Raphael Stevens

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    More than $1 billion in EV tax credits issued upfront to buyers, Treasury and IRS say

    The federal government has issued more than $1 billion in tax credits for new and used electric vehicles as an upfront cash incentive to car buyers, the Treasury Department and IRS said.
    The advance payments kicked in Jan. 1, 2024.
    The credits for new and used cars, for a respective $7,500 and $4,000, were previously available only when EV buyers filed their annual tax returns.

    Halfpoint Images | Moment | Getty Images

    The federal government has issued more than $1 billion in tax credits as an upfront cash incentive to buyers of electric vehicles, the U.S. Treasury Department and Internal Revenue Service said Wednesday.
    The Inflation Reduction Act created a mechanism whereby tax credits for buyers of new and used EVs — worth up to $7,500 and $4,000, respectively — could be delivered by car dealers at the point of sale.

    The provision kicked in on Jan. 1.
    Previously, consumers had to wait until filing their annual tax return, perhaps months or more than a year after their vehicle purchase, to get the federal credit. Americans can now also get the EV tax credit upfront regardless of their federal tax liability, which wasn’t the case prior to 2024.
    “This has never been done before,” Deputy Treasury Secretary Wally Adeyemo said during a press call.
    More from Personal Finance:The tax deadline for American expats is June 17Biden and Trump both want to extend tax cuts for most AmericansHome equity is near a record high. Tapping it may be tricky
    He called the $1 billion threshold a “major milestone” that was hit faster than expected.

    “A lot of people would like to see the savings right now instead of waiting to file their taxes next year,” Adeyemo said.

    Trying to help EVs compete on price

    The transition to EVs is a big component of the Biden administration’s push to reduce U.S. greenhouse gas emissions and curb global warming.
    The federal tax credit aims to make EVs more affordable for many households relative to their gasoline-powered counterparts.
    The EV tax credits make the cars “very price competitive and in some cases cheaper than the combustion engine vehicles” available on car lots, Adeyemo said.
    The average purchase price for electric cars was $55,242 in April 2024, versus $44,989 for traditional cars, according to Cox Automotive data. However, prices are quickly dropping: Average prices for new EVs declined by 9% in the first quarter of 2024 relative to the same period last year, it said.

    However, not all new EV models are currently available for a federal tax credit, as automakers aim to meet certain manufacturing standards in the Inflation Reduction Act. The law requires certain parts of the car be manufactured in North America to qualify for a full or partial EV credit.
    The U.S. Energy Department maintains an updated list of automakers and models that qualify for an EV credit.

    There are limitations on EV tax credit availability

    Since the start of the year, about 125,000 consumers have opted to get their “new clean vehicle” tax credit as an upfront payment, according to Treasury and IRS data. That accounts for 90% of transactions for new EVs that qualified for an advance payment, they said.
    In addition, 25,000 buyers have opted for upfront payment for the “previously owned clean vehicle” credit, representing 80% of qualifying transactions, the agencies said.
    These figures account for just “a small amount” of all EVs sold in the U.S. since the start of the year, Adeyemo said. They don’t include consumers who lease EVs or purchases that don’t qualify for credits.
    Senate Republicans introduced a measure in May to end federal tax credits available for electric vehicles and a separate one to end the tax breaks for EV charging stations.

    “The electric vehicle tax credit benefits the wealthiest of Americans and costs hardworking American taxpayers billions of dollars,” Sen. John Barrasso, R.-Wyo., said in a written statement about the EV bill, which he co-sponsored.
    Adeyemo, when asked about such criticism of the EV tax credit, pointed to the tax break’s limits on income and on households’ expected lifetime financial savings to suggest it doesn’t benefit the wealthiest households.
    For example, single and married taxpayers are ineligible for a tax break for new EVs if their annual income exceeds $150,000 and $300,000, respectively. Those income limits are lower for used EVs: $75,000 and $150,000, respectively.
    There are also limitations based on EV sticker price. For example, SUVs and smaller cars qualify only if their sticker prices are below $80,000 and $55,000, respectively. More

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    Nathan’s hot dog contest parts ways with champion Joey Chestnut over plant-based frank partnership

    Major League Eating will part ways with 16-time champion Joey Chestnut ahead of this year’s annual Fourth of July hot dog eating contest, hosted by Nathan’s Famous.
    The decision comes after Chestnut chose to represent a rival brand that sells plant-based hot dogs, the organization told CNBC in a statement.
    Hot dog sales have been on the decline as wellness and health-conscious eating trends lead consumers away from processed foods to healthier alternatives.

