Apple employees are pushing back against the iPhone maker’s call for workers to return to the office next month, arguing that they have shown they can perform “exceptional work” during two-plus years of flexible arrangements. Apple Together, a group of workers that formed last year when offices around the globe were forced to work remotely because of the pandemic, began circulating a petition internally on Sunday, demanding “location flexible work”.The petition, seen by the Financial Times, is a response to an order from chief executive Tim Cook last week telling employees in and around the Cupertino headquarters that they must return to the office three days a week from September 5. Cook said he wanted to preserve the “in-person collaboration that is so essential to our culture”.
Apple Together counters that a “uniform mandate from senior leadership” fails to respect the “many compelling reasons” why some employees are “happier and more productive” working outside of traditional office arrangements.
The group is demanding that Apple allows employees to work with their “immediate manager” to decide their working arrangements, and that they should not be subject to “high-level approvals” and “complex procedures” or have to provide private information.
A corporate employee within hardware engineering in Cupertino who is helping to organize the petition told the Financial Times that Apple Together intended to collect signatures this week before verifying and sending the results to executives.
“At this juncture we will not be releasing any specific names of individuals publicly or to exec leadership to protect our colleagues, especially in light of retail union busting and recent reports of allegations of retaliation from HR,” this person said.
Apple declined to comment. Silicon Valley companies, including Facebook and Google, allowed engineers to stay at home when Covid forced people to work remotely in March 2020. In some cases employees were allowed to relocate to other parts of the country without it affecting their salaries. Whether work should now return to pre-Covid norms has become a contentious issue, with some companies touting their flexible policies to lure and retain talent. Last year Spotify introduced a “Work from Anywhere” policy, saying it would support work-life balance by giving employees “the freedom to choose” where to work.
In May, a prominent machine learning computer scientist, Ian Goodfellow, left Apple for Google sibling DeepMind, reportedly telling colleagues that Apple’s return-to-work policy was one of the main reasons he left. The outspokenness of some Apple employees appears to have had some impact. In June, Cook had asked workers to come back to the office on Mondays, Tuesdays and Thursdays. However, in last week’s memo the policy was relaxed to Tuesdays and Thursdays, plus a third day that will be determined by individual teams. “We believe that Apple should encourage, not prohibit, flexible work to build a more diverse and successful company where we can feel comfortable to ‘think different’ together,” the Apple petition said.
Cook has not been as forceful as Musk — in March he acknowledged a return to the office might be “an unsettling change” for some — but since June 2021 he has repeatedly tried to get workers back to the office, only to have the plans delayed by new waves in Covid cases. Apple has thrived during the pandemic period, with its market valuation roughly doubling from $1.4tn in February 2020 to $2.8tn today. Some employees argue that it proves that the lack of in-office culture is not hampering their work. On Slack, the internal messaging platform used by Apple, more than 10,000 Apple employees have joined the “Remote Work Advocacy” group. And on Blind, the anonymous messaging platform for tech employees, return-to-work discussions are among the most frequent and popular issues among Apple employees.
As someone who studied at Stanford University and got exposed to the Silicon Valley culture, entrepreneurship seemed like a probable career choice for Emirati national Najla Al Midfa, CEO of Sharjah Entrepreneurship Center (Sheraa).
Instead, she chose management consulting and worked in the US for a couple of years before returning to the UAE in 2010, eventually embarking on a path to support entrepreneurs. But it wasn’t a “planned move”, she said, during an exclusive interview with Gulf News.
Back in 2010 the regional entrepreneurial ecosystem was in its nascent stage. Entrepreneurship wasn’t even spoken about in the way it is today, Midfa recollected. “So, when I got a job with the Khalifa Fund, my decision to give up a thriving career in management consulting to enter the sector, perplexed many.
“But to me, it was an opportunity to use my skills to help young Emirati entrepreneurs with their business ideas. In many ways it was like my previous consulting work. Only difference being this time I was supporting small entities and individuals understand the fundamentals of setting up a business.”
Given you moved back to the UAE at a point when the start-up culture as we know it today was taking off, do you believe you were in the right place at the right time?
Midfield: “I strongly believe so not only because of the opportunity to work with Khalifa Fund but another similar opportunity with Sheraa in my home Emirate of Sharjah. Looking back, I feel as if I got a seat on the rocket ship, the entrepreneurial ecosystem. Not only did I get the chance to see the entrepreneurial ecosystem flourish but also played an active role in nurturing and supporting start-ups.”
Not only did I get the chance to see the entrepreneurial ecosystem flourish but also played an active role in nurturing and supporting start-ups
– Najla Al Midfa
How have you seen the entrepreneurial ecosystem in Sharjah evolve over the past decade?
Midfield: “A decade ago Sharjah had universities and young talent but lacked an entrepreneurship platform until Sheraa was launched in 2016. The mandate was to support young entrepreneurs start their businesses. Six years on, we’ve supported entrepreneurs at various stages of their journey, and during this time our start-ups have raised over $125 million (Dh460 million) in capital and generated $185 million-plus (over Dh680 million) in revenue. And it all started with an idea!”
What are some unique factors that helped Sharjah evolve as an entrepreneurial hub?
Midfield: “Sharjah has a critical mass of young talent which helped the Emirate evolve into an entrepreneurial and innovation hub very quickly. Over the years we’ve had the chance to work with high potential university students although the goal wasn’t to turn all of them into entrepreneurs. The goal was to equip these students with the right skillsets for the future of the workplace while also building an entrepreneurial mindset among them. It served the twin purpose of creating a strong talent pool that start-ups could leverage on while helping graduates build their own business. Moreover, Sharjah’s position as a creative and educational hub, coupled with its strengthening focus on ‘green’ initiatives is attracting a lot of creative, edtech and sustainability focused start-ups.”
What are the different stages of funding for an entrepreneur?
Fundraising rounds allow investors to invest money into a growing company in exchange for equity or ownership. The initial investment – also known as seed funding – is followed by various rounds, known as Series A, B, and C. A new valuation is done at the time of each funding round.
However, the earliest stage of funding a new company comes so early in the process that it is not generally included among the rounds of funding at all. Known as ‘pre-seed’ funding, this stage typically refers to the period in which a company’s founders are first getting their operations off the ground.
Has the fundraising landscape evolved too?
