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Wednesday Jul.06, 2022
🔋 Tesla’s broken streak
EVs take a cross-continental cruise (Shen Chunchen/VCG via Getty Images)
Hey Snackers,
Shine bright like a billionaire… and keep up with the Kardashians. Rihanna has dethroned Kylie Jenner as America’s youngest self-made billionaire woman with a brilliant $1.4B net worth.
Stocks finished mixed to start the short trading week. Of the three major US indexes, the biggest mover was the techy Nasdaq, which gained 1.8%. As recession fears heated up, oil tanked: Brent crude had its steepest one-day drop since March.
NEV
Tesla’s quarterly deliveries fall for the first time in years, as “new energy vehicles” come for its battery-powered throne
Model Less... Tesla's streak of record quarterly deliveries is over. For the first time in over two years, Tesla’s deliveries fell from the previous quarter. The big T delivered 254,695 cars during the quarter that ended in June — fewer than expected and down by nearly 60K from the previous quarter. A few reasons for the slowdown:
- China's Covid crackdown: The zero-tolerance policy hurt Shanghai output. Tesla had to halt production at its largest factory for weeks because of citywide lockdowns.
- Global growing pains: Tesla’s having trouble ramping up production at its newest factories, in Germany and Texas, which Elon has called “gigantic money furnaces.”
NEV-er say never... Tesla's still the leader in battery-only EVs, but its stock has fallen 42% this year as rivals edge closer to the Technoking's lead. On the one hand, Tesla’s dealing with mounting electric competition from auto OGs like Volkswagen, GM, and Ford. On the other, it's dealing with rising EV and “new energy vehicle” (NEV) companies, especially in the key market of China.
- "New energy": The term China uses to denote plug-in vehicles eligible for gov’t subsidies. That includes battery-only vehicles (like Tesla) and hybrid plug-ins and fuel-cell cars.
- Dethroned? BYD, a Chinese car company backed by Warren Buffett, has surpassed Tesla as the world's largest EV producer by sales. The catch: not all its vehicles are battery-only. Many are hybrid plug-ins. Still: all are NEVs.
New energy could be Tesla’s new enemy… While Tesla’s famous for its battery-only whips, plug-in hybrids have a battery plus a regular engine for longer journeys — but are still considered “zero emission” under China’s sales rules. That means they get the benefit of less #RangeAnxiety but just as much subsidy support. That flexible NEV status helped BYD quadruple deliveries to 641K cars in the first half of the year, compared to Tesla’s 565K.
Euro
Lululemon stretches its global footprint into Spain, aiming for wealthy Euro travelers away from home
Tapas & track pants… Lululemon’s taking its athleisure biz to Spain — its first new European market since 2019. Shares of the legging legend jumped 8% yesterday after it announced plans to open two brick-and-mortar stores in Barcelona and Madrid this fall. Lulu is also set to debut a Spanish e-comm site this month as it expands its global footprint.
- Poised passport: Lulu has 40 stores in 8 European countries, including France and Germany, but earns most of its sales from North America.
- Tourist hotspots: As recreational travel rebounds, Lulu’s eyeing Europe’s top destinations (think: Paris’ Champs-Élysées and Italy) as expansion targets.
Layover leggings… in every color. Lots of pandemic thrivers have seen slowing growth as “normal” life returns, but Lulu fans are still splurging on $80 sports bras and biker shorts. Last year Lulu’s sales popped to a record $6B (beating rival Under Armour). And Lulu boosted this year’s sales outlook to $7B+ after sales grew 32% last quarter.
- By adding Spain to its portfolio, Lulu’s building on a key pillar in its long-term growth plan (dubbed: “Power of Three x2”) to double revenue by 2026.
- Lulu’s “PoT” strategy includes quadrupling international revenue and doubling sales for its e-comm and emerging men’s biz.
- So far so good: Lulu’s brand appeal has helped it gain more global market share than any other active apparel brand since 2019.
To find your base, you may have to leave home… Lulu’s already crushing it at your outdoor mall — now it’s going for splurge-happy tourists. It’s not forsaking its core North American customer base, just finding them where they’re most likely to spend. Lulu could attract wealthy regulars on long layovers, but also new foreign customers who’ve seen it hyped on Insta.
What else we’re Snackin’
- Untax: President Biden could ease some of the tariffs pumping up the cost on $300B worth of Chinese imports. That might help fight #flation, but Treasury Secretary Yellen says tariff policy isn’t a cure-all for high prices.
- Pickup: Ford’s new vehicle sales ticked up last quarter and outperformed the industry, but disappointed expectations. EV sales (think: Mustang Mach-E, F-150 Lightning) were up 77% from last year.
- Cut: Republicans from nearly two dozen states have sued to use federal Covid aid — which currently can’t be used to cut taxes — to cut taxes. Experts fear it could leave state budgets unprepared for a recession.
- EPO: The EU plans to ease IPO rules to attract $47B in funding for tech startups by simplifying listing requirements, reducing regulation, and making it easier for founders to keep control post IPO.
- Fried: KenTacoHut icon Yum Brands is about to ditch its remaining KFC restaurants in Russia, after selling its Pizza Hut franchises there in May — another example of the American “Calorie Curtain” on Russia.
Wednesday
- National Fried Chicken Day
Authors of this Snacks own: shares of Tesla, Ford, and GM
ID: 2275388
