh that of a petrol three-wheeler. So that's a huge

savings.

(END VIDEO CLIP)

DEFTERIOS (voice over): At charging points, it could take several hours to fully charge electric vehicles, but with Gayam's battery swapping solution,

pre-charged batteries can be changed over in seconds.

(BEGIN VIDEO CLIP)

GAYAM: No one wants to wait three or four hours to get their vehicles charged, they would want to get their vehicles refueled in less than one to

two minutes. They find swapping to be extremely convenient and that's the reason they're adopting this model.

(END VIDEO CLIP)

[09:55:04] DEFTERIOS (voice over): As incomes rise, more and more people are buying motorcycles and tuk-tuks. India has set ambitious targets on

electrification of vehicles to address air pollution and CO2 emissions. By 2023 it wants all tuk-tuks to be electric and all motorcycles to be battery

powered, just two years later.

(BEGIN VIDEO CLIP)

GAYAM: That is a very good ambition to have and I think that's clearly possible. The lifetime for a three-wheeler is about five to six years, so

that kind of switch should be possible.

(END VIDEO CLIP)

DEFTERIOS (voice over): From new innovations in mobility to new sources of energy, India it's not just looking at an energy transition, but an energy

transformation.

At times during the course of this journey, it looks like a monumental task. That is why I returned to New Delhi to meet the man who has overseen

and driving this transformation, and the national governments vision.

(BEGIN VIDEO CLIP)

AMITABH KANT, CEO, NATIONAL INSTITUTION FOR TRANSFORMING INDIA: We are accelerating the pace of renewables in a very, very big way. If you look

at the trend in the last three to four years it's all renewable, it's all wind, it's all hydro, and therefore, if you look at another two to four

years, maybe focusing in cleaning up our cities, you will see a huge fall and better management and we will ensure a better management of this

cities. The quality of life will improve and I think energy mix will radically change in India.

DEFTERIOS (on camera): Don't you think there's a coal curse here, though, because it's an abundance and it's cheap and it's hard to pull yourself off

of that addiction?

KANT: Coal is abundant in India, it's plenty, it's large-scale, but it's low quality coal, number one. Number two, it is a function of economics,

it's a function of commercial viability, and therefore India's biggest strength is not in coal, but in sun.

We are in the midst of one of the biggest disruptions that is taking in place right now, in terms of both mobility and in terms of energy and in

terms of storage. And I think, in the next two to four years, you will realize that the acceleration towards renewable will be phenomenal.

(END VIDEO CLIP)

DEFTERIOS (voice over): The energy challenge facing India will be daunting. Billions of homes need to be built. Many cities need to be

constructed. Billions of people need to get access to transport.

It all requires lots of energy. Get it right and it will not only benefit a nation, but can be replicated in other developing countries around the

world. You get it wrong, and it will not only have devastating consequences for its people, but potentially our entire planet.

(COMMERCIAL BREAK)

[10:00:00]

END

END

ZAIN ASHER, CNN INTERNATIONAL ANCHOR: Coming to you live from New York, I'm Zain Asher, in for Julia Chatterley and here is what you need to know.

Fighting Huawei. The U.S. asked a judge to throw out Huawei's lawsuits. Plus drowned in complaints, Samsung is facing lawsuits over its water

resistant smartphone claims. And there is no stranger danger here, companies are cashing in on Netflix popular TV series, "Stranger Things" as

it kicks off its third season. It is Thursday, and this is FIRST MOVE.

Welcome, everyone to FIRST MOVE. I'm Zain Asher, it is July 4th here in the United States. We are celebrating Independence Day here in America.

Wall Street is closed for the holiday, but all the major indices finished Wednesday's session at record highs. There are a few fireworks when it

comes to overseas trades.

European stocks a little changed overall. Italian stocks are rallying for a second day after the E.U. said it was happy for now with the country's

effort to cut debt.

Asian stocks, meantime finished the session mixed. Friday will be a very, very important day for investors here the United States. The U.S. releases

its latest jobs report which is a crucial piece of information for the Federal Reserve as it debates cutting interest rates and by how much.

We've got ADP numbers yesterday. They came in a little bit lower than expected, about 102,000 jobs added last month. Let's get right to the

drivers now.

The United States says it is hitting back at Huawei over the lawsuit it filed against the government ban. The Department of Justice has asked a

Federal court in Texas to dismiss the Chinese firm's case. Sherisse Pham is following the story. So Sherisse, first of all, just explain to us how

does this lawsuit fit in with the President Trump's announcement on Saturday at the G20 that he is easing restrictions on Huawei. How do the

two fit together?

SHERISSE PHAM, CNN BUSINESS REPORTER: So these are actually two separate issues. This lawsuit that Huawei filed, they filed it back in March. And

it was it was challenging the constitutionality of the National Defense Authorization Act.

And they said because a section of that law specifically named Huawei and banned Federal agencies from selling -- or from buying Huawei equipment,

that it was unconstitutional, but Department of Justice lawyers are saying that is wrong. They are saying that that argument is not only faulty and

outdated, but they're saying that barring Federal agencies from buying Huawei equipment is actually quote, "the logical next step" in protecting

U.S. national security.

Now Huawei has long argued that none of its products pose any kind of a national security risk and they took that case to court. They filed this

lawsuit in a district court in Texas back in March. And now this is obviously not the response that they were hoping for because lawyers are

saying, "Look, you are using arguments from Civil War and Cold War eras and they do not imply to this massive Chinese tech company."

So the part of the NDAA that they're pushing back against is specifically called Section 889. And I want to quote to you from the motion that the

Department of Justice filed overnight they said, "Section 889 does not sentence Huawei to death, imprison it or confiscate its property and

plainly, it does not preclude Huawei from engaging in its chosen profession."