Midfield: “The fundraising landscape has evolved significantly compared to a decade ago, although gaps exist. On the scaleup side growth capital remains a challenge beyond Series B financing and at the super early stage of ‘pre-seed’. But there is a sweet spot at ‘seed’ funding and Series A financing. In addition, with investors interested in specific sectors such as fintech [currently], other sectors such as hardware and deep tech are still under-funded. We need diversity of investors looking to invest in a variety of sectors. Overall, the funding ecosystem continues to grow, and these gaps will be plugged with the entry of international venture capital (VC) firms such as US-based Sequoia Capital.”
Even after getting funded some prominent start-ups shut down. What are some financial mistakes that start-ups tend to make and must avoid?
Midfield: “First, I feel it’s not a good idea to treat fundraising as a vanity metric. It’s extremely important to look at other metrics of success beyond fundraising. Second, in a bull market (explained below) when capital is relatively easy to come by VCs are comfortable with the cash burn (explained below) narrative to achieve blitz scale or growth at any cost. The problem is economies go in cycles and during a downturn the same VCs speak about conserving cash and think of fundamentals like profitability. This switch of narrative can negatively impact start-ups. Hence, there is a collective onus on VCs and ecosystem builders to encourage start-ups to be prudent with cash, have a clear path to profitability and grow sustainably.”
Explained: Bull market, cash burn and VCs – what it all means
A ‘bull’ market, mostly associated with the stock market, is the condition of a financial market in which prices are rising or are expected to rise.
The rate of ‘cash burn’ is the rate at which a new company is spending its venture capital to finance overhead before generating positive cash.
A venture capitalist (VC) is a private equity investor that provides capital to companies with high growth potential in exchange for an equity stake.
What is an oft-repeated financial advice that you give to entrepreneurs?
Midfield: “Cash is king so be cautious with your cash. That’s what I learned in university, and it holds true regardless of how the entrepreneurial ecosystem evolves.”
Would you agree that there are misconceptions around age being a barrier to entrepreneurship?
Midfield: “There is a certain kind of romanticism around college dropouts building unicorns. Whereas the reality is that most successful entrepreneurs tend to be in their late 30s and 40s. Irrespective of age as well as economic background and nationality, access must be provided to those who are really interested in starting their business. In this context, the decision by the UAE government to allow Emirati public sector employees to take a year off to build their businesses are steps in the right direction. Such initiatives are a timely reminder that it’s never too late to start something new after understanding the opportunities and pain points. After all, our goal is to create a diverse and inclusive ecosystem where everyone feels included.”
I feel it’s not a good idea to treat fundraising as a vanity metric. It’s extremely important to look at other metrics of success beyond fundraising
– Najla Al Midfa
Fear of failure and the hustle culture adversely impact entrepreneurs. Could you please share your thoughts on both?
Midfield: “There are two aspects to the fear of failure, one that prevents a person from even starting out. That’s why ecosystem builders must consciously focus on destigmatizing failure among youth by constantly emphasizing the need to try regardless of the outcome. The other extreme is getting completely burnt out to make the start-up successful leading to a hustle culture. Hence, alongside the basics of business and products, as an ecosystem builder and supporter we have a huge responsibility to ensure founder wellness.”
When you look at the future of entrepreneurship in the region, what excites you the most?
Midfield: “When I look at the future of entrepreneurship in the region, one thing I feel proud about is how some brilliant ideas have come from young minds who have not even graduated yet. Since the entrepreneurial ecosystem is no longer at a nascent stage and we have several success stories from the region, it should serve as inspiration for the next generation of changemakers. I’m genuinely excited to see the rise of many more innovative start-ups born in the region with global ambitions. Further, as we invest more in research and development activities, more innovation will emerge from the region.”
A message for the start-up community?
Midfield: “Beyond tactical advice on finance and fundraising, I’d like to strongly suggest entrepreneurs to be part of a community because entrepreneurship can be a lonely journey.”
But that doesn’t necessarily mean that the sector is in recession like what we saw during the Great Financial Crisis. It’s more nuanced than that.
For instance, earlier this week, home builders cited rising interest rates and construction costs — some of it supply-chain-related — as the culprits that “have brought on a housing recession,” Robert Dietz, chief economist at the National Association of Home Builders, said.
On Thursday, the National Association of Realtors also used the same term. “In terms of economic impact, we are surely in a housing recession because builders are not building” and sales activity has declined for six consecutive months, meaning economic activity has slowed, the NAR’s Lawrence Yun said.
“So we are in a housing recession,” he said.
Homes are still selling
To be clear, though, that doesn’t mean the broader housing market is in the midst of a meltdown.
Homes are still selling, Christine Cooper, chief US economist and managing director at CoStar Group, said.
The indicators may be “grim,” Cooper told MarketWatch, but “to a large extent, the slowdown in the market is a reversion to a more balanced market.”
It was about time that sales would slow, particularly as wages have not kept up, she added.
And prices aren’t crashing and burning.
Homeowners are “absolutely not” in a recession, NAR’s Yun stressed.
“For ordinary consumers, the word recession conjures up dismal times. It is a difficult market for those selling homes and for homebuilders,” Yun said in a follow-up email with MarketWatch. “But homeowners continue to accumulate housing wealth from rising home prices.”
Buyers may be retreating, but that’s not triggering a flood of homes hitting the market, or a scarcity of good quality buyers.
Buyers are simply feeling more uncertainty with the possibility of a broader economic recession looming.
“And the first reaction people have is to just not do anything,” Jen Holland, a realtor with ERA Key Realty in Massachusetts, told MarketWatch.
Part of it is also herd mentality: “When everybody went out to look at homes, there were lines out the door at open houses,” she said. “Everybody was like, ”I’d better go buy a house.” ”
“‘When everybody went out to look at homes, there were lines out the door at open houses. Everybody was like, “I’d better go buy a house.” ‘“
— Jen Holland, ERA Key Realty
Now that the market has slowed, rates have risen, and recession talk is pervasive, open houses have slowed down, she said. People have become more apprehensive.
“There’s definitely been a shift with buyer confidence,” Hall said.
Some of her buyers have exited sales because they felt uncertain, or that they wanted to wait for prices to drop, or rates to drop. People almost seem “frozen,” she said, “or they feel like the most stable thing for me to do is nothing.”
