Global debt is now approaching $277 trillion almost a record

Global debt is nearing a record at $244 trillion, an amount that is three times the total amount of the global economy a new analysis by the Institute of International Finance (IIF) finds.

Global Debt

The global debt to GDP ratio is more than 318 percent as of the third quarter of 2018 even though there was a stronger rate of economic growth the Washington-based Institute of International Finance claimed in a report on January 16. This is not quite a record as in the second quarter of 2016 the rate was 320 percent. As interest rates are beginning to rise globally the International Monetary Fund (IMF) is warning governments that countries should reign in their soaring level of debts and begin to build buffers against risks in the future.

A Reuters article reports: "Debt reached $244.2 trillion, compared to $235.1 trillion a year earlier and $242.5 trillion in the second quarter, the data showed. The nominal record high stands at $247.7 trillion in the first quarter of 2018."

Economist Sonja Gibbs of IIF notes that although debt has helped economic growth but warns of negative effects if there is slower economic growth and servicing debts becomes more difficult: “Debt has fueled a good deal of economic growth... Higher borrowing is widespread, though countries borrow differently. Government debt, for example, is highest among mature economies, such as the United States and France. By contrast, business borrowing has been more common in “emerging-markets"..The risk is not [an economic] blowout but a slow slog — slower growth,..As debt service gets bigger, it takes away from what you can do with more borrowing. It diverts from more productive uses.”

Key Aspects of the Debt

Total government debt was more than $65 trillion last year. This was way up from just ten years ago. The debt rose faster in mature markets.

Non-financial corporate debt climbed to over $72 trillion in 2018. This is near a new all-time high being 92 percent of GDP.

Financial sector debt grew to about $60 trillion, up 10 percent from a decade ago.

Household indebtedness rose by more than 30 percent to a total of $46 trillion. The hike was helped by strong growth in household spending in emerging markets such as China. But a number of different countries including India, Mexico, South Korea, Malaysia and several others recorded gains from 2016 of over 20 percent.

Previously published in Digital Journal

Netflix increases its monthly charges in the United States 13 to 18 percent

The giant streaming service Netflix is raising prices substantially in the U.S. to meet increasing costs and help to manage its huge debt.

The U.S. increases

The increases of 13 to 18 percent are the largest increase since Netflix began its video streaming service 12 years ago.

The most popular plan will see the monthly charge go to $13 per month from the present $10. The plan offers high definition streaming on two different internet connected devices simultaneously. Even at the new price the Netflix plan remains a few dollars cheaper than that of the popular HBO which charges $15 per month.

In the past, Netflix offered a basic $8 a month streaming plan while it hiked rates on more comprehensive plans. This time it has raised the price of the basic plan as well to $9 per month. A premium plan offering ultra-high definition will be raised from $14 per month to $16.

This is the fourth time that Netflix has increased its U.S. price with the last hike coming in late 2017. This is the first time that all 58 million U.S. subscribers, the number reported by the company last September, will face an increase.

The higher prices will be charged to all new subscribers and will hit existing customers within the next three months. Customers in 40 Latin American countries billed in U.S. currency will also be affected with the exception of key markets Mexico and Brazil. Netflix had almost 79 million subscribers outside of the US in September. More than in the U.S. itself.

Netflix investing large amounts in films and original shows

Netflix has made a huge investment in original shows and films. As a result it has assumed a large debt. Presumably Netflix is trying to compete with rivals such as Amazon, Disney and AT&T.

The company had a number of hits with its original material during the last five years. These have included: "House of Cards", Orange is the New Black, "Stranger Things", "The Crown" and the recent film the "Bird Box" On the basis of these, the company believes it can gradually raise its prices. The company said in a statement: "We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience."

Netflix spent about $4 billion last year and expects to spend about the same this year. Netflix has been borrowing large sums to pay for the expenses of programming. It raised $2 billion in an October bond offering even though it already had $12 billion in debt.

Stock price movements

Netflix is facing ever increasing competition by large firms. Coupled with the company's huge debt, this has led some investors to question whether the company can sustain its leading position in the streaming video area. The price of the stock has dropped significantly from a high of $423.21 last June. However, the recent price rise was received favorably by investors who no doubt believe that the increases wont significantly slow down subscriber growth. It is still charging competitive prices.

The company shares rose 6.5 percent on Tuesday in the early afternoon to $354.79.

GM to partner with charging networks to help out Bolt electric vehicle owners

For EV owners who travel a lot finding a charging spot with the right connections, easy to pay, and with charging space can be a challenge. Different charging networks have different apps that can make for confusion.

Too many apps

Many EV owners may map their way to a charger only to find when they arrive that the charger is occupied or even not working. Each charging network has it own app and charge card but when traveling drivers may want to use several networks. They have to get an app for each network. There are several different networks.