    Nathan’s Famous Fourth of July International Hot Dog-Eating Contest contestant Joey Chestnut stands next to the Nathan’s mascot Frankster, ahead of the official weigh in ceremony in the Manhattan borough of New York City, New York, U.S., July 2, 2021.
    Angus Mordant | Reuters

    The Nathan’s Famous Fourth of July hot dog eating contest will be down one dog this year.
    Major League Eating announced Tuesday that it’s parting ways with 16-time champion Joey “Jaws” Chestnut ahead of this year’s competition, hosted by Nathan’s Famous.

    Chestnut was previously offered a $1.2 million, four-year contract with MLE to participate in the hot dog competition, a source familiar with the matter told CNBC.
    The decision to end the relationship comes after Chestnut chose to represent a rival brand that sells plant-based hot dogs, the organization told CNBC in a statement. The New York Post reported that the brand is Impossible Foods, though the company didn’t immediately provide a comment.
    An account on X under Chestnut’s name late Tuesday said he was “gutted” to find out from the media that he was “banned” from Nathan’s hot dog eating contest this year. CNBC has not independently verified the account.
    The post also said: “To set the record straight, I do not have a contract with MLE or Nathans and they are looking to change the rules from past years as it relates to other partners I can work with. This is apparently the basis on which I’m being banned, and it doesn’t impact the July 4th event.”
    Impossible Foods offers plant-based hot dogs, which the company claims to be healthier and more eco-friendly than the traditional meat version, with half the saturated fat of the animal version and 84% less greenhouse gas emissions generated.

    For nearly two decades, contestants, including Chestnut, have worked under the same “hot dog exclusivity provisions,” the MLE said in a statement.
    “Joey is a great champion and a friend, and he is loved in Coney Island and all around the world. So I hope he’s there on July fourth as we celebrate Independence Day and he changes his choice to promote a veggie hot dog rather than ours,” Major League Eating President Richard Shea told CNBC.
    The MLE said it worked with Nathan’s to accommodate Chestnut’s requests, including allowing him to compete in a rival unbranded hot dog eating contest on Labor Day to be streamed by an unnamed major platform.
    Joey Chestnut holds the Guinness World Record for eating the most hot dogs in 10 minutes, a title he won at the annual hot dog eating contest in 2021. 
    Nathan’s Famous Hot Dog Eating Contest in Coney Island, New York, is a Fourth of July tradition and broadcast nationally on ESPN. It’s also a marketing strategy for Nathan’s Famous, whose signature offering, the hot dog, is on a decline.
    Particularly with the rise of health-conscious eating habits and the increasing importance of the wellness trend for consumers, the American staple food hot dog is one of many processed foods whose sales have been hurting.

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    National Amusements stops discussions with Skydance on Paramount deal, sources say

    National Amusements has stopped talks with Skydance on a proposed merger with Paramount Global, sources told CNBC’s David Faber.
    The deal was awaiting signoff from Shari Redstone, the controlling shareholder of Paramount.
    Paramount shares closed nearly 8% lower Tuesday.

    The Paramount Studios in Los Angeles, California, US on Monday, April 29, 2024. 
    Eric Thayer | Bloomberg | Getty Images

    National Amusements has stopped talks with Skydance on a proposed merger with Paramount Global, ending months of deal discussions without a transaction.
    National Amusements, which is owned by Shari Redstone, the controlling shareholder of Paramount, had previously agreed to economic terms on a merger with a consortium that includes David Ellison’s Skydance, and private equity firms RedBird Capital and KKR. The deal had been awaiting signoff from Redstone, CNBC previously reported. National Amusements, which Redstone controls, owns 77% of class A Paramount shares.