Hall said that two big sales fell through this week, and she’s also struggling to get to the finish line with many buyers. “There’s just so much work behind the scenes right now to keep people from jumping ship,” she said.
But given the macroeconomic backdrop, “there could still be a few more months of overshooting to the downside before inventories expand,” Cooper said, and “house price gains cool sufficiently and sales resume.”
NAR’s Yun said that he expected home sales to stabilize soon as rates are becoming more steady, so “we could soon be coming out of a housing recession.”
But all this talk of a recession and cooling demand has helped some buyers.
Prospective buyers are taking the opportunity to take their time and asking for more of sellers
“I got one house that they gave me 37 post-home inspection requests,” she said. “I almost fell off my chair. And this is a house that’s 40 years old.”
Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at firstname.lastname@example.org.
Toyota teams up with Suzuki to crack the Indian hybrid market
First new model is compact SUV, people-carrier to follow
Toyota aims to lower costs by making components in India
BIDADI, India, Aug 22 (Reuters) – Toyota is rebooting its strategy for India, doubling down on a bet that emerging markets will learn to love its hybrids, as long as the price is right.
Renowned for its pioneering Prius, the Japanese carmaker has struggled to sell large numbers of its hybrid Camry sedan since its Indian debut in 2013, partly due to a sticker price of more than eight times the annual income of a middle-class family.
This time, Toyota is determined to do it differently with lower-cost hybrids, said four company and industry executives and suppliers who provided previously unreported details about the carmaker’s sourcing, production and pricing strategy.
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Central to the strategy is a drive to cut the cost of full hybrid powertrains by making them in India, where the automaker’s factories are running well below capacity, and to source key materials within the country.
Toyota Motor (7203.T) is also leveraging its cooperation with partner Suzuki Motor (7269.T)majority owner of India’s biggest carmaker Maruti (MRTI.NS)to benefit from its low-cost engineering know-how and mild hybrid technology.
“The hybrid bet is a turning point. It will be a litmus test for Toyota’s future and success in India,” one person with direct knowledge of Toyota’s plans told Reuters.
A full hybrid can be driven for stretches on electric power whereas mild hybrid technology only supplements the combustion engine to help cut emissions. However, mild hybrids have smaller batteries and cost far less.
Toyota’s Indian strategy is at odds with global rivals Volkswagen (VOWG_p.DE)General Motors (GM.N) and India’s Tata Motors (TAMO.NS)which are rushing to roll out pure electric vehicles (EVs), and comes in the face of criticism from investors for sticking with fossil-fuel hybrids.
Hybrids are generally cheaper than EVs as they typically have smaller batteries and are not reliant on charging stations, important factors in markets such as India where customers are price sensitive and charging infrastructure can be patchy.
Toyota declined to share details about cost savings, future product launches, car pricing strategies or production plans for full or mild hybrid models in India.
The world’s biggest automaker told Reuters it wanted more first-time buyers in India to own full hybrids as a first step towards mass electrification, and that it would continue to increase local sourcing and production to be competitive.
LEARNING TO LOVE MILD
Toyota’s first new hybrid to hit India’s roads will be the Urban Cruiser Hyryder, a compact sports-utility vehicle (SUV) which two people with knowledge of the plan said is likely to be priced around $25,000 – less than half the price of the Camry.
That would pit it against popular midsize combustion-engine SUVs made by Hyundai Motor (005380.KS) and Kia Motors (000270.KS) in a fast-growing segment that makes up 18% of car sales in India, the world’s fourth-largest auto market.
The full hybrid Hyryder, however, will be 31% more fuel efficient than the Hyundai and Kia diesel models, offering an economy of 28 km per liter (65 miles per gallon), a key metric for Indian buyers.
To bring down the cost of the Hyryder, which will be sold by Toyota and Suzuki, it will use a hybrid system originally developed for subcompact cars, or one size smaller, according to a Toyota engineer familiar with hybrid technology.
By combining the hybrid system with a low-cost chassis and some upper body parts from Suzuki, the end result is an SUV on a par with or slightly cheaper than the Prius sedan, which starts at $25,000 in the United States.
“The high-cost complexity of hybrids is hard to overcome, but it’s a good start,” the Toyota source, who was not involved in the Hyryder’s development, said.
Savings have also come from working with Suzuki on designing and developing the SUV, as well as leveraging the scale and pricing power with suppliers of Maruti, which produced eight of the 10 best-selling models in India in 2021.
Even so, there is a cost differential of $3,400 between Toyota’s full hybrid and its comparable gasoline car in India, said another source, higher than the typical differential of about $2,000 for Toyota in most countries.
To boost sales in India’s price-sensitive market, Toyota will also sell Hyryders with a mild hybrid powertrain supplied by Suzuki, a significant departure for Toyota which has long championed full hybrids.
The shift is a recognition that Toyota has been unable to bring down the cost of full hybrids to the point where they can always compete on price in markets such as India, the people familiar with Toyota’s planning said.
It also shows how Toyota is altering its strategy for different markets, depending on what buyers want and are willing to pay.
“As we come down the price points … we hope to increase our numbers as well as our market share,” Vikram Kirloskar, vice chairman of Toyota Kirloskar Motor, the Japanese company’s Indian unit, told Reuters.
Toyota’s next hybrid for India will be a multi-purpose vehicle, or people-carrier, expected later this year or early in 2023, two sources said.
BUILDING IN BIDAI
Another factor affecting the Hyryder’s price is taxation. India levies taxes of 43% on hybrids – on a par with gasoline or diesel SUVs and far higher than the 5% tax on EVs.
Toyota is lobbying to get the taxes reduced, sources said. The company said it wants New Delhi to provide support, including taxation, to all green technologies that help India achieve its goal of reducing fossil fuel and carbon emissions.
So far, the government has not shown any interest in extending its fiscal support beyond EVs.
Making hybrid powertrains in India aligns Toyota with Prime Minister Narendra Modi’s drive to boost local manufacturing, especially at a time when major car companies such as Ford Motor (FN) have left the country. read more
It also comes as India tightens fuel efficiency and emission targets for carmakers. Selling hybrids will help Toyota meet its regulatory requirements as credits they earn will go towards offsetting the production of fossil-fuel vehicles.