General Motors solves the problem for the Chevrolet Bolt EV

GM has signed an agreement with two of the largest charging networks in the US, Chargepoint and EVgo, along with Greenlots that will tell Bolt drivers data about which charging stations are open and available. Individual networks have apps that provide similar service but just to their own customers. However, EV travelers may take routes in which chargers from multiple networks will be most suitable.

There is a crowd-sourced app Plug Share which is not always updated but which shows availability across networks.

MyChevy

The GM app will be called MyChevy. Bolt EV drivers can easily sign up for subscription services with partners, ChargePoint, EVgo and Greenlots once GM has agreements with the services expected to be finalized by this spring.

Drivers will be able to access charger availability before they begin a trip or when driving on the car's infotainment screen.

Charging networks creating apps that link together networks

A recent partnership between ChargePoint and Greenlots, now allows users of either network see what is available and pay using either of their apps. There is also a similar agreement between the largest US network ChargePoint and the Canadian charging network Flo. ChargePoint made a commitment at the Global Climate Action Summit in San Francisco in September to build charging spaces for up to 2.5 million electric cars globally.

Hubject

A number of new agreements are powered by system aggregators provided by such companies as Hubject, which recently entered the US market. The Hubject type of system provides a software platform that both charging companies and automakers can simply wrap into their own apps, enabling them to gather information from all the different network partners. This will make things much simpler, efficient, and convenient for EV drivers.

Hubject describes what they do on their website: "With more than 300 partners, the Hubject platform is the biggest international digital B2B market place for services related to the charging of electric vehicles. More than 80.000 charge points on three continents are connected to the open Hubject platform. Since 2012, we have been connecting different market players in order to create a digital and cross-border charging network for electric vehicles – the intercharge network. Our portfolio addresses e.g. charge point operators, emobility service providers, energy suppliers, fleet operators, car sharing companies, service card providers or automotive manufacturers."

Published previously in Digital Journal

Car makers globally intend to invest about $300 billion in electric vehicles

Global car manufacturers are planning to invest huge sums to develop and obtain batteries and build electric vehicles (EVs) over the next five to ten years.

Company plans for investment on electric vehicles (EVs)

A recent Reuters article lists the plans and investment amounts of most companies. Global car makers will target a considerable amount of their investment on EVs on the Chinese market as the government there is providing strong incentives to change to EVs. Investment in China is expected to be more than $135 billion. The investment will include not only foreign investment but also investment by Chinese companies such as SAIC, and Great Wall Motors. However, Chinese investment may be matched or even exceeded by foreign investment often with Chinese partners.

Car makers plans total about $300 billion investment in EVs. Government policies which in many cases give incentives for buying EV's and also plan on eventually stopping the production of fossil fueled vehicles are part of the reason for the company investments. Governments want to change to EVs because of the harmful emissions caused by gas and diesel engines.

Rapid technological advances such as better batteries at lower cost have led to EVs being cheaper with longer ranges on a single charge. There have been advances too in chargers lessening charge times.

The actual spending by automakers on research and development, engineering, production and procurement will likely be much higher. The Reuters report does not include related spending by suppliers, technology companies. and other industries related to EV production — but there are several notable highlights of automakers' upcoming EV projects.

Tesla's investment

Tesla is building a giga plant in China that it will wholly own. Recently, Elon Musk, the CEO of Tesla, attended a ground-breaking ceremony for the new plant in Shanghai. Tesla has said the factory will cost around $2 billion. At the event Musk said: “We think with the resources here we can build the Shanghai Gigafactory in record time and we’re looking forward to hopefully having some initial production of the Model 3 towards the end of this year and achieving volume production next year."

Total EV investment by Tesla that makes only EVs will be $10 billion. This includes $5 billion on batteries. Of this investment $2.5 billion will be in China. Tesla has still not fully funded its huge $5 billion Nevada battery factory.

GM investment

By 2023 GM is planning to roll out 23 new EVs. By 2025 it hopes to offer electrified versions of Chevrolet, Buick and Cadillac models sold in China. With its partner SAIC in China it hopes to build EV battery modules. GM hopes to spend $8 billion combined on electrification and automation over the next several years. And GM has just revealed its new fully electric Cadillac EV.

Volkswagen/Audi/Porsche investment

VW's plans are ambitious. In December last year the company said it was planning to spend $34 billion on e-mobility initiatives and another $57 billion on battery procurement through 2025. By the same year, it hopes to have 50 fully electric vehicles along with 30 hybrids. 12 of the models will be Audis. Eventually VW hopes to have electrified versions of all its 300 models in the 12 global brands it has.

Total VW investment is a humongous $91 billion. On batteries alone VW will spend $57 billion. In China VW will spend $45.5 billion, half of its total investment.

Previously published in Digital Journal

Cannabis investment to grow both in US and Canada this year

With Canada legalizing recreational marijuana last October the year 2018 saw a lot of investment in cannabis related companies in Canada. However, U.S. companies and investors are now working to gain a slice of the profits.

