Raphael Stevens

Latest story

163 Shares19 Views

Here are the products and companies most at risk from Trump’s tariff plans

by

Tariff proposals have put the complex global supply chain front and center as President-elect Donald Trump gets inaugurated on Monday.
On the campaign trail, Trump said he would add tariffs for goods made in other countries, especially China.
Those higher costs on sneakers, cars, furniture and more could force many consumers to change their buying habits.

Customers shop for food at a grocery store on Jan. 15, 2025 in Chicago, Illinois. 
Scott Olson | Getty Images

Many of the items that U.S. shoppers browse and buy in retailers’ aisles come from far-away factories or farms — a reality that could soon force many consumers to change their buying habits.
Sneakers, T-shirts, beer and other common household items are often made in countries like China, Mexico and Canada before they wind their way to a big-box retailer, grocer or mall in the U.S. That complex global supply chain is front and center Monday as President-elect Donald Trump gets inaugurated and is widely expected to announce new tariffs on imports.

While tariffs have become a familiar concept for more Americans since Trump implemented them on metals and other key materials during his first term in office, the levies he has threatened for his return to the White House could have a much bigger effect on household budgets.
Most people have little grasp of just how many items could see price hikes due to the duties: from avocados to children’s toys, to chocolate and cars, experts told CNBC. Proposed tariffs on products from China, Mexico and Canada — the three largest U.S. trading partners — would likely affect U.S. consumers the most.
The exact details of those tariffs, including which countries would be affected and how high the duties might be, remain unclear and could change. On the campaign trail, Trump spoke about implementing 10% to 20% tariffs on all countries, and putting levies as high as 60% on Chinese goods.
While news reports in recent weeks have suggested Trump could scale back his tariff proposals, and could be using them as a negotiating tactic to bend foreign governments to his will, the president-elect has denied those reports.
Since his first run for president, Trump has argued tariffs will encourage more manufacturing in the U.S. and promote job creation and national security. It’s not just him: President Joe Biden and other Democrats have backed more limited tariffs for the same reasons.

Regardless, the risk is clear for retailers: Any tariffs would bring extra costs they’d have to absorb, share with producers or pass on to customers by charging higher prices —the latter of which is the most likely scenario as the industry is reluctant to sacrifice profits, retail executives and industry experts told CNBC in recent weeks. Major retail trade groups, including the National Retail Federation and Consumer Technology Association, have warned tariffs would effectively become a tax on American businesses and consumers.
Shoppers are already expecting tariffs to hit their pocketbooks. About 67% U.S. adults surveyed said they think it is very likely or somewhat likely that companies will pass on the cost of tariffs to consumers, according to Morning Consult survey of more than 4,400 people in early December. Even so, the same poll found about 45% of adults back a 10% tariff on all imports, and more than a third of respondents support a 20% duty on all goods and a 60% levy on Chinese imports.
Ali Furman, consumer markets industry leader for PwC, said tariffs have become the number one topic of discussion among companies working with the consulting firm, and the conversations have reached the top of the C-suite. She said the tariff fallout could be different now than during Trump’s first term, since his new proposal is broader and comes as retailers struggle to convince inflation-weary consumers to spend.
“It’s not 2017,” she said. “Because there’s a more cost-conscious consumer, you have to be much more thoughtful about passing on those costs to the consumer.”
“At the same time, you don’t want to come across as anti-tariff or anti-American,” she added.
Planning for tariffs now is challenging because companies do not know how Trump will proceed. Automotive executives who have spoken with CNBC in recent weeks said they are preparing for several different scenarios but not making any moves until there’s more clarity.
“We are working, obviously, on scenarios,” Antonio Filosa, head of Stellantis’ North American operations, said. “But yes, we need to await his decisions and after the decision of Mr. Trump and his administration, we will work accordingly.”
Professor Brett House, an economist from Columbia Business School, said just about every consumer product could see a price increase under the proposals, but some companies have higher exposure than others.
“Something around 50% of U.S. petroleum imports come from Canada. The Trump administration puts tariffs on those, it is unequivocally the case that everything in the United States will become substantially more expensive,” House told CNBC in an interview. “The breadth of the impact that we should expect to see from these tariffs could be enormous and could affect every single thing we produce in the United States and every household and every business. No one will be immune.”
Here are just some of the everyday items that would be affected if duties on goods from China, Canada and Mexico take effect.

Miami, Five Below, discount variety store merchandise. 
Jeff Greenberg | Universal Images Group | Getty Images

China: Sneakers, furniture and toys

Within closets, living rooms and children’s playrooms, a range of American household goods originate in China.
The country is the largest furniture exporter on the globe, according to data from the Home Furnishings Association, a trade group that lobbies on behalf of home goods retailers. In 2023, $32.4 billion in furniture was imported into the U.S., 29% of which came from China, followed close behind by Vietnam, which accounted for 26.5% of imports, according to the HFA, which cited investment banking firm Mann, Armistead & Epperson – one of the furniture industry’s top sources for data.

Between 30% and 40% of furniture is produced in the U.S., but as much as 50% of raw materials – like wood, fabrics, hinges and screws – are imported, making price increases on home products difficult to avoid, even if they’re technically “made in America.”
HFA CEO Shannon Williams said home goods retailers cannot withstand a 60% tariff on China imports and would likely have to move supply chains if Trump’s proposed tariffs went into effect. While tables and couches likely would not cost 60% more, their prices would still rise, said Williams.
If companies redirected supply chains to Vietnam, where many manufacturers fled during Trump’s first administration, retailers could still face tariffs of 10% to 20% – plus the cost of moving and scaling operations. The tariffs alone could make a $2,000 couch cost as much as $2,200 to $2,400.
If businesses moved operations to Mexico, which accounted for about 10% of U.S. furniture imports in 2023, a $2,000 couch could cost up to 25% more at $2,500.
When Trump first announced tariff increases, some industry experts suggested that retailers might eat some of that cost and try to pass some on to the manufacturer to prevent big price hikes for consumers.
Between 2018 and 2019, when Trump introduced 10% tariffs on certain goods during his first administration, furniture prices increased by about 2.3%, according to the HFA, which cited data from the consumer price index.
This time around, the tariffs are not only higher, but also the home goods sector is struggling, leaving it less equipped to absorb the cost. Covid-era purchasing, high interest rates and a sluggish housing market have made it a “rough couple years” for the industry, said Williams.
Beyond furniture, consumers could see another everyday item cost more if higher tariffs take effect: toys.
Around 80% of toys imported to the U.S. come from China, and the cost of toys made outside of the U.S. could increase by up to 56% under Trump’s proposals, according to the Toy Association, a trade group that lobbies on behalf of the industry.
That would make a $20 Barbie doll, which has historically been manufactured in China, cost as much as $31.20.
“If this were to happen, parents could be pushed to buy less expensive, non-compliant toys from unsanctioned, online sellers. These toys often do not meet U.S. safety and quality standards and could be toxic and dangerous to children, putting them at risk,” the Toy Association said in an email to CNBC. “Toys produced by the U.S. toy industry are compliant with rigorous safety and quality standards, and we hope they will remain affordable to American families and not subject to tariffs.”