So again, you know, likely not what Huawei was looking for. But to your question earlier, Huawei has much bigger problems to deal with because

since this lawsuit was filed, they were added to a trade blacklist and that happened in May, when the Commerce Department added Huawei to the entity

list and that bars American companies like Google and Micron from selling software and chips to Huawei, and Huawei needs those parts to build its

smartphones and its telecom gear.

Now Trump did change course over the weekend and said that U.S. companies could continue selling or resume selling to Huawei provided it doesn't pose

any kind of national emergency risk as he put it, but Huawei and its suppliers are still really unclear on what those details are. They don't

know when they can start selling to Huawei again and what they can sell to Huawei -- Zain.

ASHER: All right, so there still needs to be some further clarification on that front. Sherisse Pham live for us there. Thank you so much.

Okay, so Samsung is in hot water for putting his phones in sea water. The electronics giant ran advert showing the Galaxy smartphone in oceans and in

pools making it look as though it could actually be used while swimming. Australian regulators say that is certainly misleading and are hitting the

company with a lawsuit.

[09:05:14] ASHER: Hadas Gold has been following this story. So just give us more specifics here. What exactly has Samsung claimed about their

phones and how water resistant are these phones really?

HADAS GOLD, CNN BUSINESS REPORTER: Yes, well, Zain, I'm sure we've all experienced as I myself have lost a phone to water damage, but the

Australian Competition Regulator says that Samsung was advertising its phone as being completely waterproof that you could go underwater, they

would show advertisement since February of 2016, a swimmer underwater using his phone.

They would show advertisements of the phone being used to film one of those shark cages and clearly ocean water. But now, the Australian Competitions

Regulator is filing this lawsuit against Samsung saying that these advertisements were misleading because they actually say that not all of

Samsung's are completely waterproof.

As you can see on the screen right now, these are some of the advertisements that you saw. It's very clearly a man in a pool. There's

other advertisers that show very clearly a Samsung phone being used underwater, in an ocean.

But the Australian Competition Regulator that not all of the phones were actually suitable for use in all types of water and actually even if you

went on to Samsung's website, it said that some of its phones, specifically the Galaxy S10 should not be used in the beach or at a pool.

And the Australian Regulators are saying that when people went to Samsung and said "Hey, fix my phone, it's under warranty." Samsung, they say did

not adhere to that. Now the phone subject to this case, I want to put a list up on the screen just to see how many phones are subject according to

the Australian Regulator.

They include the S10 E, multiple S10s. The S9, S9 plus, S8, S7 Edge, the Note 9, the A7, A5, -- any of these phones that were manufactured between

2016 and 2019, these are some of Samsung's most popular phones.

Now if this lawsuit is upheld, Samsung could face fines worth millions of dollars because of recent change in the law found that any -- that the

maximum penalty for any violation, you could even consider sort of each advertisement, a violation can be up to $7 million. Samsung is facing some

high fines here.

Now, this comes on the heels of a tough few months for Samsung. If you remember that foldable phone fiasco that some of their new foldable phones

that they sent to reviewers broke and they got some really awful press and they delayed the release of this foldable phone.

But this is another sort of ding in their armor now for Samsung that they're dealing with. Samsung for their part says that they stand by the

marketing and advertising of the water resistance of its smartphones and they plan to fight this lawsuit -- Zane.

ASHER: But as you mentioned, it's been a tough month and few years, I guess for Samsung. Appreciate you joining us, Hadas Gold. Thank you so

much.

Okay, so India's biggest ride hailing firm, Ola has permission to now drive in London. The company will rival Uber in one of the world's largest taxi

markets. Anna Stewart is joining us live now from London.

So it's interesting, you know, Ola, joining the London market. It's a tricky market because it's heavily saturated when it comes to other ride

hailing apps.

And also you have a huge amount of lobbying from taxi drivers in London as well that has made things quite difficult for Uber at times.

ANNA STEWART, CNN REPORTER: You're absolutely right. A real tough market to crack and I think it's really interesting that this company, it's a new

company, Ola did actually did some soft launches in smaller cities around the U.K. very quietly, before making this move in London.

We expect this launch to happen sometime around September. Tricky markets to crack firstly, due to regulation, we've got some the toughest transport

regulation out there. In fact, the London Transport Regulator actually decided not to renew Uber's license just over a year ago, that decision was

overturned in the end.

Bolt, another rival used, it to be called Taxify. That first launched two years ago. It has closed down and closed shop just three days later. That

was also due to licensing problems, but as you say, it has actually already passed this first hurdle, it's already got the license. That is great

news.

Now, the big challenge will be cannot really steal market share from Uber? Because the other rivals haven't really posed much of a threat, yet. Now

Morgan Stanley and researchers says this one could be. The thing about Ola that's different to other rivals, is it has really, really deep pockets.

It's raised nearly $4 billion. It's backed by Softbank, like Uber. So it really could be a threat here.

ASHER: But also, as you mentioned, or as I mentioned earlier, the London market is heavily saturated. It is not just Uber that Ola is going to have

to contend with here.

STEWART: Yes, there's also Kapten, there's also Bolt which used to be called Taxify. But Uber is definitely the dominant player here. And

actually apparently for Uber as a company, overall, London accounts to something between four to eight percent of all ride sharing bookings. So

it's a big deal for Uber.

So what will be interesting is when Ola actually launches sometime in September, I think we can expect to see lower driver take rates, lots of

promotions, driving down those costs, but if Uber tries to match that that is going to take a huge hit on revenue, given how big London is as a market

for Uber.

So it's going to be very interesting. It could be a race to the bottom -- Zain.

[09:10:12] ASHER: All right, Anna Stewart, live for us there. Thank you so much. All right, so these are the stories making headlines around the

world.

