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the COVID-19 pandemic amid lockdowns and quarantines, they’re now experiencing extremely high demand from millions eager to travel now that vaccines are readily available and restrictions have eased. Last week Delta reported that it earned $735 million in the second quarter as packed planes and higher fares boosted revenue close to pre- pandemic levels. But rising fuel prices and the cost of canceling more than 4,000 flights in May and June were a drag. The deal with Delta, announced at the Farnborough International Air Show near London, provides an additional shot in the arm for Boeing. The manufacturer announced last week that it delivered 51 passenger and cargo planes in June, its best month for deliveries in more than three years. Of those deliveries, 43 were for its 737 Max airliners. Regulators around the world grounded Boeing’s 737 Max jets in March 2019, after the crash of an Ethiopian Airlines jet, five months after another Max flown by Indonesia’s Lion Air plunged into the Java Sea. The U.S. Federal Aviation Administration cleared Boeing’s 737 Max for flight in November 2020. Delta has a fleet of more than 850 mainline aircraft, including more than 450 Boeing 717s, 737s, 757s and 767s. 102

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NETFLIX Q2 SUBSCRIBER LOSS WIDENS, BUT NOT AS MUCH AS FEARED Netflix shed almost 1 million subscribers during the spring amid tougher competition and soaring inflation that’s squeezing household budgets, heightening the urgency behind the video streaming service’s effort to launch a cheaper option with commercial interruptions. The April-June contraction of 970,000 accounts, announced this week as part of Netflix’s second- quarter earnings report, is by far the largest quarterly subscriber loss in the company’s 25-year history. It could have been far worse, though, considering Netflix management released an April forecast calling for a loss of 2 million subscribers during the second quarter. 104

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Netflix was probably spared from deeper losses by the ongoing popularity of “Stranger Things,” its science fiction/horror series that debuted in 2016. Following the release of the series’ fourth season in late May, Netflix said, viewers watched a total of 1.3 billion hours of it over the next four weeks — more than any other English-language series in the service’s history. The less severe loss in subscribers, combined with an outlook calling for a return to growth in the July-September period. helped lift Netflix’s battered stock by 7% in extended trading after the numbers came out. Netflix’s April-June regression follows a loss of 200,000 subscribers during the first three months of the year, marking the first time Netflix’s subscriber totals have shrunk in consecutive quarters since its transition from offering DVD-by-mail rentals to video streaming began 15 years ago. The loss of nearly 1.2 million subscribers during first half of this year also provides a start contrast to the pandemic-driven growth that Netflix enjoyed during the first half of 2020 when its streaming service picked up nearly 26 million subscribers. Despite the downturn, Netflix still earned $1.4 billion, or $3.20 per share during the quarter, a 6% increase from the same time last year. Revenue rose 9% from the same time last year to nearly $8 billion. Netflix ended June with 220.7 million worldwide subscribers. far more than any of its new competitors such as Walt Disney Co. and Apple. And in a hopeful sign, Netflix management predicted its service will add about 1 million 107

subscribers during the July-September period, signaling the worst of its slump may be over. Although Netflix’s springtime subscriber losses weren’t as bad as investors and management feared, the downturn served as a grim reminder of the challenges now facing the Los Gatos, California, company after a decade of unbridled growth. Netflix’s stock price has plunged by nearly 70% so far this year, wiping out about $180 billion in shareholder wealth. Since then, other video streaming services have made big strides in attracting viewers, with Apple winning accolades for its award-winning line-up of TV series and films while Disney’s popular line-up of family-friendly titles continues to gain traction. At the same time, Netflix has been raising its prices to help pay for its own original programming, just as the highest inflation rates in 40 years have led consumers to curb spending on discretionary items such as entertainment. “Netflix is still the leader in video streaming but unless it finds more franchises that resonate widely, it will eventually struggle to stay ahead of competitors that are after its crown,” said Insider Intelligence analyst Ross Benes. Sensing potential trouble brewing, Netflix began branching out last year by adding free video games to its streaming service. But that obviously hasn’t been enough to propel subscriber growth, prompting Netflix’s April announcement that it will crack down on the rampant sharing of subscriber passwords and take another step it once scorned by offering a less expensive tier of its service that will include 108

