What’s in This Week’s Issue…

Good morning. The average new car in America now costs over $50,000, while the average monthly payment has climbed to a record $777. And the man whose ideas helped create both has been dead for more than 60 years.

For decades, his playbook made cars more profitable than ever.

Today, it's making them unaffordable for millions of Americans while breaking the companies that built their fortunes on it.

So this week…

• 🏆 The Big Play: How a century-old strategy to sell payments instead of cars reshaped the auto industry, and why it's finally starting to backfire

• 💪 The Power Move: Why waiting for prices to fall won't save you, and what your best option looks like now

• 💵 Follow the Money: Are companies intentionally seeking visa workers?

-GEN

🏆 The Big Play

The biggest money power story of the week.

The Century-Old Playbook That Broke the Car Market

The car industry didn't end up here because of inflation or a temporary chip shortage.

It got here because, for nearly a century, automakers have been rewarded for selling bigger payments instead of better or more affordable cars. That strategy made them enormously profitable.

Now it's turning into one of the industry’s biggest problems.

1. The Man Who Changed the American Car

If Henry Ford built the modern car industry, Alfred Sloan of GM rewrote the rules that still govern it today.

Ford believed cars should be affordable enough for ordinary Americans to buy outright. Sloan believed the real money wasn't in selling a car. It was in making sure customers always came back for another one.

His philosophy quietly became the blueprint every major automaker still follows:

• Redesign cars every year so last year's model feels outdated.

• Sell the monthly payment instead of the sticker price.

• Turn transportation into status instead of utility.

For almost a century, that formula worked brilliantly. It encouraged bigger vehicles, longer loans, and ever-higher profits.

So instead of competing to build the most affordable car, the industry started competing to build the most profitable one.

That decision shaped everything that followed.

2. How Cheap Cars Became Bad Business

Then the math changed.

Automakers discovered that cheap cars brought in customers, but trucks and SUVs brought in profits. So they stopped chasing volume and started chasing margins.

• Ford earns roughly $10,000 on an F-150 while many affordable sedans barely make money.

• Ford and GM gradually eliminated most of their passenger-car line-ups to focus on trucks and SUVs.

• During the chip shortage, executives discovered that lower inventory permanently supported higher prices, and many never went back.

Americans never stopped wanting affordable cars. Automakers just made far more money selling bigger vehicles.

For a while, the formula looked unstoppable. The average new car cost more than $50,000, while seven-year loans disguised those increases behind manageable monthly payments.

Eventually, buyers hit their limit.

3. When the Playbook Turned on Itself

Nobody showed the limits of this strategy more clearly than Stellantis.

Stellantis became the clearest example of what happens when an industry pushes this strategy too far.

Former CEO Carlos Tavares believed Jeep buyers would continue paying higher prices. Instead, demand weakened, unsold inventory piled up, and the economics that had driven profits for years started working in reverse:

• Jeep prices climbed towards $70,000 before sales collapsed.

• Honda posted its first annual loss since 1957 after chasing expensive electric vehicles.

• Volkswagen is closing plants and cutting thousands of jobs despite focusing on higher-priced models.

The problem wasn’t expensive cars. It was disappearing customers.

Cheap cars had been doing something expensive cars never could: bringing enough buyers through the door to keep factories, suppliers and entire businesses running efficiently. But once those customers disappeared, even record prices couldn't prevent profits from falling.

The industry is now trapped inside the same strategy that made it successful. They know building affordable cars again may be the only way to rebuild demand.

But it also means sacrificing the margins Wall Street has spent decades rewarding.

💪 The Power Moves

Playbook for understanding the game of power.

Where There Are No Cheap Exits Left

If the industry won't build affordable cars again, the obvious advice is to wait for prices to fall or buy used instead.

Unfortunately, neither option looks as attractive as it once did:

→ Used-car prices remain elevated because buyers are competing for the same affordable vehicles.
→ Auto-loan delinquencies have reached their highest level in 32 years, meaning prices may only fall after widespread defaults.
→ Chinese automaker BYD already sells affordable electric vehicles, but tariffs and restrictions keep them largely out of the US market.

That leaves millions of Americans financing increasingly expensive cars while Wall Street continues packaging those loans into securities.

The same companies arguing that Americans don't want affordable cars also warn that affordable Chinese cars would devastate the industry.

Both cannot be true.

The Takeaway:

The American car market no longer rewards whoever builds the best affordable car. It rewards whoever extracts the most profit from the shrinking number of buyers still able to pay.

If you have a choice, buy used and pay cash.

The real American dream may no longer be driving a brand-new car. It may simply be owning one without owing anyone money.

💵 Following the Money

Three of the wildest financial and corruption stories from around the world.

#1 - Companies are intentionally seeking out visa workers. The payoff is fed inquiries, low wages

#2 - Troops are posting videos of Iran strikes. Officials say it makes them targets

#3 - Is Elon Musk’s xAI blocking a ban against AI-generated nude deepfakes?

✨ Poll time!

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