In the past hour Russian President Vladimir Putin and Pope Francis have been meeting. There is speculation it's a warm up for a Papal Visit to

Russia, which would be the very first of its kind. One likely topic for discussion is the conflict in Ukraine.

The Pope has previously urged Mr. Putin to make a quote "sincere and great effort to achieve peace."

And the US President's big Independence Day event is stirring up controversy. The "Salute to America" parade will have tanks and military

flyover and a presidential speech. A source tells CNN military chiefs are concerned it will be politicized.

And Netherlands are into Sunday's final of the Women's World Cup often knocking out Sweden. They score the only goal of the game with a sweet

injury time strike into the bottom corner. The Dutch will now face the defending World Cup champions and tournament favorite, the United States.

All right, coming up FIRST MOVE goes to the upside down. Netflix releases season three. Can't wait to watch it. Season Three of its hit show

"Stranger Things." We will take a look at how the streaming giant is cashing in on 1980s nostalgia. That's next.

(COMMERCIAL BREAK)

ASHER: All right, welcome back to FIRST MOVE, everyone. I'm coming to you live from New York, call it a pre-Fourth of July extravaganza.

All the major U.S. indices actually closed Wednesday's shortened session in record territories. See the green arrows across the board there. It was

the first time the Dow closed at all-time highs since October.

U.S. traders are pausing a breath this holiday and reflecting on the strong gains we've seen so far for the stocks this year. The Dow and the S&P are

both up more than 15 percent. The NASDAQ has soared 23 percent.

Mike Bell joins us live now with his take on the markets. He's the Global Market Strategist for JPMorgan Asset Management. Mike, thank you so much

for being with us.

So here you have the S&P 500 hitting new record highs yesterday despite the fact that you have this potential looming possible sort of trade spat with

Europe and also those ADP numbers we got yesterday came in slightly worse than expected. Walk us through that.

MIKE BELL, GLOBAL MARKET STRATEGIST, JPMORGAN ASSET MANAGEMENT: I think this year has been all about the Fed. So as the markets focused on the

potential for rate cuts coming through, the market is assuming that those rate cuts are going to extend the economic cycle.

So obviously, already the longest expansion in history that it's going to extend it for another year or two. The market is pricing consensus growth

for earnings next year double digit and to us, those numbers seem a little bit high.

You mentioned the ADP number. The payrolls print there with small companies actually now having had net job losses for the last couple of

months in a row. So to me, the risks are a little bit more balanced than the market is currently assuming. And we would be more neutral in equities

at the moment.

[09:15:13] ASHER: And when you think about it, you mentioned it's all about the Fed, when you think about this looming potential rate cut, a lot

of people are talking about the fact that it's going to be 25 basis points.

If the jobs report we're expecting on Friday comes in, not so good. Even worse, in terms of expectations than the ADP report, do you think the Fed

should be cutting rates more?

BELL: I think if payrolls tomorrow, come in sub hundred thousand, that'll then be the third sub hundred thousand month we've had in the last year.

And I think in that environment, the Fed may well feel the need to cut rates by 50 basis points.

If on the other hand, we get a job number tomorrow that's more than a hundred thousand jobs added, then I think we're probably looking at more

like a 25 basis point cut.

ASHER: All right, so earning season is, of course, on the horizon, expectations everywhere being slashed, just the fact that the expectations

are coming in a lot lower. What does that tell you about corporate America's take on global growth, and still fears about tariffs?

BELL: I think the main thing actually thatY_(tm)s squeezing earnings at the moment is not so much the trade war, but actually rising wage

pressures.

So you're seeing the tight labor markets are feeding through into higher wage growth across the economy, particularly in some of the lower paid

sectors, you're seeing an acceleration in wage growth there now. So in places like retail, for example, leisure, you're seeing wage growth come

through.

And I think particularly for smaller companies thatY_(tm)s starting to squeeze margins and the trade concerns that just adds to some of the

weakness in terms of top line growth, as economic growth potentially slows on the back of that.

So getting squeezed both from the top and the bottom in terms of sales, growth and wage growth, putting pressure on corporate profits. And I think

that's going to lead to earnings growth coming in. So not much more than zero probably in the second quarter.

The question is whether we've got reacceleration. The market is assuming that we get a reacceleration in earnings into the end of this year, and

then heading into 20 deliver about 11 percent earnings growth for 2020.

As I say, with the margin pressures building and those potential concerns around trade, that seems too high to us.

ASHER: And actually, as you were speaking there, we just saw a graphic of the 10-year Treasury yields being below two percent. I'm just -- I just

want to get your take on really what that means in terms of fears about global growth, and also expectations about central banks around the world,

boosting stimulus and monetary policy.

BELL: Yes, I think it's being driven by expectations that you're going to see not just rate cuts from the Fed, but globally, a dovish shift from

Central Bank.

So the ECB have come out saying that they're likely to stimulate further, probably with more rate cuts and perhaps restarting QE that also put

downward pressure on the 10-year yield. So I think it's responding to expectations of global stimulus from the central banks.

The key question for equity markets, though, is are we going to see a reacceleration in growth? Are those Central Bank rate cuts and further

stimulus measures going to be sufficient to cause the business surveys such as the manufacturing surveys that have been quite weak in recent months to

pick up?

If they do, then there's a risk that Treasury yields would start to rise from here. On the other hand, if growth continued to deteriorate, and the

Central Bank rate cuts and stimulus weren't sufficient to extend the cycle, then Treasury yields could have quite a lot further to form.

ASHER: Mike Bell, thank you so much. Appreciate you being on the show.

All right. So corporate earnings drive stock valuations or you'd think they'd do, however, Facts Research estimates that earnings as I was talking

about with Mike Bell, the earnings of S&P 500 companies fell in the second quarter year-over-year after dipping in the first three months as well.