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Investor interest could shift to the U.S. market this year

However, U.S. investment in cannabis related areas will not only pick up in Canada but in the U.S. as well. According to the Financial Post recreational marijuana is already legal in 10 states as well as Washington DC but is still banned at the federal level. Medical marijuana is legal in 33 states.

The market has expanded dramatically as well as hemp can now be legally grown in the U.S. as reported in a recent Digital Journal article.

Alfred Avanessy of Cormark Securities which has cannabis as its biggest source of business in Canada said: “Investors’ imagination is being captured more by what’s possible in the U.S. The U.S. is a couple years behind us from a regulatory perspective and it’s also by definition 10 times larger than we are.”

U.S. consumer spending on legal cannabis is projected to reach $20.9 billion by 2021 as contrasted with just $4.5 billion in Canada according to a report from Arcview Market Research and BDS Analytics.

U.S.-based firms entering Canadian market

In 2017 there was only one U.S. cannabis firm listing on the Canadian Securities Exchange (CSE) and it raised only $145,000. In contrast, in the first ten months of last year U.S.-based cannabis firms raised $1.1 billion U.S. on the CSE. This was about 60 percent of the total amount raised by all cannabis firms. In the first ten months of the year, U.S. firms invested $417.4 million in the CSE. The trend increased at the end of the year with several new firms being listed.

Richard Carleton CEO of the CSE said: “We have applications in hand from a number of significantly sized U.S. issuers and we’ve been talking to a number of folks who don’t have applications in yet but it seems a certainty that they will be showing up on our doorstep at some point in the first or second quarter of next year. The U.S. issuers are also providing a more compelling story to investors, coming to market with “a significant operating history, revenue in place and a significantly higher degree of maturity than we saw from the Canadian producers back in the day."

Canadian marijuana market's growth is slowing while US is accelerating

Investors may sense that the Canadian cannabis market growth is flattening somewhat. It is also plagued by supply shortages, and rather disappointing earnings. In contrast as more US states legalize recreational marijuana a much larger market than Canada's is expanding.

Steve Winokur, of Cannacord Genuity Group, one of the leading investment bankers in the industry said: “There are hundreds of businesses in the United States that are just getting their act together relative to accessing the capital markets and building their business plans, so there’s a lot of runway left for the U.S. industry.”

US companies may come to dominate the cannabis industry

Canadian companies have a head start in investing in Canada. Yet Canada's population is smaller than that of California. US firms are already selling in a much larger market, perhaps around ten times the size that Canada will be. A recent article notes: "As the thinking goes, America is where brands and fortunes are made, and there’s no reason to think that cannabis will be any different, despite the current federal prohibition."

Afzai Hasan, president of Origin House in Ottawa said: “We’re going to have a great cannabis industry here, but the people who, for whatever foolish reason, thought that Canada was going to dominate the world of cannabis, they need to disabuse themselves of that notion because it was never founded on any reality... We’re not as aggressive and competitive and capitalistic as the folks down south of the border.”

The CEO of Curaleaf, Joe Lusardi, a large US cannabis retailer does not like to be lumped in with Canadian competitors saying: “I don’t think we should be correlated with the Canadian stocks at all In many cases they’re just growers.” This may be overly negative about the role of Canadians in the cannabis industry. Some Canadian firms may very well expand into the US and be successful and also remain as retailers not just growers.

Previously published in Digital Journal

More Americans approve of AI rather than disapprove according to survey

Artificial Intelligence is likely to be one of the defining technologies of this century. It will no doubt affect everything from warfare to health care to jobs. A recent survey gauges attitudes within the U.S. public to AI.

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While more Americans were in favor of AI than opposed, opinions were mixed and varied from one group to another.

The survey

The report describes itself as follows: "This report is based on findings from a nationally representative survey conducted by the Center for the Governance of AI, housed at the Future of Humanity Institute, University of Oxford, using the survey firm YouGov. The survey was conducted between June 6 and 14, 2018, with a total of 2,000 American adults (18+) completing the survey. "

The authors claim they were more interested in breadth than depth in the study. Questions touch on numerous issues such as workplace automation, international cooperation, public trust in various actors to develop and regulate AI and many others. While the results give some preliminary insights into the nature of U.S. opinion on AI, the study raises more questions than it answers. More work is needed to gain a deeper understanding of U.S. public opinion to AI, and the authors recommend caution in interpreting the results.

General attitude to AI

The survey described AI as "computer systems that perform tasks or make decision that usually require human intelligence". 41 percent of respondents said they somewhat or strongly supported the development of AI. On the other hand 22 percent said they somewhat or strongly opposed it. However, 28 percent said they had no strong feeling one way or the other.

Relation of attitude to demographics

Young, educated, and male individuals were most likely to favor AI development. 57 percent of college graduates were in favor of AI but in contrast only 29 percent of those with high school education or less were in favor of AI development.