The new and old versions of the classic Barbie dolls are on display at Mattel Design Center in El Segundo, California, U.S., February 22, 2024. 
Mario Anzuoni | Reuters

As of the end of 2023, about 50% of toys from Barbie’s parent company Mattel were made in China, according to CEO Ynon Kreiz. This year, Mattel expects less than 40% of its sourcing to come from China so its “exposure in the U.S. to China sourcing is therefore 20%” given the company’s geographic sales mix, Chief Financial Officer Anthony DiSilvestro said.
“We’ve done a good job mitigating the potential exposure,” DiSilvestro said during a Morgan Stanley retail conference in December. “But to the extent we’re impacted, we would expect to raise prices to offset it.”
Footwear is another industry with a heavy reliance on China. About 37% of footwear imports came from the country in 2023, followed by about 30% from Vietnam, nearly 9% from Italy and 8% from Indonesia, according to data from the U.S. International Trade Commission
Nearly 100% of all footwear is imported to the U.S., according to the group.
Even before Trump’s first term, footwear manufacturers were moving some sourcing out of China as its labor force shrank, the organization’s CEO Matt Priest said. Yet he said it would be unrealistic to return production to the U.S., and moving it to another part of Asia can be difficult.
Already, some companies have accelerated their plans. Steve Madden said in November that it will reduce the goods it imports from China by as much as 45% over the next year.
At a press conference on Thursday, Priest said U.S. footwear companies are waiting for clearer policy.
“All of these actions are inflationary,” he said. “You have to pay the piper somewhere.”
China isn’t a major manufacturer of cosmetics, but E.l.f. Beauty, a drugstore staple and popular brand among younger shoppers, makes about 80% of its makeup in the region.
During an interview with CNBC late last year, CEO Tarang Amin said the company could be forced to raise prices if the tariff hikes take effect — a risky move considering its low prices are one of its main draws.

A carrier trailer transports Toyota cars for delivery while queuing at the border customs control to cross into the U.S., at the Otay border crossing in Tijuana, Mexico May 31, 2019.
Jorge Duenes | Reuters

Mexico: Cars, beer and avocados

Over the last decade, U.S. consumers have developed a bigger appetite for avocados and Mexican beers. They’ve also gotten used to buying cars from major U.S. automakers with a lot of manufacturing in Mexico.
Tariffs on Mexican imports could endanger those habits, particularly for price-sensitive shoppers.
Most major automakers have factories in the U.S. However, they still heavily rely on imports from other countries including Mexico to meet American consumer demand.
Under the North American Free Trade Agreement and the United States-Mexico-Canada Agreement that replaced it, automakers increasingly looked to Mexico as a less expensive place to produce vehicles than in the U.S. or Canada.
Nearly every major automaker operating in the U.S. has at least one plant in Mexico, including the top six-selling automakers that accounted for more than 70% of U.S. sales in 2024.
The industry is deeply integrated between the countries, with Mexico importing 49.4% of all auto parts from the U.S. In turn, Mexico exports 86.9% of its auto parts production to the U.S., according to the International Trade Administration.
Wells Fargo estimates that 25% tariffs on Mexico and Canada imports would put most of the adjusted earnings of General Motors, Ford Motor and Stellantis at risk. The firm estimates the impact of 5%, 10% and 25% tariffs to be $13 billion, $25 billion and $56 billion, respectively, across the three companies.
Most notably, GM and Stellantis both have massive plants in Mexico that produce highly profitable full-size pickup trucks. They, along with Ford and others, also have built EVs in Mexico to lower costs.
Mexico is also home to the top-selling beer in the U.S. In 2023, Constellation Brands’ Modelo overtook the crown from Bud Light. Constellation also owns Corona, which ranks in the top 10 U.S. beer brands, and fast-growing Pacifico.

Bottles of Modelo Especial beer sit on a table in Los Angeles on June 14, 2023.
Mario Tama | Getty Images

All of the company’s beer brands are imported from Mexico, and beer accounted for 85% of the company’s sales in the first three quarters of its fiscal year.
If Trump implements the tariffs, Constellation’s cost of goods sold would rise by roughly 16%, according to estimates from Wells Fargo Securities.
The company would likely choose to offset the levies by raising prices, because moving production doesn’t seem like an option due to a 2013 antitrust settlement. Constellation has spent billions of dollars in recent years to expand its Mexican production capacity.
On the company’s latest earnings conference call, Constellation CEO Bill Newlands said “it’s really too early to hypothesize” about how the tariffs will play out.
“As you would expect, we have a lot of permutations that we have considered and certainly we’ll adjust our approach depending on what plays out as we go forward,” he told analysts on Jan. 10.
Uncertainty about tariffs has led a number of Wall Street analysts to downgrade Constellation’s stock since Trump announced his intention to reignite a trade war with Mexico.

A farmer harvests avocados at an orchard in the municipality of Uruapan, Michoacan State, Mexico, on Oct. 19, 2016.
Ronaldo Schemidt | Afp | Getty Images

Avocados have proven less easy to substitute than beers.
The fruit, once a rare sight in U.S. grocery stores, has become a staple of produce displays, thanks to the growing popularity of Mexican food and diets that call for “healthy fats.”
From June 2023 to June 2024, the U.S. imported more than 2.4 billion pounds of Mexican Hass avocados.
In the U.S., avocados are grown in California, Florida and Hawaii. But roughly 90% of the avocados eaten in the U.S. are grown in Mexico, according to U.S. Department of Agriculture data.
The country is one of the few places that can produce the fruit year round, ensuring that consumers can eat avocado toast in the summer and guacamole on Super Bowl Sunday.
Over the years, avocado consumers have proven that they are willing to pay more for the fruit. While avocado demand has roughly doubled over the last decade, prices have also climbed.
“There’s nothing like an avocado … There are times of the year that yes, our prices go a little bit higher, but I feel like that is also part of the norm with our consumers. We don’t see a great dip in our consumption when those prices are a little bit higher,” Alvaro Luque, CEO of the nonprofit Avocados from Mexico, told CNBC.
Chipotle Mexican Grill famously charges a premium for adding guacamole, but the chain’s customers have largely shrugged off price increases across its menu over the last few years. The burrito chain is one of the few restaurant companies that reported traffic growth quarter after quarter last year.
Outside of avocados and cars, some companies make clothing in Mexico, too. Kontoor Brands, for example, has turned to the region to make some of its Wrangler jeans. While some of its denim currently retails for about $60 at Macy’s, that could rise to as much as $75 with tariffs factored in.

