Why Hybrids Are Lapping EVs

Plus: The healthcare sector injects a jolt into the job market. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

November 27, 2023

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Good morning.

Just the fax, ma'am.

A cyber attack on court systems in Kansas has left lawyers filing documents by hand and fax for the past month, The Wall Street Journal reported. This follows similar attacks in Florida, Georgia, Louisiana, Minnesota, and Texas. Meanwhile, MGM Resorts predicts the hack it experienced in September will result in a $100 million hit. If it sounds like a heyday for hackers, it's because it is: Cybersecurity Ventures predicts the cost of cybercrime will hit $8 trillion this year. Fax machines sound analog and low-risk, but unfortunately, they can also be hacked and used to spread vicious malware. Here's what we know for sure: no one ever got rich hacking the Pony Express.

Morning Brief

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Toyota's hybrid strategy finds its time.

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Baby boomers are fueling a healthcare boom.

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It's time to eat more salads.

Autos

Toyota's Hybrids Are Having a Moment

(Photo Credit: Andrew Roberts/Unsplash)

Slow and steady wins the race — and still saves gas.

Elon Musk and Tesla have gone all-in on electric vehicles, but Toyota — which took a more measured approach to its EV rollout — is getting to say, "I told you so," according to a Wall Street Journal report this past weekend on the two companies' trajectories.

Hey, People, You Gotta Drive Hybrids Already

Hybrid cars cut carbon emissions, have driving ranges comparable to gas engines, and don't need to be charged at home. But hybrids have played second fiddle to traditional combustion engine vehicles in the US, and when Tesla and its Model Y drove onto the scene, hybrids were relegated to third chair, with EVs seen as the inevitable future. Inevitably, US hybrid sales took a hit last year, while EV sales rose 65%, according to Kelly Blue Book.

But now, stubborn inflation and high interest rates are squeezing buyers considering a move away from gas guzzlers. Drivers are keen on sub-$50,000 price tags, but the average cost of an EV is about $53,450, according to Cox Automotive. And consider the recent fates of Ford and General Motors, which came into the year looking to take a page out of Tesla's playbook with their own major EV pushes, only to see demand wane and be forced to retreat to a re-focus on hybrids.

With the US on recession watch for more than a year now, hybrids are leap-frogging EVs, which could be stuck in a rocky future:

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By April, Tesla had already slashed prices on some of its Model Y and Model 3 cars six times this year as it looked to compete with Ford, which was cutting prices on its F-150 Lightning electric truck. Musk seemed content to forego profit — which, as it happens, plummeted 44% in the third quarter — in a bid to boost sales growth.

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Toyota Chairman Akio Toyoda saw the enthusiasm for EVs but had the company spread its investments across hybrids, EVs, and other tech. Toyota said its Q3 profit more than doubled from a year ago, thanks in part to strong global demand for hybrids. Sales of Toyota's conventional hybrids rose 41% year-over-year, and sales of its plug-in hybrids were up nearly 90%.

That's a Lot of Car: Most cars are still gas-powered and often very large. By 2022, the share of US cars on the road that were sedans dropped to 21%, while SUVs hit 55% and trucks grew to 20%, the Associated Press reported. And the results haven't been so Earth-friendly: A report from the Global Fuel Economy Initiative suggested that the negative environmental impacts from cars could've been lessened by 30% in the past decade if folks weren't so obsessed with SUVs. Bigger hasn't been better for the planet in automotive terms.

- Griffin Kelly

Indicators

Healthcare Hiring Boom Buoys Job Market

Say what you will about aging baby boomers. If it weren't for them – and their growing reliance on healthcare workers – the labor market might look a lot less peachy.

The American labor market has remained quite strong all year, even if it's just starting to cool off. Much of that robustness, it turns out, can be attributed to a white-hot healthcare sector, which powered an extraordinary amount of job growth in the past six months, according to a Wall Street Journal analysis of Labor Department data published this weekend.

The Graying Zone

The unemployment rate ticked up to 3.9% in October from the historically low 3.4% earlier this year. The bump higher tracks with a widely expected slowdown in economic growth as the calendar turns over, which would likely coincide with a widespread hiring freeze, if not layoffs.

But boomers may be putting their fingers on the scale yet again. By decade's end, a full 21% of the country is expected to be eligible for senior-citizen discounts, an increase from 17% in 2020 and 13% in 2010, according to the US Census Bureau. The graying shift is already straining a healthcare system starved for labor following a pandemic that bred burnout and early retirements.

In response, the industry is hiring up a storm:

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In the six months through October, the healthcare industry accounted for 30% of jobs added in the US, with its workers representing roughly 11% of the total labor force. In October healthcare, government, and hospitality fueled virtually all job growth.

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The hiring offset a high amount of churn: In September, the number of healthcare workers quitting their jobs was 22% higher than the pre-pandemic average in 2019.

Stable Condition: Stress and staff shortages aside, healthcare workers can take solace in the relative stability of the job — the work will continue to be essential, and recent history says your paystub may reflect that, too. Healthcare payrolls were up over 4% in the third quarter, according to a WSJ analysis, faster than the 3% pace seen earlier this year, and better than growth of just over 1% seen by all other workers. Maybe health does in fact make wealth.

- Brian Boyle

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Industrials

The UN Wants You to Eat Less Meat

The United Nations thinks we can eat our way to a greener planet.

The UN's Food & Agriculture Organization is expected to deliver a comprehensive road map to realign global food systems with carbon-emissions goals outlined in the Paris Climate Agreement at the COP28 summit later this week. The FAO has already teased out the report's main course: Wealthier nations need to limit their intake of steak, pork chops, and chicken wings.

Don't Have a Cow, Man

Cultivating and distributing our food supply accounts for a whopping one-third of global greenhouse gas emissions, with the livestock industry accounting for the uh, cow's share of that equation. Worse, environmentalists say, is the ecological impact of maintaining the livestock industry, which often leads to deforestation and biodiversity loss in addition to methane emissions.

It's no wonder that climate scientists pushing for a global economy with net-zero emissions by 2050, as agreed to in the Paris Agreement, are pushing for a major overhaul to one of climate change's major culprits:

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Disclosed carbon emissions at the world's 20 largest publicly-listed meat and dairy companies have increased over 3% this year compared to 2022 levels, according to a recent report from the FAIRR Initiative, a non-profit tracking ESG risks at large companies.

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The UN has previously recommended the industry reduce emissions by 3% annually between 2020 and 2030, and only four of the sector's top 20 have announced net-zero plans, according to the FAIRR Initiative.

Cooked on a Feeling: The UN plan, according to a Bloomberg report, will eventually include country-specific recommendations and points of emphasis. The typical person in the US consumes roughly 127 kilograms (about 280 pounds) of meat per year. That compares to about 60 kilograms in China, 27 kilograms in Thailand, and just 7 kilograms in Nigeria. Still, influencing consumer behavior — especially around diets and meat consumption — is typically politically sensitive, to say the least. To curb meat consumption in the US, the government may have to pry chicken wings out of some spicy, sauce-covered hands.

- Brian Boyle

Extra Upside

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Moving in: Shuttered Bed Bath & Beyond locations are highly desired properties.

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It's about the music: Small venues try to stay affordable even as putting on shows gets more expensive.

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Congress is Targeting Your Rewards. Headed home for the holidays using hard-earned credit card points and miles? That could change in the future if the Credit Card Competition Act of 2023 has anything to say about it. This proposed legislation could destroy valuable credit card rewards programs used for flights, hotels, and cash back. Fill out this simple form, brought to you by The Points Guy, to protect your points.*

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