🚙 Ford’s Tesla response

More a-Ford-able… Ford is following Tesla down the discount road: the Detroit carmaker said it’ll slash prices of its electric Mustang Mach-E crossover by an average of $4.5K. It also plans to boost production from 78K units/year to 130K. The Mach-E helped Ford become America’s second-best-selling EV maker, with 65K+ electric cars sold in the US last year (trailing Tesla’s 500K+). Recently Tesla also announced price cuts, including slashing its Model Y price tag by up to $13K.

• Less profit: With the cuts, the Mach-E will have a starting price of $46K. The markdowns mean that not all Mach-E models will be profitable on a per-unit basis.
• More saving: Ford expects to offset some of that profit drop with streamlined production and lower commodity costs. FYI: Ford reports on Thursday.
• Ford stock lost 3% yesterday after the news. But investors had reacted positively to Tesla’s cuts, hoping that lower prices would boost sales.

Everyone wants to be an EV player… The markdowns from America’s two largest EV sellers are all about revving up demand as competition booms (partly thanks to subsidies). From old-school players like GM and Toyota to electric-first companies like Rivian and Lucid, carmakers are doubling down on EV ambitions. While the US lags behind China and Europe in electric adoption, full-electric vehicles accounted for nearly 6% of all cars sold in the US last year — up from 3% in 2021.

Beyond the grocery aisle… into high-margin style. Walmart's going for a new look (which could make it harder for you to reach the grocery section). The big-box behemoth remodeled six of its SuperCenter mega stores to focus shoppers' attention on clothes, makeup, pet supplies, and furniture — all items with higher profit margins than groceries. A $30 floral dress that costs $3 to produce typically brings home more profit than a box of cereal.

• Front and center: Picture snazzy mannequins under spotlights at the front of the store, eye-catching cosmetics displays, and colorful pet-supply sections.
• Try it on: At least 30 more Walmart stores have adopted elements of the fanci-fied makeover. Walmart’s trying to pump profits after posting a loss in its October quarter.

Come for the juice… stay for the jeans. As America’s largest grocer, Walmart has always used affordable groceries as a hook (groceries = over half of Walmart’s sales). As food inflation squeezed budgets last year, higher-earning households switched to Walmart for groceries. Now it hopes it can persuade them to spend on more than just hummus and salmon. But it might not be easy: consumers have been cutting back on discretionary merch spend.

• Talk: The TikTok ban saga continues: Its CEO, Shou Zi Chew, agreed to testify before Congress in March to help address lawmakers’ growing concerns, from data sharing with China to propaganda risks.
• BagFee: Budget airlines are booming as flight prices stay sky high: Ryanair, aka the Spirit Airlines of Europe, posted a record profit for its holiday quarter and expects to hike prices for summer getaways.
• HotBot: Baidu, the Google of China, will reportedly integrate ChatGPT-like tech into its search results. OpenAI’s Microsoft-backed chatbot could pose an existential threat to Google.
• CryptBowl: Compared to last year's Super Bowl ads bonanza, crypto cos are muted ahead of this year's game. With crypto winter and FTX’s collapse, viewers may be less receptive to upbeat crypto-mercials.
• Luxe: After China lifted international travel restrictions for its citizens, tourist destinations are waiting for big-spending Chinese travelers to return to luxury stores and hotels. Instead, they’re flocking to stores in China.

• Earnings expected from Spotify, UPS, GM, Match, Snap, UBS, Mondelez, Marathon Petroleum, Pfizer, McDonald’s, and Caterpillar

Authors of this Snacks own shares: of Amazon, Apple, Google, GM, Snap, Tesla, Microsoft, and Walmart

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