⚡ Tesla loses its crown

Not fast enough… Tesla notched record EV sales in the final three months of last year (still feels weird to say that) after shipping nearly 485K electric vehicles. The delivery #s, which dropped yesterday, were a 20% jump from Q4 2022, but still not enough to hang on to the No. 1 spot. Chinese EV maker BYD sold 526K of its battery-only electric vehicles in the final quarter of ’23, topping Tesla for the first time.

• Full speed: BYD’s popularity has soared in China, thanks mainly to its low prices. While BYD’s Seagull costs about $11K, Tesla’s most affordable Model 3 starts at nearly $40K.

• Tight race: While Tesla still beat BYD in EV deliveries for the year (1.8M vs. 1.6M), the gap’s shrunk significantly since ’22.

Off the gas… Tesla’s long been the top pure-play EV maker, and still outearns BYD because of its high prices, but the crown's getting heavier. Yesterday, the list of electric cars that qualify for the full $7,500 tax credit from the US gov’t shrank to 13 models after the Biden admin disqualified cars with EV batteries made from a “foreign entity of concern” — ahem: China. While Tesla’s Model Y still meets the standards, the Cybertruck and some versions of the Model 3, S, and X do not. Next year, credit restrictions will expand to critical battery materials (like nickel and lithium) sourced outside the US.

Gift receipts in hand… As consumers settle back into post-holiday life, retailers face the daunting peak of the holiday-returns window (yesterday was National Returns Day). Analysts estimate that US shoppers will return as much as $173B worth of unwanted stuff from this holiday season. Those funky mittens aren’t just magically processed: transporting, sorting, and determining the condition of returned items is a huge challenge for US businesses.

• Unwanted costs: A $100 online order costs merchants about $27 to process. Just 30% of returned items are resold (think: last season’s sweater), while much of the rest winds up in a landfill.

• Package pileup: During the pandemic, shoppers cozied up to online shopping and frequent returns, and convenient habits die hard. Customers returned $817B in goods last year (double 2019’s level) with nearly 9 in 10 merchants reporting an increase in send-backs.

Throwin’ it in reverse… The US returns industry (or “reverse logistics”) is booming, worth nearly $1T in 2022. And as long as consumers keep admitting they hate their new pants, it’s projected to keep growing. Companies like Inmar Intelligence (North America’s largest) handle retailers’ unwanted goods — housing the misfit gifts in massive warehouses and determining, item by item, what’s fit for resale. As Big Returns grows, major shipping companies are getting involved: this fall, UPS acquired box-free return specialist Happy Returns.

• Disaster: Earthquakes killed dozens of people in Japan and damaged thousands of buildings. After, a Japan Airlines plane collided with a coast guard aircraft, killing five.

• Reroute: Maersk indefinitely paused all travel by its cargo ships through the Red Sea and Gulf of Aden after one of its ships was attacked. 12% of global trade passes through the Red Sea daily.

• Buffer: More folks are canceling their subs to streamers like Netflix and Max, with 6.3% defecting in November. To keep customers, companies are bundling services and offering cheaper tiers with ads.

• Tuition: A new FAFSA for student financial aid is live, but experts say few people will be able to use it right away. New changes to the form could make college costlier for some families.

• Paxnovid: $2.2B worth of Pfizer’s Paxlovid meds (used to treat Covid) in the UK and Europe are set to expire next month. Demand for Covid vaccines and meds has receded dramatically, both abroad and in the US.

• November job openings

• Earnings expected from Cal-Maine Foods

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