They are expected to do so again in the third quarter.

So why are so many stocks trading near record highs? I asked Paul La Monica about this paradox. Take a listen.

PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I think investors right now, Zain, are just so obsessed with this expectation of a Fed rate cut later

this month, and possibly more rate cuts later this year, and they're ignoring the fact that profits were down a little bit in the first quarter

expected to fall in the second quarter, it might even fall again in the third quarter.

The trade war is clearly having an impact on corporate America, but it's party mode on Wall Street because Jerome Powell is probably going to help

everyone out with a rate cut or two.

ASHER: So Paul, the issue of course, as you mentioned, is the trade war. Do you do you anticipate the trade war is actually going to impact tech and

consumer companies as well?

[09:20:10] LA MONICA: Yes, I think those are the two sectors, Zain, that people really have to pay the most attention to, in fact, according to some

data from Facts said, more than half of the earnings warnings that we've already seen for the second quarter have come from the tech and consumer

discretionary sectors. And those are the ones that both import a lot from foreign markets, particularly China, and also are exporting goods to

companies -- the countries like China, India, and you know, Europe, and that's going to be something that keep a very close eye on tech and retail,

could they be squeezed by this trade war?

ASHER: Well, we'll have to pay attention to that. And despite the warnings for second quarter and third quarter earnings, do you think that

whatever happens, things could be reversed or at least improve somewhat by the fourth quarter?

LA MONICA: Yes, that I think is the key right now, Zain. A lot of people I talked to said that, yes, we know the first quarter was not good. The

second quarter is not likely to be much better in the third quarter, it could be weak as well. But if we get trade tension out of the way by the

fourth quarter, and that's when you have the holidays, you have a lot of corporations that are trying to spend what's on their budgets before the

end of the year. That's typically when you get a big surge in profits.

And there is a lot of hope that we're going to have fourth quarter numbers really boost the overall profit picture for the year. I mean, analysts are

still expecting earnings to be up for all of 2019 largely because of expectations of a fourth quarter increase.

ASHER: All right, Paul La Monica. Thank you so much. Appreciate it.

Well, stranger things have happened on Wall Street for sure. But with the markets closed July 4th, Netflix is hoping to suck you into 1985 Hawkins

Indiana. Clare Sebastian joins us live now.

So Clare, I'm a huge "Stranger Things" fan. One thing that upset me is just how long I had to wait between the end of Season Two and the beginning

of Season Three. Literally in that time, in the gap between the two, I have gotten married, gotten pregnant had a baby and my baby is now 10

months. That is how long I had to wait between Season Two and Season Three. Let me tell you that wait was excruciating. Why? Why was the

weight so long?

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Zain, it has been a while. It was just before Halloween in 2017 that the Second Season

dropped. And Netflix addressed this last summer. They said it's a handcrafted show and the creators just needed time to get it right, but

look, it was important for Netflix that they got it right as well.

The streaming was a ramping up. Old media companies like NBC Universal and Disney starting their own services pulling their content off of Netflix.

So Netflix needs its originals like "Stranger Things" to do really well and they are trying to market these shows to improve their cult following in

any way they can.

And in this case of "Stranger Things," this has led to an unusual number of brand partnerships. The way the show is trying reach beyond your TV set or

your computer or your phone into your everyday life. Take a look.

(BEGIN VIDEOTAPE)

SEBASTIAN (voice over): Start with a cherry and some pecans, add whipped cream caramel, and finally a scoop of chocolate ice cream. The result? A

sweet marketing opportunity.

Baskin-Robbins's Upside-Down Sundae is named after the creepy parallel universe in the Netflix hit series "Stranger Things."

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Upside-Down Sundae. "Stranger Things" are happening at Baskin-Robbins.

(END VIDEO CLIP)

SEBASTIAN (voice over): It's one of a new line of treats the ice cream store is rolling out to cash in on the show's third season, which features

a fictional ice cream parlor called Scoops Ahoy.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Ahoy, eh?

UNIDENTIFIED FEMALE: Ahoy.

(END VIDEO CLIP)

SEBASTIAN (voice over): Season Three sees the teenagers from Hawkins, Indiana, take their fight against evil to the quintessential Eighties hang

out, the shopping mall.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What did you think? We're just going to sit in my basement all day, play games for the rest of your lives?

(END VIDEO CLIP)

SEBASTIAN: The real setting, though, has been happening off camera. Netflix says they're partnering with about 75 brands for the "Stranger

Things" launch, an all-out international marketing blitz featuring everything from Nike to Burger King to the Chicago Cubs.

(BEGIN VIDEO CLIP)

PETER SHANKMAN, BRANDING AND SOCIAL MEDIA CONSULTANT: Every network, every website, everyone is looking for those two hours that you have between the

timing at home, put the kid to bed, finish dinner, and watch something.

So anything that Netflix can do to grow that brand recognition and make you remember, "Hey, I should finish the season of `Stranger Things'" is a

benefit.

UNIDENTIFIED MALE: If you love the TV show "Stranger Things," then boy, have we got a LEGO set for you.

(END VIDEO CLIP)

SEBASTIAN (voice over): Many of the brand tie-ins play on the 1980s nostalgia the show is known for.

Netflix even convinced Coke to re-release New Coke, a product which flopped back in 1985 after "Stranger Things" decided to incorporate it into its

plot.

Netflix says no money changed hands in the Coke deal or in many of the show's other branding deals. Instead, Netflix is allowing companies to use

the "Stranger Things" brand in return for a commitment to spend marketing dollars and dish up buzz for the show.

(BEGIN VIDEO CLIP)

SHANKMAN: They don't necessarily care so much about revenue from these deals. They do care about brand awareness, and they do care about

acknowledgment.

