Business

Despite its promise, a future full of autonomous vehicles still seems like a distant fantasy.
But tech giants, automakers, and start-ups from the U.S. and China, including Ford, GM, Baidu, Tesla, and Alphabet, have invested billions of dollars and years of R&D into making it a reality.
Robotaxis seems like a good bet to be first to make it to market in a major way. As one expert said, “Ride-hailing is a lousy business model with unhappy human drivers and urban mobility problems.”

An Apollo Robotaxi runs at Shougang Park as Baidu launches China’s first driverless taxi service in the city on May 2, 2021 in Beijing, China.
He Luqi | Qianlong.com | Visual China Group | Getty Images

For years, Alphabet’s Waymo and others leaders have promised autonomous vehicles are just around the bend. But that future has not arrived yet. Why not?
“In one word, it’s complexity,” said James Peng, CEO and co-founder of Pony.ai, an autonomous vehicle company. “Every time there is a technical breakthrough, there are challenges. We have the AI, the fast computer chips, the sensors. It’s all solvable by fitting all the pieces together smoothly. 99.9% is not good enough to perfect the technology.”

Despite promises of life-saving, climate-change fighting, and cost-efficient driving, the reality is that “the autonomous vehicle nirvana is 10 years out,” said Michael Dunne, CEO of autotech consultancy ZoZoGo. “While it’s not impossible to get there, even the most advanced technologies are not there yet and used mainly in confined areas where things are predictable. We are far, far away from universal acceptance.”
Not only that, but “the business model is a bigger challenge than the technology,” he said.  
Self-driving vehicles without steering wheels or brake pedals have been slow to scale and are viewed by many as a novelty. Additional road tests are needed to work out tech glitches. Regulations to permit driverless vehicles are still evolving by city, state, and country. High price tags hovering above $100,000 for an AV-equipped auto are a drawback to individual purchases for most buyers. Commercialization is still underway. Safety concerns remain, particularly after a fatal crash in March 2018 involving one of Uber’s vehicles in Tempe, Arizona and multiple incidents involving Teslas being operated in self-driving mode. 

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Still, market leaders are betting big on smarter transit technology and are testing its viability, logging thousands of road miles to train self-driving algorithms and AI sensors to drive better than humans in all kinds of weather and unpredictable circumstances. Tech giants, automakers, and start-ups including GM’s Cruise, Waymo, Baidu, and others have invested billions of dollars and years of R&D in this emerging market poised to reach 12% of new car registrations globally by 2030. Meanwhile, Tesla continues its work on its semi-autonomous autopilot and self-driving systems.

Promising future for robotaxis, robo-deliverys

Now after a decade and some bumpy starts, it’s robotaxis, robot-driven deliveries, and autonomous trucks that are emerging as the most promising money-makers in the market.

“Ride-hailing is a lousy business model with unhappy human drivers and urban mobility problems. The next great thing could be fleets of robotaxis,” said Erik Gordon, a professor at the University of Michigan where he focuses on entrepreneurship and technology. He envisions urban streets without accidents, honking, traffic jams, and dedicated lanes for self-driving vehicles.
In this next phase of passengers and road testing, the technical complexities are growing with unpredictable traffic patterns and weather factors such as fog and rain, plus lingering social awareness and acceptance issues.
“It will still require a significant amount of time for autonomous driving to be commercialized on a large scale,” said Dong Wei, vice president and chief safety operation officer of Baidu Intelligent Driving Business Group in Beijing.
Paid passenger fares in fully driverless robotaxis could be the next step toward the commercial development of this transformative market.

Pony.ai, which ranked No. 10 on the 2022 CNBC Disruptor 50 list, along with Baidu in Beijing, have led the industry in launching fare-charging robotaxis for the public in China. The two companies started charging fares last November in Beijing for their robotaxi services, which have a safety driver monitoring the ride. Additionally, Pony.ai is starting a paid taxi service this May featuring 100 AVs as traditional taxis within the Nansha district of Guangzhou. Both also have been testing AVs and robotaxis in the U.S., although Pony.ai’s driverless tests were suspended in California after a vehicle hit a lane divider and street sign in Fremont.
China is targeting smart transportation as a national growth strategy and has designated several sections of major cities for testing. “If you are looking for the perfect place to test autonomous driving, it is hard to beat China for its ambition,” said Dunne. 
While the Chinese and U.S. markets are developing closely in parallel, given heightened U.S.-China tech innovation competition and restrictions on cross-border investment, one plausible scenario is “two global ecosystems, one that is China-led and one that is U.S.-led with their respective systems and governments,” Dunne said. “China does not want U.S. companies vacuuming up data and China testing in the U.S. faces the same issue. Chinese AV companies are likely to maintain R&D in the U.S. but deploy in China for China.”
In the U.S., industry leaders Waymo and Cruise expect to soon launch their own paid driverless robotaxis in San Francisco after several months of testing rides with employees. Additionally, Waymo plans to expand its fee-charging driverless rides to downtown Phoenix after pilots in late 2018 for paying customers in suburban Chandler.