On some issues there was a strong consensus among groups, for example on regulation. 82 percent of those questioned somewhat or strongly agreed with the statement "robots and artificial intelligence are technologies that require careful management." Respondents ranked data privacy as one of the most important governance challenges but also ranked cyberattacks and autonomous weapons as also quite important.

No consensus on who should limit AI development

University researchers were the most trusted with 50 percent of respondents reporting a fair amount of confidence or a great deal of confidence in them. However, the US military came a close second with 49 percent trusting them. Tech companies had a 44 percent trust level. Facebook however had a poor rating with 4 in 10 saying they had no trust in the company to regulate AI.

Other issues

On the question of whether AI should develop high-level machine intelligence with the common sense ability of a human, there were mixed answers. Fully 29 percent of respondents neither supported nor opposed the development. 31 percent said they somewhat or strongly support the development while 27 percent were opposed.

On the relative importance of AI issues as a global risk out of 15 issues, AI was judged to be relatively low. Nuclear issues or recessions were ranked much higher. However failure to act on climate change was also ranked low. Terrorist acts, infectious diseases were also ranked relatively high as possible problems in the next ten years.

Previously published in Digital Journal

Traffic disrupted at Heathrow airport in UK because of reported drone sighting

(January 8) Just a couple of weeks after drone sightings caused the Gatwick airport in the UK to be shut down, Heathrow airport has now also had its flight schedule disrupted by drone sightings.

BBC report

Departures were temporarily stopped at Heathrow airport in London after a drone sighting was reported according to police. A spokesperson for Heathrow said the suspension of takeoffs was a precautionary measure to prevent any threat to operational safety.

This action follows the disruption last month at Gatwick Airport in which thousands of passengers were stranded after drones had been allegedly sighted. The Heathrow spokesperson said: "We continue to work closely with the Met Police to respond to reports of drones at Heathrow. Based on standard operating procedures, working with Air Traffic Control and the Met Police, we have resumed departures out of Heathrow following a short suspension. We continue to monitor this situation and apologise to any passengers that were affected by this disruption."

The Gatwick drone case

The drone sightings at Gatwick resulted in 36 hours of chaos stretching between December 19 and 21 just before Xmas. More than 140,000 passengers were affected at Gatwick during that time. About 1,000 flights were cancelled over the period because of the drone sightings.

Gatwick claimed last week that it had spent 5 million pounds to prevent future attacks. Heathrow also confirmed that they would buy new systems to counteract drones. It has also been announced that police will be given new powers to deal with the illegal use of drones.

BBC cameraman reported seeing the drone

Martin Roberts a BBC cameraman claimed he was driving on the M25 past the Heathrow airport at about 17:45 GMT when he saw what he believes was a drone. Roberts said:| "I could see, I'd say around 300 feet up, very bright, stationary flashing red and green lights, over the Harmondsworth area. I could tell it was a drone - these things have got quite distinctive lights - not a helicopter. The lights were very close together. It was a very clear night and the object was stationary, it was turning very, very slightly. I could see it very clearly, I'd say for about four to five minutes."

Travel expert Simon Calder

Calder claimed that the halting of departures would mean about 40 aircraft did not take off when they were scheduled to do so.

Heathrow is one of the busiest airports in the world. Calder said: "They will now be able to start getting away, but all that time you have had arrivals coming in and gates not being available because departing planes haven't gone. It's going to be messy for the rest of the evening. Heathrow told me that they had actually provided equipment and personnel to help their big rival Gatwick out during the drone event."

Sky News report

The Sky News report claims that only the northern runway was closed while the other one remained open. No doubt this allowed for arriving planes to land.

The report claims that Scotland Yard reported the sighting in the vicinity of the airport about 5:05 PM. No doubt this is local time. The Yard report said that officers at Heathrow were investigating along with colleagues at the airport.

The airport issued a tweet saying that it was working closely with Met Police to ensure there was no threat to operational safety. The tweet also apologised for any inconvenience caused to travellers. One traveller tweeted that he was on a plane waiting to take off and said that there was a police helicopter over the runway.

Under new rules drones will be required to stay even further away from airports. Heathrow is one of the world's busiest airports.

Previously published in Digital Journal

Chinese and many European customers will be able to configure there Tesla model 3s

Tesla began taking reservations for Model 3s in both Europe and China at year's end of 2018. After making a $1,000 deposit customers were able to use the Tesla online configurator. However, now the customer can use the company's "design studio" as well.

The studio will be open to those with reservations in China as well as many left-hand drive countries in Europe including France, Germany, Sweden, Switzerland, Austria, Denmark, and Sweden along with others. In a tweet the company said: "Model 3 configurator is now open to left-hand drive countries in Europe. Design your Model 3"

Just two Model 3 versions available to configure at present

Just the long range all-wheel drive Model 3 and its jazzier counterpart the Model 3 Performance are available for configuration at present. The medium range Model 3 which is just rear-wheel drive and travels 260 miles on a charge is not listed on the design studio. The model was announced in October.