Canada: Cars, coats and French fries

Tariffs on Canadian goods would be another blow for automakers and car buyers. French fries and winter coats also risk getting pricier for consumers.
Canada exported $27 billion of cars in 2022, trailing only crude petroleum as its top export, according to the Observatory of Economic Complexity.
Tariffs on Canadian vehicles would impact Detroit automakers the most, but there would likely be consequences across the industry depending on changes to parts from suppliers such as Canada-based Magna. Ontario Premier Doug Ford and other politicians and industry officials have described Trump’s tariff proposal as an existential threat to the country’s recovering automotive industry.
Five automakers — Ford, GM, Stellantis, Toyota Motor and Honda Motor — produced 1.54 million light-duty vehicles last year in the province, largely for U.S. consumers.
Michigan Gov. Gretchen Whitmer warned on Wednesday that potential 25% tariffs on imports from Mexico and Canada would harm the U.S. auto sector, increase vehicle prices and benefit China.
“Think about this: 70% of all the auto parts we make in Michigan go directly to our neighbors. … The only winner in that equation is China. They would love nothing more than to watch us cripple American’s auto ecosystem all by ourselves. This is a matter of national security. We cannot let that happen,” she said during a speech at the Detroit Auto Show.

Salt on french fries
Peter Dazeley | Getty Images

But it wouldn’t just be the auto industry that feels the pressure from Canadian tariffs.
Consider the humble French fry: Canada exports roughly $40.5 billion in agricultural goods to the U.S. annually, including $1.7 billion in frozen French fries and other frozen potato products, according to Agriculture and Agri-Food Canada, the country’s counterpart to the U.S. Department of Agriculture.
Canada’s frozen French fries largely come from McCain Foods. The Canadian family-owned company says that one out of every four fries eaten globally comes from its facilities. The company has seven Canadian factories and 11 in the U.S, according to its subsidiaries’ websites.
As the last year has shown, consumers have grown more price sensitive at grocery stores and in fast-food drive-thru lanes, making it unlikely that they’d swallow a price increase offsetting the tariff.
If Trump does implement steeper tariffs on Canadian goods, McCain could shift even more of its production to the U.S. Suppliers could jump ship to a U.S. rival like Lamb Weston. Luckily, many French fry suppliers, including the Idaho-based Lamb Weston, have expanded their capacity since the Covid pandemic.

A view inside Canada Goose’s U.S. flagship store in New York City. 
Noam Galai | Wireimage | Getty Images

Tariffs on Canadian goods could also affect apparel.
Canada Goose has built its reputation on high-end outerwear for chilly temperatures, made in Canada. About 70% of the retailer’s merchandise is made in the country, and 30% is made in Europe at a factory that the company owns in Romania and at contractors in other parts of the continent.
A company spokesperson declined to comment on how Canada Goose is preparing for tariffs and whether it will increase prices. More

More stories

  • 213 Shares14 Views

    in Finance

    Chinese investments in the U.S. have plummeted since Trump’s first term. The trend is unlikely to reverse

    Chinese companies won’t likely step up investments in the U.S. under the incoming Trump administration, analysts said.
    “That’s probably the last thing on Trump’s mind, is trying to incentivize [Chinese companies] to invest here,” said Rafiq Dossani, an economist at U.S.-based think tank RAND.
    Chinese investment deals in the U.S. have slowed drastically since Trump’s first term, according to the latest American Enterprise Institute data.

    Cho Tak Wong, the chairman of auto glass giant Fuyao Glass, bought the vacant General Motors manufacturing plant in Moraine, Ohio in 2014.
    The Washington Post | The Washington Post | Getty Images

    Chinese investments in the U.S. have dramatically declined since Donald Trump’s first term. This trend is unlikely to reverse as Trump returns to the White House, analysts said.
    Trump has threatened additional tariffs on Chinese goods soon after his inauguration on Monday, building on an increasingly tough U.S. stance on Beijing.

    “That’s probably the last thing on Trump’s mind, is trying to incentivize [Chinese companies] to invest here,” said Rafiq Dossani, an economist at U.S.-based think tank RAND.
    “There’s an ideological mismatch. All the rhetoric is, keep China out of the U.S., let their products come in, which are low-end,” he said in an interview earlier this month. But other than that, “don’t, don’t let them come in.”
    In the last several weeks, Emirati property giant Damac has pledged $20 billion to build data centers in the U.S., while SoftBank CEO Masayoshi Son announced a $100 billion investment for artificial intelligence development in the U.S. over Trump’s four-year term.

    Chinese investment deals in the U.S. have slowed drastically, according to the latest American Enterprise Institute data. Just $860 million flowed into the U.S. in the first six months of 2024, following $1.66 billion in 2023. That’s down sharply from $46.86 billion in 2017, when Trump began his first term.
    At the peak, Chinese companies had made high-profile U.S. acquisitions, such as buying the Waldorf Astoria hotel in New York. But regulators on both sides have stemmed the flow.

    “Chinese investment in the U.S. has slowed down dramatically since Beijing tightened control over capital outflows in 2017, followed by a series of regulatory policies in the U.S. aimed at excluding investments in certain sectors,” Danielle Goh, senior research analyst at Rhodium Group, said in an email.
    In the “foreseeable future,” she doesn’t expect Chinese investments in the U.S. will recover the peak levels seen during the 2016 to 2017 period. Goh pointed out that instead of acquisitions, Chinese companies have turned more to small joint ventures with U.S. companies or greenfield investments, in which business are built from scratch.
    For example, Chinese battery manufacturing company EVE Energy is the technology partner with a 10% stake in a joint venture with U.S. engine company Cummins’ Accelera division, Daimler Truck and PACCAR. The companies announced in June 2024 they were kicking off plans for a battery factory in Mississippi that would begin production in 2027 and create more than 2,000 jobs.
    Since the Covid-19 pandemic, the U.S.-China Chamber of Commerce has mostly helped Chinese e-commerce companies set up local offices, rather than establish manufacturing businesses, the nonprofit’s president Siva Yam told CNBC.
    “Most of those investment nowadays tend to be a little bit smaller, so they are not on the radar, easier to approve,” he said, referring to regulators in both the U.S. and China. But he remained uncertain about whether Chinese companies could use investments to offset the impact of tariffs.
    Individual U.S. states have grown increasingly wary of Chinese investment. Last spring, Politico reported that more than 20 states were passing new restrictions on land purchases by Chinese citizens and companies, or updating existing rules.
    Chinese hackers in December targeted a government office that reviews foreign investment in the United States, CNN reported, citing U.S. officials. This was part of a wider breach of the Treasury Department, which declined a CNBC request for comment.

