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Hello again, dear readers!

Have carmakers jumped too far, too fast, into the EV revolution? The global industry is experiencing a sudden and worrying slowdown that could spell disaster for the likes of Tesla. Or are we simply witnessing a plateau between the first wave of early-moving consumers and mass-market adoption? Find out below.

Also, if you’re in HR, have you considered offering “Grandernity leave”? Older workers are flooding into offices around America and employers need to act fast to attract, engage, and retain them. It’s a symptom of the ongoing retirement crisis which was bound to happen as the aging Boomer generation puts the system under increasing strain. 

Want more? This issue features the usual bunch of AI Insights and recommendations for the week's podcasts, books, shows, charts, and tweets, followed by a final chuckle. 

Let’s get going. 

Industry Highlights: Trouble in EV Paradise

Has the EV revolution hit a rough patch? Concerns are growing about an “enormous misallocation of capital” as EV sales lag dramatically behind production in the US, China, and elsewhere. 

The Financial Times reports that 13.5 million EVs are expected to be manufactured globally this year, rising to 18 million by 2025. But sales are nowhere near as strong. Only 9.5 million EVs were sold in 2023, with 2024 sales estimated to climb to a mere 9.8 million. Check out Tesla’s numbers for Q1 2024:

Why the slowdown? The theory is that, outside of early adopters, most consumers feel EVs are too expensive, while others are skeptical about the whole need-to-charge thing. Many countries including the US are way behind in terms of building the charging infrastructure we’ll need to have all these millions of extra EVs on the road. 

The Financial Times lays out two scenarios: in the first, mass-market buyers inevitably come around to EVs once they become cheaper than petrol cars and there are enough chargers on our roads: “most consumers will never turn back.” In this case, EV makers need to ride out a few more bumpy years until the industry reaches a tipping point in the second half of this decade. 

But in the other scenario, prices fail to fall, authorities don’t build the charging infrastructure we need, and motorists resist indefinitely. The fledgling EV industry will collapse, along with any chance of meeting long-term decarbonization targets which urgently require the removal of ICE cars from the roads. In other words, we’ll be back in Who Killed the Electric Car territory, but this time the villains will be us consumers. 

Tesla is currently facing threats from multiple angles: competition from more affordable Chinese brands (BYD and MG), stuttering demand for EVs in the US and China, and Musk himself, viewed by some potential buyers as a toxic personality. Tesla isn’t alone - nearly every carmaker has sunk vast amounts of capital into the EV revolution. 

But here’s the difference: legacy carmakers can hedge their bets by falling back on petrol models or hybrids (hybrid sales are up) to ride out the current slowdown. Ford, for example, is cutting its 2024 production targets for the F-150 Lightning pickup by 50%, while Audi is similarly reducing its rollout targets for the Q6 e-tron. 

Musk has no such option. Tesla’s shares have fallen 31%, and its market cap has just about halved from its 2021 peak of $1.2 trillion, putting the company at risk of falling out of its vaunted position in the Magnificent Seven:

Tesla has cut prices to stimulate demand, but selling at a loss is clearly unsustainable. What’s needed is a cheaper Tesla model to compete with a wave of EVs coming out of China (BYD has also slashed prices across every model). But - talking about a “misallocation of capital”, Tesla has shelved or possibly scrapped its plans for its Model 2 low-cost vehicle (priced somewhere around $25k) in favor of developing self-driving Robotaxis (expected August 2024), Class-8 Semi Haulage Trucks, the Cybertruck, and the Roadster. At present, 90% of Tesla’s sales come from the Model Y and the Model 3, both of which have prices out of reach for the mass market.  

So, should automakers be panicking? Industry insiders say no. There are now 51 EV models on the market, offering more choice than ever to Americans who want to ditch their ICE vehicles. EVs account for 10% of the market, and EVs are on track to meet Biden’s ambitious climate goals. Prices are dropping, and we’re seeing cool new models like the Volvo EX30, the Kia EV9, and the Chevy Blazer EV. 

