Motley Fool Money
The EV Truck War Is Officially On
Mon Jul 17 2023Description
The episode covers various topics including the Cybertruck and electric trucks, EV sales and charging stations, Eli Lilly's acquisitions and pharmaceutical industry, bull vs bear argument on Eli Lilly, and the impact of student loan payments and refinancing.
Insights
Competition in the electric truck market
The Cybertruck faces competition from Rivian, GM, and Ford who have introduced their own electric trucks.
Range concerns for electric trucks
The promised range of 500 miles for the Cybertruck may not be accurate or applicable in all scenarios. Actual range will likely be less than advertised but improve over time.
EV sales growth and charging station dominance
EV sales are growing at a slower rate, but Tesla dominates the North American charging station market.
Eli Lilly's acquisitions and drug pipeline
Eli Lilly is acquiring an obesity drug maker and has multiple drugs in its pipeline, including treatments for obesity and Alzheimer's.
Debate on Eli Lilly's stock price
There is a debate on whether Eli Lilly's stock price already reflects its success, with a high forward PE ratio.
Impact of student loan payments
The resumption of student loan payments could impact the economy, with potential effects on spending in industries like travel, retail, and auto.
Save plan for student loan payments
The save plan aims to make student loan payments more affordable by reducing monthly payment as a percentage of discretionary income and shortening the time to loan forgiveness for lower balance borrowers.
On-ramp program for loan payments
The on-ramp program allows borrowers to restart their loan payments without penalties or credit score impact, providing a soft landing and helping them adjust to the new normal budget.
Impact of student loan payments on industries
Industries like travel may suffer when loan payments kick in, as consumers are likely to cut back on discretionary spending. Lenders like car payment providers may not be significantly affected.
Refinancing options for student loans
Companies offering private student loans and refinancing may benefit, but currently, federal loan interest rates are better than refinancing options.
Chapters
- Cybertruck and Electric Trucks
- EV Sales and Charging Stations
- Eli Lilly and Pharmaceutical Industry
- Bull vs Bear Argument on Eli Lilly and Student Loan Payments
- Impact of Student Loan Payments and Refinancing
Cybertruck and Electric Trucks
00:05 - 08:10
- The Cybertruck has been delayed for two years and had a botched reveal in 2019.
- There is still demand for trucks and growing demand for e-trucks.
- The look of the Cybertruck is odd, but it appeals to fans of sci-fi movies.
- Between one and a half to two million reservations have been made for the Cybertruck.
- Competition in the truck market is increasing with Rivian, GM, and Ford introducing their own electric trucks.
- The Ford F-150 Lightning has dropped its price by 17% to around $50,000, possibly due to competition from the Cybertruck.
- The price reduction on the F-150 Lightning may be influenced by tax incentives in the Inflation Reduction Act.
- Ford wants to protect its position as the best-selling truck manufacturer and is willing to sacrifice some profits to do so.
- The design of the Ford Lightning resembles a regular truck unlike the unique appearance of the Cybertruck.
- Range is an important factor for trucks due to towing capabilities. Tesla's promised range of 500 miles may not be accurate or applicable in all scenarios.
- Tesla has a history of overpromising and underdelivering on certain aspects.
- The actual range of electric trucks will likely be less than advertised but will improve over time.
- Videos and documentation will likely surface testing the range of electric trucks like the Cybertruck.
EV Sales and Charging Stations
07:50 - 15:47
- EV sales are growing, but at a slower rate
- Price cuts and government incentives are driving EV adoption
- Tesla dominates the North American charging station market
- Charging station availability is a challenge for trucks in rural areas
Eli Lilly and Pharmaceutical Industry
15:23 - 22:57
- Eli Lilly is acquiring an obesity drug maker for up to $1.93 billion
- Obesity drugs present a lucrative market with less political pressure on pricing
- Alzheimer's drugs face more scrutiny on pricing and affordability
- Eli Lilly has multiple drugs in its pipeline, including obesity and Alzheimer's treatments
- Investing in diversified pharmaceutical companies reduces risk compared to one-drug companies
- Eli Lilly's stock price may already reflect its success, with a high forward PE ratio
Bull vs Bear Argument on Eli Lilly and Student Loan Payments
22:27 - 29:28
- Bear argument: success already priced in due to high forward PE ratio
- Price vs potential debate for a giant like Eli Lilly
- Lilly's strong returns to shareholders contribute to its current price
- Recent news of acquisition and good trial results for Lilly
- Price close to 52-week high, may be better to wait for a better price
- Excitement for trial results vs pricing of the drug
- Uncertainty around drug pricing and societal tolerance
- Discussion about driving a cyber truck at a low price
- Resumption of student loan payments could impact the economy
- Save plan designed to make student loan payments more affordable
- Cuts monthly payment as a percentage of discretionary income from 10% to 5%
- Raises definition of discretionary income from 150% to 225%
- Borrowers will pay less per month towards student loans under the save plan
- Save plan does not apply to parent plus loans
- Shorter time to loan forgiveness for lower balance borrowers under the save plan
- $12,000 or lower loans forgiven after on-time repayment in ten years
Impact of Student Loan Payments and Refinancing
29:02 - 29:56
- The on-ramp program allows borrowers to restart their loan payments without penalties or credit score impact.
- The program provides a soft landing for borrowers and helps them adjust to the new normal budget.
- It remains to be seen how many people will start making payments given the one-year forgiveness period.
- The on-ramp program is expected to lessen the probability of a spending recession, especially among younger Americans with more discretionary income.
- Companies in the travel industry may suffer when loan payments kick in, as consumers are likely to cut back on discretionary spending.
- Retail and auto industries may also experience a decline in sales, but lenders like car payment providers may not be significantly affected.
- Companies offering private student loans and refinancing may benefit, but currently, federal loan interest rates are better than refinancing options.