Five interesting things that Hodges Capital research analysts discovered this week...

#1 HYBRIDS ARE GAINING TRACTION: According to data from Wards Intelligence, hybrids accounted for 7.6% of all new vehicle sales in the U.S. in 2023, up from about 3% in 2020. An article in Vox indicated that almost 80% of daily car trips in the U.S. are less than 10 miles, and most plug-in hybrids can function as fully electric for 20 to 40 miles at a time. Hybrids have been on the road since the Toyota Prius launched in Japan in 1997.  In 2023, hybrids sold for an average of $42,500 compared to $60,500 for EVs and $47,500 for conventional models.

#2 STAYING CONNECTED: According to the Pew Research Center, 80% of American adults indicated that they had home broadband internet service. This compares to just 1% of American adults in 2000. Today, 95% of U.S. adults use the internet, with the greatest adoption between the ages of 30 and 49. Women, college graduates, high-income earners, and those in suburban communities have the highest usage.     

#3 BIG LOSS FOR HERTZ: Hertz announced that it would offload 10,000 Tesla Model 3s and an additional 20,000 over the next year. According to the Car Dealership Guy, Hertz went all in on EVs back in 2021, purchasing 50,000 Model 3s as part of a 100,000-car deal. Since then, the Company has lost $440MM on the bet, mostly due to rapid depreciation.  Hertz’s depreciation cost per vehicle (DPU) skyrocketed to $592 in the first quarter of 2024, up from $498 in the previous quarter and $253 a year ago. Hertz bought near the top of the market, and Tesla has steadily dropped prices.  

#4 TIME VALUE OF MONEY: According to Grant’s Interest Rate Observer, stock market activity is increasingly concentrated in the final 10 minutes of the day. Data from BestEx Research shows that roughly one-third of average daily S&P 500 component volumes were logged after 3:50 pm Eastern in March. The rise in passive investing helps explain the migration, as index funds typically transact at day’s end to match their benchmarks.

#5 TOLL TRAP: According to the Dallas Morning News, Texas has built nearly as many tollway miles as the rest of the U.S. combined in the last 20 years. Between 2001 and 2021, Texas built more than 628 miles of toll roads. Lawmakers turned to toll roads to boost the Texas economy and address population growth without raising taxes. Texas’ population surpassed 30 million in 2022 and is expected to reach 47.4 million by 2050.

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