    Deal-making strategy?

    Trump has indicated tariffs may be used to coerce Chinese investment in the U.S.
    In his speech accepting the Republican nomination, he said, “I will bring auto jobs back to our country, through the proper use of taxes, tariffs, and incentives, and will not allow massive auto manufacturing plants to be built in Mexico, China, or other countries.”
    “The way they will sell their product in America is to BUILD it in America, and ONLY in America. This will create massive jobs and wealth for our country,” he said, according to an NBC News transcript.
    Chinese battery giant CATL reportedly said in November it would build a U.S. plant if Trump allowed it. The company did not immediately respond to a request for comment.
    Advocacy group Center for American Progress pointed out in December that during his first term, Trump cancelled restrictions on Chinese telecommunications company ZTE — just days after the Chinese government and Chinese banks invested $1 billion in a Trump Organization-affiliated theme park in Indonesia.
    The Trump transition team did not immediately respond to a request for comment on the ZTE deal or the opportunities for Chinese companies to invest in the U.S.
    Even if Trump welcomed more Chinese investment, or coerced it through tariffs, large investments are long-term processes that won’t happen overnight, pointed out Derek Scissors, senior fellow at the American Enterprise Institute.
    Then there’s the unpredictability of the president-elect’s policies.
    “Trump saying the U.S. is open to Chinese companies in 2025 is no guarantee [even] for 2029,” he said. More

  • 125 Shares42 Views

    in Finance

    CFPB fines Equifax $15 million over errors on credit reports

    The Consumer Financial Protection Bureau fined Equifax $15 million over credit reporting errors.
    The CFPB alleged the credit bureau failed to properly investigate consumer disputes.
    Credit reports have a significant impact on consumer finances, experts said. They may dictate someone’s success in qualifying for a loan, renting an apartment or getting a job.

    Elijah Nouvelage/Bloomberg via Getty Images

    The Consumer Financial Protection Bureau fined Equifax $15 million over errors tied to consumer credit reports, alleging the company failed to conduct proper investigations of disputed information, the federal watchdog announced Friday.
    Equifax is one of three major credit reporting agencies in the U.S., a group that also includes Experian and TransUnion.

    “Equifax ignored consumer documents and evidence submitted with disputes, allowed previously deleted inaccuracies to be reinserted into credit reports, provided confusing and conflicting letters to consumers about the results of its investigations, and used flawed software code which led to inaccurate consumer credit scores,” according to the CFPB’s order.

    Why credit reports are important

    Credit reports are a ledger of consumers’ borrowing records, such as loan payment history and bankruptcy filings.
    The financial consequences of inaccurate information on those reports can be “severe,” said Adam Rust, director of financial services at the Consumer Federation of America, a consumer advocacy group.
    “It can change your ability to qualify for a loan, to get a job, to rent an apartment, all kinds of things that are very fundamental to navigating your personal life,” Rust said.

    Equifax had ‘flawed’ process, CFPB says

    Equifax processes about 765,000 consumer disputes a month, CFPB said.

    Its “flawed” dispute policies and technology failures occurred since at least October 2017, “to the detriment of millions of consumers,” according to the CFPB, which alleged Equifax violated the Fair Credit Reporting Act.
    More from Personal Finance:Expert predictions for interest rates in 2025Over 1 million people got student debt forgiven in 2024Nearly half of credit card users are carrying debt
    Equifax settled the allegations to “[turn] the page on the CFPB’s long-running investigation,” a company spokesperson wrote in an e-mail.
    The company has invested more than $1.5 billion in technology and infrastructure improvements over the last few years, including “significant changes” to its dispute process and consumer support, the spokesperson said.
    “Our Purpose is to help people live their financial best and we know consumers and our customers depend on our data for important financial decisions,” they wrote. “Even one error affecting a consumer is one error too many.”

    The $15 million civil penalty follows a lawsuit CFPB filed against another credit bureau, Experian, on Jan. 7, alleging the company conducted “sham” investigations of credit report errors. In a statement on its site, Experian said the lawsuit was “completely without merit” and an “example of irresponsible overreach.”
    “Credit bureaus have been sued repeatedly for this kind of conduct,” said Chi Chi Wu, senior attorney at the National Consumer Law Center. “They’re decades-old problems.”
    An Equifax data breach in 2017 also compromised the personal information of 147 million consumers, for which the company ultimately agreed to settle for $700 million.

    How to have good ‘hygiene’ with credit reports

    Consumers should check their credit reports at least once a year, Rust said. The Federal Trade Commission also recommends doing a check before applying for credit, a loan, insurance or a job.
    Consumers should ensure they recognize identity information on their credit report such as addresses and Social Security numbers, and verify that account information such as debt balances and delinquency status are correct.
    “That’s just a good practice of financial hygiene,” Rust said.

    Importantly, a credit report differs from a credit score. The latter is a numerical output compiled with information on a consumer’s credit report.
    “If you see a sudden change in credit score, that’s a signal,” Rust said.
    The three major credit bureaus allow consumers to request a free copy of their credit report once a week. Consumers can request a copy at AnnualCreditReport.com and by calling 1-877-322-8228. Other sites may charge consumers or be fraudulent, according to the Federal Trade Commission.

    What to do about a credit report error

    Smith Collection/gado | Archive Photos | Getty Images

    Consumers who see an error on their credit report should dispute it in writing, along with documentation. Send that by postal mail to the credit bureau and request a return receipt, Wu said. Consumers have better odds of resolution by mail than online, she said.
    Consumers should also file a complaint with the CFPB and their state attorney general’s office, Wu said.
    Consumers can ask that a statement of their dispute be included in their file and in future credit reports, and also ask the credit bureau to provide their statement to anyone who received a copy of their report in the recent past, Wu said.