There would have to be a significant policy earthquake to derail the long-term trend toward EV adoption. Would a Trump victory have much effect? As usual, it’s hard to determine Trump’s attitude in this area, although we can probably expect another tariff war:

“I want people to buy an electric car, if you want one, but I want them to buy every other form of transportation, every other—I want you to use gasoline a lot, because we have more gasoline than any other country anywhere in the world.”

For now, the best policy for automakers is to hold firm but stay smart. Keep lowering EV prices as much as possible, lean into hybrids if needed, and wait for the mass market to get on board with EVs.

The Future of Work: Boomers Aren’t Retiring Yet

Guess which generation represents the fastest-growing segment of the labor force? No, it isn’t the Millennials or Gen Z. It’s the Boomers!

According to HBR, more than 10 million Americans aged 65+ are currently employed. We can expect this number to rise to 15 million by 2032, when one in four workers will be 55 or older. 27% of Americans aged 65-73 are actively hunting for jobs. 

This was bound to happen. As members of the bulging Boomer generation reach their seventh and eighth decades, we will inevitably see friction around pensions and a re-ignition of the debate around retirement age.  

In his annual letter to investors, BlackRock CEO Larry Fink discussed the retirement crisis and suggested that Americans should work later into their lives. Fink pointed out that people are living longer lives worldwide, which makes it harder to save enough for retirement. He also highlighted the decline in pension enrolment in the US and the strain an aging workforce is putting on the Social Security Administration.

Let’s not forget that the retirement age is a highly emotive issue, particularly for an employee frustrated by seeing the goalposts move just as they are reaching the end of their working life. In France, we saw riots in the streets (yes, rioting pensioners!) in response to the 2023 French pension reforms - which were ultimately canceled. 

A significant factor contributing to the US retirement crisis is the insufficient savings of many Americans. Fink mentioned that nearly half of Americans aged 55-65 had no personal retirement savings as of 2022, according to the Census Bureau. To address this, experts propose rethinking how workers view their retirement accounts. Instead of focusing on total balances, statements should show employees the monthly income they can expect to receive when they retire based on their current savings rate. 

Fink challenged the traditional retirement age of 65, emphasizing the need for HR departments to find ways to hire and retain older workers capable of working for longer. Pew Research data shows that nearly one in five Americans aged 65 and older were employed as of 2023, almost double the number from 1987. 

But here’s the problem. Historically, employers haven't been open to hiring or keeping older workers. Recent research from Boston College's Center for Retirement Research (CRR) suggests that this is changing, with employers recognizing the productivity of older workers.

HBR’s deep dive into this issue, titled Redesigning Retirement, suggests employers get the most out of older workers by tapping into their experience and formalizing programs to ensure knowledge is passed down to younger colleagues. Attract, retain, and engage older workers with programs such as phased retirement and refresher training on the latest ways of working, systems, work terminology, and tech. Stamp out bias against older workers and look out for subtly ageist language in your job ads (“energetic,” “digitally savvy”). Finally, offer some flexibility regarding timing (part-time work), location (work from home), and benefits. Older workers are less likely to value paid time off but are very keen on health insurance and dental care benefits.

Watch this space. If you’re in HR, start thinking about ways to attract, engage, and retain older workers. Grandternity leave, anyone?

AI Insights

• Ebay launched an AI-powered personalized fashion shopping tool: “Shop The Look” is a new feature in Ebay’s IoS app that shows personalized shopping suggestions based on a customer’s purchasing history, revealing similar items and outfit inspirations that match that customer’s style. 

• US Government to give Taiwan’s TSMC $6.6 billion toward Arizona chip plants: The Biden government has stressed the need to bring more chip production to American soil, given the fragility of Taiwanese supply chains in the event of Chinese military aggression. 

• Meta will start applying “Made in AI” labels to AI-generated videos: The new policy will impact AI-generated videos, audio, and images on Facebook and Instagram from May 2024. Meta will also add a “high risk” label to AI-generated content that could “deceive the public on a matter of importance.” Sounds like a good move in an election year.