[09:25:08] SEBASTIAN (on camera): Now, it's one thing to incorporate brands seamlessly into a show's narrative to get a sense of authenticity

and nostalgia. That was actually part of the vision for "Stranger Things" from the start.

Now, of course, the risk is that all of this ends up going too far and the marketing starts to overwhelm the show itself.

Clare Sebastian, CNN, New York.

(END VIDEOTAPE)

SEBASTIAN: Well, Zain, of course, you and I are far too young to remember 1985 clearly, but the experts do say ...

ASHER: I was two actually.

SEBASTIAN: ... that this nostalgia is key, exactly. The experts say this nostalgia is key as long as the show stays on message and the brand

partnerships are playing into this kind of nostalgia, then they should be okay. It should be something that doesn't overwhelm the creativity of the

show itself.

ASHER: And it's interesting, because Season Two, a lot of people were a little bit disappointed with. What are the expectations for Season Three,

just in terms of -- I mean, there's so much pressure on the creators of "Stranger Things," because it is such a popular show. There's a lot of a

lot at stake here.

SEBASTIAN: There's a lot at stake here, a lot of the action as the piece showed, it looks like it's going to be taking place around this mall that

has led to those opportunities for brands to be part of the show organically.

I will just point out again, Netflix says that they aren't making money from the kind of product placement that you see in this show. It's organic

to the show. It's not something that they're using for revenue.

But this is still you know, kind of a new advertising paradigm that we're existing in and Netflix has consistently denied that it's not moving to an

ad-based system and that it's not going to have an ad-based subscription.

So product placement is one thing, marketing partnerships be it, you know, stores using the show's branding to sell products or partnering with the

characters on adverts is a potential new revenue stream for Netflix because we know that the show, the company rather is burning through cash as it

spends big on content -- Zain.

ASHER: All right, Clare Sebastian live for us, thank you so much. I'm sure we'll both be watching later on today. All right. That's it for

FIRST MOVE. Thank you so much for watching. I'm Zain Asher. Up next on CNN, "The Global Energy Challenge: India."

But first, I'll be back with a quick look at your headlines.

(COMMERCIAL BREAK)

ASHER: Hello everyone, I'm Zain Asher and this is CNN News Now. And we've just got some breaking news into CNN. The Australian student, 29-years-old

Alek Sigley who was detained in North Korea has actually just landed moments ago in Narita Airport in Tokyo.

[09:30:11] ASHER: The 29-year-old Alek Sigley was actually studying and living in Pyongyang when he was reported missing by his family roughly

around June 25th. He went missing for about a week. He was detained for about a week. But Sigley actually told reporters that he was feeling great

when he landed in Beijing earlier today.

As I mentioned, he landed in Tokyo, Narita Airport moments ago. Australia's Prime Minister thanked Sweden for its role in securing his

release. The Swedish diplomats were pivotal in securing Alek Sigley's release.

(BEGIN VIDEO CLIP)

SCOTT MORRISON, AUSTRALIAN PRIME MINISTER: This outcomes demonstrate the value of the discreet behind the scenes work officials in resolving

conflicts in sensitive consular cases in close partnership with other governments.

I'm sure we all could not be more pleased that we not only know where Alek is, but we know he is safe.

(END VIDEO CLIP)

ASHER: The U.S. President's big event planned for American Independence Day is drawing scrutiny. A source tells CNN, military chiefs are concerned

it will be politicized.

The parade in Washington was apparently inspired by France's Bastille Day Parade Mr. Trump saw two years ago and we will have tanks and it will have

tanks and a military flyover.

And as of few minutes ago, Russia's President finished his talks with the Pope in Vatican City. The two men exchange gifts, and Vladimir Putin

presented members of his delegation to the pontiff.

Mr. Putin is due to meet Italy's President later on this hour. All right. That is your CNN News Now. I'm Zain Asher, "The Global Energy Challenge:

India," starts right now.

(BEGIN VIDEOTAPE)

JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR (voice over): Energy, the power behind humanity. Progress at a cost, and still close to a

billion of us are without electricity.

As we aspire for quality, and equality of life, our numbers rise. With each new generation, expectations will demand more efficient power from

greener and cleaner sources.

Meeting innovators and visionaries across some of the world's key economies, I'm on a journey to explore how we can make this critical energy

transition.

DEFTERIOS (on camera): Our very existence may depend on how we face up to the global energy challenge.

DEFTERIOS (voice over): New Delhi, the capital city of India. It is home to more than 20 million people and is one of the world's fastest growing

cities. It has a relentless demand for energy. In fact, the people of this vast nation are among the largest growing energy consumers in the

world.

That is why I'm beginning an energy journey in one of the world's most populous countries. A trip that will take us more than 3,000 kilometers

into the heart of rural India, but it's in New Delhi where we begin with a trip to one of its busy street market.

(BEGIN VIDEO CLIP)

VARUN SIVARAM, ENERGY EXPERT: If I had to pick one word to describe the city, the first choice would be chaos, and the second would be energy.

(END VIDEO CLIP)

DEFTERIOS (voice over): Thirty-year-old Varun Sivaram, gets India's energy challenge. Born in the United States to Indian immigrants, the Stanford-

educated Rhode scholar is an energy expert, who has packed his bags and moved to be at the heart of these energy transition.

(BEGIN VIDEO CLIP)

DEFTERIOS (on camera): Is India the right place to delve in first for us?

SIVARAM: I couldnY_(tm)t think of a better country around the world, not a single country around the world where you don't have a more exciting or

more challenging energy transition.

Look, here in India, 300 million people are going to enter India's cities by 2050. Three quarters of the building stock in 2040 hasn't been built

yet, and there's this enormous transition going on now, or so we hope, from coal to a renewable energy.

