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Here’s your Investing Action Plan for Wednesday: what you need to know as an investor for the coming day. The first major test of demand for electric cars from a global auto giant begins tomorrow as Volkswagen (VWAGY) starts taking preorders for its upcoming ID.3. The Boeing(BA) 737 Max will be back in the spotlight as the head of the Federal Aviation Administration testifies on Capitol Hill, while Federal Reverse Chairman Jerome Powell continues his update to lawmakers.
Volkswagen Takes On Tesla
The German automaker’s ID.3 will go on sale in Europe Wednesday for under 40,000 euros (around $45,000), with first deliveries set for early September. The electric hatchback kicks off Volkswagen’s ambitious, $50 billion plan to bring affordable electric cars to the masses — and to challenge Tesla’s (TSLA) global dominance in electric vehicles. But a key software update won’t come until next year, meaning cars delivered this year will lack some promised functionality.
While VW has built electric cars before, the ID.3 is built from the ground up to be electric. It uses the new modular electric or MEB platform, which the company claims will make electric cars more affordable. The ID.3 will be followed by a whole family of ID cars, including crossovers, SUVs and a minibus, with the ID.4 crossover making its way to the U.S. market unlike its smaller ID.3 counterpart.
Boeing 737 Max Hearing
FAA chief Steve Dickson will testify before the Senate Commerce Committee about “issues associated with the design, development, certification, and operation” of the Boeing 737 Max. The plane was involved in two deadly crashes that killed 346 people and has been grounded since March 2019. Deliveries also remain on hold. At hearings last year, senators from both sides of the aisle blasted the Boeing’s close relationship with the FAA.
The upcoming hearing may also provide investors with more clues as to when the Boeing 737 Max will return to service. The company reportedly plans to run an FAA recertification flight later this month. In late May, Boeing restarted production but then told a key supplier a week later to hold off on some work, suggesting more delays or a slower ramp-up.
Fed Chief Takes Hill Again
Powell will appear before the House Financial Services Committee after testifying before the Senate Banking Committee Tuesday, when he warned that the Q2 GDP drop “is likely to be the most severe on record.” In written testimony released Friday, the Fed chair said consumers and businesses will remain fragile and that Congress may need to take more action. Powell’s semiannual report to lawmakers also follows the Fed’s launch of its Main Street lending program, which will provide up to $600 billion in loans to U.S. businesses, as well as its announcement that the central bank will buy corporate bonds directly to further prop up the economy.