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Hertz Shifts Gears

Hertz, IMF, Apple

Good Morning!

Happy MLK Day! Don’t forget that the stock market is closed today.

👉 Hertz plans to sell EVs

👉 IMF sends artificial intelligence warning 

👉 Apple offering rare discounts

Let’s get into it!

HERTZ: Plans To Sell EVs

Last week, Hertz announced its plan to sell about a third of its global electric vehicle fleet, a surprising shift from its previous commitment to EVs. This move aligns with a broader industry trend where automakers are revising their EV strategies, often scaling back due to growing inventories and reduced demand. For instance, General Motors and Honda canceled their joint affordable EV project in October, while Tesla has been cutting its prices globally in 2023.

Source: Electrek

Hertz intends to sell around 20,000 EVs and use the proceeds to buy traditional combustion engine cars. This strategy is expected to incur a $245 million depreciation expense but should improve the company's bottom line by the same amount over two years. This decision reflects a broader market shift, with Hertz already reducing its EV purchases due to falling market values. EVs currently make up about 11% of Hertz's fleet.

🎯 GRIT TAKE: When Hertz made this deal, it was considered… upgrade to VIP to read the full GRIT Take. 

IMF: Artificial Intelligence Warning

The International Monetary Fund (IMF) has warned that artificial intelligence could affect nearly 40% of jobs worldwide, with higher risks in high-income countries than in emerging and low-income nations. Based in Washington, D.C., the IMF suggests that AI might increase global inequality. IMF Managing Director Kristalina Georgieva emphasized the need for policies to address this issue and prevent AI from intensifying social tensions.

In high-income countries, about 60% of jobs could see AI impact, potentially enhancing productivity for some. Conversely, in emerging markets and low-income countries, the impact is estimated at 40% and 26%, respectively, with limited infrastructure hindering immediate AI benefits and possibly worsening inequality.

Source: Central Banking

The IMF also highlighted the risk of income disparities within countries due to AI, where those able to use AI could advance while others might lag behind. Goldman Sachs has noted that AI could affect up to 300 million jobs globally but also acknowledged its potential to boost productivity and economic growth.

APPLE: Offering Rare Discounts

Apple offers discounts on a range of products in China, including the iPhone 15 series, as shown on its website. This rare move for Apple comes amid increased competition and concerns over slowing smartphone demand. The discounts, which include 500 Chinese yuan off the iPhone 15 range, coincide with the upcoming Lunar New Year.

Source: BBC

Analysts at Jefferies reported a significant year-on-year decline in Apple's iPhone sales, with a 30% drop in the first week of the month and a 3% decrease in annual iPhone sales in China for 2023. This decline is partly due to competition from local manufacturers like Xiaomi and Huawei, with Huawei notably launching a high-end smartphone despite U.S. sanctions.

Headlines You Need To Know: 🎙

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A Billion Dollar Shoe Empire

Nike rejected this guy, so he built a billion-dollar shoe brand instead.

Oliver Bernhard is an Ironman runner who has been incredible at his craft. In fact, he was such a great runner that Nike sponsored him.

However, he was obsessed with gaining an edge and went to Nike with an idea for designing a shoe that was built around “cloud-like cushioning technology.” Nike was not a fan of the idea and basically told him to focus on running.

Source: Drapers

Bernhard was never shy of a challenge, so he and his two friends launched a shoe brand called “ON Cloud.” Stealing a page out of Michael Jordan and Nike’s playbook, ON sought after their famous athlete and chose Roger Federer. ON Cloud eventually blew up, and everyday customers started wearing their shoes.

Today, the company is worth billions of dollars.

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