India is the place to be, and it's also the place we must be because as that climate change continues to ravage the planet, and developing

countries in particular, it's going to be nations like Indian with rapid emissions growth, that have to step up, slow their growth and also protect

their people from what climate change is going to do.

DEFTERIOS: People love a challenge, but is this a grave challenge in India? Insurmountable challenge in your view?

SIVARAM: I wouldnY_(tm)t call it insurmountable, it's great, absolutely, but I wouldn't call it insurmountable, otherwise I would not be here.

India's emissions are growing very rapidly, it's also the world fastest growing major economy over the last five years.

So it's trying to do three things all at once. It's trying to power it's rapidly growing economy, it's trying to control its rapidly growing

emissions.

[09:35:06] SIVARAM: Nine out of 10 of the most polluted cities in the world are in India. And third, it's trying to protect the country from

what climate change is about to do. It's going to bring droughts, it's going to bring natural disasters, these three things in parallel, powering

the country, controlling its emissions, and adapting to climate change are very difficult to do all at once, but it's not insurmountable.

(END VIDEO CLIP)

DEFTERIOS (voice over): India is among the countries most vulnerable to climate change. Intense heat waves during the summer months have become

the norm. It's the third largest emitter of greenhouse gases.

(BEGIN VIDEO CLIP)

SUNITA NARAIN, DIRECTOR GENERAL, CENTER FOR SCIENCE AND ENVIRONMENT: We are not backing from the challenge, we are not running away. We have large

numbers of people in this country who recognize the fact that, yes, climate change is here, because our crops are suffering, we are finding freak

weather more and more.

We know the pain of climate change, but we also know that we cannot be the victims of climate change. We cannot today be asked to be also the only

solution to climate change.

(END VIDEO CLIP)

DEFTERIOS (voice over): But there is another major environmental issue affecting this country. Air pollution. With India having the majority of

the most polluted cities in the world, New Delhi has emerged as one of the most dire on earth. Hazardous air engulfs it on a daily basis.

(BEGIN VIDEO CLIP)

AJAY MATHUR, DIRECTOR GENERAL, THE ENERGY AND RESOURCE INSTITUTE: In the last three, years I've started having a permanent cough. That just tells

you the cause of living and working in the polluted city. Do we have to clean it up? Yes.

And in each city, the reason for pollution is somewhat different, but ultimately, it's about industrial power stations, it's about

transportation, it's about construction and demolition ways.

NARAIN: The City of Delhi is to the outraged at the level of pollution. Right now, our pollution levels are high, because we have high sunlight, we

have ozone levels that are high, but in winter is when you really see the force of pollution, because that is when inversion takes place.

We are trying, we are working on it, it's a tough challenge, because it's an energy challenge.

(END VIDEO CLIP)

DEFTERIOS (voice over): New Delhi has made some efforts. Heavy polluting, coal-fired power plants within 100 kilometers of the city have been closed,

and all public transport vehicles have switched to cleaner, compressed natural gas, but it hasn't been enough.

The reason, India's sheer growing demand for energy, a demand that set to double over the next decade.

(BEGIN VIDEO CLIP)

NARAIN: It's a challenge where we have to deliver basic energy to millions of people. Just think of the fact that there are millions of households

still which cook their food on biomass, which means that poor women are exposed to extremely polluted air, because they can't afford clean energy.

That is the level of energy poverty we have.

(END VIDEO CLIP)

DEFTERIOS (voice over): To witness firsthand what's driving the increasing energy demand, we've come to an air conditioner production facility outside

of New Delhi. More than 12,000 units roll off the production line at two of LG's plant every day. They expect to sell more than one million units

this year alone.

(BEGIN VIDEO CLIP)

MATHUR: The single largest increase in electricity demand is coming from air conditioning. As people become richer, they buy more air conditioners,

but the problem that this does is, that it leads to peaks in electricity demand.

In the City of Delhi, we have now started to see that the largest amount of electricity is used at 11:00 at night on hot, humid nights. Why? Because

that is when each one of us are going to bed and switch on our air conditioners.

Now, this is when only six percent of Indians, and ten percent of Indians in Delhi have air conditioners. I shudder to think what will happen to the

demand profile as more and more people get air conditioning.

(END VIDEO CLIP)

DEFTERIOS (voice over): Demand for electricity is set to explode, with the current population of 1.3 billion, in a matter of years, India is set to

overtake China as the most populous country in the world.

As I leave New Delhi, I'm struck by the daunting challenges facing this developing country. How to deliver more energy to its growing masses? But

also address its dirty energy sources. Toxic air pollution, and escalating CO2 emissions. Well, my next destination provide me with some answers.

A train and car ride several hours later, and I'm in the coal capital of India, Singrauli. Here, in the northern coalfields, open cast mines that

run for kilometers on and dominate the landscape.

[09:40:10] DEFTERIOS (on camera): It's extraordinary because the sheer size of it is mind-boggling.

DEFTERIOS (voice over): A massive 70 percent of this country's electricity now comes from coal, almost double the amount used by the rest of the

world. This is a 24 hour, seven days a week, 365 days a year operation.

(BEGIN VIDEO CLIP)

PRABHAT KUMAR SINHA, CHAIRMAN AND MANAGING DIRECTOR, NORTHERN COALFIELDS LIMITED: The coal is abundantly available here. There is a total, I think

of more than 12 billion tons of coal lying here. It can continue up to more than 40 years.

(END VIDEO CLIP)

DEFTERIOS (voice over): Coal is the world oldest and dirtiest energy source. It has powered the Industrial Revolution. But today, it's being

targeted as one of the chief villains of global warning.

Singrauli has eight coal power plants producing enough electricity every day to power 16 million homes.

DEFTERIOS (on camera): It is just staggering the scale of this operation, there are 58 wagons on each train filled to the brim with coal and there

are up to 80 trains delivering to power plants in this area.