    Paramount shares closed nearly 8% lower Tuesday following the report.
    National Amusements said in a statement on Tuesday it has “not been able to reach mutually acceptable terms regarding the potential transaction with Skydance Media for the acquisition of a controlling stake in NAI.”
    “NAI is grateful to Skydance for their months of work in pursuing this potential transaction and looks forward to the ongoing, successful production collaboration between Paramount and Skydance,” the statement said.
    Redstone’s company said it “supports the recently announced strategic plan being executed by Paramount’s Office of the CEO as well as their ongoing work and that of the Company’s Board of Directors to continue to explore opportunities to drive value creation for all Paramount shareholders.”
    Paramount declined to comment. Spokespeople for Skydance and Redbird did not immediately respond to requests for comment.

    The Wall Street Journal earlier reported talks had ended.
    “While National Amusements had agreed to the economic terms that Skydance offered, there were other outstanding terms on which they could not come to agreement,” a NAI spokesperson said.
    There’s been a disconnect on why the discussions didn’t amount to a deal, according to people familiar with the matter, showcasing the nature of the process that has gone on for months with various twists and turns.
    Redstone and the special committee had asked for a so-called majority of the minority vote as part of the deal, a clause the Skydance bidding consortium found unacceptable and impracticable to add after deal talks had long started, according to people familiar with the matter. The special committee’s approval process, meant to determine the deal’s fairness, negated the need for such a vote, according to those familiar with Ellison’s thinking.
    The Skydance bidding consortium instead blamed Redstone’s inability to let go of a family asset, her desire for more money for NAI, and private comments critical of David Ellison from Paramount board member Charles Phillips as likely reasons a deal collapsed, according to people familiar with the matter. A spokesperson for Phillips declined to comment.
    The Special Committee of the Board of Directors of Paramount Global said, “The Special Committee met on Tuesday to discuss progress of discussions regarding a potential transaction with Skydance Media. At that time, the Special Committee was informed by a representative of National Amusements, Inc. that it did not have an agreement on a deal with Skydance Media and didn’t anticipate a path forward on this transaction. The Special Committee did not vote on any potential transaction.”

    Moving forward

    The about face on the proposed deal not only comes days after Skydance and Paramount agreed to merger terms, but also after Paramount’s annual shareholder meeting, where the company’s leadership outlined plans for the future.
    Last week, Paramount’s current leadership, the so-called “Office of the CEO” — CBS CEO George Cheeks, Paramount Media Networks CEO Chris McCarthy and Paramount Pictures CEO Brian Robbins — mapped out the company’s strategic priorities in the event the company was not sold.
    The shared leadership structure was put into place in late April, when former CEO Bob Bakish stepped down.
    The trio outlined a plan that included exploring streaming joint venture opportunities with other media companies, eliminating $500 million in costs and divesting noncore assets. The plan that was presented to shareholders was Redstone’s alternative option if she chose not to sell.
    While Redstone noted during the beginning of the shareholder presentation the unorthodox structure of the leadership team, she voiced her support. She has approved of their ideas and leadership during their short tenure, CNBC previously reported.
    Redstone has controlled the future of Paramount and whether a sale would take place. She can now consider other offers for National Amusements from outside buyers.
    In May, another potential buyer for Paramount surfaced — Apollo Global Management and Sony, which formally expressed interest in acquiring the company for $26 billion, CNBC previously reported. However, Redstone favored a deal that would keep the company together, and Apollo and Sony planned to break up Paramount, separating its movie studio from other parts of the business including its broadcast network, CNBC previously reported.
    Under those terms, which were still being ironed out up until Tuesday, Redstone would have received $2 billion in cash for National Amusements, CNBC reported. Skydance would buy nearly 50% of class B Paramount shares at $15 apiece, or $4.5 billion, leaving the holders with equity in the new company. Skydance and RedBird would have also contributed $1.5 billion in cash to help reduce Paramount’s debt.
    The plan outlined by Paramount’s three leaders last week emphasized the reduction of debt and getting the company back to an investment-grade rating after it was lowered to junk status earlier this year. Paramount had roughly $14.6 billion in long-term debt as of March 31. More