    Consumers who can’t get an error fixed after repeated attempts may wish to consult an attorney, she said.
    “Not every error will be worth bringing a lawsuit,” she said. “But if your loan ends up being more expensive because of a credit reporting error, that’s the kind of real harm [for which] you may want to consider litigation.”
    Consumers may be able to find an attorney through organizations such as the National Association of Consumer Advocates, Wu said. More

  • 150 Shares40 Views

    in Business

    Unrivaled women’s basketball league debuts Friday. Here’s everything we know about it

    Women’s basketball league Unrivaled will play its first games on Friday night.
    The league has raised $35 million in funding so far, including from prominent athletes like Coco Gauff and Alex Morgan.
    Unrivaled looks to capitalize on the rapidly growing interest and record-setting ratings the WNBA achieved in 2024.

    Unrivaled 3-on-3 women’s basketball league
    Courtesy: Unrivaled

    Unrivaled, a new 3-on-3 women’s professional basketball league, launches Friday, presenting both a major test and opportunity for women’s sports to boost its growing profile in the United States.
    The league, co-founded by WNBA superstars Napheesa Collier and Breanna Stewart, has already announced deals with a dozen sponsors and raised $35 million in funding. Collier told CNBC that the league has already shown it has “immense” potential and opportunity.

    “When you invest into the players and invest into women’s sports, I think we’re seeing the return already,” she said. “This is just the beginning for us. It’s year one and we’ve already been able to do this, so we’re really excited for the future.”
    Games will air on Warner Bros. Discovery-owned TNT Sports platforms in a multiyear media rights deal. TV ratings will matter not just in terms of total viewership, but also demographics, said Lee Berke, president and CEO of sports consulting firm LHB Sports, Entertainment & Media.
    “You’re looking for audiences that skew younger, men and women watching, you’re looking for the size of the audience,” Berke told CNBC. “There’s obviously a lot of hype going into day one. You want to see that audience expand and grow over the course of the season.”
    Here’s what to know about Unrivaled ahead of its inaugural tip-off:

    How the league works

    Unrivaled’s first season will feature six teams playing against one another for two months. The season culminates in a four-team playoff tournament, with the championship taking place on March 17. There is also a 1-on-1 player tournament set for the middle of the season.

    Games are played in a 3-on-3 format and take place on a smaller court compared to WNBA courts. They last one hour and are broadcast on TNT on Fridays and Mondays and on TruTV on Saturdays. Games are also available to stream on WBD’s Max.
    All games are played at the Mediapro US venue in Medley, Florida, a suburb of Miami. The season takes place during the WNBA offseason and is intended to provide an alternative to playing overseas.
    Many WNBA players spend their offseason playing for teams in Russia, China and other countries to supplement their income. However, the WNBA collective bargaining agreement signed in 2020 now suspends players without pay for the season if they don’t return from their overseas teams in time for training camp. WNBA training camp starts on April 27.
    “It’s trying to fill a gap in the calendar for these players. It’s extending the runway of professional basketball,” Alex Bazzell, Unrivaled president and Collier’s husband, previously told CNBC.

    How players are paid

    Unrivaled will also pay many players a higher salary than the WNBA does. The total salary pool is over $8 million, Bazzell told SB Nation, which averages out to about $242,000 per player this season. Players will also receive equity and revenue shares from the league, which has said it is offering the highest average salary in women’s professional sports league history.
    At a press conference Friday, Bazzell said the league doesn’t have a minimum or maximum salary, but that pay is partly based on what competitors and other women’s sports leagues pay.
    “We are being extremely aggressive when you look at the entire landscape and ecosystem,” Bazzell said. “We try to look at numerous things: What are you making overseas, potentially? What are you making in the WNBA? How do we beat those numbers, candidly, to make it worth their while?”
    WNBA yearly salaries currently range from the minimum $66,079 to the core player maximum of $249,244. Only one player per WNBA team can be designated as a core player and earn that amount.

    Unrivaled Basketball League: Rae Burrell
    Courtesy: Unrivaled

    Who’s involved

    The league has 36 participants for its first season, all of whom played in the WNBA last year. There are 15 2024 WNBA All Stars on the rosters, headlined by All-WNBA first-team honorees Collier, Stewart and Alyssa Thomas. Other notable players include Sabrina Ionescu, Brittney Griner and Angel Reese.
    Unrivaled has raised $35 million from its seed and Series A rounds from a host of high-profile investors. Its backers include basketball stars like Giannis Antetokounmpo and Carmelo Anthony as well as Olympians like Alex Morgan and Michael Phelps. Tennis great Coco Gauff was announced as its newest investor on Jan. 6.
    Collier said while everyone else is now catching on to the rise of women’s sports, sports figures were early to recognize the value of the industry.
    “I think the people in sport have known this for a long time,” Collier said. “To see the support of other athletes is really encouraging. They believe in us so much, so that’s been really nice to see.”
    Unrivaled’s corporate partners, Collier added, align with their vision of growing the sport.
    “We said for a long time, this is not a charity. This is a great business opportunity, and those brands recognize that, too,” Collier said. “They’re not just doing this out of the goodness of their heart, they do believe in the growth of women’s sports. But they’re also doing it because they know that is something that has a lot of potential to be profitable.”
    About a dozen companies have inked sponsorship deals with Unrivaled, including Sephora, State Farm, Wilson, Ally Financial and Samsung. Most recently, Unrivaled named Sprite as its presenting partner for the 1-on-1 tournament and Bodyarmor as its official sports drink.
    “It’s tremendously impressive, both in terms of the number of sponsors, the quality of the sponsors and the fact that these are nontraditional sports sponsors,” Berke said.
    TNT Sports’ crew of announcers and studio hosts for Unrivaled coverage includes Basketball Hall of Famer Lisa Leslie and two-time WNBA MVP Candace Parker.

