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Electric Vehicle Demand Is Particularly Strong in China and California

Follow Sam on Twitter @skorusARK


While noise about a dearth of demand for electric vehicles seems to be at a fever pitch in the financial markets, facts suggest that the opposite is true. As shown below, the demand for gas-powered cars has peaked in China, the world’s largest auto market, and is falling precipitously, while EV sales growth has accelerated to 65-70%, pushing their share to nearly 5%.



China is not alone, as the same trends seem to be in place in California. As shown below, the market share of electric vehicles in California increased to 5.7% during the first quarter of 2019 while all new light-vehicle registrations dropped 5.3%. Tesla deliveries increased by 172.1%. Also worth noting from the chart, the share of plug-in hybrids dropped significantly in the first quarter, supporting ARK’s research that hybrids are an interim technology and our conclusion that companies like BMW that are investing in hybrids as opposed to pure EVsare making a mistake.


In the US, California often is an early adopter of new technologies.  If hybrids are any guide, demand for EVs in the rest of the US will pick up significantly in the months and years ahead.




Venmo’s Public API Allows Access to Information About User Transactions

Follow Max on Twitter @mfriedrichARK


Arguably, PayPal’s Venmo is the most popular mobile payment application in the US and, with 40 million active users, the second largest consumer finance platform based on the number of digital users at the top US banks. Venmo’s viral nature is based on its social network-like experience in which users interact and share transactions not only with friends but also public feeds.


PayPal has been criticized because users have to opt in to disable public access to information about their transactions. Other than amounts, many details of their transactions are publicly available.


Out of curiosity, we analyzed 696 Venmo transactions that took place over 3 minutes on 1/1/19. As shown below, 32% of the transactions were food related, with the Pizza emoji (🍕) one of the most popular words or emojis attached as a message. 23% of transactions landed in the ‘Other’ bucket, as they were difficult to characterize, while 15% were for rent or utility payments, not unsurprising on the first day of the month. Notably, 6% of the transactions were service related, with categories ranging from “Consulting” to “Therapy”.

Source: Public Venmo API



Facebook Expects to Launch ‘GlobalCoin’ in 2020

Follow Yassine on Twitter @yassineARK


Facebook’s highly anticipated cryptocurrency is set to launch in the first quarter of 2020. Named ‘Globalcoin’, the cryptocurrency will be a stablecoin pegged to a basket of fiat currencies. With plans to launch in a dozen countries by the first quarter of 2020 and spending significant time with officials from both the US Treasury and the Bank of England, Facebook appears to be taking a regulatory-friendly approach.


Facebook also is in talks with money transfer firms including Western Union as it aims to provide more efficient ways for people to transfer and store value without a bank account. Clearly, it intends to compete with Paypal’s Venmo and Square’s CashApp to become one of the world’s digital wallets.


In ARK Disrupt Issue 163, we discussed potential strategies and reasons to foster the adoption of Facebook’s cryptocurrency. Targeting the $600 billion remittance market seems promising given Facebook’s 2+ billion global user-base because existing mobile payment platforms are country-specific and cannot facilitate cross border transactions. The risks to consider, however, are government bans in countries fearful of losing control over their currencies. Despite these risks, the opportunities could revolve around data: with more transactions on its network, Facebook will be able to identify and track spending habits more precisely, improving ad targeting in all of its apps.


Facebook is expected to outline details about the launch this summer. We will be watching closely.



A Winter Freeze Hits Huawei

Follow James on Twitter @jwangARK


The US Commerce Department is adding Huawei to its “Entity List”, effectively barring US companies from providing products and services to the Chinese tech champion. Google, Microsoft, and ARM, among others, already have indicated that they will stop providing Huawei with new products.


The fallout from this ban could be profound. Huawei smartphones rely on ARM-based CPUs and Google’s Android operating system. An export ban on these technologies effectively freezes Huawei’s product roadmap. Huawei will have to find an alternative to ARM-based mobile chips and a non-Google version of Android, a nearly impossible task.


Huawei’s 5G infrastructure faces a similar fate. 5G equipment requires components and intellectual property (IP) from US companies such as Qualcomm, Broadcom, Analogy Devices, and Texas Instruments, among others. Building a full 5G product stack without access to US suppliers might not be possible.


If China and the US negotiate a trade deal, it could lift the ban against Huawei overnight. But, if tensions escalate, Huawei could be the first victim of the “long game”.


ARK's statements are not an endorsement of any company or a recommendation to buy, sell or hold any security. For a list of all purchases and sales made by ARK for client accounts during the past year that could be considered by the SEC as recommendations, click here. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. For full disclosures, click here.



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