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    Affirm buy now, pay later loans will be embedded into Apple Pay later this year

    Apple device users will soon be able to tap into buy now, pay later loans from Affirm for purchases, the companies said Tuesday.
    Affirm will surface as an option for Apple Pay users on iPhones and iPads later this year.
    Apple also said that installment loans via credit and debit cards would be available on Apple Pay in the U.S. with Citigroup, Synchrony and Fiserv-related issuers.

    Chris Ratcliffe | Bloomberg | Getty Images

    Apple device users will soon be able to tap into buy now, pay later loans from Affirm for purchases, the companies said Tuesday.
    Affirm will surface as an option for U.S. Apple Pay users on iPhones and iPads later this year, the San Francisco-based fintech company said in a filing. Apple confirmed the news in its own update.

    “This provides users with additional payment choices, and offers the ease, convenience and security of Apple Pay alongside the features users love in Affirm – flexibility, transparency and no late or hidden fees,” Affirm said in an email statement.
    The move is a boost to Affirm and the buy now, pay later sector in general. When Apple introduced its own BNPL product last year, investors were concerned that the tech giant would crowd out stand-alone providers like Affirm. But the fact that Apple decided to also allow Affirm products in its ecosystem shows that the fintech company has something unique to offer.
    For instance, while Apple’s BNPL loan lets users repay purchases in four installments over six weeks, Affirm has an array of longer-term offerings that can be repaid over a year or more. The companies didn’t provide details on the terms of the new loans.
    “The bottom-line — in our view — is that Affirm’s strong brand and sophisticated underwriting technology have a moat that Apple likely could not replicate on its own,” Mizuho Securities analyst Dan Dolev said in a research note.

    Citi, Synchrony

    Apple also said that installment loans via credit and debit cards would be available on Apple Pay in the U.S. with Citigroup, Synchrony and Fiserv-related issuers. Traditional credit card players have begun offering BNPL-style installment loans after their popularity surged during the Covid pandemic

    Synchrony said in an email that it was planning personalized installment loans with promotions based on the transaction size and merchant involved, with the possible use of promotional interest rates and loan durations.
    “This announcement with Apple marks an opportunity for Synchrony to scale our flexible payment options and offer our merchants the ability to expand their presence in a growing mobile payments ecosystem,” Mike Bopp, Synchrony’s chief growth officer, said in an email.
    Thanks to the ubiquity of the iPhone, Apple Pay has more than 500 million users around the world and a leading market share in the U.S. for its mobile payment and digital wallet platform.
    Shares of Affirm rose 11% Tuesday, while Apple’s stock was up 7.3%.
    Affirm’s stock rose despite the fact that the company indicated it would take time for the partnership to significantly boost its revenue.
    “Affirm does not expect this partnership to have a material impact on revenue or gross merchandise volume in fiscal year 2025,” the company said in its filing.

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    GM trims 2024 EV forecast amid slower-than-expected demand

    General Motors is trimming its expected sales and production of all-electric vehicles this year, as U.S. adoption of EVs occurs slower than expected.
    GM Chief Financial Officer Paul Jacobson said the company now expects production of 200,000 to 250,000 EVs this year, down from a previously announced range of 200,000 to 300,000.
    The Detroit automaker is in the middle of launching its newest EVs, including its new entry-level Chevrolet Equinox EV.

    GM’s 2024 Chevrolet Equinox EV during a media launch event for the vehicle in Detroit, May 16, 2024.
    Michael Wayland / CNBC

    DETROIT – General Motors is trimming its expected sales and production of all-electric vehicles this year, as U.S. adoption of EVs occurs slower than expected.
    GM Chief Financial Officer Paul Jacobson said the company now expects production of its all-electric vehicles to range from 200,000 to 250,000 this year, down from a previously announced range of 200,000 to 300,000. The company has recently said it will produce volume to match demand, which is growing more slowly than had been forecast.

