TikTok is Watching

Plus: Europe is ready to put the E in e–fuels ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

March 22, 2023

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TOGETHER WITH

Good morning.

Cathie Wood has had something of a reverse Midas touch. On Tuesday, the Ark Investment Management founder and CEO told Bloomberg that selling stocks during the market rout last year resulted in over $2 billion in losses.

But, Wood claims, there is a silver lining if you squint hard enough: those losses could offset hypothetical future tax bills on hypothetical future gains… hypothetically. If that sounds pollyannaish, keep in mind that this is the person who once saw future world-dominating potential in companies like Coinbase, Roku, and Peloton.

Morning Brief

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EU plans to meet in the middle on EV legislation.

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For Apple, India is almost the new China.

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You can’t ban TikTok out of existence.

Automotive

EU to Propose Synthetic Fuel Legislation Amid EV Push

(Photo Credit: Oli/Flickr)

Germany can still make combustion engines. They just can’t run on gas.

The European Union intends to phase out the production of gas-powered cars in favor of electric vehicles. But in a new effort to find a compromise, a draft proposal seen by Reuters says auto companies will still be allowed to make combustion engines as long as they only run on low-polluting e-fuels, also known as synthetic fuels.

Change the Fuel, Not the Car

As much as global superpowers and car makers are pushing for EVs to be the only cars on the road in the next 15 years, some drivers and manufacturers don’t realistically see the electric slide happening that quickly. This month, the EU was slated to vote on legislation that would ban the sale of new combustion engine cars in the bloc by 2035. But Germany – a nation known for its automaking ingenuity – had its Transport Ministry log objections that e-fuels, which can be pumped into any of the 1.4 billion combustion engine vehicles currently in use, should have a place in the green revolution. The vote was then halted.

Despite their cleanliness, e-fuels are incredibly labor-intensive and expensive. To get gasoline, you drill, drill, drill…and refine, of course. But to make synthetic fuel, you first need to separate the hydrogen and oxygen atoms in water via electrolysis. Then you need to capture carbon dioxide from the air and separate part of its elements. Finally, everything goes into a machine called a Fischer–Tropsch reactor where they fashion long-form carbohydrates – the things that make a car go vroom vroom.

So while it appears Germany has gotten its way, at least for now, synthetic fuels are more of an interesting experiment rather than anything practical:

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In December, Porsche, a collection of energy companies, and the Chilean government, officially opened a synthetic fuel refinery in Punta Arenas where they initially planned to produce 34,000 gallons of fuel a year. To put that into perspective, the US consumes about 369 million gallons per day. The e-fuel isn’t yet available to the public and will likely first be used in motorsports.

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Plus, the price is a little steep. In a recent YouTube video from the car-focused brand Donut, reps filled up at the Chile refinery and estimated it cost about $40 a gallon. Production is expected to increase and costs would lower, but most of those figures are for 2050. That $5.57 price tag at the pump in Frankfurt doesn’t look too bad now.

The Start of Something Smart: This isn’t to say e-fuel is a worthless investment. EVs have very small carbon footprints, but in a place like the US, they get charged on an electrical grid that’s still based 80% on fossil fuels. E-fuel refineries run on renewable energies like wind and solar. Try to look at it as a small-scale reinvention of the grid that might hold a significant place in energy production in the next half-century.

– Griffin Kelly

Tech

Apple Lobbies India Hard on Labor Law

You can take the Apple factory out of China, but can you take China out of Apple?

Apple has been busy lobbying states in India to change their labor laws to more closely resemble China’s, and it’s going pretty well. The move to India is crucial to Apple’s plans to spread out its supply chain and become less reliant on China and comes as the iPhone maker slashes costs to keep from falling into the same black hole that swallowed its Big Tech compatriots.

Apple’s Indian Summer

The onset of the pandemic was an uncomfortable lesson in diversification for Apple. China was one of the first countries to lock down and iPhone production lines fell silent, inspiring the company to start considering other countries as alternative production hubs. The Wall Street Journal reported in December that Apple was fast-tracking its plans after workers exhausted by China’s zero-covid policy clashed with police at a factory nicknamed “iPhone City.”

Apple is eyeing India and Vietnam to be the two new nodes in its supply web, and while it’s keen to reduce its dependence on China it also wants to export some of its labor practices:

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Apple and its supplier Foxconn successfully lobbied the Indian state of Karnataka to raise the maximum duration of a factory shift from 9 hours to 12 hours, and to push the upper limit on overtime from 75 to 145 hours per 3-month period, the Financial Times reported.

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Now The House That Steve Jobs Built is pushing for similar reforms in the neighboring state of Tamil Nadu. Sources told Bloomberg that Apple’s emphasis is on flexibility, allowing factories to run two 12-hour shifts rather than three 8-hour ones.

While Apple is working hard to tighten its belt to avoid the multiple rounds of high-profile layoffs that have plagued Amazon and Meta in recent months, it’s clearly investing heavily in India. Bloomberg reports it’s in talks to build accommodation for female workers near its new facilities as a way to side-step concerns around women’s safety while commuting to work.

Bridge of Spyphones: Apple won’t be able to dodge its Russia problem, however. While government workers in various Western countries have been told to delete TikTok from their phones, Russians are being told to throw out their phones altogether. A Russian outlet reported Kremlin officials working on next year’s presidential election were instructed to throw out any iPhones by April 1 over concerns they could be vectors for Western espionage.

– Isobel Asher Hamilton

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Tech

Study Finds TikTok Tracking Pixels Present in State-Government Sites

What’s scarier: the Luddite ineptitude of big government or the ubiquity of big tech?

As state and local governments move to ban TikTok from employee devices, a team of internet researchers at Feroot Security have discovered an alarming, if hilarious, self-own: TikTok’s web-activity tracking pixels are present in as many as 30 state government websites, effectively making them inadvertent agents in the Chinese company’s data collection practices.

The Call is Coming From Inside the State House

A nationwide ban on TikTok over fears that user data could hypothetically be shared with an increasingly belligerent Beijing is just about the only issue uniting politicians on both sides of the US political aisle at the moment. TikTok CEO Shou Zi Chew will attempt to quell concerns in a congressional hearing later this week, but he probably didn’t help his cause Tuesday morning by delivering a personal message to the app’s 150 million US users warning that their favorite screen distraction may soon disappear from their devices.

Many state governments have already begun to take matters into their own hands. Unfortunately, those hands seemingly still find the touch of a keyboard more foreign than familiar — and are attached to brains that don’t quite realize that in an internet world predicated on digital advertising, Big Tech is always watching:

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In a review of 3,500 companies, organizations, and government entities, Feroot found TikTok tracking pixels in 30 sites operated by 27 different states.

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Examples include a Utah government site helping job seekers and Maryland’s Covid portal. Both states have banned the TikTok app on state-owned devices, and both states removed the trackers after being contacted by reporters from The Wall Street Journal.

Not Just TikTok: TikTok wasn’t the only foreign site caught snooping in the digital shadows. Feroot also found pixels on state-government sites from Tencent, Alibaba, and the Russian cybersecurity firm Kaspersky. Overall, TikTok pixels were in 10% of the 3,500 sites examined. Meanwhile, Meta and Microsoft were present in around half of all sites, while Google tracked you across 92% of sites. As Sting once sang: Every step you take …

– Brian Boyle

Extra Upside

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The Bard’s Tale: Google releases its own AI chatbot to compete with ChatGPT and Bing.

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Not just streaming: Subway and other fast food chains offer subscriptions to build loyalty.

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