Wednesday Nov.17, 2021

🏆 Lucid’s EV award

Race for the EV Big 3 [mrPliskin/E+ via Getty Images]

Hey Snackers,

Delivery-only “ghost kitchens” have been cropping up everywhere, and we just got another one: DJ Khaled is launching an international chicken-wing delivery through Another Wing.

Stocks slipped today despite strong earnings from Target and Lowe’s. Visa shares slumped and pulled the Dow down after Amazon said it would stop accepting Visa cards in the UK next year.

Shiny

Lucid takes its spot among the Big 3 EVs after winning “car of the year”

Halle-lucid... The sedans are coming. EV startup Lucid went public via a SPAC merger in July, and began delivering its luxury sedans to driveways last month. Yesterday, the Lucid Air — aka Lucid’s first product — was crowned car of the year by auto magazine Motor Trend. It’s the first time the award has been given to a carmaker’s first vehicle (FYI: Tesla won in 2012 for the Model S). The specs:

High range, high price: The Lucid Air has the longest range of any EV sold in the US, at 520 miles/charge. Tesla’s Model S, the next closest, gets just over 400. But its $169K price tag tops sedans from luxe brands like Tesla and Porsche.
Futuristic features include an iPad-like touch display, a 21-speaker sound system, and a solid glass roof that still keeps the sun at bay.

Making Elon sweat... Lucid shares soared 23% yesterday after it won the award and dropped its first public earnings on Monday. It’s now worth more than Ford, even though it delivered zero vehicles last quarter and lost more than $500M. Investors were revved up over future sales.

Lucid ended last quarter with 13K reservations, representing ~$1.3B in potential sales. Lucid execs say the total has jumped to 17K since then.
Lucid plans to produce 90K/year by 2023, and has $4.8B in cash on hand to do it. Tesla delivered 1,500 Roadsters in its first year on the market.
FYI: Saudi Arabia's sovereign wealth fund owns 63% of Lucid, and has plans to turn its capital city, Riyadh, 30% electric by 2030.

We could get an EV Big 3… Just like GM, Ford, and Stellantis (fka Fiat-Chrysler) are the Big 3 Detroit car companies, we could see a Big 3 of California EV makers if Lucid and Rivian can scale like Tesla has. EV purchases in the US have nearly doubled from a year ago and growth is expected to accelerate. But consumers want more options than just Tesla. Tesla still accounts for the majority of EVs sold in the US, but it’s expected to lose market share in the coming years.

Shelves

Walmart is stocked up for the holidays — thanks to its pricey private ships

Stocked and loaded… Walmart’s holiday shopping carts. Walmart beat quarterly sales growth expectations, but profits plunged 40% from last year on higher supply and labor costs. FYI: Target, Macy’s, and Kohl’s, which face similar supply and labor crunches, also report earnings this week.

E-cart (still) strong: Walmart’s US e-commerce sales jumped 8% from last year and 87% from 2019.
Mixed bag: While Walmart shares fell 3% on plunging profits, execs boosted holiday forecasts, saying there’s “excitement in the air.”

Ship, ship, hooray… US holiday spending is expected to hit a record $800B+ this season — great news for retailers with inventory, but a missed opportunity for those running short. Last month, shipments from Asia took twice as long and cost twice as much as pre-pandemic. Walmart, Home Depot, and Costco started paying for private ships as early as May to keep shelves stocked. Now...

Walmart had 11.5% more inventory than last year, from clothes to Christmas trees.
Home Depot reported stronger-than-expected sales partly because of inventory management (feat. chartered ships).
Smaller retailers that can’t afford $140K/day private ships may be stuck: Half of small retailers say they expect supply-related holiday inventory shortages.

More problems can mean more money… for companies that can afford to tackle them. Everyone’s dealing with supply and labor headaches. But Walmart has the cash and infrastructure to handle them — and gain a competitive advantage in the process. Walmart is known for keeping prices steady as inflation rises, cutting into profits to attract more customers. The cost of keeping shelves stocked is high, but it could pay off in more market share. Other companies like Amazon and Chipotle are also spending big to overcome supply and labor obstacles and win customers.

What else we’re Snackin’

Pills: After Pfizer requested FDA approval yesterday for a new antiviral Covid pill for high-risk patients, the White House said it would buy 10M courses for $5B.
Backpedal: Peloton announced plans to sell $1B worth of stock yesterday, just weeks after insisting it didn’t need any more cash to combat slowing growth.
Smoky: North Carolina officials began investigating Puff Bar, the e-cig company that replaced Juul as the most popular vape among teens.
Contraband: The US Justice Department is selling $56M worth of crypto seized in a crackdown on crypto-lending program BitConnect to compensate fraud victims.
Views: Netflix said it would rank its top 10 shows by total hours watched, instead of how many viewers watched the first two minutes, after facing criticism over its metrics.
Punt: The Green Bay Packers NFL franchise is selling “shares” of itself for $300 to fund stadium improvements — but the shares can’t be traded, resold, or cashed out.

Calling all Snackers: You hear from us every day, but we want to hear from you. If you have a second, let us know what you think about Snacks with our quick survey.

Wednesday

Earnings expected from La-Z-Boy, NVIDIA, Cisco, Lowe's, Target, Baidu, Bath & Body Works, and Sonos

Authors of this Snacks own shares of: Pfizer, Ford, GM, Tesla, Netflix, Walmart, and Amazon

ID: 1925251

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Quite a few news outlets are reporting that Apple thinks it’s only going to sell 400,000 to 450,000 Vision Pros in 2024, compared a “market consensus” of 700,000 to 800,000. They’re all citing a note from Apple analyst Ming-Chi Kuo.

Obviously there’s no question that Apple’s $3,500 face computer will have a limited audience and could be a huge flop, but this also doesn’t seem like accurate news.

The issue is that 1) this 400,000 number isn’t new. Back in July of 2023, the Financial Times reported that Apple planned to make fewer than 400,000 units in 2024, reducing its initial projections of 1M units, citing two people close to Apple and, the Chinese contract manufacturer assembling the device. 2) It's unclear who was estimating 700,000-800,000 Vision Pros in the first place, but it appears that it was Ming-Chi Kuo himself?