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commercial interruptions. Without providing further specifics, Netflix said that both the ad- supported plan and the crackdown on password sharing will begin early next year. The company didn’t say how much the streaming option with commercials will cost. Netflix took another step toward putting together the ad=supported option last week when it announced it will team up with Microsoft to deliver the commercials. 111

CALIFORNIA SOCIAL MEDIA ADDICTION BILL DROPS PARENT LAWSUITS A first-of-its-kind proposal in the California Legislature aimed at holding social media companies responsible for harming children who have become addicted to their products would no longer let parents sue popular platforms like Instagram and TikTok. The revised proposal would still make social media companies liable for damages of up to $250,000 per violation for using features they know can cause children to become addicted. But it would only let prosecutors, not parents, file the lawsuits against social media companies. The legislation was amended last month, CalMatters reported. 112

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The bill’s author, Republican Assemblymember Jordan Cunningham, said he made the change to make sure the bill had enough votes to pass in the state Senate, where he said a number of lawmakers were “nervous about creating new types of lawsuits.” “They get afraid it will open the floodgates to frivolous claims,” Cunningham said. “They seem to be more comfortable letting this be handled by the public prosecutors, who already end up taking the lead on this kind of consumer protection type stuff.” While the revised bill might win more votes in the state Legislature, it hasn’t won over social media companies, many of which are based in California and remain opposed. TechNet, a group of technology CEOs and senior executives, says it is nearly impossible to separate social media content — words, photos and videos uploaded by people — from the features companies use to deliver that content, including things like push notifications, newsfeed and the ability to scroll endlessly through posts. “I think that violates our First Amendment rights and the editorial discretion that we have,”said Dylan Hoffman, TechNet’s executive director for California and the Southwest.“It doesn’t make sense to identify the feature when it’s the content underlying it that may cause the problem.” Hoffman said social media companies have introduced lots of new features to address what he called the “a really difficult and complex issue” of children’s use of social media. Many platforms let parents set time limits for their children or disable certain features. 115

“There is a lot of innovation in this space to make sure that parents and kids are able to better control their social media usage,”Hoffman said. The bill would exempt social media companies from these lawsuits if they conduct quarterly audits of their features and remove any harmful products within 30 days of learning they cause children to become addicted. Hoffman says that would offer companies little protection because advocates claim nearly everything about a social media app or website is addictive, including the newsfeed and algorithms suggesting content. He said companies would have to dismantle their entire websites within 30 days to avoid liability — something Hoffman said would be“impossible.” Cunningham scoffs at that argument, saying the legislation would give social media companies an incentive to police themselves to avoid penalties. He said most other products are covered under consumer protection laws that allow people to sue companies for selling products they know to be dangerous. “We just haven’t extended it to social media platforms yet because they are new, and we didn’t really know that they were conducting this social experiment on the brains of our kids,” Cunningham said. “They don’t have any incentive to change.” The bill is one of several proposals in the Legislature this year targeting social media companies. A bill by Democratic Assemblymember Jesse Gabriel would require social media companies to publicly disclose their policies for removing 116

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problem content and give detailed accounts for how and when they removed it. A bill by Sen. Tom Umberg would let Californians who were targeted in a violent social media post seek a court order to have the post removed. And a bill by Assemblymember Buffy Wicks would require companies to meet certain standards when marketing to children online. 118

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US POSTAL SERVICE TO BOOST PURCHASES OF ELECTRIC VEHICLES The U.S. Postal Service plans to substantially increase the number of electric-powered vehicles it’s buying to replace its fleet of aging delivery trucks, officials said. The Postal Service anticipates boosting electric vehicles from 20% to 50% in its initial purchase of 50,000 vehicles — with the first of them rolling onto delivery routes next year. It also proposes buying an additional 34,500 commercially available vehicles over two years, officials said. The proposal, posted in the Federal Register on Thursday, came after 16 states, environmental groups and a labor union sued to halt purchases of next-generation delivery vehicles under the initial plan that was skewed heavily toward gas- powered trucks. 120