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The Supply Aside

📕 Read - The Anxious Generation: How the Great Rewiring of Childhood Is Causing an Epidemic of Mental Illness

Jonathan Haidt’s book is best described as an urgent investigation into the collapse in youth mental health due to the shift in kids’ energy and attention from the physical world to the virtual one. Haidt points the finger at smartphones and social media apps, soaring time online, and the distress felt by teens constantly comparing themselves to others. The Anxious Generation delves into four chilling impacts of a phone-based childhood: sleep deprivation, social deprivation, cognitive fragmentation, and addiction. A must-read for parents. 

What Else I’m Reading

• Power bills are likely to keep rising even when the inflation dragon is tamed: We just heard this week that inflation is running hot yet again. If you’ve been banking on slowing inflation to bring down your power bills, you’ll be disappointed. Bloomberg reports that ratepayers are footing the bill for a spending spree as utilities fortify, decarbonize, and expand their grids.

• When Volkswagen went all-in on EVs: While many carmakers are hedging their bets by producing fuel-burning cars alongside EVs, Volkswagen has provided an interesting case study by going 100% electric at its large plant in Zwickau, Germany. The result? No economic hardship for the factory town, no mass layoffs, no bankrupt suppliers… although Volkswagen is increasingly worried about the popularity of rivals like Tesla and BYD. 

• How does your dream economy compare to reality? An interesting (and quite fun) interactive article from WSJ where you use a series of sliders to indicate where you’d like the economy to be, then see where we currently stand. Some of the results took me by surprise. 

📺 Watch - Leaders Who Make A Difference (HBR)

Hosted by HBR’s editors, Leaders Who Make a Difference 2024 convened top CEOs and management thinkers to explore driving positive social change through innovative business and leadership practices. It was an all-virtual program featuring live interviews, mini-masterclasses, audience Q&As, and more. 

This session featured leaders including Jim Rowan (Volvo Cars CEO), Lisa Su (AMD CEO), and a whole bunch of social entrepreneurs from around the world. Topics covered everything from harnessing AI, career advice, wise thoughts on leadership, the challenges of the circular economy, EV Tech, and healthcare. 

I enjoyed the format, which included plenty of breaks and even a workplace yoga session… although attending an online conference did have a COVID-era feel.

👂 Listen - The Knowledge Project Podcast: Dr Julie Gurner

“Most people are capable of far more than they imagine themselves to be,” says executive performance coach and doctor of psychology Dr. Julie Gurner. “We stay small because we believe these imaginary rules to be true.” Gurner joined The Knowledge Project podcast to talk about strategies for reaching one’s potential, including harnessing discipline, motivation, breaking the imaginary rules we learned as children that hold us back today, setting boundaries, the advantages of caring deeply and challenging directly, and more.

💡 Think - Hungry For More

There’s plenty to chew on after concluding our annual month of Ramadan. Ramadan’s end is always filled with reflection and evaluation and, for my part, high hopes followed by the wish that, at the very least, we did better than last year and the coming one might be even better. It is always a bittersweet time of the year, and it should be, a treasured and rewarded one, but nonetheless, a sad one when it ends properly. And before we know it, we’re back to the mundane world of work and, more importantly, to eating and drinking during the day with my fellow humans. Eid Mubarak to all my celebrating friends.  

Charts of the Week

Quote of the Week

Tweet of the Week

I recently had what can be deemed a ‘viral tweet.’ Don't ask me why or how, as this was not planned. I stumbled on a tweet and felt the need to fire a quick response, and lo and behold, it garnered almost 126K views and over 720 likes. 

The Final Chuckle

Thanks so much for reading. I’d love to know what you think about this issue and how I can make it more useful to you.

If you have suggestions or topics you want to see me address, email me at [email protected]!

Want more?

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Happy reading this weekend!

-- Naseem