The mass market Model 3 is Tesla's fastest selling car ever

The Model 3 has become Tesla's fastest selling car. The company has been anxious to bring it to new markets especially China which is the largest EV market in the world. The European market is almost tied with that of the US. In 2018 Tesla concentrated on meeting the demand in North America for its most affordable car. This helped the company have its first profitable quarter in the last two years. Selling the model 3 in new markets may help Tesla show profits again.

As US market for Model 3 cools it could heat up in Europe and China

Tesla not only managed to meet demand for the Model 3 in the US, it had over 3,000 of the cars in stock at the end of the year. Tesla was so anxious to sell off its stock before the US federal tax credit for each car was cut in half at the end of the year that it kept some stores open until midnight on New Year's Eve as was reported in a recent Digital Journal article. The tax credit also reduces in June and phases out the end of 2019 for Tesla EVs. The company has already cut the price of all its US models to compensate for the halving of the government tax credit. Many US customers may be waiting to buy the cheaper $35,000 basic Model 3 which is not yet in production but will be sometime later this year.

Bringing the Model 3s to China and Europ may also help to provide profits while the company waits for new models such as the Model Y crossover SUV to come into production in the US.

Tesla planning to build cars in Europe and China

The company has already signed an agreement just last summer to build its third Gigafactory ibn China just outside Shanghai. In a change from earlier regulations, Tesla will solely own the factory with no Chinese partner. It is likely there will be a fourth Gigafactory built in Europe but there has been no announcement yet of which country it will be located.

Tesla has already been producing some Model 3s specifically for European and Chinese markets. It hopes to be selling Model 3s in Europe and China by late February or early March. However, it is still seeking full approval of the vehicle from European regulators.

Apple stock declines in spite of good holiday sales after price target slash

(January 3) Just over last night, Apple stock suffered a decline of more than nine percent. The downward trend was continuing in trading this morning. The stock price has declined 38 percent since last October.

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Apple's stock price decline

The company halted trading yesterday afternoon in order to provide guidance for future earnings. The iPhone upgrade market has softened and this was among the factors causing a big impact on revenues.

On October 3, Apple stock was priced at $232.07 per share but has dropped $87 a share since that high point. However, the market in general has also suffered a decline. As the Techrunch article went to press the price was still down 8.19 percent at $144.98.

D. Davidson senior analyst Tom Forte said that Apple's announcement was surprising given that Apple traditionally has a strong position: “We knew that iPhone unit sales were weak, but just not how weak." The company said it is now expecting $84 billion in the quarter that ended Saturday, down from its earlier estimate of $89 billion to $93 billion.

China a key factor in Apple's decline

Forte thinks that the China situation is key to the decline as a full 20 percent of Apple sales are in China. The U.S. China trade war with accompanying tariffs on both sides is having a negative effect on Apple's Chinese business. The iPhone is much pricier than competing phones including those of the Chinese giant competitor Huawei but also foreign competitor Samsung. Given the weakening Chinese economy, many Chinese consumers simply cannot afford the high-priced iPhone. Apple is also having patent disputes with Qualcomm in China as reported in this Digital Journal article. Apple had already indicated that iPhone sales were weak in other markets as well such as: India, Russia, Brazil and Turkey.

Other than iPhone rest of Apple portfolio is up

Aside from the iPhone, the remainder of Apple's portfolio is up a huge 19 percent. The company has even been able to set aside a whopping $100 billion for a stock buy-back. Forte notes: “They have the balance sheet. They have the stock buy-back program. They still generate very significant free cash flow, and if the individual investor won’t buy the stock, then the company will buy the stock."

Cannacord Genuity believes that Apple is still a sound company in spite of the announced lower iPhone sales outlook. The company wrote in a report: “We maintain our belief Apple can expand its leading market share of the premium-tier smartphone market and the iPhone installed base (excluding refurbished iPhones) will exceed 700M in 2018. This impressive installed base should drive iPhone replacement sales and earnings, as well as cash flow generation to fund strong long-term capital returns. We reiterate our BUY rating but decrease our price target to $190 based on our lowered estimates.”

In Forte's view the company might not recover in the near term as long as the U.S.-China trade war is not resolved.

Apple's banner holiday sales

A recent article notes: "Apple today is sharing some good news in the wake of yesterday’s reveal of a significant, market-moving cut to its revenue forecast, attributed to declining iPhone sales in China’s slowing economy. The company says its App Store, at least, was having a good holiday. This year, customers spent $1.22 billion during the 2018 holiday season and broke a new single-day record on New Year’s Day."

On New Year's Day the company reported more than $322 million was spent in New York setting a record as customers bought iPhones, iPads with apps, and used their App Store gift cards.

The sales this year broke those of last year's holiday season which saw sales of $890 million and $300 million on New Year's Day. CEO of Apple Tim Cook noted in his announcement yesterday that the App Store remained one of the bright spots in Apple's services category.