    Why it matters

    Unrivaled’s debut comes amid a spike in national interest in women’s sports — particularly basketball.
    The WNBA in particular enjoyed a surge, as former college stars Caitlin Clark, Cameron Brink and Reese led an attention-grabbing rookie class. The league said it broke an all-time record with over 54 million unique viewers during the season and saw its best in-person attendance numbers in 22 years.
    Last year’s WNBA Finals, in which the New York Liberty defeated the Minnesota Lynx in five games, was the league’s most-viewed championship series in 25 years, according to ESPN.
    The WNBA is expanding the Finals from a best-of-five format to a best-of-seven series starting next year. It is also debuting a 13th franchise, the Golden State Valkyries, next season and will add teams in Toronto and Portland, Oregon, in 2026.
    Both the WNBA and its players are poised to cash in on the momentum.
    The league can reevaluate its current 11-year, $2.2 billion media rights deal after 2028, CNBC previously reported, and the WNBA players union opted out of its current collective bargaining agreement in October. A new agreement, which would take effect after next season, could provide players with higher wages and more benefits, and the growing spotlight on WNBA athletes gives them greater leverage at the negotiating table.
    Unrivaled will have a big impact on the business of women’s basketball, Collier told CNBC.
    “We’re already seeing it expand the landscape. Overseas contracts are going up, other domestic league contracts are going up,” Collier said. “We’re trying to expand what the normal thinking around the business of women’s sports is, and you’re definitely going to see us push for those same things in the CBA.”
    — CNBC’s Lillian Rizzo, Jake Piazza and Alex Sherman contributed to this report. More

  • 175 Shares42 Views

    in Business

    FAA grounds SpaceX’s Starship after midflight explosion, reports property damage on Turks and Caicos

    The FAA grounded SpaceX’s Starship pending an investigation into the failure that caused the rocket to break apart midflight.
    The regulator noted in a statement that it has received “reports of public property damage on Turks and Caicos” islands in the Caribbean.
    SpaceX must complete the investigation and put in place any required corrective actions before the FAA issues the company with a new license to launch Starship again.

    SpaceX’s mega rocket Starship launches for a test flight from Starbase in Boca Chica, Texas, on Jan. 16, 2025.
    Eric Gay | AP

    The Federal Aviation Administration said on Friday that SpaceX’s Starship rocket is grounded until the company and regulator complete an investigation into the midflight failure of the most recent test flight, which forced airlines to divert flights.
    The regulator noted in a statement that, while there have been “no reports of public injury,” it has received “reports of public property damage on Turks and Caicos” islands in the Caribbean.

    SpaceX must complete the investigation and put in place any required corrective actions before the FAA issues the company with a new license to launch Starship again.
    The FAA diverted and delayed dozens of commercial airline flights — including several operated by American Airlines, JetBlue Airways and Delta Air Lines — after the Starship rocket exploded and rained down debris minutes after launching on Thursday.
    SpaceX said in a statement that it believes a fire in the vehicle led to Starship breaking apart. Videos posted on social media by people in the region showed the rocket detonating in space.

    Orange balls of light fly across the sky as debris from a SpaceX rocket launched in Texas is spotted over Turks and Caicos Islands on Jan. 16, 2025.
    Marcus Haworth@marcusahaworth | Marcus Haworth Via Reuters

    Notably, the FAA says it activated a “Debris Response Area” to warn aircraft of debris falling “outside of the identified closed aircraft hazard areas.”
    Before rocket launches, the FAA publishes “Aircraft Hazard Areas” that tell pilots where debris may fall if something goes wrong midlaunch.

    A map of the “aircraft hazard areas” published before SpaceX’s seventh Starship flight.
    Federal Aviation Administration

    SpaceX initially published a statement on its website Thursday that Starship debris fell “into the Atlantic Ocean within the predefined hazard areas,” seemingly contradicting the FAA’s explanation for why a “Debris Response Area” was activated.
    As of Friday morning, the latest SpaceX statement did not include that specific language. The company’s website said more broadly that “any surviving pieces of debris would have fallen into the designated hazard area” after the failure.
    The FAA, in response to CNBC’s request for clarification on whether Starship debris landed outside the predefined hazard area, reiterated that its “information is preliminary and subject to change.” SpaceX did not respond to a request for comment.

    Read more CNBC space news More

  • 138 Shares47 Views

    in Business

    FTC sues PepsiCo, alleging price discrimination is raising costs for consumers

    The Federal Trade Commission is suing PepsiCo for allegedly giving an unnamed big box retailer more favorable prices than its competition.
    The unnamed retailer is Walmart, sources familiar with the matter told CNBC.
    Pepsi denied the allegations and called the lawsuit partisan.

    Cans of Pepsi are on display at a Target store in the Flatbush neighborhood of Brooklyn, New York City, on Feb. 9, 2024.
    Michael M. Santiago | Getty Images

    The Federal Trade Commission said Friday that it is suing PepsiCo for illegal price discrimination, alleging the food and beverage giant gave an unnamed retailer more favorable prices than its competition.
    Walmart is the unnamed retailer, people familiar with the matter told CNBC.

    The FTC alleges Pepsi violated the Robinson-Patman Act, which bars sellers from giving competing buyers different prices for the same “commodity” or selectively providing allowances, like compensation for advertising. The agency argues Pepsi gave Walmart promotional payments and allowances, as well as advertising and promotional tools, that it didn’t offer to the retail giant’s rivals.
    Pepsi denied the allegations and said the FTC’s lawsuit is wrong, both factually and legally.
    “PepsiCo strongly disputes the FTC’s allegations, and the partisan manner in which the suit was filed. We will vigorously present our case in court,” the company said in a statement to CNBC. “PepsiCo’s practices are in line with industry norms and we do not favor certain customers by offering discounts or promotional support to some customers and not others.”
    Walmart did not immediately respond to a request for comment from CNBC.
    The complaint, which was filed in the Southern District of New York, is currently sealed.

    The FTC also said that a “substantial portion” of the alleged violations are redacted in the lawsuit, citing legal protections given to Pepsi and the large, big box retailer. The commission is seeking to lift the redactions to show how Pepsi broke the law and how those alleged actions led to higher prices for competing retailers.
    The Robinson-Patman Act was passed in 1936, but the federal government stopped enforcing it during the deregulation of the 1980s. The FTC resumed its enforcement in December when it sued Southern Glazer’s, the largest U.S. distributor of wine and spirits.
    The lawsuit comes on the final business day before President-elect Donald Trump’s inauguration on Monday, which will spell the end of Lina Khan’s time as chair of the FTC. Her Republican successor, Andrew Ferguson, currently serves on the commission and released a statement dissenting against the decision to sue Pepsi.
    The Biden administration has taken a flurry of legal action against companies and corporate executives in its final days, targeting Capital One, Southwest Airlines and Elon Musk, among others.
    — CNBC’s Mary Catherine Wellons contributed reporting for this story. More

  • 125 Shares33 Views

    in Finance

    China meets its official growth target. Not everyone is convinced

    The company at the heart of “Severance”, a celebrated TV show that just began its second season, features a department of “Macrodata Refinement”. Its workers must spot disconcerting numbers and lock them away in a digital bin. Does China’s National Bureau of Statistics (NBS) have a similar department? If so, it excelled itself this week. More

  • 225 Shares33 Views

    in Business

    Ozempic is in the next round of Medicare drug price negotiations. See the full list of 15 medications

    The Biden administration unveiled the next 15 prescription drugs that will be subject to price negotiations between manufacturers and Medicare.
    It kicks off the second phase of a landmark provision in the Inflation Reduction Act that aims to make costly medications more affordable for seniors. 
    At the top of the list is Novo Nordisk’s blockbuster diabetes injection Ozempic, weight loss shot Wegovy and diabetes pill Rybelsus, which are considered one product since they all share the same active ingredient, semaglutide.

