Hi! Two-thirds of Americans say the US is more divided than usual, according to a recent YouGov survey, the remaining third presumably disagree wholeheartedly and want nothing to do with their rival faction. Today we’re exploring:
Made in China, for China
Volkswagen has lost its crown in China, as new data reveals that domestic brand BYD has become China’s best-selling car brand for the first time, capturing 10.4% of the market in the most recent quarter.
Founded in 1995 by a Chinese chemist, BYD's original focus was on energy storage, with a large battery-factory in Shenzhen. But 8 short years later the company was able to position itself at the centre of China's burgeoning auto industry, after acquiring a small car manufacturer in northern China.
From there, BYD’s production of affordable combustion engine vehicles ramped up quickly. However, it wasn’t until BYD started to focus on electric vehicles — harnessing its years of experience in battery technology — that the company really made its mark. A $230m investment from Mr. Warren Buffett in 2008 helped supercharge the company’s growth, with BYD's relentless focus on manufacturing as much as possible “in-house” helping to keep costs down.
One example of BYD's ability to scale is the humble pandemic mask. During the height of the COVID outbreak, BYD began to assist in the production of masks. Within weeks the company had built an enormous supply chain in record time, which was reportedly able to produce 50 million masks every single day at its peak.
Tesla beat BYD to become the first company to sell more than a million all-electric vehicles in a year — shipping 1.31m in 2022 — but BYD's growth suggests the race to 2 million might be a lot closer. The Chinese company's shipments in Q1 nearly doubled its efforts from last year.
Last week, the Wall Street Journal reported that an office building for sale in San Francisco — which was worth $300m before the pandemic — is now expected to receive bids around $60m, which would crystallize an ~80% loss for the seller. Though it’s an extreme example, the San Francisco fire sale is indicative of a broader issue, as many, including the famous 99-year-old investor Charlie Munger, are warning about an impending storm in the US commercial property market.
Given the rise of remote working, it’s no surprise that office planners are finding they have too much space — the US office vacancy rate reached an all-time high of 12.9% last month, marking its sixth consecutive quarter of increase. Big tech companies such as Meta, Lyft, and Salesforce have already begun shedding millions of square feet of office space.
If history is anything to go by, the pain in commercial real estate might only be getting started. The two most recent commercial real estate crashes saw values fall ~17% (1989-1993) and ~35% (2007-2010). That would suggest that prices could come down a lot further than the 8% they've already fallen — a comparison which gets more alarming when you consider that those crashes came before the remote work revolution.
As the largest lenders to, and owners of, commercial buildings, America’s banks are heavily exposed to any slowdown. Indeed, banks hold roughly half of the whopping $5.6 trillion in debt that the commercial property industry owed in 2022.
What’s in a name
Women have long been under-represented in the boardrooms of big business, a phenomenon that led to a New York Times piece in 2015 which revealed that there were more Johns, Jons, or Jonathans running S&P 1500 companies than female-led organizations.
A recent Bloomberg update with similar analysis has revealed some progress, with more female CEOs in the flagship S&P 500 Index than ever before. Indeed, 41 women now lead S&P 500 companies, with execs like Mary Barra heading up GM, Adena Friedman at Nasdaq and Corie Barry at Best Buy.
The total count is up 18 compared to where it was 8 years ago, and it means, for the first time, that the tally of 41 female CEOs finally matches the 23 + 18 CEOs that are called Jon / John or James. Last year, 13% of new CEOs were female, suggesting that the count of 41 is likely to rise — but 50:50 representation seems, at a minimum, decades away.
Go deeper: with the new Bloomberg analysis and a 2018 revision from the Times.
• Living among the rich and famous this summer will come at a high price — a home in the Hamptons now costs a record $3 million on average.
• NASA trying to keep its Voyager 2 spacecraft working until 2026. That's a tall order considering the spacecraft is more than 12 billion miles away, is running out of power, and is made up of instruments from the late 1970s.
• A WW2 veteran has received more than 4,000 cards for his 105th birthday.
• Hundreds of celebrities, fashionistas, and designers will descend on New York’s Metropolitan Museum of Art tonight to attend the annual Met Gala — a fundraising event where tickets start at $50k a person or $300k for a table.
• Visualizing legendary painter Bob Ross’s color palette.
• Charting Ukraine’s rising exports since Russia’s invasion.
Quick cut: The Super Mario Bros movie has become just the fifth movie to break through the $1 billion mark at the global box office since the pandemic. Can you name the other 4? [Answer below].