    “So at the lower end of that, and I think it reflects the momentum that we have in the business,” Jacobson said Tuesday during a Deutsche Bank investor event.
    Jacobson said GM expects EVs to make up 8% of U.S. sales industrywide this year. That’s lower than many other auto analyst forecasts, which expect EVs to represent around 10% of industry sales in 2024.
    GM expects its EVs to be profitable on a production, or contribution-margin basis, once it reaches production of 200,000 units. That milestone is still expected in the fourth quarter of this year, he said.
    Jacobson said the automaker, which does not report monthly sales, sold more than 9,500 EVs in North America in May. Sales of GM’s all-electric vehicles remained minuscule during the first quarter. EV sales totaled 16,425 units, or 2.8% of the automaker’s overall sales during the period.

    Stock chart icon

    GM, Ford and Stellantis shares in 2024.

    The Detroit automaker is in the middle of launching its newest EVs, including its new entry-level Chevrolet Equinox EV. The vehicle will start at around $35,000 before EV incentives, such as a federal credit of up to $7,500. GM also recently relaunched its Chevrolet Blazer EV after halting sales due to software issues.

    The two new EVs, which share GM’s “Ultium” EV platform and technologies, are crucial for GM’s EV growth.
    In addition to making the EVs announcement, Jacobson said the company expects its second-quarter earnings to be better than the first three months of the year. He also said the automaker this month will invest $850 million into its troubled Cruise autonomous vehicle unit to help with operational cash.
    The comments by Jacobson come after the company on Tuesday morning announced that a new $6 billion stock repurchase authorization has been approved by its board, largely backed by sales of its traditional gas-powered vehicles.
    The new buyback authorization comes as an accelerated $10 billion share repurchase program announced in November 2023 is expected to be completed by the end of June.
    “We are very focused on the profitability of our [internal combustion engine] business, we’re growing and improving the profitability of our EV business and deploying our capital efficiently. This allows us to continue returning cash to shareholders,” Jacobson said in a release.

    Correction: GM is trimming its EV production target to 200,000 to 250,000 vehicles in 2024. A prior version of this article misstated that range. More

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    Donald Trump’s trade hawk is plotting behind bars

    Ahead of America’s election in November, company bosses, financiers and diplomats are busy calling on Donald Trump’s allies, trying to divine the economic policies that the former president will pursue if he is re-elected. But there is one man in Mr Trump’s orbit who holds more sway than most and who, for now, is virtually inaccessible. That is because he is inmate number 04370-510 in the Federal Correctional Institution of Miami.Peter Navarro, a leading economic adviser in Mr Trump’s first administration, is more than halfway through a four-month sentence for contempt of Congress. He bristles with indignation at the justice system, disdains Joe Biden’s record and longs to steer America towards hardline protectionism. In written correspondence with The Economist, Mr Navarro has laid out how he thinks Mr Trump should approach trade—from turning up the heat on China to slapping tariffs on just about everyone else. It is a dark, angry vision for the global economy. As polls stand, it is one Mr Navarro may shortly be able to promote from inside the White House. More

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    Warner Bros. Discovery strikes 10-year deal to broadcast the French Open in the U.S.

    Warner Bros. Discovery’s TNT Sports will be the exclusive broadcaster of the French Open in the U.S. beginning in 2025.
    Before this deal, the games at Roland-Garros were broadcast in the U.S. by NBC and the Tennis Channel.
    Warner Bros. Discovery has been upping the ante with sports offerings as the company continues negotiations to extend its partnership with the NBA.