DEFTERIOS (voice over): The skies throughout Singrauli are covered in a thick dark haze. At times, in the distance, you can barely make out the

coal fired chimney stacks.

(BEGIN VIDEO CLIP)

DEFTERIOS (on camera) Is India behind in what other countries are doing to deal with climate change?

SIHNA: It is behind it, but we are trying our best to make it up. In this area, you are seeing -- we have heard that it is a critically polluted

area, but it's not due to the coal mining only. We are supplying the coal to the power houses also.

DEFTERIOS: As we do the interview, you can see the air quality here.

SINHA: Yes, yes.

DEFTERIOS: It's critical.

SINHA: It's critical. It is critical.

(END VIDEO CLIP)

DEFTERIOS (voice over): Apart from the coal mines and plants, up to one million people live in Singrauli. Ruta Kahar, her husband and three

children have been trying to survive in the midst of the pollution for several years.

(BEGIN VIDEO CLIP)

RUTA KAHAR, SINGRAULI RESIDENT (through translator): We are unable to carry out any family activities, we have problems drinking water, we have

stomach complications, children are impacted too because of the coal. The coal dust gets into the house, it gets deposited on to our food, there is a

lot of difficulty.

(END VIDEO CLIP)

DEFTERIOS (voice over): Despite just getting access to electricity, Ruta still cooks using highly polluting wood.

In what has been seen as a huge success, Prime Minister Narendra Modi's government says it has brought electricity to tens of millions of rural

Indians. But while many villages have been connected, many individual houses have yet to be linked up, and many are too poor to afford it.

(BEGIN VIDEO CLIP)

DILIP KUMAR NAMDEO, SINGRAULI BUSINESSMAN (through translator): There are 400 people in this village and everybody is affected, everyone here is

below the poverty line, ever since this coal production came into existence, it has given rise to a lot of health problems. We've complained

about this several times, but nobody has paid heed to what we have said.

(END VIDEO CLIP)

DEFTERIOS (voice over): According to the Health Effects Institute, 1.2 million deaths were caused in India in 2017 due to air pollution. Northern

Coal Fields Limited says, mitigation measures are being introduced to try and reduce the pollution.

Waters being sprayed on the coal fields to decrease the spread of dust, thousands of trucks that ferry coal to the plants will be phased out in

favor of trains.

Old power stations are being decommissioned and replaced with newer less damaging plants, which claim to lessen the emissions entering the

atmosphere, but it's clearly not enough.

(BEGIN VIDEO CLIP)

DEFTERIOS (on camera): Coal is worldwide a major contributor to CO2 emissions. This must be a major concern personally and for the company.

SINHA: We are making all efforts, we are leaving no stone unturned for environment pollution control. I am sure that this will be taken care of

in the near future. We are trying our best, sir.

(END VIDEO CLIP)

DEFTERIOS (voice over): However, the production of coal is not set to cease here anytime soon. In fact there are plans for it to increase by 20

percent between now and 2024. All to meet this country's sheer demand for energy.

When we come back, I travel to a state that is a shining example of what India needs to do to embrace clean energy.

(COMMERCIAL BREAK)

[09:47:34] DEFTERIOS (voice over): Telangana is one of 29 states in India. It's almost the size of Greece and home to 40 million people. Its capital

Hyderabad has become a tech hub. When it comes to power, it's a microcosm of the country's energy transformation, and how it plans to tackle air

pollution and rising CO2 emissions.

That is why I've come here to find out if the changes taking place can be replicated across the country.

Five years ago, the state had daily power cuts.

(BEGIN VIDEO CLIP)

AJAY MISRA, SPECIAL CHIEF SECRETARY, ENERGY DEPARTMENT: The agricultural or the rural Telangana was getting power only for four to five hours per

day. Then, in the city and surrounding, the industry was witnessing two days in a week, there was no power supply for the industry. Since January

2018, 24/7 electricity is being provided to the people of Telangana.

(END VIDEO CLIP)

DEFTERIOS (voice over): The state government has invested big in a non- fossil fuel energy sources, especially solar. Today, it is the second

largest producer of solar energy in the country.

(BEGIN VIDEO CLIP)

SUMANT SINHA, CHAIRMAN AND MANAGING DIRECTOR, RENEWED POWER LIMITED: When Mr. Modi became Prime Minister in 2014, at that time, we had about 20,000

megawatts of both wind and solar installed. And at that point, he set a target of getting at the end of -- by the end of 2022, almost 175,000

megawatts of wind and solar installed which is an eight times growth in the next eight years, and that is actually quite remarkable.

It is almost China-esque in its thought process in terms of setting a very large target and trying to work towards getting there.

(END VIDEO CLIP)

DEFTERIOS (voice over): India is a perfect location for solar power, as it receives twice as much sunshine as Europe. It has led to renewed power,

becoming the largest independent producer of clean energy in India. Currently producing about one percent of the country's electricity.

(BEGIN VIDEO CLIP)

SINHA: The great news is that the cost of renewable energy which is really what is going to replace coal over time has come down quite dramatically,

and so now renewable energy is about 30 to 40 percent cheaper then thermal energy. And so that really begins to provide the foundation for these

transition to happen, from thermal, into renewables.

(END VIDEO CLIP)

DEFTERIOS (voice over): But there is a problem with solar. The sun does not shine all day. Battery storage is very expensive and you currently

can't store solar energy for a long period of time.

(BEGIN VIDEO CLIP)

[09:50:07] SINHA: I think storage is going to become cheaper as we go forward, and so the cost of solar, plus storage will end up eventually

becoming cheaper, or at least on par, with other sources of energy like coal. And that is really when you at least, blur the tipping point of

renewable energy.

