—— Ford Cuts EV Jobs; Tesla Loses Nearly $100B in Value; Biden Cancels $5B Student Debt; U.S. Home Sales Hit 20-Year Low; Consumer Confidence at 3-Year High; Google Scientists Launch AI Startup; China’s International Travel Still Lags
1. Ford Cuts EV Jobs
U.S. automaker Ford Motor announced today it will lay off 1,400 workers who produce the F-150 Lightning electric pickup, citing weaker-than-expected demand.
The company still expects global EV sales to grow in 2024, though at a slower pace than previously projected.
While cutting EV production staff, Ford will add over 1,000 jobs at its Michigan assembly plant to increase production of gas-powered vehicles like the Bronco and Bronco Raptor SUVs.
CEO Jim Farley said the staffing changes reflect shifting consumer demand, though the company remains optimistic about the long-term future of EVs.
UBS expects U.S. EV sales to rise 11% this year—well below last year’s 47% growth.
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2. Tesla Loses Nearly $100 Billion in Value
In 2023, Tesla’s stock more than doubled. But in just the first two weeks of 2024, its shares have fallen 12%, wiping out $94 billion in market value.
Analyst Jeffrey Osborne said investors are increasingly concerned about slowing EV industry growth—especially in China, where steep price cuts have intensified a “race to the bottom” dynamic.
Tesla’s vehicle profit margin has dropped from 27.9% to 16.3% year-over-year, with rising labor costs further squeezing profits.
Despite beating Q4 delivery estimates, Tesla has been overtaken by BYD in sales.
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3. Biden Cancels $5B Student Debt
President Joe Biden announced today the cancellation of $5 billion in student loan debt for borrowers who have repaid for at least 10 years or served in public service.
Among the 74,000 people receiving relief, 44,000 are public servants and 30,000 have repaid under income-based plans.
Support among low-income and minority voters—crucial for Biden’s reelection—has been slipping, and this move is likely aimed at boosting confidence.
Since taking office, Biden has canceled a total of $136 billion in student debt.
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4. U.S. Home Sales Hit 20-Year Low
The National Association of Realtors reported that U.S. existing home sales fell 1% in December to an annual rate of 3.78 million units.
2023 marked the lowest annual sales since 1995—when the U.S. population was 74 million fewer and the median home price was just $114,600.
NAR economist Lawrence Yen said December likely marked the bottom and expects a recovery this spring due to lower mortgage rates and rising inventory.
Spring is traditionally the peak season for U.S. housing, and 2024 is showing signs of recovery.
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5. U.S. Consumer Confidence at 3-Year High
The University of Michigan’s Consumer Sentiment Index rose 9.1 points this month to 78.8—the biggest monthly gain since 2005 and the highest since 2021.
Consumers now expect prices to rise just 2.9% over the next year—down from 3.1% last month and a 3-year low.
Confidence rose across all demographics—regardless of age, politics, or income. Over half of U.S. households believe their wage gains will match or exceed inflation.
Since June 2022, the index has surged 60%.
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6. Google Scientists Launch AI Startup
Two DeepMind scientists—Laurent Sifre and Karl Tuyls—are in talks with investors to launch a Paris-based AI startup called Holistic.
The pair are seeking $220 million in funding and have submitted their resignations to Google.
They are considered influential leaders in the AI field, and the large funding target shows strong investor confidence.
Former DeepMind researchers also founded Mistral AI, now valued at over $2 billion.
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7. China’s International Travel Still Lags
In Q4 2023, the number of outbound Chinese travelers was only 60% of 2019 levels.
China’s recovery in global travel remains far behind the U.S. and U.K.—hurting airlines, travel agencies, and luxury brands that once relied heavily on Chinese spending.
In 2019, 170 million Chinese travelers spent $248 billion abroad—14% of global travel spending.
During the pandemic, reduced Chinese travel cost global tourism $129 billion.
Forty-five cities lost direct flights from China, and outbound routes from China shrank by 43%.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.