Previously published in Digital Journal

New Chinese regulations reduce number of part-time ride-hailing drivers

During the last few years, millions of Chinese workers earned extra money by working as ride-hailing drivers. Driving around in China is a status symbol even at the price of having to pay off a car loan every month.

Didi Chuxing

Didi Chuxing has about 90 percent of China's e-hailing trips in 2017. Most of its drivers are part-time. Half of its drivers worked less than two hours a day according to a report by Bain and Company.

The sharing economy

The ride-sharing drivers are part of what is called the "sharing economy" that the Chinese government has been keen to promote.

The phrase "sharing economy" is used vaguely to cover many different things. Wikipedia says: " Sharing economy is an umbrella term with a range of meanings, often used to describe economic activity involving online transactions. Originally growing out of the open-source community to refer to peer-to-peer based sharing of access to goods and services, the term is now sometimes used in a broader sense to describe any sales transactions that are done via online market places, even ones that are business to business (B2B), rather than peer-to-peer. For this reason, the term sharing economy has been criticized as misleading, as some argue that even services that enable peer-to-peer exchange can be primarily profit-driven. However, many commentators assert that the term is still valid as a means of describing a generally more democratized marketplace, even when it's applied to a broader spectrum of services. Alternatively, collaborative consumption or the sharing economy refers rather to resource circulation systems which allow a consumer two-sided role, in which consumers may act as both providers of resources or obtainers of resources. The exchange may be performed directly on a peer-to-peer basis, or indirectly through a mediator (ex. store, website, app); online or offline; for free or for other compensation (ex. money, points, services, etc.)."

China includes shared platforms, from mobility to elderly care services under the sharing economy. The sector is expected to show a 30 percent annual growth over the next five years in many different fields such as agriculture, education, medical treatment, and care of the elderly. A recent Chinese newspaper article notes: "The market turnover of China's sharing economy reached 4.9 trillion yuan ($763.5 billion) last year, a 47.2 percent increase from the previous year, according to a report released by the Sharing Economy Research Center of the State Information Center."

New regulations will make part-time driving expensive

New regulations that came into effect January 1st 2019 bans drivers who do not have the required double licenses. One of these licenses is for drivers and the other one for the cars they use. The licenses are intended to vet drivers more adequately than in the past.

In certain cities the ride-hailing permit requires drivers to have a local residency permit allowing them to legally work in the area. Many drivers did not have these local permits but are migrant workers from rural areas. These drivers will become ineligible to drive using the ride-hailing apps

Drivers will still be able to work as independent contractors. A Didi driver from Shenzen told TechCrunch: “No part-time drivers want to register their private car as a commercial one because of the high costs that come with it. Being part-time doesn’t pay the bills anymore.”

Didi’s dilemma

Ride-hailing took off quickly as there was relatively lax regulation of the industry at first. Even companies such as Uber jumped into the rising business although it was later bought out by Didi. However, regulations have gradually increased. The latest tightening of regulations was no doubt partly caused by a reaction to the deaths of two Didi passengers in 2017.

The tighter regulations are causing a steep decline in driver and car numbers. In Nanjing alone, Didi claims the regulations have weeded out more than 160,000 illegal vehicles according to local media. Didi has to consider way to maintain a constant supply of drivers as the decline of cars and drivers leads to longer wait times for customers as well as dissatisfaction with the service.

Didi is burning through cash

Originally there were generous subsidies for users and drivers to help the industry grow, But now Didi lost $585 million in just the first half of 2018. Didi cannot afford to offer cash heavy incentives in the near term. Didi is offering test preparation for drivers to ensure a supply. It is also letting drivers rent licensed cars it gets from car rental and auto maker partners.

Didi is also facing new competition from companies such as BMW, and Volkswagen with its Chinese partner.

Dong Feng, the founder of a Chinese car rental company said: “Didi has educated China about what is ride-hailing. If it doesn’t react swiftly to changing dynamics, the billions of yuan it’s burned through will suffer from low returns.”

Previously published in Digital Journal

While competitors close stores, Whole Foods to open new ones

Amazon is reported as intending to expand Whole Foods stores throughout the U.S. into suburbs and other areas. It also desires to bring its two-hour Prime Now delivery system to all Whole Foods stores anonymous sources tell the Wall Street Journal.

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Whole Foods searching for retail space

Whole Foods employees already are searching out retail space in some parts of Idaho, Wyoming, and southern Utah that they could use. One anonymous source told the Wall Street Journal that the spaces were sometimes up to around 45,000 square feet which would make them a bit larger than the average Whole Foods store by a margin of 2,000 square feet.

The expansion is not likely limited to the Rocky Mountain area but includes other regions that Amazon has not yet announced.

