The truth about your smog check


September 4, 2019

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Today, Lego sales are up again, and TikTok joins the NFL playpen, but first…

The Hustle Daily Email  

Listen to our podcast 🎧 Today on My First Million, learn how Aleks Svetski turned $250k in debt into millions in the bank — all by age 25.

The market for carmaker carbon credits is in the fast lane… for now

Inside the US auto industry, the trading of carbon emissions credits has become a big business where carmakers with extra credits — like Tesla and Honda — sell millions in credits to carmakers without enough — like Fiat Chrysler and General Motors. 

But with emissions law now under review, a regulatory rollback could destroy the sustainability stockpiles amassed by these carbon-credit kingpins — and reward their choking competitors. 

So, how did we get here?

It started in 2012, when the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) mapped out a greenhouse gas emissions reduction plan for passenger cars.

The plan required automakers to reduce emissions each year — either by improving their own efficiency or buying credits from other companies that had already gotten their sh*t together.

Carmakers could get credits for rolling out sustainable features like efficient engines, LED lights, or improved seats — and even earn credit multipliers for launching electric cars and plug-in hybrids. 

Some invested in efficiency while others just bought credits…

And now, the differences are stark: Toyota, Honda, and Nissan-Mitsubishi hold more than 1/2 of all available credits. Efficiency-focused Toyota had a total of $71.4m in credits stockpiled in 2017, while gas-guzzling Jaguar Land Rover had a balance of negative $575k in credits.

This imbalance opened the door to trade between carmakers, turning emissions into a huge expense for some carmakers and a source of revenue for their competitors-turned-creditors.

An example: Last year, Tesla — which is cruisin’ with credits as an electric automaker — sold $420m worth of credits to competitors including General Motors and Fiat Chrysler. 

The carmaker credit could soon crash

Under the original plan, the emissions program was supposed to continue through 2025, which would have allowed continued trade in credits. 

But the White House wants to eliminate emissions credits and freeze emissions standards starting in 2020, which would cause carmakers like Tesla — which has cashed in roughly $2B in credit-based revenue since 2010 — to lose lots of revenue. 

In July, Honda, Ford, VW, and BMW partnered with the state of California in a voluntary emissions agreement that would preserve the credit system despite a federal freeze — setting the stage for a continuing carbon credit clash.

Giving credit where it’s (over)due
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Today’s episode of My First Million is brought to you by Hustle Con, our annual conference that’s happening December 2-3, 2019 in Oakland, CA. Grab your tickets here.

Everybody loves a comeback story

Aleks Svetski wanted to be a young millionaire.  

So, he taught himself how to trade the stock market, invested $5,000 of his college scholarship money, and turned it into over $50,000… in just 6 months. 

Impressive? Yes. Did he know the GFC was looming? No.

Instead of reaching his 20-year-old millionaire dreams, he lost everything — and went into $250k of debt.

But that setback ignited Aleks’ entrepreneurial spirit

He started multiple companies, dug himself out of debt by 23, and — after going on a Silicon Valley sabbatical — founded a micro-investing app whose goal is to make Bitcoin accessible to everyone.

Click below to listen to our podcast and learn how Aleks turned $250k in debt into millions in the bank.

The NFL announces new partnership with TikTok to move the markers with youngsters

Just in time for the NFL’s 100th season, the league has announced a multi-year partnership with TikTok.

The NFL’s TikTok page has already begun sharing behind-the-scenes video footage and highlight reels and other classic internet stuff like memes and hashtag challenges.

According to CNBC, the partnership was drawn up in the league’s playbook to help the NFL score with young viewers not only in the US, but worldwide — and we aren’t talking millennials.

Is football an old person’s game?

As Morning Consult reported last fall, football appears to be losing yardage with Gen Z, as they watch less network television and are also playing the sport less, mainly due to head injuries.

On the flip, TikTok has become wildly popular among younger generations. It was the 3rd-most downloaded app in the US in the first quarter of this year. 

Success lies within TikTok’s partnerships 

Partnerships with major brands such as Chipotle, Ralph Lauren, and Burberry helped to legitimize the platform in the US over the last year, and those partnerships have attracted sports leagues like the NFL and others who are working to bring on new affiliates. 

Both Wimbledon and the NBA have worked with TikTok to promote their games across the globe as well.

Movin’ the chains
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As regulators zoom in on Big Tech, Big Telecom companies face less regulation

Big Tech companies like Facebook, Amazon, and Google find themselves in the strange position of playing defense against fines and increased scrutiny from federal agencies such as the Federal Communications Commission (FCC) and the Department of Justice (DOJ). 

But, on the other end of the broadband spectrum, Big Telecom is benefiting from less regulation from the FCC, Axios reports.

So, what led to this shift?

Facebook, Google, and the like have been wylin’ for years, but now government agencies have finally started eyeballing them for anti-competitive behavior and other naughties. 

The FTC recently asked Google to pony up $200m to resolve issues surrounding children’s privacy law violations on Youtube, and it also fined Facebook $5B for privacy violations. 

Meanwhile, Congress has made several moves to reduce regulation for Big Telecom companies like Comcast, Verizon, and AT&T. 

Now, Big Telecom poses a threat to Big Tech again

For years, heavy regulations have squeezed the telecom biggies. 

But the telecom industry seems to be finally catching a break: Pending a Justice Department greenlight, Sprint and T-Mobile may soon merge (they’ve already gotten FCC approval). 

AT&T and Verizon, which have put on their Captain America costumes to position themselves as powerhouses in the global race for 5G, are also the beneficiaries of friendly federal policy.

Now, if the DC Circuit Court agrees to the FCC’s rollback of net neutrality rules, broadband providers will score yet another victory. 

Tele me more

After sales slump, Lego gets back to what it does best… stackin’ blocks and makin’ bucks

Last March, Lego reported its first decrease in sales in 13 years, which resulted in 1.4k layoffs.

Now, little more than a year later, the Danish toymaker is back to building its block biz: Lego reports that global sales were up 4% in the first 6 months of 2019.

The big screen was a big reason for Lego’s bounce-back

According to Lego, sales of toy sets related to the recent Avengers movie and its own Lego Movie 2 were particularly strong. Generally, Lego sets tied in to other franchises — Star Wars, Harry Potter, Jurassic World — are the brand’s biggest block-busters.

Despite the sales increase, operating profits dropped 16% due to increased investment in Lego’s online presence and its physical stores across India and China.

But Lego wasn’t the only toymaker to get involved with video…

Most major toy companies are embracing mixed media. 

American toy titan Hasbro recently purchased Entertainment One, which makes the wildly popular children’s TV series Peppa Pig.

Today’s toymakers can’t just make toys, they need to make toys relevant — and one way to do that is by investing in video programming that exposes kids to toy characters.

Some startups are going even further to make toys relatable: Superplastic recently raised $10m to turn its toys into Insta-influencers.

Back to the block
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Hmm. Maybe they are onto something.

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