At the Toyota Kirloskar Auto Parts factory in Bidadi, an industrial town near Bengaluru in southern India, the Japanese automaker’s new Indian strategy is already in motion.
A joint venture between Toyota, its parts affiliate Aisin Seiki Co (7259.T) and India’s Kirloskar Systems, the plant is manufacturing E-Drives for the Toyota Hybrid System.
The E-Drive ensures seamless switching between the engine and electric motor, and shifting the manufacture of one of the hybrid system’s four key components to India is a major move.
Toyota sees the Bidadi factory as a starting point for building a local supply chain for the EVs it will eventually bring to India.
“We now have the core technology, whether it’s an electric vehicle or a hybrid,” Kirloskar said.
‘IT’S A HUGE BET’
The plant can make 135,000 E-Drives a year on one assembly line and could raise that to over 400,000 by adding two more.
About 55% of raw materials by value for the E-Drives come from India, two sources said. Capital equipment, such as tools and dies, are also made there, although rare earth magnets for the motors and some other components are imported.
The cost savings on the made-in-India E-Drives are expected to be in the “double-digits” in percentage terms compared with imported systems, one source said.
Toyota will also export them back to Japan for hybrid cars built there, as well as to countries in Southeast Asia.
“India is one of the lowest cost bases for these parts. We are competitive on this,” Kirloskar said, adding that he expected about 40% to 50% to be exported, although that could change depending on local demand.
Of the three other main hybrid components, Toyota already makes engines in India but the 1.8 kilowatt-hour (kWh) lithium-ion batteries and power control units will be imported for now.
Toyota is making the Hyryder at its under-used and revamped plant in Bidadi, which has an annual capacity of 200,000 cars.
More than 50% of Hyryder pre-orders are for the full hybrid, although people aware of Toyota’s production plans say this could settle at 30% to 40% with the cheaper, mild hybrid becoming more popular in India – where most cars sell for under $15,000.
“Once numbers pick up, the cost will come to a point where hybrids will become mainstream. This will lay the ground for an eventual switch to fully electric or fuel cell vehicles,” said one person familiar with Toyota’s plans.
“It’s a huge bet but we know electrification is the future.”
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Reporting by Aditi Shah in Bidadi, India, and Norihiko Shirouzu in Beijing; Edited by David Clarke
But it’s not yet clear when the state’s new, higher EVincentiveswill kick in. And, for now at least, there are some major limitations on which cars actually qualify for the federal program; only 21 models are currently eligible, and that number could soon shrink, depending on how quickly automakers can adapt.
If you’re in the market for an EV, use this guide to figure out if you should move fast or pump the brakes.
How big are the incentives, and when can I get them?
The federal bill includes tax credits of up to $7,500 for new electric or fuel-cell vehicles, extending the previously existing tax incentives. Some plug-in hybrids qualify, too.
Starting Jan. 1, 2023, those rebates will be available only to individuals who make less than $150,000, or $300,000 for married couples.
The new Massachusetts bill will increase rebates for new fully electric cars and fuel-cell cars from $2,500 to between $3,500 and $5,000 — the exact amount is yetto be determined — with an additional $1,500 rebate for low-income residents and an extra $1,000 for those who trade in an internal combustion vehicle.
But the state bill does not include a timeline for implementing any of these changes. And it’s not clear how the new program will be paid for: The new climate bill sets up an Electric Vehicle Adoption Trust, but doesn’t actually fund it. (The money could come from a separate economic development bill, but the Legislature failed to complete it before the session ended last month, so the timing and outcome remain uncertain.)
For now, the old program is still open and funded until the middle of 2023, according to Kyle Murray, Massachusetts senior policy advocate at the Acadia Center.
Which new EVs qualify for the new federal credits?
If you bought an EV before Biden signed the IRA on Tuesday and it previously qualified for a credit, you can still claim it on next year’s taxes.
But the moment Biden signed the bill, a new requirement kicked in: To qualify for federal credits, EVs must now be assembled in North America.
With that change, just 21 models of EVs in North America are eligible, the Biden administration said Tuesday.
The full list ison the Department of Energy’s website. (If you’ve already entered into a written contract to buy an EV that’s not listed, you should be all right.)
Two more stipulations — set tostart being phased in sometime after Jan. 1, 2023 — will mean that qualifying cars must use a battery that is both built in North America and made with a certain percentage of minerals mined or recycled within the continent or a trade partner country. If a vehicle meets only one of those criteria, it can qualify for half of the credit, said Chris Harto, a senior policy analyst for transportation and energy at Consumer Reports.
Brian Willis, communications director for the Zero Emission Transportation Association, said the Inflation Reduction Act also includes billions to help auto companies move their manufacturing and sourcing to the United States.
But Harto said it’s impossible to say how long it will take manufacturers to come into compliance. The Alliance for Automotive Innovation says it could be a fewyears.
They areif you want an EV credit fast, consider quickly snapping up one of those 21 models if you can find onebecause some may become ineligible next year.
On the bright side, on Jan. 1, 2023, the legislation will toss out a limit that prevented manufacturers from offering tax credits once they sell 200,000 vehicles. That means cars made by companies like General Motors, Tesla, and Toyota, which have already exceeded that cap, will become eligible again.
But also starting in 2023, federal credits will also come with price restrictions. New electric vans, SUVs, and pickup trucks can’t cost more than $80,000, and new sedans, hatchbacks, and wagons must cost $55,000 or less.
Keep in mind: The amount of federal tax credit you can receive also depends on how much you owe in taxes. If the car you buy is eligible for up to $7,500 in credits, you must owe that amount or more to receive the full incentive amount. The Massachusetts rebates are available regardless of how much a taxpayer owes.
Which new EVs qualify for state rebates?
Right now, only vehicles that cost under $50,000 qualify for Massachusetts rebates. But the new climate law will increasethat cap to $55,000.
Anna Vanderspek, electric vehicle program director at the Boston-based nonprofit Green Energy Consumers Alliance, expects the bill will eliminate state rebates for plug-in hybrids, which are currently worth $1,500.
Both federal and state incentives for used EVs are also availableon the way.
Beginning in 2024, federal incentives of up to $4,000 will be available for used EVs that cost up to $25,000. If you meet the income requirements, that is — a maximum of $150,000 for couples or $75,000 for an individual. Used EVs do not have to meet the new federal manufacturing and material sourcing rules.