Argo AI begins driverless operations in Miami and Austin.
Courtesy: Argo AI

Ford and VW-backed Argo-AI have begun operating autonomous test vehicles without a human safety driver in Miami and Austin, Texas, moving around employees. Argo has been testing its self-driving technology on streets in eight cities across the U.S. and Europe, with some of its vehicles, with a human safety driver, being used by passengers in Miami Beach, Florida, through Lyft’s ride-sharing network. Lyft has a roughly 2.5% stake in the company.
Amazon-acquired start-up Zoox is custom testing its cube-like robotaxis in the Bay Area, Seattle, and Las Vegas, without initially charging for rides.

Billions bet by U.S. and Asian auto, tech giants

Chasing the opportunity, equity funding in AV tech companies eclipsed $12 billion in 2021, up more than 50% from 2020, according to CB Insights. The U.S. funding is dominated by Waymo, which topped out at $5.5 billion including from Alphabet, and by Cruise, which is backed with $10 billion from GM, Honda, and other investors, with a $5 billion line of credit from GM Financial. Pony.ai, co-founded by former Baidu AV lead developer Peng in 2016, is financed with $1.1 billion, including a $400 million investment from Toyota.
Start-ups in the AV space have piggybacked on major automakers and ride-hailing services, for instance, Motional, formed in 2021 through a joint venture with Hyundai and pilots with Lyft.  Uber sold its self-driving unit, the Advanced Technologies Group, to Aurora Innovation, after Uber’s co-founder and former CEO Travis Kalanick had touted self-driving as a priority. Aurora, invested in by Amazon, Hyundai, and venture firms Sequoia Capital and Greylock, is working on launching a commercial robotic truck system by late 2023, followed by a robotaxi project.
Several other market segments are being carved out as differentiators by companies developing commercial robotaxis. One of the more advanced as it seeks to diversify from its search and advertising core, Baidu is supplying its Apollo Go AV “brains” to robo-buses and other transit means in China while providing Apollo self-driving solutions to automakers. The monthly pricing of Apollo Go over five years is comparable to the labor cost of a ride-hailing driver in major cities in China, a Baidu spokesperson said. The company is also selling intelligent transportation solutions with projects in 34 Chinese cities, for improving traffic conditions, road safety, and air quality. Baidu has further teamed up with Geely (Chinese owners of Volvo) to fund its intelligent electric vehicle business JIDU and mass-produce a robocar for launch in 2023.
Production of robo-vehicles is costly but pursued as another strategy to commercialize the market. Cruise has partnered with GM and Honda to mass-produce the Origin, an all-electric self-driving, shared vehicle due out within a few years from GM’s Factory Zero assembly plant in Detroit. Amazon-owned Zoox has built dozens of custom-built, electric, autonomous robotaxis at its plant in Fremont, rolling out gradually. Waymo is expanding its current ride-hail fleet of I-Pacers and Chrysler Pacifica hybrids made in Detroit and collaborating with Chinese automaker Geely to equip its all-electric, purpose-built AVs for U.S. roads in the coming years. Pony.ai recently unveiled its sixth-generation autonomous driving system, expecting to equip a seven-seat Toyota Sienna model and begin road testing in China this year with robotaxis following in 2023.  
Robot-powered delivery services are also emerging as a viable path toward commercial scale and profitability. Cruise has partnered with Walmart in the Phoenix area to deliver groceries, and plans to expand the service nationally, said Gil West, Cruise chief operating officer. Nuro, a Silicon Valley robotics start-up in autonomous delivery, is test driving a bot service to Walmart and Kroger customers in several cities, and recently added 7-Eleven customers in Mountain View. Uber began pilots this month of food deliveries by sidewalk robots and self-driving cars in Los Angeles.
For Zoox, supplying Amazon with last-mile deliveries from its shuttles is a possible scenario. “We haven’t rule this out as a use case,” said Jesse Levinson, Zoox CTO and co-founder. “Our business model is charging people money to take a ride. The biggest cost of a ride-sharing vehicle is the driver. We can amortize the cost of the vehicle by these fares over five years.”
It may seem counterintuitive, but the AV long-haul trucking space is moving perhaps the fastest in this evolving market. Jim Scheinman, founding managing partner at Maven Ventures and an early investor in Cruise, noted that Embark Truck and other AV trucking companies will help the trillion-dollar market in many ways. “Not only by keeping our freight costs substantially lower which will continue to be so important in a world of continued supply chain issues and inflation, but also in helping the long haul trucking labor shortages as well as being so much more environmentally friendly,” Scheinman said. “Massive wins for everyone and the planet,” he added.
One newcomer is Pittsburgh-based Locomation, a hybrid semi-autonomous technology for two-truck convoys, with a driver in the lead vehicle monitoring the ride while another is off-duty in the follower truck, taking a rest. “With trucking in demand for freight and a driver shortage, this helps to solve a pain point,” said Cetin Mericli, a co-founder of Locomation, which has been testing with three national trucking customers. “This system can double the efficiency of the drivers, keep the trucks running more often, and speed up deliveries,” he said. “In a very 2020 fashion, our inaugural autonomous delivery was a trailer full of TP.”
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SMALL BUSINESS PLAYBOOK 2022
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Just 5% of small business owners report cybersecurity to be the biggest risk to their business right now, according to the CNBC|SurveyMonkey Small Business Survey.
The latest survey was the first to take the Main Street pulse since Russia — associated with many high-profile hacks in recent years and making threats about a “military-technical measures” — invaded Ukraine.