    A box of Ozempic and contents sit on a table in Dudley, North Tyneside, Britain, October 31, 2023. 
    George Frey | Reuters

    The Biden administration on Friday unveiled the next 15 prescription drugs that will be subject to price negotiations between manufacturers and Medicare, kicking off the second phase of a landmark process that aims to make costly medications more affordable for seniors. 
    Topping the list are Novo Nordisk’s blockbuster diabetes injection Ozempic, weight loss shot Wegovy and diabetes pill Rybelsus, which are considered one product in the talks since they all share the same active ingredient: semaglutide. Those treatments fueled the rise of the red-hot obesity market and have been difficult for patients to access due to cost, insurance coverage and supply constraints. 

    The agreed-upon prices for the second wave of drugs are scheduled to go into effect in 2027.
    Here are the 15 drugs subject to the initial talks this year: 

    Ozempic, Wegovy, Rybelsus, (semaglutide,) made by Novo Nordisk, is used for Type 2 diabetes, weight management, and cardiovascular health
    Trelegy Ellipta, made by GSK, is an inhaler used for chronic obstructive pulmonary disease and asthma
    Xtandi, made by Pfizer, is used to treat prostate cancer in men
    Pomalyst, made by Bristol Myers Squibb, is used to treat a blood cancer called multiple myeloma and a cancer that develops in people with HIV
    Ibrance, made by Pfizer, is used to treat certain breast cancers
    Ofev, made by Boehringer Ingelheim, is used to treat chronic lung diseases in adults.
    Linzess, made by AbbVie and Ironwood Pharmaceuticals, is used to treat irritable bowel syndrome and chronic constipation
    Calquence, made by AstraZeneca, is used to treat certain types of blood cancer 
    Austedo, Austedo XR, made by Teva Pharmaceuticals, is used to treat involuntary movements caused by tardive dyskinesia or Huntington’s disease
    Breo Ellipta, made by GSK and Theravance, is an inhaler used to treat chronic obstructive pulmonary disease
    Tradjenta, made by Boehringer Ingelheim and Eli Lilly, is used for Type 2 diabetes management 
    Xifaxan, made by Salix Pharmaceuticals, is used to treat diarrhea caused by traveling or irritable bowel syndrome
    Vraylar, made by AbbVie, is used to treat schizophrenia, bipolar I disorder, and major depressive disorder
    Janumet, Janumet XR, made by Merck, is used to manage Type 2 diabetes
    Otezla, made by Amgen, is used to treat plaque psoriasis, psoriatic arthritis, and oral ulcers

    President Joe Biden’s Inflation Reduction Act gave Medicare the power to directly hash out drug prices with manufacturers for the first time in the federal program’s nearly 60-year history. Some congressional Democrats and consumer advocates have long pushed for the change, as many seniors around the country struggle to afford care.
    About 5.3 million people with Medicare Part D coverage used the 15 drugs in the second round of talks to treat various conditions, such as asthma, cancer and Type 2 diabetes, between Nov. 1, 2023, and Oct. 31, 2024, according to a release from the Department of Health and Human Services on Friday. The group of medicines also accounted for roughly $41 billion, or 14%, of total Part D prescription drug costs during that time period, the release added.
    When combined with the the 10 medications selected for the first cycle of negotiations, the 25 products represent 36% of all Medicare Part D prescription drug costs during that time period, the release said.

    The drugs have been on the market for at least seven years without generic competitors, or 11 years in the case of biological products such as vaccines. 
    Medicare has already completed negotiations for the first 10 drugs selected in the program, with new prices set to go into effect next year. In August, the Biden administration said it expects those negotiated prices to save Medicare enrollees around $1.5 billion in out-of-pocket costs in 2026 alone. The government also expects the prices to lead to around $6 billion in net savings for the Medicare program in 2026, or 22% net savings overall.
    But it’s unclear whether President-elect Donald Trump could try to change or scale back some of the law’s provisions when he takes office next week. 
    The negotiation program has also faced a flurry of – so far unsuccessful – legal challenges from the pharmaceutical industry, which views the process as a threat to its revenue growth, profits and drug innovation. 
    Medicare covers roughly 66 million people in the U.S., and 50.5 million patients are currently enrolled in Part D plans, according to health policy research organization KFF.
    Almost 10% of Medicare enrollees ages 65 and older, and 20% of those under 65, report challenges in affording drugs, a senior administration official told reporters last year. 
    “Last year we proved that negotiating for lower drug prices works. Now we plan to build on thatrecord by negotiating for lower prices for 15 additional important drugs for seniors,” HHS Secretary Xavier Becerra said in a release. “Today’s announcement is pivotal – the Inflation Reduction Act is lowering prices for people on Medicare. HHS will continue negotiating in the best interest of people with Medicare to have access to innovative, life-saving treatments at lower costs.”
    Patient advocacy groups, such as nonprofit AARP, applauded the announcement on Friday.
    “For too long, big drug companies have padded their profits by setting outrageous prices at the expense of American lives, forcing seniors to skip prescriptions they can’t afford,” AARP said in a statement. “The first round of Medicare drug price negotiation made it clear that this process will reduce the prices of these important products and create billions of dollars in savings for Medicare and its beneficiaries.”

    What’s next in the Medicare price talks? 

    Drugmakers will have until Feb. 28 to decide whether to participate in the program. If a drugmaker declines to negotiate, it must either pay an excise tax of up to 95% of its medication’s U.S. sales or pull all of its products from the Medicare and Medicaid markets. 
    Those that participate will engage in a lengthy negotiation process involving months of back-and-forth price offers with Medicare. The federal program determines its initial offer for each medication using sales volume data, the level of federal financial support for the drug’s development and data on pending or approved patent applications and exclusivities, among other information.
    After the second round concludes, Medicare can negotiate prices for another 15 drugs that will go into effect in 2028. The number rises to 20 negotiated medications a year starting in 2029. 
    The government will only select Medicare Part D drugs for the first two round of negotiations. It will add more specialized medications covered by Medicare Part B, which are typically administered by doctors, in 2028.
    But drugmakers will have more opportunities to negotiate with Medicare, based on the final guidance released last year for the second round of price talks. The first optional negotiation meetings will take place after Medicare makes its initial price offers for the 15 drugs, which must be presented by June 1. More

  • 175 Shares47 Views

    in Business

    Why 2025 is set to be a crucial year for Amazon’s Zoox robotaxi unit

    Amazon-backed Zoox is hoping to succeed in commercializing robotaxi operations in 2025.
    The company plans to start rides to the public “quite soon,” expand its operating regions and grow its self-driving vehicle fleet from the couple dozen it currently operates.
    Las Vegas is expected to be Zoox’s first commercial market, and it hopes to launch an “Early Rider Program” there in the coming months before opening it up to the general public later this year.

