Axios Closer

Picture of a golden bell on a white background.

Hello! Today was a better day for the markets.

Today's newsletter, edited by Pete Gannon, is 698 words, a 2½-minute read.

🚨 Situational awareness: Coinbase shares closed down 12.6% and are still falling after hours as revenue drops 27% from a year ago.

🔔 The dashboard: The S&P 500 closed up 0.3%.

Biggest gainer? Fortinet (+6.8%). ¯\_(ツ)_/¯

Biggest decliner? Dentsply (-7.3%), the dental equipment manufacturer, on disappointing Q1 results.

1 big thing: EV upstarts stumble

Illustration: Aïda Amer/Axios

Startup electric vehicle makers are watching their stocks plunge as they grapple with market challenges that established automakers may be better positioned to handle, Nathan writes.

Why it matters: A bevy of startups like Rivian, Lucid, Faraday Future and Lordstown have attempted to follow the Tesla path of disrupting the traditional automotive industry, making bold promises about their production plans and financial prospects.

Driving the news: Shares of Rivian, which reports earnings Wednesday, have fallen more than 78% this year.

  • Lordstown Motors shares are trading at less than $2, well below their 52-week high of $15.80.
  • And beleaguered startup Faraday Future has watched its shares lose more than half of their value over the last month, plunging to less than $2.

Of note: EV startups are facing an onslaught of competitive vehicles made by established automakers with massive production capacity, such as the imminent Ford F-150 Lightning pickup, which has exceeded expectations in advance orders.

The big picture: EV startups are dealing with all the same issues as established automakers, such as supply chain problems, materials inflation, intense competition and the stock market's intense volatility of late.

  • But when you’re starting from scratch, those issues are amplified — such as suppliers that decide to prioritize their bigger, more established customers.

What they're saying: "My honest view is there are too many startups around and not all of them will make it because at the end of the day it's a very hard job," Faraday Future CEO Carsten Breitfeld tells Axios.

Go deeper.

2. Charted: Household debt grows

Data: N.Y. Federal Reserve/Equifax; Chart: Kavya Beheraj/Axios

Household debt balances are growing, according to a quarterly household debt report from the New York Fed, Axios' Pete Gannon writes.

Details: Mortgage debt grew $250 billion in the quarter and now accounts for 71% of household debt balances, up from 69% in the fourth quarter of 2019.

  • Credit card debt fell 1.75% compared to last quarter, but outstanding balances are up 9.2% from Q1 2019, the last quarter before the pandemic.

Of note: Americans are managing their credit, with only 2.7% of outstanding debt in delinquency at the end of March.

3. What's happening

🏛 Treasury Secretary Janet Yellen said eliminating the right of women to make decisions about having children would have a very damaging effect on the economy. (Axios)

🎮 Sony and Nintendo can't produce enough video game consoles to keep up with demand due to chip shortages. (WSJ)

🛋 Netflix is planning to roll out its cheaper ad-supported subscription tier in the fourth quarter, sooner than thought. (NYT)

🪧 Target workers in Virginia filed for a union election, a first for the retailer. (New Republic)

4. Elon Musk would reverse Trump ban

Elon Musk speaking in Texas in February 2022.
Photo: Jim Watson/AFP via Getty Images

Twitter co-founder Jack Dorsey says he agrees with Elon Musk that former President Trump should have his Twitter account reinstated.

Details: Musk earlier today told the FT that the ban "was morally wrong and flat-out stupid."

  • Twitter banned Trump's personal account days after the Jan. 6 Capitol riot because of the "risk of further incitement of violence."

What they're saying: Musk told the FT that he believes permanent bans on Twitter should be quite rare, as they undermine trust in Twitter as a town square."

  • "I do agree," Dorsey tweeted, in response to a tweet from Axios' Dan Primack.

Separately, Musk said his Twitter takeover is "not a done deal" but could be in two or three months, "best-case scenario."

Go deeper.

5. Paper-based ketchup ... bottle

A picture of a Kraft Heinz paper-based ketchup bottle.
Kraft Heinz is developing a paper-based ketchup bottle in partnership with Pulpex. Photo courtesy of Kraft Heinz

What I wouldn't give for a ketchup bottle ... that works.

  • Maybe this will be the one, Nathan writes.

Driving the news: Heinz announced Tuesday that it's developing a paper-based ketchup bottle with Pulpex.

  • The bottle, which will come from renewable products, will also be recyclable.

The impact: Kraft Heinz, which owns the brand, said the move is part of its plan to "make all packaging globally recyclable, reusable or compostable" by 2025 and to achieve net-zero greenhouse gas emissions by 2050.

Yes, but: What we really need is a bottle that doesn't make that awkward noise if you try to use it when it's half-empty.

6. What they're saying

"It will be a stellar and exciting television career."
— Fox CEO Lachlan Murdoch on securing Tom Brady as an in-game football analyst when (and if?) he stops playing. The NY Post is reporting the contract as 10 years and $375 million. 😮

Thanks to Sheryl Miller for copy editing today's (and every day's) newsletter.