EV sales stumble, insurance premiums rumble

Brian Chesky and Joe Gebbia are in New York, working on a tiny website called Air Bed and Breakfast. It’s buggy and doesn’t work most of the time. They are deep in credit card debt and their company is about to die. It’s late 2007, so elections are around the corner. They design and make Obama cereals by hand to sell to conference goers. That scrappy move takes off as they sell $30k worth of cereal boxes, pay off debt and get accepted in startup accelerator Y-Combinator for their scrappy story. You know the rest.

Alright so today:

• Everyone is buying EVs. Or are they?

• Car insurance premiums are going up.

• Homebuilders are seeing an upside

  Let’s do a look-see.

The Big Picture

Percentage of Battery electric vehicles went up from 2.6% of total vehicles in 2020 to 8.5% of total vehicles in February 2023. It has since slid to 7.3% in March. According to a J.D Power report in March, there are 21% of US consumers who say they are ‘very unlikely’ to buy EVs and that percentage has grown from 17.8% in January. Consumers who said they would likely buy EVs has stagnated at about 27% for several months now.

The key reasons for halt in EV adoption from consumers is lack of charging station availability. This is closely followed by the sticker price on the vehicles. The most surprising indication in the report is that 33% of GenZers say they’re ‘somewhat unlikely’ or ‘very unlikely’ to buy EVs.

This report comes amidst a flurry of EV news as Chevy Bolt is being phased out by GM. The vehicle which was supposed to compete with Tesla Model 3 faced recalls and fire issues in 2021. Now, there are factors which could support growth in EV. Inflation reduction Act for example offers tax credits to purchase of new EVs and also electric charging station investments. US also wants to bring greenhouse gas emissions in 2030 at 2005 levels which should push the needle further.

Sector Sweep

Tech

• Apple IPhone sales are growing in India however their overall revenue was 3% at $94.8 billion for the last 3 months.

• Lyft shares fell as their revenue expectations in the upcoming quarter is lower than expected. They are also managing layoffs and major leadership changes.

• Order in is now the craze, as Doordash revenue grew a massive 40% to $2 billion in the first quarter this year. Tight monetary policy at the Federal end doesn’t seem to change consumer habits when to comes to home delivery just yet.

Transportation

• FAA is clearing airspace for flying taxis, as Boeing based Wisk Aero prepares to build its autonomous flying taxi for 4. United Airlines, Delta are investing in some of these flying car startups.

Real Estate

• Homeowners are postponing their home buying plans with the rise in interest rates, causing home sale supply to get squeezed. New home market is experiencing a boom as home construction businesses are up.

Insurance

• Inflation is hurting auto insurance companies like Allstate and Progressive as they’re raising their premiums. Used car parts are also getting more expensive with longer repair times as their rates keep rising.

That’s all for today folks. Do keep a lookout for our weekly email about stock deep dives and personal finance strategies this Saturday.

BTW, do tell us how we did. Just hit us with a reply.

Cheers!

Memetic Universe

Jamie Dimon has a glint in his eye..

Elon Musk is a bad investor for sure.