Whole Foods expanded earlier this year

Earlier in 2018, Whole Food launched 365 branded stores. These stores tend to be smaller than the typical Whole Food stores. They have a focus on locally produced goods and are often less expensive than their other stores. The expansion is happening at the same time as other supermarket chains are shutting stores down. This leaves lots of retail space for Amazon to choose from often at reasonable prices.

A recent article notes: "While other supermarket chains shutter stores, scale back on expansion plans or choose not to renew leases, Whole Foods is planting more stores across the U.S. The grocer has long been a favored tenant in the retail real estate world — being a traffic driver to shopping centers and always paying rent on time — and an acquisition by Amazon only made the Whole Foods name more popular. Now, Whole Foods is looking to go after a lower-income household in creating stores that primarily carry less-expensive goods.The Austin, Texas-based chain on Wednesday brought its first 365-branded store to the East Coast, in New York. The Brooklyn location, on the ground floor of a residential building, marks the seventh in the country. Sixteen stores are in the pipeline, according to its website."

Overall Amazon sales doing well

Over late summer and fall Amazon enjoyed sales of $34.3 billion. However, Amazon does not reveal how much of this is due to Whole Foods. Amazon did say it had more customers than ever. It also said that Whole Foods had set a record for selling turkeys. Further information can be found in this article.

Previously published in Digital Journal

Porsche to release the Taycan an all-electric sports car by the end of this year

Porsche will release its first all-electric sports car next year. The arrival of the new EV, the Taycan, is eagerly awaited even by Tesla owners. The Taycan is to come onto the market at the end of 2019.

CEO of Porsche, Klaus Zellmer said that if everyone who has posted a deposit to pre-order the Taycan follows through and buys it, the car will be sold out in the first year of production. Zellmer noted that more than half of those who have pre-orders have not owned or do not own a Porsche. He claimed that many are coming from Tesla.

CNET quotes Zellmer as saying: "More than half of the people that are signing up for the Taycan have not owned or do not own a Porsche," he said. So what do they drive? "Typically, if we look at our source of business, people coming from other brands, it's Audi, BMW, or Mercedes. The no. 1 brand now is Tesla. That's pretty interesting, to see that people that were curious about the Tesla for very good reasons obviously don't stop being curious."

Zellmer did not say how many people had made deposits or how many units of the Taycan will be produced this year and afterwards. Previously Porsche said that it planned to make about 20,000 Taycans per year. However, in November a Porsche official said that due to demand Porsche would increase production but he did not say by how much.

The Taycan

The Taycan is expected to have three models including an all-wheel drive version. The base model is called the Taycan, the Taycan 45 is the all-wheel drive version, and the Taycan Turbo is the top model. It is called Turbo even though that is usually reserved for internal combustion engines. Taycan roughly translates into "lively young horse".

Some see the Taycan as a threat to Tesla which so far has dominated the luxury EV market. The Volkswagen Group that owns Porsche has invested over a billion dollars in the car.

CNET reports that the Taycan will have a huge 600 horsepower and a range of more than 300 miles. The top-of-the line Turbo is expected to have a price tag of more than $130,000.

Previously published in Digital Journal

Perovskite solar cells to make solar sells much more efficient

A number of companies from Oxford in the UK to Redwood City California are working to commercialize new solar technology that could further increase adoption of the generation of renewable energy.

Perovskite and Perovskite solar cells

Peroovskite is described by Wikipedia as follows: "Perovskite (pronunciation: /pəˈrɒvskaɪt/) is a calcium titanium oxide mineral composed of calcium titanate (Ca Ti O3). It lends its name to the class of compounds which have the same type of crystal structure as CaTiO3 (XIIA2+VIB4+X2−3), known as the perovskite structure.[5] Many different cations can be embedded in this structure, allowing the development of diverse engineered materials.[6]"

Wikipedia's entry on the related solar cells is in part as follows: "A perovskite solar cell is a type of solar cell which includes a perovskite structured compound, most commonly a hybrid organic-inorganic lead or tin halide-based material, as the light-harvesting active layer.[1][2] Perovskite materials such as methylammonium lead halides and all-inorganic cesium lead halide, are cheap to produce and simple to manufacture."

The efficiency of devices that use these materials has risen from just 3.8 percent in 2009 to 23.3 percent in late 2018. In silicon-based tandem cells the efficiency has reached 27.3 percent. These Perovskite solar cells are the fastest advancing solar energy technology today. They have the potential of even better efficiencies with very low production costs.

Oxford PV and Swift Solar

Oxford PV is a startup working with Oxford University. It received $3 million from the UK government to develop the new technology. Just two days ago another company in the US, Swift Solar, raised $7 million to help bring the technology to the commercial market as shown in a Securities and Exchange Commission filing.

The new Perovskite solar cells contain the first new technology to come along for years that can offer better efficiency in converting light to electric power at a much lower cost than existing technologies.