It’s not yet clear how much the state’s used EV rebates will be worth; lawmakers left it up to program administrators to decide.
Starting in 2024, federal incentives will be available when youbuy your car at the dealership. The new state climate bill, too, will allow the state to offer point-of-sale rebates, although we don’t yet know exactly when.
So if upfront costs are a concern, consider waiting to buy.
What about chargers?
The federal law, starting next year, willprovide subsidies for home chargers — up to $1,000, or 30 percent of the cost, whichever is less.
The new statelaw does not include home charger subsidies. But it does require electric utilities to establish discounted charging rates during off-peak hours when demand is low, and itrequires the state to installmore high-power chargers at service areas along the Massachusetts Turnpike, as well as at subway and commuter rail stops and at least one ferry terminal. The bill sets up a trust to fund charging infrastructure, but again, doesn’t put money into it.
To help people navigate state and federal incentives, Consumer Reports is updating its online Electric Vehicle Savings Finder. The goal is to have it fully updated before most of the new federal incentives kick in.
Dharna Noor can be reached at email@example.com. Follow her on Twitter @dharnanoor.
HIGASHIOSAKA, Japan Aug 22 (Reuters) – The small factories in the western Japanese city of Higashiosaka for decades fueled the thundering rise of the country’s biggest brands – but a weak yen and rising costs have accelerated a slow decline, and are reshaping the industrial heartland .
Home to about 6,000 firms, 87% of which have fewer than 20 employees, the city is emblematic of how such forces are pushing Japan’s small manufacturers towards a tipping point.
The workshops in Higashiosaka create metal components for everything from train seats to ballpoint pens, and have long relied on powerhouses such as Sharp, Panasonic, and Sanyo for orders.
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Now Sanyo is gone, acquired by Panasonic. Work in general has dried up in recent years in the face of competition with South Korea and China; when Taiwan’s Foxconn acquired Sharp in 2016, it moved much of the company’s manufacturing out of Japan.
The amalgam of issues that Higashiosaka faces – an aging population, offshoring, and a sagging currency – mirror the problems that have been chewing at the foundation of the world’s third-largest economy and its global exports, which hit 83.1 trillion yen ($610.54 billion) last year.
One factory in the city, aircraft component manufacturer Aoki, is pivoting to the food industry after being hit hard by the pandemic. Another, air drill parts maker Katsui Kogyo, raised prices for the first time since it started business in 1967. Lampshade company Seiko SCM scaled back its production and is seeking to revive Higashiosaka’s manufacturing industry by converting part of its headquarters to shared working space.
“It’s like being the frog being slowly boiled alive,” said Hiroko Kusaba, CEO of Seiko SCM. “We all believed that the big brands would always protect us, but that’s just not the case anymore.”
In the past six months, the value of the Japanese yen has plummeted from about 115 yen to the dollar in early March to more than 130 yen in August. And the pain of COVID lingers: 67% of the small firms in Higashiosaka say they are still hurting from the pandemic, according to a survey conducted in April by the local chamber of commerce.
For these companies, weathering the economic storm isn’t just about surviving, but preserving the industrial ecosystem.
Small- and medium-sized enterprises account for 99.7% of companies and 68.8% of employment in Japan. But these same companies represent only 52.9% of the economy, according to a 2016 government survey, the most recent data available.
The region around Higashiosaka has a history as a manufacturing hub dating back hundreds of years. The city still has industrial enclaves where tiny factories are wedged between houses, hammering, sawing and shaping metal from early morning to dusk.
That mishmash of production has given rise to human connections and a sense of community, said Hirotomi Kojima, chief executive of Katsui Kogyo, the air drill company. That provides a crucial support network, but also makes it difficult to pass along higher costs.
Kojima raised prices in October. Materials costs have soared since then, but he is hesitant to raise prices again, worried that he may lose long-term customers.
They have asked favors of Kojima, such as splitting costs or “going easy” on price increases.
“The closer I am to the customer, the harder it is to start that conversation,” Kojima said.
Torn between protecting those ties or hurting his business, Kojima is seeking new clients for the first time in his 10 years as CEO.
He often visits with Hironobu Yabumoto, a close friend who manages another air drill manufacturer. Although they are in direct competition, they pass each other’s orders and share clients.
“We want the manufacturing industry and this culture to stay,” and that is a bigger priority than being the last one standing, Yabumoto said.
In the past decade or so, both Kusaba and Kojima have seen at least one factory quietly close every year as aging owners die, fall ill or shut down their heirless businesses.
The surviving companies are closely knit. Kusaba, who is not from the city, said the locals – such as the baker and rice seller – anchor her to the community.
“And they come to me saying how business is down, how they had so many customers before when the manufacturing industry was thriving, and how times have changed so much,” said Kusaba, who has been CEO of Seiko SCM for 12 years.
That is why she is turning her own business on its head to protect her bottom line and help manufacturers in Higashiosaka.
In June, she reduced the die-cast department of her company to three people from six and decreased the amount of machinery. In its place, she is creating a co-working office space and opening a “shared factory,” where users can pay for access to machines and resources that will cut fixed costs and increase production.
“The big brands, the big manufacturers – they’ve forsaken us,” Kusaba said. “Now, we need to communicate with the consumer directly. We only have ourselves to rely on.”
Her decision means there will be more die-cast work for her competitors, but Kusaba said she would rather do that than watch the entire industry fall into ruin.
“Competition isn’t the way to survive. We have to join forces instead,” she said.
Aoki, which was labeled “non-essential” during the pandemic, is trying to avoid being dragged down by an airline industry wrecked by COVID-19. CEO Osamu Aoki has pegged his hopes on a different arena: food manufacturing.
He is designing and building a machine that processes meat. For now, it sits in the Aoki factory as workers fine tune the device.
Although he predicts the food industry will provide more stability, Aoki is expecting his electricity bills to double in August – an 8 million-yen increase that will require a 4% jump in revenue to cover.
Japan’s manufacturing has traditionally been dependent on selling value-added products, in which a weak yen boosts profits. But that no longer seems true, Aoki said.
“I think it’s a reckoning,” he said of the sagging currency. “It’s now the time to re-evaluate.”
