SUVs are taking over America

Hello,

Thanks to recent court disclosures, we learnt Instagram’s revenue for the first time.

In 2021, Instagram made ~$32.4 Billion in Ad revenue, which makes it ~12% bigger than YouTube (~$28.8 Billion). What’s even more impressive is that Instagram’s revenue grew by ~190% in the 3 years from 2018 to 2021.

Remember that Facebook (Meta) bought Instagram in 2012 for only $1 Billion. This has been a massive home run for Zuckerberg!

Moving on in a completely different direction - in today’s chart, we look at the the world of automobiles on American roads.

CHART

Sedans use to rule American roads. Now its SUVs (Sports Utility Vehicles)!

In 2013, more than half the cars produced in US were Sedans/Wagons. In 2023, this number has reduced to only 23%. SUVs on the other hand now account for ~60% of all Light Duty Vehicles produced in US every year!

According to EPA, SUVs come in broadly 2 types: (a) Cars and (b) Trucks.

This is mainly a regulatory classification and may not align well with how Consumers see it. Nevertheless, in terms of data, SUVs heavier than 6,000 pounds or having a four-wheel drive are classified as Trucks, while the rest are classified as Car SUVs. Most of the recent increase in SUV production share is driven by Trucks

So what’s behind this increase in SUVs?

• Most of SUVs are classified as light trucks, and have less stringent emission requirements than Sedans. This is basically a regulatory loophole as light trucks category was initially seen as “work-related” vehicles. However, most of the SUVs are now used as everyday vehicles.

• Consumers increasingly want SUVs for reasons like perception of more safety while driving, more space/room in the car (although some people complain that car companies are forcing them to buy these as they have stop producing smaller cars)

• Its more profitable for car companies to sell SUVs. So much so that Ford has completely stopped making Sedans.

SUVs are making a lot of money for Car companies. But its causing negative impact on City life for many (If you don’t like this trend, you will enjoy watching this video)

BUSINESS QUIZ

GOOD READS 

Sharing some interesting posts/articles that I enjoyed reading this week (a mix of topics, all engaging, some with data and some without)

• Americans use electricity in their house, mainly to control temperature

• Sam Altman shares some tips on How to be successful. Every famous person writes about this topic, but I found his list to be quite good.

• 1250 artists made more than $1 Million on Spotify

• America’s use of ChatGPT is ticking up, but we are still in early days. Only 23% of adults say they have ever used ChatGPT

• Rise of Financial Nihilism - Why does it feel like there is more gambling than ever before

That’s all for this week. Thanks for reading! 👋