Sam Stranks, the lead scientific adviser and a co-founder of Swift Solar said: “Perovskite has let us truly rethink what we can do with the silicon-based solar panels we see on roofs today. Another aspect that really excites me: how cheaply these can be made. These thin crystalline films are made by mixing two inexpensive readily abundant salts to make an ink that can be deposited in many different ways… This means that perovskite solar panels could cost less than half of their silicon counterparts.”

The Perovskite material was first incorporated in solar cells by Japanese researchers in 2009 but they had low efficiencies and lacked stability rendering them of no use to industry. However, in the last nine years this has all changed as the stability of compounds has been vastly improved and efficiency has grown dramatically.

Improvements in efficiency and lower costs make commercial use viable

Oxford PV is working to develop Perovskite solar cells that would achieve conversion efficiency of 37 percent. This is much better efficiency than existing polycrystalline photovoltaic or thin-film voltaic cells. Up until now the new technology has been too costly to compete with the mass production in China pushed by the Chinese government. However, the reductions in costs and improved efficiency of the new technology will now begin to lure investors who can see it as a viable commercial alternative to the existing cells.

Oxford PV's Chris Case said in a statement: “Today, commercial-sized perovskite-on-silicon tandem solar cells are in production at our pilot line and we are optimizing equipment and processes in preparation for commercial deployment.”

Previously published in Digital Journal

Testa's new model Y coming this March

Tesla will unveil its fifth car, the Model Y in March of 2019. The new EV is expected to be a crossover SUV that will be smaller than the model X and with a lower price tag.

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The model Y will use much of the Model 3's underlying technology. It should be a hit in the US where SUV sales are booming. Other EV's such as those of Jaguar, Audi, Mercedes-Benz and Porsche will not be in direct competition with the model X. However two new vehicle announcements indicate there will be considerable competition in China a huge market of EVs.

NIOs ES6

The Chinese EV startup NIO launched the ES6 a smaller five seat successor to their first car the larger ES8. The ES6 is a more affordable version of the ES8. It will start at 358 thousand RMB or $51,000 US but that is before government subsidies bring the cost down. The Chinese government is promoting EVs.

The base model will have a 70kwh battery pack that will offer a substantial range of 410 km or 254 miles on a single charge or slightly more in performance trim about 267 miles. However, there will also be a model with a larger 84 kwh battery pack that will go quite a bit further about 480 km or 298 miles with the performance version eking out a bit more at 317 miles.

All versions of the ES6 are outfitted with dual electric motors and will be loaded with Tesla-like tech. There is a 11.3 touchscreen between the dashboard and the center console. There is another screen beyond the steering wheel that replaces the conventional instrument cluster. There is also a heads up display that shows critical info such as speed in the drivers' field of view. There are also sensors that provide driver assistance such as lane keep and adaptive cruise control.

The ES6 has its own unique features such as an AI system called NOMI a robot that sits on top of the dashboard. It even has an intelligent fragrancing system to offer a more pleasant experience to occupants.

The ES8

The ES8 starts at about $68,000 US dollars before discounts and has a range of about 355 kilometers or about 220 miles on a charge. The price is about half of what the Tesla Model X sells for in China. As of now Tesla cars do not qualify for incentives and subsidies since they are imported. However, Tesla has agreed to build a factory in China. Other car makers have partnered with Chinese companies to enter the Chinese market.

The company has developed a quick battery-swapping system that can change the ES8 battery pack in just three minutes. The company intends to build 1,100 battery-swapping stations around China by 2020. This should help with long haul trips.

NIO has financial backing from Chinese tech giants such as Tencent and Baidu. It recently received a $1 billion round of funding. It plans to bring its EVs to the US in 2020.

The Xpeng G3.

Another Chinese EV maker Xiaopeng or Xpeng just officially announced its first all-electric EV the G3. Xpeng is backed by Foxconn and the giant Alibaba and is valued at around $3 billion already. It has borrowed heavily in concept designs from Tesla's Model X.

However the G3 does not seem an obvious clone of the Model X or Model Y. The G3 will start at just 227,800 RMB or just a bit below $33,000 US and that is before any government subsidies. As with the NIO it has a massive Tesla-like touch screen in the dashboard. It has a battery pack that should last around 230 miles on a single charge.

Timeline for the vehicles

Xpeng is already taking orders for the G3 and claims that it is ready to start deliveries. NIO has opened up preorders for the ES6 just this week with deliveries to start in June 2019. Government subsides could reduce the price of cars up to $10,000 depending upon where the cars are delivered.

Tesla's timeline for offering the Model Y in China is not clear. It is not even clear where Tesla will build the SUV. Elon Musk said the target date is 2020 for production but has not yet said where it will be produced whether in the US or China. Both NIO and Xpeng are far behind Tesla in EV production. Production of the ES8 of NIO was begun only in June and it has only made 10,000 or so cars. Xpeng is even further behind. Tesla cars are now sold in China but those manufactured in the US will face tariffs that could make them more expensive than any Chinese competitors.

Previously published in Digital Journal