The changes and experiments in Higashiosaka do not guarantee its survival, or that of Japan’s small-business culture.
“We won’t see a total wipe-out if the factories can pass through the extra costs… but the longer (high prices) drag on, the harder it will be on them,” says Naohito Umezaki of the Higashiosaka Chamber of Commerce.
He added that the city’s social fabric was already fraying as family-owned companies shut down for good; a top priority is finding people to take over and preserve the manufacturing tradition.
At Aoki, 22-year-old Yuto Miyoshi sought advice from the CEO about whether to succeed his father in running the family welding business in a neighboring city.
“My father is often warning me of the hardships of running a business,” Miyoshi told Aoki.
But he added that on one rare occasion his father had a bit too much to drink, and let slip what a succession plan would mean to him.
“He said: ‘I would be so happy if you took over,'” Miyoshi said.
($1 = 136.1100 yen)
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Reporting by Sakura Murakami. Editing by Gerry Doyle
FILE PHOTO: Employees work on the production line of vehicle components during a government-organized media tour to a factory of German engineering group Voith, following the coronavirus disease (COVID-19) outbreak, in Shanghai, China July 21, 2022. REUTERS/ Aly Song
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SHANGHAI, Aug 22 (Reuters) – China cut its benchmark lending rate and lowered the mortgage reference by a bigger margin on Monday, adding to last week’s easing measures, as Beijing boosts efforts to revive an economy hobbled by a property crisis and a resurgence of COVID cases.
The People’s Bank of China (PBOC) is walking a tight rope in its efforts to revive growth. Offering too much of stimulus could add to inflation pressures and risk capital flight as the Federal Reserve and other economies raise interest rates aggressively. read more
However, weak credit demand is forcing the PBOC’s hand as it tries to keep China’s economy on an even keel.
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The one-year loan prime rate (LPR) was lowered by 5 basis points to 3.65% at the central bank’s monthly fixing, while the five-year LPR was slashed by 15 basis points to 4.30%.
The one-year LPR was last reduced in January. The five-year tenor, which was last lowered in May, influences the pricing of home mortgages.
“All told, the impression we get from all the PBOC’s recent announcements is that policy is being eased but not dramatically,” said Sheana Yue, China economist at Capital Economics.
“We anticipate two more 10 bps cuts to the PBOC policy rates over the remainder of this year and continue to forecast a reserve requirement ratio (RRR) cut next quarter.”
The LPR cut comes after the PBOC surprised markets last week by lowering the medium term lending facility (MLF) rate and another short-term liquidity tool, as a string of recent data showed the economy was losing momentum amid slowing global growth and rising borrowing costs . read more
In a Reuters poll conducted last week, 25 out of 30 respondents predicted a 10-basis-point reduction to the one-year LPR. All of those in the poll also projected a cut to the five-year tenor, including 90% of them forecasting a reduction greater than 10 bps. read more
Worries over widening policy divergence with other major economies dragged the Chinese yuan to near two-year lows. The onshore yuan last traded at 6.8232 per dollar.
LOSS OF MOMENTUM
China’s economy, the world’s second largest, narrowly avoided contracting in the second quarter as widespread lockdowns and a property crisis took a heavy toll on consumer and business confidence.
Beijing’s strict ‘zero-COVID’ strategy remains a drag on consumption, and over recent weeks cases have rebounded again. Adding to the gloom, a slowdown in global growth and persistent supply-chain snags are undermining the chances of a strong revival in China.
A raft of data, released last week, showed the economy unexpectedly slowed in July and prompted some global investment banks, including Goldman Sachs and Nomura, to revise down their full-year GDP growth forecasts for China.
Goldman Sachs lowered China’s 2022 full-year GDP growth forecast to 3.0% from 3.3% previously, far below Beijing’s target of around 5.5%. In a tacit acknowledgment of the challenge in meeting the GDP target, the government omitted a mention of it in a recent high profile policy meeting.
“The asymmetrical LPR cuts came in line with our expectations,” said Marco Sun, chief financial market analyst at MUFG Bank.
“The policy intention was quite obvious… as the 15 bps cut to the 5-year LPR was meant to boost long-term financing demand.”
The deeper cut to the mortgage reference rate underlines efforts by policymakers to stabilize the sector after a string of defaults among developers and a slump in home sales hammered consumer demand.
Sources last week told Reuters that China will guarantee new onshore bond issues by a few select private developers to support the sector, which accounts for a quarter of the national GDP. read more
The LPR cut was necessary, “but the size of the reduction was not enough to stimulate financing demand,” said Xing Zhaopeng, senior China strategist at ANZ.
Xing expects the one-year LPR could be cut further.
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Reporting by Winni Zhou and Brenda Goh; Edited by Shri Navaratnam
Tesla’s “Full Self-Driving” software, which currently costs $12k, will get a $3k price hike to $15k on September 5th in North America, coinciding with the wide release of the 10.69.2 Beta update. The early release version has just started rolling out to beta testers, and results are coming in to give us a sense of whether this update is worth the price increase.
It has been called a “major code change” and a “big step forward” by Tesla CEO Elon Musk, who announced the price increase earlier today.
Tesla FSD price increases
Given this apparent increase in abilities, Tesla has decided it’s time to increase prices again on the software. Prices will go up to $15k on September 5th, although the “old” price of $12k will be honored for orders made before but delivered after September 5th. This price hike will only happen in North America – other regions are “safe” with the old price for now, because those regions tend to get Autopilot updates later than North America.
Tesla has steadily increased the price of its FSD software since it first debuted. The public rationale is that as the software becomes more capable it also becomes more valuable, and therefore the price should go up.
But it also works as an incentive to have Tesla owners purchase the software early in order to “lock-in” lower prices. An FSD buyer who purchased the software years ago might have paid as low as $5,000 (although the earliest buyers were treated unfairly in that respect) for software that currently costs $12k, but can now derive the same amount of benefit as a current buyer.
Tesla’s Full Self-Driving is unfortunately still anything but self-driving. As-is, the system is still “Level 2” in the SAE’s autonomous driving classification, much like other driver assist technologies like GM’s Super Cruise and Mercedes Intelligent Drive. A Level 2 system requires that a driver remain present and attentive to the road at all times, although the driver can take their hands off the wheel.
