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Hey Snackers,
Happy St. Patty's Day! If you see a neon green river in Chicago, don't be alarmed. If you see a neon green river not in Chicago, please be alarmed.
Stocks pulled back from their Monday records yesterday. Today, all eyes are on the Fed: Chairman Jerome Powell is expected to speak about interest rates (what else?).
PS: We want your Women's History Month SnackFacts! Submit yours here, and we might feature it on our newsletter and/or pod.
Electrify
Volkswagen gears up to challenge Tesla's dominance (with help from its friends)
Flashback to 2015... That's when the EPA outed Volkswagen for programming its cars to pass diesel emissions tests — while they were actually emitting up to 40X more (outside of the tests). After the Dieselgate scandal, VW earned a rep for being the opposite of green. Flashforward to 2021...
- Volkswagen is tying its fate to electric cars and taking on Tesla. According to its CEO, VW wants to "get close" to "and then overtake" Tesla. Your move, Technoking.
"Power Day"... VW's not-so-subtly titled event to show how it will overtake Tesla with its new electric tech (sorry, Battery Day). Some highlights:
- Cost-slashing: VW said it'll slash the cost of batteries (the priciest part of EVs) by up to 50% by 2030 — making its EVs cheaper than gas cars.
- Convenience-boosting: By 2030, it'll slash battery charging time to 12 minutes — on par with how long it takes you to figure out which side of the car your fuel filler is on (every time).
- Range-soothing: VW says it'll have 18K fast-charging stations across Europe by 2025, to soothe nagging range anxiety (the fear of running out of e-juice in a gassy world).
- Battery-building: VW is building six battery factories in Europe.
VW is giving a masterclass in delegation... While Tesla tries to do everything itself, VW is going with a partnership strategy. Those battery factories? They're being built alongside suppliers like Sweden's Northvolt. Those 18K charging stations? BP and other companies are providing the electric juice. Volkswagen's EV platform (motor, chassis, etc)? It's sharing with Ford, who plans to use it to build some of its own EVs. In the race to go green, collaboration could be key to scaling faster... and cheaper.
Hike
Higher taxes could be coming for America's wealthy — and companies everywhere
Recheck the checking account... Last week, President Biden's $1.9T stimulus bill passed, and $1.4K checks started rolling out. Now, Biden is turning his attention from distributing trillions to raising taxes... on corporations and the wealthy. This would be the first major tax hike in nearly 30 years. Some of the proposals reportedly being considered:
- Raising the corporate tax rate to 28% from 21%. Trump slashed it to 21% from 35% in 2017.
- Raising the income tax rate on people making $400K+ per year (less than 10% of total tax payers).
- Raising the capital-gains tax rate (what you pay when you sell investments at a profit) for people earning at least $1M/year.
Hut, hut, hike... Some of the proposed hikes could hurt US GDP and wages long-term, according to the Tax Foundation (an independent think tank). Theoretically, the more $$$ companies spend on taxes, the less they have for growth and investments. But thanks to tax breaks and loopholes, America’s largest corporations paid an average tax rate of just ~11% on 2018 profits. Tax hike proposals are likely to get serious pushback. So why is Biden doing it?
- Pay for "Build Back Better": Biden pledged $2T to clean energy innovation, and trillions more to building a modern infrastructure (think: roads, bridges). That could cost ~$7T.
- Curb the debt: While the $1.9T stimulus was financed entirely by US government IOUs (aka: debt), the BBB plan likely won't be. Higher taxes could help pay for BBB, without adding to the US’ $28T debt.
- Deliver: Dems have been calling for higher taxes on the rich and corporations. Biden could fulfill his campaign promise of doing that.
Staying competitive is key... For decades, countries have been competing with each other to attract corporate investment for economic growth. The main way to do that: lower taxes for companies. In 2000, more than 55 countries had corporate tax rates above 30% — now, less than 20 do. The global average was 24% in 2018. By raising the rate to 28%, the US could lose corporate activity to other countries. That's why Treasury Secretary Janet Yellen is trying to forge an agreement with other countries for a global minimum corporate tax.
What else we’re Snackin’
- Gig: Uber will have to reclassify all UK drivers as workers (with benefits) after losing a major labor battle.
- Ludick: Dick’s Sporting Goods launches its own men’s athleisure line to rival Lululemon.
- Lede: Facebook signs a three-year deal to pay Rupert Murdoch's News Corp Australia for its news content.
- Scoot: E-scooter legend Bird is investing $150M to double its presence across Europe (drivers must be thrilled).
- Vax: Health authorities and scientists think European governments shouldn't have suspended AstraZeneca's vaccine.
- SPACial: Digital trading app eToro is going public at a $10.4B valuation by merging with a special purpose acquisition company.
Wednesday
- Jerome Powell press conference
- St. Patrick's Day
- Earnings expected from Lennar
Authors of this Snacks own shares of: Uber and Tesla
ID: 1567122