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The new environmental proposal effectively pauses the purchases at 84,500 total vehicles — 40% electric — even as the Postal Service seek to buy up to 165,000 next-generation vehicles over the next decade to replace aging delivery trucks that went into service between 1987 and 1994. Future purchases would focus on smaller amounts of vehicles in shorter intervals than the original 10-year environmental analysis, officials said. The goal is to be more responsive to the Postal Service’s evolving operational strategy, technology improvements and changing market conditions, the Postal Service said in a statement. A public hearing on the new proposal will be held next month. The next-generation delivery vehicles are taller to make it easier for postal carriers to grab packages and parcels that make up a greater share of volume. They also have improved ergonomics and climate control. 122

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AUTOMAKERS TARGETING AVERAGE HOUSEHOLDS WITH NEW CROP OF EVS In their first rollouts of electric vehicles, America’s automakers targeted people who value short- range economy cars. Then came EVs for luxury buyers and drivers of pickups and delivery vans. Now, the companies are zeroing in at the heart of the U.S. auto market: The compact SUV. In their drive to have EVs dominate vehicle sales in coming years, the automakers are promoting their new models as having the range, price and features to rival their gas-powered competitors. Some are so far proving quite popular. Ford’s $45,000-plus Mustang Mach E is sold out for the model year. On Monday night, General Motors’ 124

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Chevrolet brand introduced an electric version of its Blazer, also starting around $45,000, when it goes on sale next summer. Also coming next year: An electric Chevy Equinox, with a base price of about $30,000, whose price could give it particular appeal with modest-income households. There’s also the Hyundai Ioniq 5 and Volkswagen’s ID.4 in the $40,000s and Nissan’s upcoming Ariya around $47,000 with a lower-priced version coming. All start off considerably less expensive than Tesla’s Model Y small SUV, the current top EV seller, with a starting price well into the $60,000s. The new models, which can get about 300 miles per electric charge, are aimed at the largest segment of the U.S. market: Modest-size SUVs, representing about 20% of new-vehicle sales. Industry experts say entering the smaller SUV segment, with its reach into a broader demographic of buyers, is sure to boost electric vehicle sales nationally. “Going to the smaller utility segment gives you the opportunity to access the most customers in one (market) segment,” said Stephanie Brinley, principal analyst for S&P Global Mobility. “To make a transition from (internal combustion engines) to electric, you have to be in more space. You have to be in more price points. You have to be in more sizes.” Brinley noted that the small and midsize SUV segments meet many people’s needs, something that previous electric vehicles did not. “If it’s a price you can reach but it’s a product that you can’t put your kids and your dog in, you’re not going to buy it,” she said. 127

Chevrolet says the Blazer will get a minimum of 247 miles (398 kilometers) per charge. Pricier high-end versions could go up to 320 miles (515 kilometers). The Blazer will be available with Chevrolet’s SS performance package with a zero-to-60 mph (97 kilometers per hour) time of under four seconds. There will be a police version, too. “Early on, the demographic composition of an EV buyer was certainly someone that perhaps had higher education, higher household income,” said Steve Majoros, Chevrolet’s marketing director. “That’s very indicative of early adopters. But as we move up that curve, the intention and where we’re pricing this product is to certainly make it more available for more mainstream buyers.” To attract buyers of modest means, EVs need to be priced even lower, in the $30,000-to-$35,000 range, GM CEO Mary Barra said in an interview this week with The Associated Press. Electric vehicles, she said, also have to have the range and charging network so they can be the sole vehicle that some people own. “Most electric vehicle owners today own multiple vehicles, so they have an internal combustion vehicle to jump into depending on their needs,” Barra said. Automakers have been pushing to fully restore a $7,500 tax credit for people who buy EVs to jump-start sales. But the measure is stalled in Congress. It’s especially important for GM, Tesla and Toyota, which have maxxed out the number of credits they are allowed and can no longer offer them to buyers. Other automakers are approaching the limit, too. 128