Some of the highest profile cyberattacks on the U.S. in recent years are alleged to have originated in Russia, including the 2021 attack on the Colonial Pipeline — the largest fuel pipeline in the U.S. — the SolarWinds attack in 2020, and the 2016 hacking into the Democratic National Committee. 
Since Russia invaded Ukraine in January of this year, the U.S. government has warned of an elevated risk of a cyber attack, which Russia could use to try to draw the U.S. into a direct conflict. Despite the increased threat, small business owners are no more concerned about a potential cyber attack — and no more prepared to deal with one should it occur — than they were a year ago.

The CNBC|SurveyMonkey Small Business Survey checks in with more than 2,000 small business owners every quarter to understand their outlook on the overall business environment along with their own business’s health. In the latest survey, just 5% of small business owners reported cybersecurity to be the biggest risk to their business right now. 
Quarter over quarter, the number saying cybersecurity is their top risk has held steady and is the lowest priority out of the five surveyed. In the same time period, the number of small business owners who say inflation is the biggest risk to their business has increased from 31% to 38%, holding the top spot in terms of risk. The numbers reporting supply chain disruptions and Covid-19 as the biggest risk have both declined. 
This latest round of the Small Business Survey is the first to field after the Russian invasion into Ukraine, though the international events have had no perceptible impact on small business sentiment in the U.S. 

Arrows pointing outwards

Cybersecurity has consistently ranked as an afterthought for most small business owners when making risk assessments.
CNBC|SurveyMonkey Small Business Survey Q2 2022

While it isn’t their top worry, almost four in 10 small business owners say they are very or somewhat concerned their business will be the victim of a cyber attack within the next 12 months. This trend, too, has held steady for four straight quarters, with no change at all since the Russian incursion into Ukraine. 
The smallest of small businesses are the least concerned about cyber attacks: just 33% of owners with 0-4 employees are concerned about experiencing a cyber attack within a year, compared with 61% of small business owners who have 50 or more employees. 

Few small business owners rate cyber threats at their top business risk, and fewer than half consider it to be a concern, but nevertheless a majority express confidence in their ability to respond to a cyber attack. Just as in previous quarters, about six in 10 small business owners are very or somewhat confident that they could quickly resolve a cyber attack on their business if needed. 

Cyber disconnect between business owner and customer

This general lack of concern among small business owners diverges from the sentiment among the general public. In SurveyMonkey’s own polling, three quarters of Americans say they expect businesses in the U.S. to experience a major cyber attack within the next 12 months. 
Consumers’ expectations for cyber-preparedness vary from industry to industry. A majority of people in the general public say they have confidence that their banks (71%), their health-care providers (64%), and their email providers (55%) are equipped to protect them from cybersecurity threats; on the other hand, just 32% expect the social media platforms they use to be prepared. 
We see similar results in the small business realm. Small business owners in the finance and insurance industries are some of the most confident that they would be able to quickly respond to a cyber attack; more than seven in 10 say they would be able to combat an attack. Among those in the arts, entertainment, and recreation industry that number falls to 50%. 
That’s important, because any cyber attack – even one that is quickly resolved – can have a long-lasting negative impact on a business. Consumers would rather not be the victim of a cybersecurity attack themselves, and they are wary to trust businesses that have been compromised in the past. In SurveyMonkey’s polling, 55% of people in the U.S. say they would be less likely to continue to do business with brands who are victims of a cyber attack.
For small businesses to truly be prepared, they need to take more concrete steps. Fewer than half each say they have installed antivirus or malware software, strengthened their passwords, or backed up files on an external hard drive to protect their business against potential cyberattacks. Only a third each have enabled automatic software updates or enabled multi-factor authentication. Just one quarter have installed a virtual private network (VPN). 
These are basic actions that most companies in corporate America would consider to be table stakes, but they are admittedly much more costly to implement in a small business environment. Small businesses that fail to take the cyber threat seriously risk losing customers, or much more, if a real threat emerges.  More

Life Changes

Families with loved ones who have special needs much shelter as many assets as possible to ensure much needed, life-saving government financial support is not lost.
Special needs trusts are designed to do just that, and it’s ideal to have both kinds: first-party and third-party.
Parents should work with experienced special needs planning attorneys, especially because incorrect language can disqualify a trust.

Yagi Studio | Digitalvision | Getty Images

Special needs trusts are essential for the well-being of a person with special needs, experts say.
“The most important reason for a special needs trust is that individuals with special needs often are unable to make appropriate financial decisions for themselves and/or are at risk for financial exploitation by others,” said certified financial planner Mike Walther, founder of Oak Wealth Advisors in Northbrook, Illinois.

Equally important, according to Charles Italiano, assistant director of Westchester Disabled On the Move in Yonkers, New York, “is to maintain eligibility for public benefits such as [Supplemental Security Income] and Medicaid, and enable children with special needs to have a fulfilling life.”

More from Life Changes:

Here’s a look at other stories offering a financial angle on important lifetime milestones.

