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An Alaska state flag blows in the wind at the Robert B. Atwood Building in Anchorage, Alaska.
David Ryder | Bloomberg | Getty Images

These are tough times in Skagway, Alaska, population 1,183.

“We’re in hard core survival mode,” Mayor Andrew Cremata told CNBC.

In a normal summer, the Southeast Alaska town would be teeming with tourists from the cruise ships sailing the Inside Passage. Residents could drive 15 miles up the Yukon Highway into Canada to run their basic errands, or they could hop on a state-run ferry to the next town over, Haines.

But this year, the cruise ships have just started running again. Cremata is hoping Skagway will see 100,000 passengers this year; in 2019 they had 1.1 million. The border to Canada remains closed to non-essential traffic, and the ferries, part of the Alaska Marine Highway System, are plagued by budget cuts.

“Just getting your family down to go see a dentist or doctor, when that becomes burdensome or overly expensive, there’s a point where people have just had it and move away,” Cremata said.

Multiply Skagway’s situation by thousands of communities and more than 700,000 Alaskans, and you can begin to understand why The Last Frontier finds itself in last place in CNBC’s 2021 America’s Top States for Business rankings.

It is the sixth bottom-state finish for Alaska in 14 years. The state previously achieved the dubious distinction in the first four years of the study between 2007 and 2010, hitting bottom again in 2018.

As difficult as the past year has been in this state and across the country, it presented opportunities that Alaska failed to capitalize on.

Alaska met the pandemic with the best-funded public health system in the nation, according to the United Health Foundation, spending $289 per person per year. That is more than three times the national average. Earlier this year, the state was setting the pace for Covid-19 vaccinations, even in its most remote regions.

As the national economy struggled to regain its footing, Alaska offered a generally business-friendly regulatory climate — its legal system tilts toward business, and the number of state laws and regulations is manageable. The conservative-leaning Tax Foundation ranks Alaska’s tax climate the third-best in the country.

In Skagway, Mayor Cremata said state and federal officials have been extremely helpful through the crisis.

“They are always ready and willing not only to engage us as a community, but individual people and business owners in the community. People that were struggling with problems with unemployment and all these kinds of things,” he said.

And at a time of social upheaval, Alaska offered its relatively diverse population some strong protections against discrimination.

High costs hurt Alaska

So how did Alaska manage to finish No. 50 again in 2021 despite so many advantages going in? In a word: cost.

Cost of Doing Business carries the most weight in this year’s study. As the recovery builds, states are touting low business costs more than any other factor, according to CNBC’s analysis. Alaska is an extremely expensive place to do business.

Even Alaska’s competitive tax climate, which earns points for relatively low property taxes and no personal income tax, includes a top corporate tax rate of 9.4%, among the highest in the country.

A snow covered road with power lines in Kaktovic, Alaska.
David Howells | Corbis Historical | Getty Images

Utility costs are oppressive. Alaskans paid an average of $20.20 per kilowatt hour for electricity last year, according to U.S. Department of Energy data, with even higher rates in remote areas. That was second only to Hawaii, and nearly double the national average. Wages are high thanks to the high cost of living, and office and industrial space — which are in short supply — is pricey.

Cremata said he is worried about how the price of everything seems to be creeping higher.

“Everything’s barged in,” he said. “And so, if the cost of fuel goes up, it affects the rates on the barge and that affects the price of your milk and eggs.”

Indeed, even that high rate of public health funding may be deceiving, because health care in Alaska is so expensive. An office visit to a doctor in Anchorage averaged more than $206 last year, according to the Council for Community and Economic Research, C2ER. That is more than twice the cost in Phoenix, Arizona.

Meanwhile, Alaska’s Covid-19 vaccination rate, once the envy of the nation, has fallen below the national average, according to data from the U.S. Centers for Disease Control and Prevention.

Medical Assistant Julia Naea administers the Pfizer Covid-19 vaccine at the Blood Bank of Alaska in Anchorage on March 19, 2021.
Frederic J. Brown | AFP | Getty Images

In March, Alaska became the first state in the nation to make vaccines available to everyone aged 16 and older. Officials theorize that meant those who wanted to be vaccinated were quick to get their shots, leaving vaccine-hesitant residents — many in rural or remote areas — who have proven difficult to convince.

Vaccination rates are a metric in the Top States’ Life, Health and Inclusion category, where Alaska finishes No. 19 this year.

