Vroom Sputters, CX Study Shows Improvement, Tesla’s FSD v 12

Paul J Daly: 0:00

Hey Tuesday baby Tuesday coming in hot so much to talk about today. Sometimes there's not a lot sometimes there is they were talking about room sputtering, a CX studies showing improvement and Tesla's full self driving, maybe for real this time. I mean, does anybody really say like, Oh, I bet they got it this time, right? Everybody says,

‍Kyle Mountsier: 0:31

I want a t shirt that says Tesla, maybe for real? Maybe for

Paul J Daly: 0:35

real today, we'll see. We will see wouldn't be a great shirt. It really would be. So what are we releasing today? If so many things, all that a lot of check this out. Oh, we were at.

Kyle Mountsier: 0:47

We were at public policy day last week at whatnot, the Washington Auto Show. And it was amazing. First of all, so let's just start with that. But one of the even more amazing things is we get to conduct a series of interviews of which we're releasing on the in the dirt podcast and on our YouTube channel. So you can go to YouTube or, or iTunes or Spotify or Google podcasts or anywhere in search in the dirt. And so here's here's a list ready. Jamie darvish, the CEO of darcars, I think he's the CEO of darcars. coo? Is he? Yep, yes, his brother's the CEO, really? And

Paul J Daly: 1:27

how he introduced himself as CEO. Why introduced maybe

Kyle Mountsier: 1:31

we got Mike Stan, president of NADA. And then he and then we have John O'Donnell, the president of what NADA he was. He had a bunch of great insight, and the DC Auto Show, like that's just the start of the lineup. There's more great to come. But those three right now, and they're all like 10 to 12 minutes. Yeah, quick shots. Tackle them in like a half an hour show at one and a half speed.

Paul J Daly: 1:56

Yes. Yeah, one and a half speed. It's my best friend. Yes, it's my best friend. Yeah, so go check those out. Also on YouTube, if you go to a so tube, ASOTU dot B E, it'll get you to all of our content. And when you scroll through that you'll realize how much content actually comes out of this, this carnival that we call us. We also have a new episode of the wheelhouse dropping today at 1pm. It's about how to build a culture where people of all backgrounds feel accepted and accept others. This is Karen Byrd, Alan Brown, Demetrius Naylor talks about an all star lineup and of course, hosted by the one and only Daniel go ver who does such an amazing job hosting the show. And just building out some meaningful conversation. We have nine days until NADA, I don't know if anyone noticed, and 112 days to a soda con. Hey, listen, we've been putting this out and talking about a little bit more. Did we show the pins on the show yet on hold? I don't know if you have one there.

Kyle Mountsier: 2:49

Look at this guy. Right there, you see that? It's right there. You got a whole bag of them a little pin. They'll go on your tie or your jacket or your lanyard. And last week, we had him at one NADA and everybody wanted one. And yeah, you're gonna want one too.

Paul J Daly: 3:09

You're gonna want a pin. And you're gonna want a sticker. Because we have

Kyle Mountsier: 3:14

some stickers that go on badges, little badges, but they're holographs tears. Look at the I know, my kids were like, how do they do that?

Paul J Daly: 3:21

It's a magic kids. It's magic. It was cool at any at the Washington policy show to see people see the pin and immediately put it on their suit and people that we didn't know, because they read more than cars. And they automatically understand what it's about, which is pretty powerful. They're like, yes, it is about more than cars. So if you're at NADA, we need everybody in this community to have one of these pins to have a sticker on their badge. We need to show like everybody in the industry that they need to be over here paying attention to what's going on. That's going to be a ton of fun. Okay, so we have some things. I know so many announcements today. I'm sorry, but we're coming to NADA. We want everybody to be together. We are having a meetup, a Soto meetup right after Kyle and I get off the NADA live stage, which is right next to registration in the main lobby, we're going to be with Andy Belcher. We're going to be talking about more than cars the Docu series, showing clips from it. And we want everybody to show up in force to show NADA like, hey, people care about this, and that we're really grateful that they gave us some time on the life stage and are allowing us to be a part of, you know, this movement in automotive, very thankful for them and their partnership there. So this is Thursday, February 1 315. Thursday, February 1 315. In the lobby by the live stage.

Kyle Mountsier: 4:40

Get off the plane come there, then.

Paul J Daly: 4:43

Yes. And then we'll go to the sphere together. All right. Let's talk about some big news going on. It's been all over LinkedIn in a we'll call it a not so surprised announcement online us. Us vehicle retailer Vroom announced that it was ceasing ecommerce activities due to financial strain and a focus on liquidity preservation right like gonna save as much as they can. The company which went public in 2020 made big waves with its aggressive Super Bowl advertising, portraying auto dealers as torturing captors. The ways I could come up with torturing captors the company had initially thrived during the pandemic, right increased online vehicle activity. However, a consistent decline in profits never stopped. Last two quarters alone, they lost $130 million in use car sales operations, or they plan to halt vehicle sales altogether, liquidate it, current inventory, but they are going to continue the two business units that they had acquired United Auto credit cord, and car story, they acquired those, those are going to still keep running. They employ Around 800 people, however, the US car side is going to be letting go of 800 people. So obviously a lot of people looking for work. It's always a tough when you build something you care about. And so, you know, we're looking at the rest of this industry to welcome them with open arms.