Level 2 really can’t be considered self-driving, as a driver is still always responsible for the car. Not until we reach level 4 can a car really be considered self-driving, able to make all decisions without the necessity of a driver being in the seat.
While its features have improved over time, it still results in some scary situations, as Fred recently found out when it almost threw him off a cliff. For most of the drive it behaved well, but “most of the drive” is not enough when you’re perched along a cliff, or passing by pedestrians and motorcycles, or driving at high speeds, etc.
10.69 update test drives
However, that was pre-update. And post-update test drives have started showing up on YouTube as the software rolls out to beta testers. This one showed improvements and no driver interventions over a ten minute drive on several unmarked roads:
Here’s a drive that starts on dirt roads, which the software used to be capable of, but would often warn the driver to take over immediately. The drive shows a seemingly unnecessary slowdown on the dirt road while going up a small hill, and had several disengagements and quirks but did not encounter any phantom braking on town roads:
Here’s an examination of unprotected left turns by Chuck Cook, who has become famous for “Chuck’s turn,” a difficult unprotected left which has proven challenging for many autonomous/driver assist systems:
This turn was in fact mentioned specifically in the patch notes for 10.69: “Improved unprotected left turns with more appropriate speed profile when approaching and exiting median crossover regions, in the presence of high speed cross traffic (‘Chuck Cook style’ unprotected left turns” .
Chuck seems quite excited about 10.69’s behavior on his turn, and it seems to be a significant improvement from previous versions. He still felt the need to take over on some trials, but the car seems to understand the concept of waiting in the median for a space in traffic to slot into – most of the time.
However, Chuck found some previously distressing behaviors have been carried over into 10.69, and still need to be worked on:
So while the software does solve some problems, there’s still work to be done. While many expect/hope for Tesla to reach Level 4 soon, 10.69 is not there yet.
Does FSD change how you drive?
Currently, Tesla Full Self-driving does not mean a big change in how a driver uses their vehicle. You still must be in the seat, and still need to pay attention to the road. You can’t have your car drop you off and go find parking for yourself, or give you a ride home after a night out, or drive yourself while you read the paper, work on spreadsheets or watch a movie.
Autopilot does provide certain benefits, like reducing cognitive load over a long drive. Many drivers say they feel more refreshed when they reach their destination when driving with Autopilot engaged. But those benefits are largely included with the basic Autopilot package that all Teslas come with, which includes lane-keeping and adaptive cruise control on highways.
Also there are the safety benefits – but those are, again, included with all Teslas.
Tesla even splits some of the functions out of FSD into “Enhanced Autopilot,” a package that has been available from time to time and currently costs $6,000. This includes Navigate on Autopilot and Auto Lane Change, which will automatically guide you to freeway exits and interchanges, Autopark to help with parking, and Smart Summon which can bring your car to you from the other side of a parking lot.
Currently, FSD’s only function is to stop at stop signs and traffic lights, and with FSD Beta, Autosteer on city streets.
While these are neat things to have, it’s hard to suggest that they are worth $15,000. That amount of money gets you a lot of rides from taxis or ride-hailing apps, where you really can offload the driving to someone else. Or if you want more hardware, after the new one EV tax credit from the Inflation Reduction Act comes into effect, it might even pay for an entire 2023 Chevy Bolt if you’ve also got access to state or local credits.
Is Tesla Full Self-driving worth it?
So, from what we’ve seen, and after this upcoming price increase, is FSD worth it?
This is unfortunately not a question we can answer for everyone, because everyone’s economic situation and needs are different.
While early testers do seem quite satisfied with the update, $15,000 is still a steep price.
For early Tesla owners, who bought FSD as early as 2016, it’s hard to say that the thousands of dollars they spent has produced fruitful results, given that cars are currently still not able to drive themselves. Some of those cars might reach the end of their service life before full self-driving is solved, resulting in that money being spent on software that was never actually delivered.
For those owners, Tesla may eventually offer some sort of “loyalty program” – as it were currently does in China, offering FSD for half-price if an owner buys another Tesla and had FSD on their original one. Although it should probably just allow transferability of the license – especially for owners who have owned FSD for years and gotten little to no benefit from it (given that FSD Beta is still locked behind a “safety score,” making owners qualify for software they already purchased).
And if Level 4+ self-driving actually is solved, to the point where vehicles can function as driverless taxis (outside of geofenced areas like GM’s Cruise and Google’s Waymo currently do), the software could be worth more than the car. But that’s a big “if,” particularly considering the software would have to satisfy safety regulators before allowing cars to drive around with nobody in them.
So the question of whether it’s worth it runs down a similar line as it always has: do you think the value of Full Self-Driving will go up in the future, fast enough that a $12,000 payment now (or $15k after Sept 5) will be “worth” the “investment”?
If you take Elon’s word for it, then you’ll only have to wait until “next year” to find out. Whichever year that may be.
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Alibaba has faced growth challenges amid regulatory tightening on China’s domestic technology sector and a slowdown in the world’s second-largest economy. But analysts think the e-commerce giant’s growth could pick up through the rest of 2022.
Kuang Da | Jiemian News | VCG | Getty Images
Chinese tech giants Alibaba and Tencent often talk about all of their innovations and new products during earnings calls with investors.
But the second quarter was different. Executives at China’s two largest tech firms focused on something a little less flashy — keeping costs down.
It comes after Alibaba and Tencent posted a set of second-quarter results that confirmed these once free-wheeling and high-flying behemoths are not growing anymore.
Alibaba and Tencent have felt the effects of a Covid-induced economic slowdown in China that is hitting everything from consumer spending to advertising budgets. The tightening of domestic technology regulation in areas from antitrust to gaming over the last year and a half is also weighing on results.
As revenue remains under pressure, both giants have looked to be more disciplined in their approach to spending.
“During the second quarter, we actively exited non-core businesses, tightened our marketing spending, and trimmed operating expenses,” Tencent CEO Ma Huateng, told analysts during a call Wednesday. “This enabled us to sequentially increase our earnings despite difficult revenue conditions.”
Indeed, Tencent’s profit, when excluding certain non-cash items and the impact of merger and acquisition transactions, rose 10% from the previous quarter.