    Spain’s Rafael Nadal reacts as he plays against Germany’s Alexander Zverev during their men’s singles match on Court Philippe-Chatrier on day two of The French Open tennis tournament at The Roland Garros Complex in Paris on May 27, 2024. 
    Anne-christine Poujoulat | AFP | Getty Images

    Warner Bros. Discovery’s TNT Sports will be the new exclusive U.S. broadcaster of the French Open, also known as Roland-Garros, beginning in 2025, the company announced Tuesday.
    The entertainment company signed a 10-year contract with the French Tennis Federation for an average of about $65 million per year, according to a person familiar with the matter.

    The deal is set to make Warner Bros. Discovery the largest global broadcast partner to the Grand Slam tournament, which hosted 675,000 spectators this year. Warner Bros. Discovery-owned Eurosport has been broadcasting the French Open to 55 countries outside the U.S. since 1989, according to a press release.
    “Roland-Garros perfectly aligns with our global sports strategy and our commitment to adding premium live sports content to our TNT Sports portfolio. We look forward to serving fans with a best-in-class content experience and providing them with direct access to more live Roland-Garros coverage than ever before,” TNT Sports Chairman and CEO Luis Silberwasser said in the release.
    Per the agreement, the matches will be broadcast live on TNT, TBS and TruTV, including simulcasts on the company’s streaming platform Max.
    Before this deal, the tournament was broadcast in the U.S. by Comcast’s NBC and streaming service Peacock and the Tennis Channel through a sublicensing deal.
    TNT Sports announced it will have an on-site presence, including studio and announcing teams from multiple positions inside the Roland Garros Stadium in Paris, with further details on coverage to be announced in the coming months.

    The news comes as Warner Bros. Discovery is launching a joint sports streaming service called Venu with Disney’s ESPN and Fox. Venu is set to launch this fall and will include TNT, TBS and TruTV in its offering of channels.
    Adding the French Open is more evidence that the company wants to add live sports if the price makes sense for the investment. In the past three years, TNT Sports has acquired rights for the National Hockey League, NASCAR, U.S. Soccer, the College Football Playoffs (through a sublicensing deal with ESPN), and now the French Open.
    Meanwhile, Warner Bros. Discovery is still in negotiations with the NBA to extend its partnership to broadcast live games. While NBCUniversal has made an offer for the package of games TNT Sports has been carrying, Warner Bros. Discovery is focusing on a different package of games, CNBC previously reported.
    With the hangover from the Hollywood writers’ strike and cost-cutting measures across the industry, including at Warner Bros. Discovery, media giants have been leaning heavily on sports as a way to bring in bigger audiences and more advertising dollars.
    Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
    — CNBC’s Alex Sherman contributed to this report.

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    GM board approves new $6 billion share buyback authorization

    General Motors on Tuesday announced a new $6 billion stock repurchase authorization has been approved by its board.
    The new buyback authorization comes as an accelerated $10 billion share repurchase program announced in November 2023 is expected to be completed by the end of this month.
    Shares of GM were up 1% in premarket trading. The stock closed Monday at $47.57, up about 32.4% this year.

    General Motors CEO Mary Barra, center, at the New York Stock Exchange, Nov. 17, 2022.
    Source: NYSE

    DETROIT – General Motors on Tuesday announced a new $6 billion stock repurchase authorization has been approved by its board.
    The new buyback authorization comes as an accelerated $10 billion share repurchase program announced in November 2023 is expected to be completed by the end of this month.

    “We are very focused on the profitability of our [internal combustion engine] business, we’re growing and improving the profitability of our EV business and deploying our capital efficiently. This allows us to continue returning cash to shareholders,” GM CFO Paul Jacobson said in a release.
    The new authorization will allow GM to opportunistically repurchase shares after the completion of the existing reauthorization, the automaker said. A timeframe for completion of the program was not announced.
    Shares of GM were up 1% in premarket trading. The stock closed Monday at $47.57, up about 32.4% this year.
    The announced buyback plans come amid uncertainty surrounding the adoption of all-electric vehicles, which GM has bet heavily on, and stalling customer demand for new vehicles.  
    “The investments GM made in its brands and product portfolio over the last several years, and the company’s operating discipline, are delivering consistently strong revenue growth, margins and free cash flow,” Jacobson said.

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