🪫 Tesla’s subsidy blues
Hey Snackers,
Rom-coms are out; rom-commerce is in. Walmart’s releasing an original 23-episode holiday series called “Add to Heart,” which advertises Walmart products (with add-to-cart buttons, natch). Who needs “Love Actually” when you have “A Walmart Commercial”?
Stocks were mixed yesterday as job openings dropped to their lowest level since March 2021. Quits stayed low for the fourth straight month as US workers tried to rebuild emergency funds (FYI: 40% of Americans have depleted their pandemic-era savings). Meanwhile, bitcoin climbed past $44K — its highest price since April 2022.
The Biden admin’s new rules on EV tax credits could further cool the electric market
I got new rules, I count ’em… The Biden admin went full Dua Lipa with new rules that would cut subsidies for EVs with Chinese battery components. To spur electric adoption, Uncle Sam has been offering generous tax credits for EV buyers. But starting next month, cars with China-made battery parts will no longer be eligible for the full $7.5K credit. Because China is the world’s top EV battery producer, it could mean pricier electric rides for Americans:
Tesla’s already warned buyers that the tax credit for its cheapest car (the Model 3) will be halved to $3,750 starting in January. Read: the Model 3’s battery components likely won’t meet the new sourcing rules.
Old rules: Already, of the hundred or so EV models on sale in America, only 20-ish qualify for the credit (they must be assembled in North America, and there are also restrictions on the origin of battery minerals). With the new rules, there could be even fewer rides that qualify.
“Made in the USA” all the way… The new measures are part of a White House effort to bring more car manufacturing to the States. But they could interfere with another Biden-admin goal: that half of all new-vehicle sales should be electric by 2030. China accounts for about two-thirds of the world’s battery-cell production, while the US makes up just about 10%. FYI: the new rules also say that EVs can’t contain parts made in Russia, North Korea, or Iran (aka “foreign entities of concern”), but China’s inclusion will have the biggest impact.
The bumpy road could get bumpier… EV sales growth (though strong) has cooled, despite price cuts and federal incentives to fuel demand. GM, Ford, and Tesla have said they’d delay billions in spending on electric models and factories, citing slowing sales. For many consumers, EV prices are still too high, even with gov’t incentives. Now they’ll likely be higher.
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Uber’s set to join the S&P 500, topping off a banner year for the everything-delivery giant
Where to? The S&P 500… Investors revved up Uber shares after news that it’s expected to be added to the S&P 500 (ETA: December 18). Refresher: the S&P 500 tracks the performance of America’s top 500 public companies, and is often used as a benchmark for the broader market. Companies joining the S&P club may sometimes see a temporary stock boost, because their addition can drive buying from fund managers.
Swap: Roughly a third of S&P companies have been replaced since 2015, and 11 companies have been added this year, including Airbnb and Lululemon.
Criteria: To qualify for S&P inclusion, companies need at least a $14.5B market cap and positive earnings for the past four quarters.
5-star year… Uber’s market cap broke through $100B last month for the second time ever. It’s now sitting pretty at $119B — well above the S&P’s median market cap of $31B. Uber has delivered an operating profit for two straight quarters, showing after years of doubt that its biz can make $$. In Q3, Uber notched record ridership, with strong growth in both ride-hailing and food delivery. Another win for Uber this year: California upheld Prop 22. The gig company also expanded its package delivery and advertising businesses (think: in-app promos). Uber aims to make $1B next year from ads alone.
The “Uber for [insert service]” is Uber…. In the 2010s, Uber was in a race against Lyft to be the dominant ride-hailing company. Now Uber’s in a different league than its much smaller rival as it tries to become an app for lots of services. Its food-delivery biz takes a 24% bite out of DoorDash’s market-share dominance. Up next: Uber’s testing a TaskRabbit-like service.
What else we’re Snackin’
Vice: Take-Two Interactive dropped its “Grand Theft Auto VI” trailer a day early after someone leaked it on X. The hotly anticipated game is set for a 2025 release and is expected to rake in billions.
Unspool: Designer-rentals company Rent the Runway reported a drop in subscribers and revenue. Last month, rival Urban Outfitters’ Nuuly service beat the nearly 15-year-old fashion co to profitability.
Taxing: SCOTUS heard arguments for a case with potentially huge ramifications for the tax code. Experts called it a preemptive attack on wealth taxes, but most justices seemed wary of upending current principles.
KO: Microsoft’s looking to launch a new mobile-gaming store. The Xbox parent hopes to use its massive catalog of games (plus Activision’s “Call of Duty” and “Candy Crush”) to boost its mobile market share.
Poke: Covid-vax rates are down in the US, with only 15% of adults getting the latest shots from Pfizer, Moderna, or Novavax as of last month. US hospitalizations have ticked up recently.
Wednesday
Earnings expected from Campbell, ChargePoint, Chewy, and GameStop
Authors of this Snacks own bitcoin and shares of: GM, Microsoft, Moderna, Rent the Runway, Tesla, Uber, and Walmart