Tencent President Martin Lau said the company exited non-core businesses such as online education, e-commerce, and game live streaming. The company also tightened marketing spend and cut down low areas of investment such as user acquisition. Tencent’s selling and marketing expenses fell 21% year-on-year in the second quarter.
The Shenzhen-headquartered company’s headcount was also down by 5,000 versus the first quarter.
James Mitchell, chief strategy officer at Tencent, said that with these initiatives plus investments in new areas, the company can “return the business to year-on-year earnings growth, even if the macro environment remains as it is today” and even if revenue growth remains flat.
Alibaba meanwhile flagged its cost cutting drive earlier this year and continues to push forward with it.
“In the coming quarters and the remainder of this fiscal year, we will continue to pursue the strategy of cost optimization and cost control,” Toby Xu, chief financial officer at Alibaba, said during the company’s earnings call this month.
Xu said the Chinese e-commerce giant has “narrowed losses” in some of its strategic businesses.
Where’s the growth coming from?
Alibaba and Tencent have had to play a delicate balancing act to convince investors that while costs are being cut, they’re still investing in the future.
“For them to go back to [the] earnings growth path, cost optimization alone is not enough. They need to find new growth drivers,” Winston Ma, adjunct professor of law at New York University, told CNBC via email.
Alibaba will continue to focus on areas with “long-term potential” such as cloud computing and overseas e-commerce, Chelsey Tam, senior equity analyst at Morningstar, told CNBC. “For the unprofitable businesses it will evaluate the cost and benefits.”
Ivan Su, senior equity analyst at Morningstar, said that Tencent has “done a really good job balancing long-term investments and near-term profitability.”
“If you look at the cost initiatives they announced, some of the reductions are permanent, such as cloud migration and shutdowns of unprofitable noncore businesses, while others (marketing budget pullback and hiring slowdown) are more temporary in nature. So there’re multiple levers they can pull to create such balance,” Su said.
FOX Business host Charles Payne provides insight on investing in the stock market on “Making Money.”
Investors are gearing up for another busy week of corporate earnings and economic data focused on housing and the consumer. The upcoming week will also be big for investors of AMC Entertainment, which will debut its APE shares, and Tesla, which will begin trading shares under a 3-for-1 stock split.
DOW JONES AVERAGES
NASDAQ COMPOSITE INDEX
On Friday, the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite ended the week lower as fears resurfaced over a September rate hike by the Fed. The Dow lost almost 300 points on the day.
FOX Business takes a look at the upcoming events that are likely to move financial markets in the coming days.
Palo Alto Networks and Zoom Video Communications will kick off the week with earnings after the bell. Investors will also take in the Chicago Federal Reserve’s National Activity Index.
PALO ALTO NETWORKS INC.
ZOOM VIDEO COMMUNICATIONS INC.
In other Fed news, Lorie Logan will take over as president of the Dallas Federal Reserve. She replaces Robert Kaplan, who resigned from the role in October following a stock trading controversy.
AMC ENTERTAINMENT HOLDINGS INC
In addition, AMC’s preferred equity units are slated to begin trading on the New York Stock Exchange under the ticker symbol APE. Each APE unit represents one one-hundredth interest in a share of AMC’s authorized Series A convertible participating preferred stock. AMC will issue one APE unit as a dividend for each share of common stock.
Earnings will ramp up on Tuesday with Dick’s Sporting Goods, Dole PLC, JM Smucker, JD.com, Macy’s and Medtronic before the market open and Advance Auto Parts, Intuit, La-Z-Boy, Nordstrom, Toll Brothers and Urban Outfitters after the beautiful
DICK’S SPORTING GOODS INC.
THE JM SMUCKER CO.
ADVANCE AUTO PARTS INC.
TOLL BROTHERS INC.
URBAN OUTFITTERS INC.
Housing will be in focus for economic data on Tuesday with new home sales and building permits. Minneapolis Fed president Neel Kashkari will also participate in a Q&A session at a gathering of the Wharton Minnesota Alumni Club.
Petco and Brinker International will take the earnings spotlight before the market opens on Wednesday. Autodesk, Box, NetApp, Nvidia, Snowflake, Splunk and Victoria’s Secret will deliver earnings results after the bell.
PETCO HEALTH AND WELLNESS COMPANY INC.
BRINKER INTERNATIONAL INC.
On the economic data front, investors will digest durable goods, pending home sales, weekly mortgage applications and the Energy Information Administration’s weekly crude stocks.
RITE AID CORP.
Rite Aid will also hold a virtual event where president and chief executive Heyward Donigan and chief financial officer Matt Schroeder will field questions from retail shareholders.
Wrapping up the week for earnings will be Abercrombie & Fitch, Burlington Stores, Coty, Destination XL Group, Dollar General, Dollar Tree, Gap, Hain Celestial Group, Peloton Interactive and Shoe Carnival before the market opens on Thursday.
ABERCROMBIE & FITCH CO.
DESTINATION XL GROUP
DOLLAR GENERAL CORP.
DOLLAR TREE INC.
THE HAIN CELESTIAL GROUP INC.
PELOTON INTERACTIVE INC.
Meanwhile, Dell Technologies, Marvell Technology, Ulta Beauty, VMware and Workday will be the earnings to watch after the bell.
DELL TECHNOLOGIES INC.
MARVEL TECHNOLOGY INC.
ULTA BEAUTY INC.
Economic data on the docket will include corporate profits, the second estimate on GDP and the latest in initial and continuing jobless claims.
The Federal Reserve will also host its annual symposium in Jackson Hole, Wyoming, which will bring together prominent central bankers, finance ministers, academics and financial market participants from around the world. This year’s meeting, entitled “Reassessing Constraints on the Economy and Policy,” will run through Aug. 27.
In addition, shares of Tesla will begin trading under its 3-for-1 stock split. Each stockholder of record as of Aug. 17 will receive a dividend of two additional shares of common stock for each share held, which will be distributed after the close of trading on Aug. 24.
Finishing out the week for economic data will be the personal consumption expenditures (PCE) price index and the University of Michigan’s consumer sentiment index.
UNITED BANKSHARES INC. (WEST VIRGINIA)
Friday also marks the last day of trading for United Bancshares before its voluntary delisting from the Nasdaq. The company has taken steps for its shares to be quoted on the OTCQX Market on or about Aug. 29 under the ticker symbol UBOH.