Why do many people with special needs need to be on government assistance?
Because the cost of care can be astronomical, said Michael Beloff, partner and Chartered Special Needs Consultant with Belvedere Wealth Partners in Stamford, Conneticut.
For example, daytime support services for a severely impaired individual can run more than $100,000 per year, while a group home in the Northeast can run from $140,000 to $300,000 per year, he said.
“Depending on the nature of the impairment of the individual, most families cannot afford to fund these services out of their pockets during their lives and after their passing,” he said. “That’s where Medicaid comes in.”

As SSI and Medicaid recipients are allowed limited income and only $2,000 in liquid assets, it becomes imperative that families shelter assets in special needs trusts to ensure their loved ones do not lose this life-saving government financial support.
Special needs trusts should be drafted as soon as the child has a special needs diagnosis, Walther said.

Two types of trusts

There are two kinds of special needs trusts. Ideally, you need both, according to Italiano.
• Third-party: “This type of trust is funded with the parents’ money, solely for the child’s need, and will never be in the child’s name,” Italiano said. “After the parents pass away, the funds go to someone other than the child.”
These are most often funded with insurance and funds from the parents’ estate and can be set up without funds at first, Beloff said.
Once funded, the trust has its own tax ID number and its own tax return must be filed. These funds are meant to cover expenses that Medicaid or SSI do not cover, such as travel, clothes, computers, etc.

Watch for conflicts of interest if the trustee is also the ultimate beneficiary.

Michael Beloff
Chartered Special Needs Consultant with Belvedere Wealth Partners

“It’s a way to ensure that the money will be there and will be overseen by a qualified trustee, such as a family member, a friend, or an outside party such as a bank or a non-profit,” Beloff said. “Watch for conflicts of interest if the trustee is also the ultimate beneficiary.”
It’s important to let other family members know they should make any gifts or bequests to the trust so as to avoid negative effects on the special child’s eligibility for Medicaid, said attorney Ray Falcon, principal of Falcon Law Group in Woodcliff Lake, New Jersey.
• First-party: This trust is created with the individual’s own assets to shelter any income, whether earned or inherited, in order to not exceed Medicaid income and asset limits. Distributions must be approved by the trustee, Italiano explained.

“This type of trust may have a payback provision, such that any funds left over after the individual passes go to pay back cumulative Medicaid expenditures,” he said.

Working with attorneys

Costs vary for setting up special needs trusts in different parts of the U.S., but tacking them on to a general estate plan could add $2,000 to $6,000, depending on complexity.
Parents should work with experienced special needs planning attorneys, especially because incorrect language can disqualify a trust, Walther said.
Falcon recommended questions for attorneys under consideration. “You should ask a prospective attorney, ‘How many trusts have you written?’ and ‘Have your trusts been reviewed and approved by Social Security and Medicaid in my state?'”
Reputable sources to find specialized attorneys and planners include the Academy of Special Needs Planners and the Special Needs Alliance. More

Elon Musk wears many hats as Tesla CEO, SpaceX CEO, and founder of the Boring Company and Neuralink.
He’s also a prolific Twitter user. The news that Musk made a $44 billion offer to buy Twitter and potentially become the social media company’s CEO has sent shock waves through Wall Street and social media.

“Forty-four billion continues to be a head-scratcher for a company that I believe is probably worth closer to $30 or $35 billion,” said Wedbush analyst Dan Ives in an interview with CNBC. “But when you’re the richest person in the world, you can do that. And that’s why Twitter investors, when they saw the $44 billion, they were popping champagne or drinking their favorite alcohol.”
The deal can still fall through, though. As ongoing stock market volatility wipes millions in market cap from tech companies, Musk said he’s putting the deal on hold until he gets more clarity on how many fake accounts exist on Twitter. Analysts believe Musk may be using this debate to drive down his proposed $54 per share takeover price now that so much value has been drained from tech stocks over the past few weeks.
And on Friday, Musk finds himself embroiled in scandal. He’s taken to Twitter to respond to a report from Business Insider that says SpaceX paid a flight attendant $250,000 in severance over a sexual misconduct claim made against him.
Twitter declined to comment about the allegations and reiterated comments from earlier in the week that the company’s board remains committed to the original deal with Musk.
Watch the video above to find out more about how Musk’s bid for Twitter came together, how the social media company could change under his watch and what obstacles remain that could stand in the way of the deal going through.

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Prices for battery-related commodities have surged in recent months, and analysts expect them to rise further over the next few years.
Electric vehicle makers have already begun passing those higher costs on to their buyers.
But some automakers are determined to hold down prices — at least for now.

Tesla’s Model 3 at the Tesla store in Washington, D.C.
Salwan Georges | The Washington Post | Getty Images

Automakers from Tesla to Rivian to Cadillac are hiking prices on their electric vehicles amid changing market conditions and rising commodity costs, specifically for key materials needed for EV batteries.
Battery prices have been declining for years, but that may be about to change. One firm projects a sharp increase in demand for battery minerals over the next four years that could push the price of EV battery cells up by more than 20%. That’s on top of already-rising prices for battery-related raw materials, a result of supply-chain disruptions related to Covid and Russia’s invasion of Ukraine.

The higher costs have some electric vehicle makers boosting their prices, making the already-expensive vehicles even less affordable for average Americans and begging the question, will surging commodity prices slow the electric-vehicle revolution?