(END VIDEO CLIP)

DEFTERIOS (voice over): India has set a target for 40 percent of its electricity to be from non-fossil fuel sources by 2030, but despite rapid

growth in the renewable sector, it is still not enough to meet the country's thirst for energy.

(BEGIN VIDEO CLIP)

SINHA: I think that, over the next 12 years or 13 years, India's energy demand is going to double from where we are right now. Because you're

going at about six to seven percent every year. And a large part of that incremental demand will be met through renewable energy sources.

But the reality is that even if you meet 50 percent of the new incremental demand from renewable energy, the balance of 50 percent also has to be met

from somewhere.

It's unlikely to be hydro or nuclear or even gas, and therefore, the slack is going to be picked up by coal.

(END VIDEO CLIP)

DEFTERIOS (voice over): Telangana is already achieving 40 percent of its electricity from a mix of renewables. The remainder, 60 percent it's from

coal, some of which is sourced through a warrant of underground mines. To see how this works, I'm venturing underground, 300 meters deep underground,

in fact.

Down here, it's like another city of hundreds of workers, beavering away around the clock in search for the black gold. In these mines, production

is also being ramped up to meet the escalating demand for energy.

(BEGIN VIDEO CLIP)

MISRA: In addition to what we have today, approximately 10,000 megawatts, in the next four years we will be adding approximately 9,000 megawatts of

thermal or waste energy.

Of late, we have gone far from what is called super critical technology for thermal power projects, which has very low level of emission and damage to

the environment. We have done that for more than a hundred years going to the present rate where we have to take advantage of that.

(END VIDEO CLIP)

DEFTERIOS (voice over): To counter the dangerous emissions and pollution from coal, one billion trees have been planted in this state over the last

five years, and they have big plans they want to cover a third of this territory.

(BEGIN VIDEO CLIP)

MISRA: It is called "Haritha haaram" which in English would mean green garland. All these 12,000 village local bodies which are called punjabs

are mandated to have a nursery each minimum for the greening of the state will become a movement in this place. Through legislation and also

involvement of the local people and the participants.

(END VIDEO CLIP)

DEFTERIOS (voice over): Air pollution and emissions are being tackled on the streets, too. Electric buses are being introduced and the state has

big plans to become the electric vehicle capital of India.

(BEGIN VIDEO CLIP)

RAJA GAYAM, FOUNDER AND CEO OF GAYAM MOTORWORKS: Telangana has all the resources to develop as a center of electric vehicle revolution. So the

government has brought in various incubators which is encouraging innovation among startups.

I think we got very good feedback.

(END VIDEO CLIP)

DEFTERIOS (voice over): In 2015, the Gayam brothers develop their first electric tuk-tuk. A three wheeler that's very popular on the streets of

India. Today, they have sold thousands across the country, and the world, and have Amazon, Ikea, and Uber among their clients.

(BEGIN VIDEO CLIP)

GAYAM: One of the reasons why most of the corporates adopt our vehicle is it's not just environmentally friendly, but it's also very economical.

So the operational cost for a three wheeler, for an electric three wheeler is only about one seventh that of a petrol three-wheeler. So that's a huge

savings.

(END VIDEO CLIP)

DEFTERIOS (voice over): At charging points, it could take several hours to fully charge electric vehicles, but with Gayam's battery swapping solution,

pre-charged batteries can be changed over in seconds.

(BEGIN VIDEO CLIP)

GAYAM: No one wants to wait three or four hours to get their vehicles charged, they would want to get their vehicles refueled in less than one to

two minutes. They find swapping to be extremely convenient and that's the reason they're adopting this model.

(END VIDEO CLIP)

[09:55:04] DEFTERIOS (voice over): As incomes rise, more and more people are buying motorcycles and tuk-tuks. India has set ambitious targets on

electrification of vehicles to address air pollution and CO2 emissions. By 2023 it wants all tuk-tuks to be electric and all motorcycles to be battery

powered, just two years later.

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GAYAM: That is a very good ambition to have and I think that's clearly possible. The lifetime for a three-wheeler is about five to six years, so

that kind of switch should be possible.

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DEFTERIOS (voice over): From new innovations in mobility to new sources of energy, India it's not just looking at an energy transition, but an energy

transformation.

At times during the course of this journey, it looks like a monumental task. That is why I returned to New Delhi to meet the man who has overseen

and driving this transformation, and the national governments vision.

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AMITABH KANT, CEO, NATIONAL INSTITUTION FOR TRANSFORMING INDIA: We are accelerating the pace of renewables in a very, very big way. If you look

at the trend in the last three to four years it's all renewable, it's all wind, it's all hydro, and therefore, if you look at another two to four

years, maybe focusing in cleaning up our cities, you will see a huge fall and better management and we will ensure a better management of this

cities. The quality of life will improve and I think energy mix will radically change in India.

DEFTERIOS (on camera): Don't you think there's a coal curse here, though, because it's an abundance and it's cheap and it's hard to pull yourself off

of that addiction?

KANT: Coal is abundant in India, it's plenty, it's large-scale, but it's low quality coal, number one. Number two, it is a function of economics,

it's a function of commercial viability, and therefore India's biggest strength is not in coal, but in sun.

We are in the midst of one of the biggest disruptions that is taking in place right now, in terms of both mobility and in terms of energy and in

terms of storage. And I think, in the next two to four years, you will realize that the acceleration towards renewable will be phenomenal.

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DEFTERIOS (voice over): The energy challenge facing India will be daunting. Billions of homes need to be built. Many cities need to be

constructed. Billions of people need to get access to transport.

It all requires lots of energy. Get it right and it will not only benefit a nation, but can be replicated in other developing countries around the

world. You get it wrong, and it will not only have devastating consequences for its people, but potentially our entire planet.

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