Internet access remains a challenge

In addition to its cost issues, Alaska ranks No. 49 in the Top States’ Infrastructure category, above only Maine. It is yet another lost opportunity. Alaska might have been able to use the nation’s move toward remote work to partly offset its inherent infrastructure disadvantages, which include its distance from the rest of the country and its vast size.

This year’s Top States study introduced broadband connectivity as an infrastructure metric. But broadband in Alaska is the worst in the nation, according to BroadbandNow Research.

In Skagway, Cremata said internet service is cumbersome and expensive.

“You have to actually have a landline in your house for it to work,” he said. “So, the internet has a pretty substantial price to it, but then you also have a $30 charge because you need a landline for the broadband to work.”

According to BroadbandNow, fewer than 61% of Alaskans have access to broadband at all, and none have access to a low-priced plan, which the organization defines as costing less than $60 per month. The average speed is a paltry 58.6 Mbps, or one-third the speed in the top-ranked state, New Jersey.

Cremata said that early in the pandemic, when he and other local leaders worried the cruise ships could disappear for five years, they convened a task force to consider ways to reinvent the economy. One of the ideas was to make Skagway an internet hub, but it went nowhere.

“You’d have to have really fast internet, obviously, because you probably want to have all of your communications done in the cloud, which is pretty much impossible right now in Skagway,” he said.

Alaska Gov. Mike Dunleavy, while speaking at a dedication ceremony for a hydroelectric turbine generator in Igiugig, Alaska, on Tuesday, July 16, 2019.
Luis Sinco | Los Angeles Times | Getty Images

In May, Gov. Mike Dunleavy created a task force to recommend ways to improve connectivity in the state.

“On the heels of a global pandemic, now more than ever do we see the critical role that the internet plays in nearly every part of life and the importance of good connectivity for every Alaskan,” Dunleavy said in a statement.

But it is Alaska’s third broadband task force in the last decade, with little to show for the efforts. It is also unclear whether the state can muster the funding needed to bring its service up to date.

In his statement announcing the task force, Dunleavy, a Republican, emphasized the use of federal pandemic relief money to pay for the expansion. And while his administrative order creating the task force also contemplates using state funds, Dunleavy and the state legislature are already locked in a titanic struggle over the budget.

This month, Dunleavy vetoed more than $200 million in state spending approved by the legislature, with cuts aimed at everything from tourism marketing to mental health services.

Dunleavy also vetoed $8.5 million in funding for Alaska’s ferry system known as the Alaska Marine Highway System, a link to the outside world for communities like Skagway. 

And he relentlessly slashed the University of Alaska’s budget, with cuts totaling $70 million over three years. That hurts the state’s ranking in Education, where it finishes No. 47.

Crude oil rebound hasn’t helped Alaska

Hanging over all of Alaska’s business and financial woes is the price of oil, the state’s economic lifeblood. Oil revenues typically account for more than one-third of the state’s budget.

A part of the Trans Alaska Pipeline System is seen on September 17, 2019 in Fairbanks, Alaska.
Joe Raedle | Getty Images

Last year, as weak demand during the pandemic pushed oil prices to historic lows, oil production in Alaska fell to its lowest level in more than 40 years, according to the Energy Department.

This year, prices have rebounded, but production in Alaska has not. Alaska oil producers face much lower cost competition in the lower 48, as well as an intensifying tug-of-war over federal oil leases. Production through April was down nearly 5% from a year ago.

State budget forecasters expect oil production tax revenue will be around $311 million in the 2021 fiscal year that ended on July 1. That would be a 9% increase from 2020, but a 36% decline from the year before.

Those kinds of numbers could make it even harder for Alaska to climb out of the cellar next year.

Cremata said he hopes the crisis will convince Alaska to think beyond its traditional economic drivers including tourism, fishing and oil.

“You can’t think backwards. You have to think forwards,” he said. “Perhaps, this is like a chaos-opportunity moment — where there’s chaos, there’s opportunity, so that people in Alaska, who maybe have been relying on things that aren’t as reliable anymore, maybe try to expand towards some different ideas.”

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Lucid (LCID) faced challenges in Q2, but here’s why the CEO is still confident about the future

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August 6, 2025

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Lucid (LCID) faced challenges in Q2, but here's why the CEO is still confident about the future

Lucid-LCID-stock-Q2-earnings

Lucid Group’s (LCID) stock is dropping on Wednesday after the company missed Q2 expectations. CEO Marc Winterhoff admitted during a new interview that the auto tariffs and the end of the $7,500 EV tax credit “keeps us up at night,” but promises things are looking up from here.