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Money for the credits, as well as funding for additional EV charging stations, was in President Joe Biden’s $1.8 trillion “Build Back Better” social and environment bill, which is all but dead because of the objections of Sen. Joe Manchin, a West Virginia Democrat. Last week, Manchin also rejected a slimmed- down version that included provisions to combat climate change. He indicated his support for just two items from Biden’s broader agenda: Reducing prescription drug costs and bolstering subsidies for families to buy health insurance. His vote in an evenly split Senate would be needed for anything to pass. Even without the tax credit, the industry’s march toward electric vehicles is moving apace. Edmunds.com says electric vehicles now account for about 5% of U.S. new vehicle sales with 46 models on sale. S&P’s Brinley foresees the market share rising to 8% next year, 15% by 2025 and 37% by 2030. “It seems like the number of choices are growing exponentially for electric vehicles as we move forward,” said Erich Merkle, Ford’s top U.S. sales analyst. Demand for battery-powered vehicles and gas- electric hybrids has grown as gasoline prices skyrocketed this year. Dealers report that every vehicle delivered is typically already sold or gone soon after it arrives. Jonathan Chariff, CEO of South Motors, an 11-dealer group in South Florida, said it’s impossible to assess just how big the demand for electric vehicles is. There’s huge interest, especially in electric SUVs, and vehicles are selling fast. But the supply is constrained 131

because automakers don’t have enough computer chips to build as many vehicles as they want. Given the enormous consumer interest in EVs, Chariff said he expects the vehicles to continue to sell even if their prices don’t fall. “The real question,” he said, “is if and when the supply chain can meet the market demand, what is the true price point?” 132

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ELECTRIC MOTORCYCLES FLOOD HAVANA AMID DIESEL SHORTAGES 134

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The young people come and go on their electric motorcycles at this highway outside Cuba’s capital where they perform stunts and talk about their two-wheelers, which would be largely silent if it weren’t for the music blasting from speakers. Cuba has been flooded in recent years with “motorinas,”as the electric scooters are called on the island, which have been promoted by the government as efficient alternatives amid extreme gas and diesel shortages, and as a solution to the country’s transportation problems. Authorities permitted their importation last decade – Cubans cannot import motorcycles with gasoline or diesel engines – and since then about 300,000 of them have circulated on the island, said Col. Mario Ríos Labrada, head of vehicle registry at the National Transit Directorate. In comparison there are an estimated 500,000 cars. The motorcycles can cost between $2,000 and $5,000. Many originate in China and are imported to Cuba through Panama. Cuban officials say a locally made electric motorcycle called the “Minerva” is being produced at an old bicycle manufacturing warehouse in Villa Clara. “There is an ‘outbreak’ of electric motorcycles, everyone likes them,” said Ernesto José Salazar, 20, who works in a paint shop. “We got to meet up with 200 motorcycles, honking and listening to music.” Young riders organize through social networks and spend hours discussing the benefits of a battery or where to buy tires or find the best workshop. 137

“Fuel is a lost cause, you have to look for it and queue up, right now having an electric motorcycle here is life itself,” said Alejandro Vasallo, 23. Cuban drivers face shortages of fuel, especially diesel, which is also used to power the electricity generators that feed the nation’s power grid, which collapsed this summer. Oil shortages have been caused by difficulties in Venezuela – an ally and supplier of the island – and U.S. sanctions. Electric scooter drivers recharge the batteries through normal power sockets and are out of luck when the supply goes down. Authorities in Cuba promote electric motorcycles as energy efficient and as an alternative to a public transportation system plagued shortages of parts to repair broken down buses and a lack fuel. “Electricity will always be cheaper than diesel fuel and gasoline, and in addition, electric motors are much more efficient than combustion engines, you can save up to 70% of the cost of fuel,” Ramsés Montes Calzadilla, strategy director of the Ministry of Energy and Mines, said in an interview with news website Cubadebate. Electric motorcycles are changing the urban landscape in Cuba and also creating challenges: the batteries tend to catch fire and their relative silence accompanied by driver inexperience is causing traffic accidents. The latest figures available from the Fire Department indicated that in the first half of 2020 there were 263 fires from motorcycles with gel or lithium batteries, a notable increase compared to 208 for the entire year 2019. 138