Passing costs on

Industry leader Tesla has worked for years to lower the costs of its vehicles, part of its “secret master plan” to promote a global shift to zero-emissions transportation. But even it has had to raise its prices several times over the last year, including twice in March after CEO Elon Musk warned that both Tesla and SpaceX were “seeing significant recent inflation pressure” in raw materials prices and transportation costs.
Most Teslas are now significantly more expensive than they were at the beginning of 2021. The cheapest “Standard Range” version of the Model 3, Tesla’s most affordable vehicle, now starts at $46,990 in the U.S., up 23% from $38,190 in February 2021.
Rivian was another early mover on price hikes, but its move wasn’t without controversy. The company said on March 1 that both of its consumer models, the R1T pickup and R1S SUV, would get hefty price increases, effective immediately. The R1T would jump 18% to $79,500, it said, and the R1S would jump 21% to $84,500.
Rivian at the same time announced new lower-cost versions of both models, with fewer standard features and two electric motors instead of four, priced at $67,500 and $72,500 respectively, close to the original prices of their plusher four-motor siblings.  

The adjustments raised eyebrows: At first, Rivian said that the price hikes would apply to orders placed before March 1 as well as to new orders, essentially doubling back to existing reservation holders for more money. But two days of pushback later, CEO RJ Scaringe apologized and said Rivian would honor the old prices for orders that were already placed.
“In speaking with many of you over the last two days, I fully realize and acknowledge how upset many of you felt,” Scaringe wrote in a letter to Rivian stakeholders. “Since originally setting our pricing structure, and most especially in recent months, a lot has changed. Everything from semiconductors to sheet metal to seats has become more expensive.”
Lucid Group is also passing on some of those higher costs to the well-heeled buyers of its expensive luxury sedans.
The company said on May 5 that it will raise the prices of all but one version of its Air luxury sedan by about 10% to 12% for U.S. customers who place their reservations on or after June 1. Perhaps mindful of Rivian’s about-face, Lucid CEO Peter Rawlinson assured customers that Lucid will honor its current prices for any reservations placed through the end of May.
Customers making reservations for a Lucid Air on June 1 or later will pay $154,000 for the Grand Touring version, up from $139,000; $107,400 for an Air in Touring trim, up from $95,000; or $87,400 for the least expensive version, called Air Pure, up from $77,400.
Pricing for a new top-level trim announced in April, the Air Grand Touring Performance, is unchanged at $179,000, but — despite similar specs — it’s $10,000 more than the limited-run Air Dream Edition it replaced.
“The world has changed dramatically from the time we first announced Lucid Air back in September 2020,” Rawlinson told investors during the company’s earnings call.

Legacy advantage

The established global automakers have greater economies of scale than companies such as Lucid or Rivian and haven’t been hit quite as hard by rising battery-related costs. They, too, are feeling some pricing pressure, though they’re passing on the costs to buyers to a lesser degree.
General Motors on Monday raised the starting price of its Cadillac Lyriq crossover EV, bumping new orders by $3,000 to $62,990. The increase excludes sales of an initial debut version.
Cadillac President Rory Harvey, in explaining the hike, noted the company is now including a $1,500 offer for owners to install at-home chargers (though customers of the lower-priced debut version will also be offered the deal). He also cited outside market conditions and competitive pricing as factors in raising the price.
GM warned during its first-quarter earnings call last month that it expects overall commodity costs in 2022 to come in at $5 billion, double what the automaker previously forecast.
“I don’t think it was one thing in isolation,” Harvey said during a media briefing Monday in announcing the price changes, adding the company had always planned to adjust the price tag after the debut. “I think it was a number of factors taken into account.”
The performance and specifications of the new 2023 Lyriq are unchanged from the debut model, he said. But the price increase puts it closer in line with the price of the Tesla Model Y, which GM is positioning the Lyriq to compete against.
Rival Ford Motor has made pricing a key part of its sales pitch for the new electric F-150 Lightning pickup. Many analyst were surprised last year when Ford said that the F-150 Lightning, which recently started shipping to dealers, would start at just $39,974.
Darren Palmer, Ford vice president of global EV programs, said the company plans to maintain the pricing — as it has so far — but that it’s subject to “insane” commodity costs, like everyone else.
Ford last month said it expects $4 billion in raw material headwinds this year, up from a previous forecast of $1.5 billion to $2 billion.
“We’re going to still keep it for everybody, but we’ll have to react on commodities, I’m sure,” Palmer told CNBC during an interview earlier this month.
If the Lightning does see a price increase, the 200,000 existing reservation holders are likely to be spared. Palmer said Ford took note of the backlash against Rivian.

Established supply chains

The Lyriq and the F-150 Lightning are new products, with new supply chains that – for the moment – have exposed the automakers to rising commodity prices. But on some older electric vehicles, such as the Chevrolet Bolt and Nissan Leaf, the automakers have been able to keep their price hikes modest despite the higher costs.
GM’s 2022 Bolt EV starts at $31,500, up $500 from earlier in the model-year, but down about $5,000 compared with the previous model year and roughly $6,000 cheaper than when the vehicle was first introduced for the 2017 model-year. GM has not yet announced pricing for the 2023 Bolt EV.
Nissan said last month an updated version of its electric Leaf, which has been on sale in the U.S. since 2010, would maintain similar starting pricing for the vehicle’s upcoming 2023 models. The current models start at $27,400 and $35,400.
Nissan Americas chairperson Jeremie Papin said the company’s priority around pricing is to absorb as much of the external price increases as possible, including for future vehicles such as its upcoming Ariya EV. The 2023 Ariya will start at $45,950 when it arrives in the U.S. later this year.
“That’s always the first priority,” Papin told CNBC. “That’s what we’re focused on doing … it’s true for ICE as it is for EVs. We just want to sell cars at a competitive price and for their full value.”