    A Zoox robotaxi sits outside the company’s large office and warehouse in Las Vegas.
    Michael Wayland / CNBC

    LAS VEGAS — This year is expected to be a crucial one for Amazon’s autonomous vehicle unit Zoox, as the company plans to grow its operations and commercialize its robotaxi business.
    Zoox is aiming to begin offering rides to the public “quite soon,” expand its operating regions and “significantly” grow its self-driving vehicle fleet from the couple dozen it currently operates, according to co-founder and Chief Technology Officer Jesse Levinson.

    “That’s a lot of work, but we’re excited for that,” Levinson said during a 40-minute drive around Las Vegas in one of the company’s robotaxis. “We’re pretty happy with the progress we’ve made.”
    Zoox’s plans come even as some investors have lost enthusiasm for autonomous vehicles, and they’re not alone as legacy automakers such as General Motors, Ford Motor and Volkswagen have disbanded self-driving units in recent years.
    Zoox, founded a decade ago and purchased by Amazon for $1.3 billion in 2020, has been testing its purpose-built robotaxis on public roads since early 2023. It is currently testing the vehicles, which do not include manual controls such as a steering wheel or pedals, in three cities: Las Vegas; San Francisco; and Foster City, California, where it is headquartered.

    A row of Zoox robotaxis sit inside the company’s large office and warehouse in Las Vegas.
    Michael Wayland / CNBC

    Las Vegas is expected to be Zoox’s first commercial market. The company is hoping to launch an “Early Rider Program” in Sin City in the coming months before opening it up to the general public later this year. San Francisco, where Zoox began testing in November 2024, will follow, the company said.
    Levinson said Zoox also is eyeing an expansion to Miami; Austin, Texas; and others, but the company has not announced a set timeframe for those cities.

    “Hopefully by the end of this decade, if you’re in most of the major cities in the U.S., this will be your favorite way to get around,” Levinson said.
    Amazon does not publicly disclose its investments in Zoox or other early-stage business, saying such investments are viewed as emerging, long-term initiatives to assist the company and its customers.

    Riding in a robotaxi

    The Zoox robotaxi differs from others, as it was developed from the start to not have a human driver. That is a different path from Alphabet-backed Waymo — the U.S. leader in robotaxis — which has retrofitted traditional vehicles to have autonomous vehicle capabilities.

    Zoox co-founder and Chief Technology officer Jesse Levinson.
    Courtesy image

    Some have described vehicles such as Zoox’s robotaxis as “boxes” or “toasters.” The doors open from the middle, with rows of seats facing each other, and there’s no space for a driver. GM’s Cruise also had plans to launch such a vehicle, the Origin, but canceled production as the company faced problems following an accident involving a pedestrian in October 2023.
    “The vehicle itself, I think, is quite interesting,” Sam Abuelsamid, an autonomous expert and vice president of market research at Telemetry Insights, said about Zoox. “It’s kind of the right size of vehicle, the right kind of form factor.”
    During a sunny morning driving around the outskirts of the Las Vegas Strip, the Zoox autonomous vehicle handled well. It made turns as it should and drove assertively, but not aggressively. There were some questionable choices during the ride, such as opting to stay in a long line of vehicles and not navigating around a large trailer, but overall, the vehicle operated as it should.
    Driving assertively is something the Amazon-backed company has been working on during years of testing, Levinson said. An autonomous vehicle cannot break laws like many human drivers, but it also cannot be too cautious or aggressive because that can lead to accidents or incidents with other human drivers.

    Future of the business

    Test and data-capture vehicles inside Zoox’s large office and warehouse in Las Vegas.
    Michael Wayland / CNBC 

    If Zoox can grow as planned this year and begin commercial operations, it would arguably be a far second in the robotaxi business to Waymo.
    “I don’t want to imply that it’ll be a commercially meaningful business this year … but it’s going to be useful in terms of customers will be able to get value out of it and actually use it to go places. We’re excited for that,” Zoox’s Levinson said. “We’ve taken a pretty conservative and steady approach to scaling and rolling out, just because of the safety-critical nature.”
    GM’s Cruise autonomous vehicle unit was considered a leader with Waymo until the company grounded its robotaxi fleet and announced the end of its commercial operations late last year. That came after a October 2023 accident in which external probes found the company misled or deceived regulators about the incident.
    Offering public rides is just another step in the challenging commercialization of autonomous vehicles. Waymo started offering supervised rides to the public in Arizona in 2017, followed by unsupervised driverless rides in 2019. It has slowly expanded to hundreds of autonomous vehicles in four markets that are now conducting more than 150,000 paid rides a week.
    “From a technology standpoint, I think that Zoox is going in the right direction. What I’m somewhat less convinced about is the business model,” Abuelsamid said. “The technology is maturing. It’s still not perfect, but it’s getting better.
    “But everybody’s trying to figure out what’s the operating model that will actually be able to cover the cost and make this money,” he continued.

    The robotaxi industry has proved to be far more challenging than many thought toward the end of the 2010s, when GM, Waymo, Lyft, Uber and many others entered the market with grand ambitions of commercializing the technology and removing the human driver from driving.
    Companies have proven self-driving vehicles can work, but the costs have been far greater than initially anticipated with longer-than-expected paybacks. Not to mention that several reported on-road issues, as well as faced uncertainty surround regulations and liabilities.
    Others, most notably Tesla, have declared ambitions for robotaxi businesses, but have failed to develop driverless vehicles or commercial, driverless ride-hailing operations.
    Meanwhile, Waymo continues to expand. Last year, it announced an expanded partnership with Uber to bring its robotaxi services to Austin and Atlanta, only on the Uber app, beginning in early 2025. Waymo also expects to expand to Miami in early 2026.
    “They’re absolutely the leader,” Abuelsamid said. “They’re the only ones operating any kind of real robotaxi service today, at any kind of scale; they’re far away the biggest.”

    Don’t miss these insights from CNBC PRO More