Lucid (LCID) CEO explains Q2 hurdles and future plans

After missing top and bottom line expectations, Winterhoff told investors on the company’s earnings call that Lucid is “entering a pivotal new phase.”

Despite the reassurance, Lucid’s CEO admitted several things negatively impacted earnings. For one, its gross margin for the quarter was -105%, due to $54 million in extra costs from tariffs.

Lucid also lowered its production goal for the year from a firm 20,000 to between 18,000 and 20,000. The company stated that the updated range reflects the changing market.

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During an interview on Wednesday morning, Winterhoff told CNBC’s Phil LeBeau that changes in trade, tariffs, and tax credits are “something that, you know, keeps us up at night.”

Lucid posted revenue of $259.4 million, missing Wall Street’s estimates of around $280 million. It also reported a wider-than-expected net loss of $790 million, or a loss of $ 0.34 per share.

Lucid-LCID-Q2-earnings
Lucid Gravity Grand Touring in Aurora Green (Source: Lucid)

Winterhoff told LeBeau that the biggest challenge Lucid faced in Q2 was tariffs, which had a bigger impact on gross margins than expected. However, it should work itself out throughout the remainder of the year, Lucid’s CEO added.

The other topic that many were wondering about was the availability of Earth magnets. Winterhoff explained that, unlike most of its competitors, Lucid was able to overcome the issue.

Lucid-Uber-Q2-earnings
Lucid Gravity SUV with Nuro’s self-driving tech (Source: Lucid)

If it weren’t for Lucid’s quick actions, the company would have had to stop production in Q2. Instead, Winterhoff said that the company now has the raw materials, earth magnets, and licensing for the remainder of the year.

Lucid’s CEO added, “We are actually in a good place right now.” The company secured a partnership with Uber and Nuro to develop and deploy 20,000 robotaxis over the next six years. As part of the agreement, Uber is investing $300 million into Lucid.

Although it missed expectations, Lucid is still making progress. The EV maker is coming off its sixth straight quarter with record deliveries. It also produced a record number of vehicles in Q2.

After overcoming supply chain issues that limited Gravity output, Lucid said it’s on track to “significantly increase production” in the second half of the year.

Lucid-stock-Q2-earnings
Lucid delivery and production (Source: Lucid Group)

Lucid ended the quarter with $4.86 billion in total liquidity, which it expects will provide funding through the second half of 2026, when it plans to launch its midsize platform.

The midsize platform will have at least three “top hots,” or vehicles, including an electric SUV and Sedan. With prices expected to start at around $50,000, Lucid’s midsize EVs are expected to go head-to-head with the Tesla Model Y and Model 3.

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Lucid Group (LCID) stock chart Q2 2024 through Q2 2025 (Source: TradingView)

Lucid Group’s (LCID) stock is down about 10% on Wednesday following Q2 earnings. Despite share prices surging after the Uber partnership last month, Lucid’s stock is still down nearly 30% over the past 12 months.

The company is planning a reverse stock split, which will be voted on at an upcoming investor meeting, to boost the share price and attract larger investors.

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Elon Musk teases new Tesla ‘Full Self-Driving Supervised’, but manage your expectations

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August 6, 2025

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Elon Musk teases new Tesla 'Full Self-Driving Supervised', but manage your expectations

Tesla Self-Driving

Elon Musk is teasing a new Tesla ‘Full Self-Driving Supervised’ (FSD) update with “10x improvements”, but historical performance compared to Musk’s announcements suggests that it’s safer to manage your expectations.

In a new X post last night, Musk is teasing an upcoming new FSD update that will include a “10x increase in parameters”:

Tesla is training a new FSD model with ~10X params and a big improvement to video compression loss. Probably ready for public release end of next month if testing goes well.

This is the second time that Musk is teasing an update to Tesla’s Full Self-Driving program this year.

The version of FSD in consumer vehicles hasn’t improved all year, as Tesla has focused its efforts on its ‘Robotaxi’ service in Austin.

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After launching FSD v13 on HW4 vehicles late last year, the system has not shown meaningful improvement based on crowdsourced community data.

In fact, it appears to be deteriorating.