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LAWMAKERS, WILDLIFE OFFICIALS STUDY E-BIKES ON TRAILS The use of electric bikes is surging, so lawmakers and wildlife officials are studying their impacts on trails to determine where they should be allowed. The Washington Department Fish and Wildlife and Department of Natural Resources is conducting a survey that’s looking at the use of e-bikes on natural surface trails, KING5 reported. “We’ve already had like 7,000 respondents to that survey, and our public meetings, we had at least 120 people at each of those,”said Heide Anderson, recreation planner for the Washington Department of Fish and Wildlife. 141

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Legislation passed last year also directs wildlife officials to get input from several groups, including tribal leaders and the disabled community. “E-bikes really provide a way for a lot of people to access trails and public lands that might not otherwise be able to,”Anderson said. There are concerns about more use on public lands when it comes to wildlife, soil, and water resources. “Our biggest mission is to protect the wildlife resources out there and so trying to balance now the two is very important to us,”Anderson said. The survey wrapped up last weekend, and wildlife officials have until the end of September to get a report to lawmakers. “We want to think about where are the best places to use them,”said state Sen. Marko Liias, chair of the senate’s Transportation Committee. The next step is policy. Officials hope the study will give clear rules and regulations on when and where e-bikes can be used. “We don’t want to have folks come too fast on trails where that’s not safe, we want to make sure they have the right kind of bike for the right kind of trail. That’s part of what the department’s doing is just thinking through those details.,”Liias said. The main goal is to get more folks outside. 143

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DEAL FOR $5.5B HYUNDAI PLANT IN GEORGIA NEARS FINAL APPROVAL The local economic development agency that worked with Georgia officials in recruiting Hyundai Motor Group to build a $5.5 billion electric car plant near Savannah approved its portions of the deal Tuesday, though details of tax breaks and other incentives have yet to be disclosed. The joint development authority that voted to enter the deal represents four southeast Georgia counties that will give up hundreds of millions in taxes in exchange for at least 8,100 jobs Hyundai has promised to create. Officials said they won’t release details of the incentives package until the state and Hyundai finalize the deal, possibly later this week. 145

“I think it’s very fair, I think it’s very equitable,” Trip Tollison, who heads the Savannah Economic Development Authority, said of the deal. “I think it represents what the region needs to make the company — the folks moving here with all the jobs — successful.” Republican Gov. Bryan Kemp called the project the largest economic development deal in Georgia’s history when it was announced two months ago in Bryan County, where Hyundai plans to build the company’s first U.S. plant dedicated to electric vehicles. The automaker plans to start construction next year and begin producing up to 300,000 vehicles per year in 2025. State officials have said that the incentive package would be similar to the $1.5 billion in tax breaks and spending given to Rivian Automotive, which is planning an electric vehicle factory east of Atlanta. The top item in that Rivian package was $700 million in property taxes waived by local governments over 25 years. The company agreed to make $300 million in payments in lieu of taxes starting in 2023. The Savannah Harbor- Interstate 16 Corridor Joint Development Authority voted Tuesday on how money from Hyundai’s payments in lieu of taxes would be shared, but did not release how much projected tax revenues are being waived or how much Hyundai will pay. Tollison, who works with the joint development authority, said Bryan, Bulloch, Chatham and Effingham counties must still approve the revenue-sharing agreement. He said Bryan County would get the majority of the money, 146

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but that other counties would share in revenue because they are putting up money to buy land and build roads, and also will see growth from the deal. One major benefit for Hyundai will be an income tax credit worth an estimated $213 million. That’s based on the credit of $5,250 per job over five years that Georgia offers for its largest development projects. If Hyundai didn’t owe that much state corporate income tax, Georgia would instead give the company personal income taxes collected from Hyundai workers. Hyundai is also likely to save hundreds of millions of dollars from sales tax exemptions on machinery and construction materials. State and local officials already spent $61 million to buy 2,200 acres (890 hectares) for the project site in Bryan County. The partners later bought another 700 acres (283 hectares) but haven’t disclosed how much the additional land cost. The authority approved a $65.7 million contract to clear the land. It also approved a contract to design an entrance road. Kia, another subsidiary of the Hyundai Motor Group, got more than $450 million in incentives for its plant in West Point, southwest of Atlanta. Georgia has promised SK Innovation $300 million in incentives for a $2.6 billion, 2,600-worker battery plant that the Korean company is building northeast of Atlanta. 149

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