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The NBA has two big media rights deals expiring after the 2024-25 season. The question is: Will the league strike agreements with streaming services?
Rising stars like Luka Doncic, strong playoff ratings and the resurgence of the Golden State Warriors have put the NBA in a strong position before it considers what to do next with his televised games.
“They’re no longer dependent on major market teams. That’s evidence of strength,” said longtime sports media executive Neal Pilson.

Ja Morant #12 of the Memphis Grizzlies drives to the basket to shoot against the Golden State Warriors in the second half of Game Three of the Western Conference Semifinals of the NBA Playoffs at Chase Center on May 07, 2022 in San Francisco, California.
Thearon W. Henderson | Getty Images

The NBA is in a strong position as it bounces back from the pandemic and gears up for its next media rights cycle in the next few years. Playoff viewership increased without much participation from teams in the huge New York and Los Angeles markets. The league’s biggest star, LeBron James, isn’t in the playoffs, either.
Audiences are tuning in to watch the Golden State Warriors, who have returned to title contention after missing the playoffs last year. The Boston Celtics are drawing big numbers, too, as the storied franchise looks to add an 18th title banner to its arena rafters. Electric young stars Ja Morant and Luka Doncic have also helped the NBA’s playoff ratings recovery after two down years caused by the pandemic.  

“The NBA is no longer dependent on one or two teams,” said longtime sports media executive Neal Pilson. “They’re no longer dependent on major market teams. That’s evidence of strength.”
The NBA’s conference finals started earlier this week on Warner Bros. Discovery property Turner Sports and Disney-owned ABC and ESPN networks. Through the early conference finals matchups, postseason games are averaging 3.7 million viewers on the networks, up 14% when compared to 2021.
More than 6 million watched game one of the 2022 Western Conference Finals between the Warriors and Dallas Mavericks. And ESPN also reported roughly 6 million viewers watched game one and two of the Celtics-Miami Heat series. The NBA uses metrics from measurement company Nielsen for its viewership stats.
The NBA’s $24 billion deal with ESPN and Turner ends after the 2024-25 campaign. Speculation about whether the NBA will embrace streaming services in the next round of deals.
The league will have a strong hand to play in large part because of its young stars.

Pilson, a former president at CBS Sports, pointed to the NBA’s team balance and the promotion of young stars as a reason fans are showing interest. The Memphis Grizzlies’ Morant and Dallas’ Doncic put the NBA in a “healthy situation” for a lucrative rights deal, he said. 
The popularity of the 22-year-old Morant helped lead the Memphis Grizzlies to its most-watched playoff series ever. The Grizzlies series against the Warriors averaged 5.9 million viewers over six games. That included 7.7 million viewers who watched game one – the highest-rated game in the playoffs so far. 
Morant missed the final three games of the series due to injury. But he’s expected to return next season, so expect national networks to feature more Grizzlies games. 

Luka Doncic #77 of the Dallas Mavericks handles the ball during Game 1 of the 2022 NBA Playoffs Western Conference Finals on May 18, 2022 at Chase Center in San Francisco, California.
Noah Graham | NBA | Getty Images

Doncic, 23, led the Mavericks to a game seven win over the top-seeded Phoenix Suns on Sunday. That game averaged 6.3 million viewers and was the fifth-most watched game in the playoffs this year.
“You can put Memphis and Dallas on and get an audience,” said Pilson, adding that the NBA is “not dependent on the Lakers and certainly not dependent on the Knicks.”
The league will be tested during the NBA Finals in June, though.
The NBA Finals averaged 9.9 million viewers in 2021, when the Milwaukee Bucks and their superstar, Giannis Antetokounmpo, defeated the Suns. That’s up from an average of 7.5 million viewers for the 2020 NBA Finals, which featured James and the Lakers playing in front of an empty arena in the Orlando Covid bubble. But it’s also way down compared to the 15.1 million viewers who watched the 2019 NBA Finals featuring Warriors and Toronto Raptors. 
Of the remaining teams, a Heat-Mavs final might not draw top viewership like a Celtics-Warriors, or Celtics-Mavs series. But Pilson said the remaining star players, including Warriors superstar Stephen Curry, would still be enough to draw a substantial audience. The profile of Jayson Tatum, the Celtics’ 24-year-old top star, has also grown this postseason.
“There are more NBA teams now that can support the Finals in terms of athletes and ratings than there were 10 years ago,” he said. “It’s beachfront property – sports is driving the television economy. It’s why rights fees are expensive, and sponsors have to pay top dollar.”