With 16,000 miles on the first 5 point updates on FSD v13, people were traveling on average 510 miles between critical disengagements (left), and now with the last 4 point updates, people are traveling 431 miles between critical disengagements (right):

Although the discrepancy could also be explained simply by the latest data being more accurate with more mileage.

Now, Tesla shareholders are hoping that the lag in improvement will be mitigated by Tesla using what it has learned through its deployment of its supervised robotaxi service in Austin to release a significantly improved FSD update.

In June, Musk first teased this update, and at the time, he said that it would include a “4x increase in parameters” and would come “in the next few months.”

Now, he seems to bonify the increase in parameters to “10x” and adjusts the timeline to the end of September.

However, before getting excited, it’s important to remember the last time Musk promised an increase in performance through an increase in parameters.

 The CEO said that FSD v12.5 on HW4 was a “5x increase in parameters” and that was quite disappointing.

FSD v12.5 on HW4 (left) only brought a 22% increase in miles between critical disengagement compared to v12.3 (right):

In fact, the miles between critical disengagements plummeted with other v12.5 point updates, and it ultimately ended at 184 miles between critical disengagements, significantly below v12.3:

Therefore, it’s hard to get too excited about a new “10 increase in parameters” when that’s what happened the last time Musk called for it.

Electrek’s Take

Let’s be optimistic here and assume a 2x improvement in miles between critical disengagements from now on.

FSD on HW4 would still only be at about 900 miles between critical disengagements, which is nowhere near where you need to be for an unsupervised self-driving system.

At this improvement rate, Tesla would still need 5-10 years to get close to an unsupervised driving system and that’s while it is reaching the limits of its HW4 system. It’s becoming fairly clear that HW4 is going the way of HW3: obsolescence.

Tesla FSD would be impressive if it were sold as what it is: a level 3 driver assistance system. It’s best out there.

But it needs to be compared against what it is sold as: a self-driving system that will enable unsupervised autonomy.

In comparison to that, it’s terrible.

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Volkswagen is killing off one of its oldest SUVs, and it will no longer sell this EV

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August 6, 2025

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Volkswagen is killing off one of its oldest SUVs, and it will no longer sell this EV

Volkswagen-retires-SUVs

Volkswagen is shaking things up with plans to trim its lineup. Volkswagen is killing off one of its oldest SUVs, but an electric vehicle is also in line to get the axe.

Volkswagen is retiring the Touareg and electric ID.5 SUVs

The Volkswagen Touareg has been on sale for over 24 years. First launched in 2022, the luxury SUV was developed in tandem with the Porsche Cayenne, sharing powertrain components and a similar design.

Next year, Volkswagen will retire it from its lineup. Company insiders confirmed to Autocar that Touareg production will end in 2026, leaving the Tayron as the largest Volkswagen SUV available in the UK.

Unlike several of its popular nameplates, including the Golf and Tiguan, the Touareg has no direct successor planned.

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However, that’s not the only vehicle Volkswagen is cutting from its lineup. The ID.5, Volkswagen’s electric coupe-SUV, is also getting the axe.

The ID.5 was just launched in 2021 as a sportier, more coupe-like alternative to the ID.4, but it has failed to live up to the hype. With the ID.4 overshadowing the coupe version, Volkswagen will cut it from its lineup starting in 2027.

Volkswagen-ID.5-electric-SUV
Volkswagen ID.5 Pro (Source: Volkswagen)

The move comes as VW doubles down on more affordable, mass-market EVs like the upcoming ID.2 and ID.1. Volkswagen will launch the ID.2 next year, which could arrive as the ID.Polo, followed by an SUV version. In 2027, the production version of the ID.1 is scheduled to launch.

Volkswagen is also reportedly developing a “mini Buzz,” an electric MPV that will replace the Touran. Although nothing is official, the idea has been brought up in boardroom meetings.

VW-retiring-SUVs
Volkswagen ID.4 GTX and ID.5 GTX (Source: Volkswagen)

However, with Skoda considering a similar vehicle, sources close to the company’s CEO, Thomas Schäfer, say it’s not a priority right now. The source added, “We looked at it, but the market is demanding crossovers and SUV models.” That’s where Volkswagen is focusing next with a drastic overhaul to its ID series of electric vehicles, expected.

Although it had eight of the top ten best-selling EVs in Germany in the first half of 2025, VW has struggled to keep pace in global markets.

Will the new entry-level EV lineup help it turn things around? That’s what Volkswagen is betting on. We will see how it plays out over the next few months.

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