Boston Celtics guard Marcus Smart (36) is fouled by Miami Heat forward P.J. Tucker (17) during the first quarter. The Miami Heat host the Boston Celtics during game 2 in the NBA Eastern Conference Finals at FTX Arena in Miami, FL on May 19, 2022.
Matthew J. Lee | Boston Globe | Getty Images

At the NBA’s board of governors meeting April in New York, league commissioner Adam Silver said it’s “premature” to contemplate adding new partners in the next rights deal, he did say the NBA was closely monitoring the rights marketplace – particularly as tech behemoth Apple is now spending to show sports on its Apple TV+ service. 
“The discussions we’re having now have more to do with predictions and where the media market is going,” said Silver. “I think we’re going to continue to see a morphing of a lot of these rights that have historically been on traditional services to streaming services. And frankly, that’s where the consumers are going, too.”
But how the NBA packages those rights is up in the air. Apple showed its interest in getting in the sports media business when it struck a deal this spring to land MLB rights. Amazon is already in business with the NBA, as it streams WNBA games.
“I think that’s the direction media is going in this country,” said Silver. “People want personalization. They want customization.” 
Streaming platforms, he added, offer sports fans “flexibility and attributes that maybe you don’t find through conventional, satellite and cable delivery.”

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Citi expects the space industry to reach $1 trillion in annual revenue by 2040, with launch costs dropping 95% to unlock more services from orbit.
The global space economy’s value reached $424 billion in 2020, having expanded 70% since 2010.
Despite the optimistic outlook on the space economy’s future, Citi emphasized that much about the industry remains speculative.

A Falcon 9 rocket carries 49 Starlink satellites toward orbit on Feb. 3, 2022.

The space industry should reach $1 trillion in annual revenue by 2040, with launch costs dropping 95%, Citigroup analysts said in an extensive report published this month.
A further decline in the cost of accessing space would create more opportunities for technological expansion and innovation, unlocking more services from orbit such as satellite broadband and manufacturing, the bank added.

Citi’s estimates for the industry match forecasts published in recent years by Morgan Stanley, Bank of America and others. The global space economy’s value reached $424 billion in 2020, according to research from Space Foundation, having expanded 70% since 2010.
“Revenue from manufacturing, launch services and ground equipment will make up the majority of the revenue growth in the satellite sector,” Citi said. “However, the fastest growth rate is expected to come from new space applications and industries, with revenue forecast to rise from zero to $101 billion over the period.”
Private investment in space companies, especially from venture capital, has steadily broken annual records over the past decade. Last year, space infrastructure companies received $14.5 billion of private investment, according to Space Capital’s quarterly report, which tracks about 1,700 companies.
A flurry of space companies went public last year through SPAC deals, but most of the stocks are struggling despite the industry’s growth. The shifting market environment, with climbing interest rates hitting technology and growth stocks hard, have seen space stocks drop as well. Shares of about a dozen space companies are off 50% or more since their debut.
Despite Citi’s optimistic outlook, the firm emphasized that much remains speculative in the industry, “such as space-based solar power, moon/asteroid mining, space logistics/cargo, space tourism, intercity rocket travel, and microgravity R&D and construction.”

“A similar analogy would be attempting to forecast the value of the internet today versus nearly 20 years ago when the term ‘smartphone’ was relatively unknown and before broadband replaced dial-up internet connections,” the analysts said.

Launch costs plummeting

In Citi’s view, a $1 trillion space economy would happen through a decline in launch costs, which it says “have already fallen precipitously since the 1980s,” about 40 times lower.
The cost of a rocket launch is typically broken out on a dollar-per-kilogram basis. From 1970 to 2010, Citi noted, the average launch cost plateaued around $16,000 per kilogram for heavy payloads and $30,000 per kilogram for light payloads.
The bank credited the private sector for the sharp decline in costs. “Lower launch costs were pioneered by SpaceX with the launch of Falcon 9 in 2010,” Citi said. The rocket dropped the average cost per kilogram down to around $2,500, 30 times lower than NASA’s Space Shuttle’s costs and 11 times lower than the previous historical average.
“Fundamentally, with the new generation of space being driven by the commercial sector, the launch industry is seeing a secular shift from being largely cost-plus pricing-based to being value-based in order to open up new markets and maximize profitability,” Citi said. “Previously, the launch market had a limited number of government-supported companies that were concerned more with military capability and creating revenue and jobs than with increasing operational efficiency.”
The increasingly common practice of reusing rocket boosters is driving that cost down. Citi estimates launch costs could fall to about $30 per kilogram by 2040 in a best-case scenario. If rockets are “still only being reused around 10 times” each by 2040, which SpaceX is already doing, the cost still comes down significantly to about $300 per kilogram, the firm said.

Satellite boom

The satellite market makes up the largest slice of the space economy, at over 70%, and Citi says the sector “is undergoing a paradigm shift in demand.”
While satellite revenues have dominantly come from services like television, the bank sees an expansion into applications ranging from consumer broadband to mobile connectivity to internet-of-things networks.
The bank believes the expansive satellite networks of SpaceX’s Starlink and Amazon’s Project Kuiper will accelerate this shift through “greater accessibility” to internet services across the globe.
Another sector Citi sees strong gains in is satellite imagery, which the firm estimates makes up about 2%, or $2.6 billion, of the current space economy. The bank forecasts an expansion in the sector driven by “space-as-a-service” applications, reaching $17 billion in annual sales by 2040.

Regulations and space junk

Expanding the space economy won’t be easy, though, the firm said, noting that the harsh environment of space, the steep upfront capital costs and the long timeline to see returns on space projects all represent significant growth risks.
Citi stressed that the perception of space “as a mere hobby for billionaires” represents another risk, as the industry “needs to gain public acceptance before it can be adopted across various industries.” While investment from private entities has driven down the cost of access to space, with more people and spacecraft flying for a fraction of what governments have been able to accomplish, the perception that space companies are ego-driven pet projects of the most wealthy individuals can damage the industry’s potential, the firm said.
As to human spaceflight, Citi noted that the failure rate for crewed launches is less than 2% historically. But that “is still far too high for space passenger flights,” it said, given that commercial aviation experiences failures at the minuscule rate of about 0.0001%.
Regulatory risk represents another obstacle for the industry, Citi noted. There are several federal and international entities responsible for approving and regulating space companies.
Then there’s space junk. Such debris represents “a rapidly growing threat to satellites in orbit, future launches and the expansion of opportunities across the space ecosystem,” Citi said. Tens of thousands of artificial objects are tracked in orbit around the Earth, with many times that expected to be in orbit but are too small to be tracked.
“This increases the risk of the ‘Kessler Syndrome’ becoming a reality — the idea that space junk in orbit around the earth, with no air resistance to slow it down, will reach a saturation point where it simply collides with other space junk and fragments into smaller pieces, until it eventually creates a debris field that stops any new satellites from being launched,” Citi said.

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Monday – Friday, 6:00 – 7:00 PM ET

CNBC’s Jim Cramer warned investors on Friday that a market rally has no chance of sustaining until the causes of the turmoil are resolved.
“We need China to reopen, Russia to withdraw from Ukraine, and the [Federal Reserve] to curb-stomp inflation with a 100-basis point rate hike,” the “Mad Money” host said.

CNBC’s Jim Cramer warned investors on Friday that a market rally has no chance of sustaining until the causes of the turmoil are resolved.
“If we want the market to stage a meaningful comeback, we need China to reopen, Russia to withdraw from Ukraine, and the [Federal Reserve] to curb-stomp inflation with a 100-basis point rate hike,” the “Mad Money” host said. “Unfortunately, only one of those three is within America’s control.”

His comments come on the heels of a volatile week of trading spurned by missed earnings quarters from retail behemoths, mounting investor concerns about inflation and global geopolitical tensions.
The S&P 500 closed around 19% below its record, while the Nasdaq Composite reached 30% off its highs, in bear market territory. The Dow Jones Industrial Average recorded its first eight-week losing streak since 1923.
In addition to giving his take on the current market, Cramer looked ahead to next week’s slate of earnings and gave his thoughts on each reporting company. All earnings and revenue estimates are courtesy of FactSet.
Monday: Zoom

Q1 2023 earnings release after the close; conference call at 5 p.m. ET
Projected EPS: 96 cents
Projected revenue: $1.23 billion

Zoom stock will stay down unless the company innovates or acquires another company that helps it do so, Cramer said.

Tuesday: Best Buy, AutoZone, Toll Brothers
Best Buy 

Q1 2023 earnings release before the bell; conference call at 8 a.m. ET
Projected EPS: $1.59 
Projected revenue: $10.45 billion

Cramer noted that while he’d normally urge investors to buy shares of Best Buy at its current price, buying anything lately has felt risky.
AutoZone

Q3 2022 earnings release before the bell; conference call at 10 a.m. ET
Projected EPS: $26.20
Projected revenue: $3.71 billion

Cramer said that the company’s stock is a winner.
Toll Brothers

Q2 2022 earnings release after the close; conference call at 8:30 a.m. ET
Projected EPS: $1.50
Projected revenue: $2.08 billion

“Most skeptics … think the earnings will be cut in half in the future, if not more,” Cramer said.
Wednesday: Nvidia

Q1 2023 earnings release after the close; conference call at 5 p.m. ETProjected EPS: $1.30
Projected revenue: $8.12 billion

“The action ahead of the quarter has been horrendous. … I actually think the print will be a good one, I just don’t know if anyone will care,” Cramer said.
Thursday: Macy’s, Costco
Macy’s

Q1 2022 earnings release before the bell; conference call at 8 a.m. ET
Projected EPS: 82 cents
Projected revenue: $5.33 billion

Macy’s has a similar product lineup to Target, which reported worse-than-expected earnings this quarter, Cramer noted.
Costco 

Q3 2022 earnings release at 4:15 p.m. ET; conference call at 5 p.m. ET
Projected EPS: $3.04
Projected revenue; $51.32 billion

Cramer said that while the company is performing well, its stock is down so much that a huge special dividend and buyback might be the only thing that could make it rally.
Friday: Canopy Growth

Q4 2022 earnings release before the bell; conference call at 10 a.m. ET
Projected EPS: $10.70
Projected revenue: $130 million

“Canopy needs national legislation promoting use of marijuana, not just flat out legalization, but subsidies” for its stock to rally to its previous highs, Cramer said.
Disclosure: Cramer’s Charitable Trust owns shares of Costco and Nvidia.

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