Kyle Mountsier: 6:04

That's right. Yeah, I mean, one, let me just say, going back to 2021, when the Superbowl commercial was released, I've I've never been a proponent of the way they've gone to market. They have come up against dealers and and been detractors to the entire process. It's clear that dealers have a role to play. But they weren't wrong about some things. The thing that got them in the trick bag, which every startup deals with, is just the legitimacy of it's hard to do business in auto, especially at scale. It's hard for me, it also stinks because they had acquired Texas direct back in the day, which was a behemoth, and always nailed it with customer service and the experience. And so they weren't able to transfer that to the enterprise level and go nationwide. With that, it seems. And the biggest thing, again, is just 800 jobs in auto people that at least understand the landscape probably understand the data, and probably understand how to communicate to customers and what customers want. And so right for the picking people that could pretty easily move into our dealer jobs, absolutely. Industry Partner jobs or SEM jobs. So check out check out LinkedIn, because I'm sure they're gonna be there.

Paul J Daly: 7:24

Absolutely. Actually, I realized I had a point wrong. They're reducing the workforce by 800 employees, which is a 90% cut. So actually, you know, 890% of the staff is gone, the remaining 10% will be with the other two business units. CEO Tom short said, despite significant efforts to do so we ultimately were unable to raise the necessary capital in the current market. This pivot is really well into our next story. So kind of the contrasting statement and probably one of the reasons is that the Cox 2023 automotive buyer journey study has just been released highlighting significant improvements in customer satisfaction in both new and used vehicles shopping across the board, saying shorter buy times are key factor, while drawing attention to a balanced approach of online and in store experiences. So the buying improve to 79% of new vehicle buyers saying they were highly satisfied. That's the highest rating they could give an all time high and notable rebound from some declines in 21 and 22. New car buyers spent about 11 hours and 45 minutes in their purchasing journey that includes from the first time they like say, Hey, I think I need a new car and they start researching. It's a decrease from previous years. While used car buyers spent over 14 hours understandably a little bit more and more options. You got to figure out what you want, but the time to shop also decreased by over an hour. So test drive and experience satisfaction very satisfied 82% vehicle pickup and delivery 79% Sales Team interaction 77% And this is people saying they were very satisfied with their experience. Yeah, so sticker shock ease a little bit, but still just about half 49% of buyers saying I paid more than I thought I was going to as opposed to 54% last year. Vanessa Todd from Cox automotive quote said customer consumers are not pursuing an entirely digital experience. Rather we believe car buyers want a seamless experience where they can start the process at home and then go to the dealership test drive a car complete the deal and learn more about their new purchase those two stories. Stories make sense together, don't they?

Kyle Mountsier: 9:38

Those Those nail it we've been talking about this and peep and dealers have been talking about this for a long time. Over the past year and a half. It's clear that customers want a true omni channel experience where they can start online and finished in store. There's an old saying time kills deals right? The longer it takes to do anything, the harder it is to continue that purchase. process. So whether that's an in the storeroom experience, or the digital shopping journey, which looks like it's seeing less time engaged with, which means users are able to get to the information that they desire quicker. All of that provides a better shopping experience, because you just don't have to go through whatever pain you have to endure, because there's always pain friction happens whenever you're doing a transaction, whatever your pain you have to endure, if you can do it for less time, you get a better experience. So continuing to shorten that time to close that time to deal is the best case scenario. And, and putting a heightened level of attention on the in store experience, because people still want to be with people. They love it

Paul J Daly: 10:43

something about that. And you know, this, I feel like the Evie craze, we'll call it and this artificial demand generated by public opinion or just social media momentum. And we're seeing what the effects of that and obviously government intervention to in the Evie side, but when I think of the consumers want to buy a car fully online, right, and the thing that was adopted, and people just start thinking, Oh, that must be the case must be the case. We're showing, and we're seeing that it's just not true. Right. Like both of those things aren't true. So I think that the experience dealers have always been, like kind of a sit tight mentality, like stay the course, right? Like, we know what's happening, let's use these opportunities to improve what we're doing. And, man, I'm so proud that that auto dealers have done just that, since Carvana came out since Varun launched the pandemic hit, the survey just shows it and I

Kyle Mountsier: 11:37

would say consumers want the ability to do as much of the process they want to online, which could be the entire process. And they should be able to but they want to be able to, to customize that process based on their needs. So they just want to do a portion of it, they may want to do the whole thing. And they may want to do a portion of it or the whole thing in the store. It's just that we have to give those customers choice isn't anything like Kroger, there's some days I want to go shop I want to pick up the thing I want to put in my cart, I want to walk out with it because I've got to I've got to look at some days, I'm gonna drive by pickup just because it's going to be the most convenient some days I'm not getting out of my house. Send that thing over to me. Instacart style, right, but I have the option to choose.

Paul J Daly: 12:19

I have yet to do a drive by pickup anywhere. It's glorious. I just feel like it's gonna take longer. Now. I don't know why it's magical.

Kyle Mountsier: 12:28

Is it look, button aside. Publix gets the Goldstar for the best. They do it right. Every single time you're they they you notify them when you're headed there. They are literally like coming out to the car as you pull up

Paul J Daly: 12:46

on the fire I could live with that

Kyle Mountsier: 12:48

I could start next best almost identical to that Kroger a little bit lower. However, it's like the max I've ever waited is five minutes in the car. It's better than fast food these days. So you know do good

Paul J Daly: 13:00

waiting, but I'm going to try it. I think I'm going to try it. That's that's what's a little late for New Year's resolution I'm going to try to pick up and I'll let you know how I was speaking of things people are trying

Kyle Mountsier: 13:09

yo segway. So Tesla's much anticipated FSD for full self driving beta v. 12. Update is now rolling out to customers potentially marking a pivotal moment in the company's pursuit of full self driving capability. So the V 12 update introduces a big shift. So the controls of the vehicle are now managed by neural networks and true AI rather than traditional hard coded programming. The programming that's been replaced is over 300,000 lines of C++ code and moves it all into a neural network where the AI is continually learning from current and past experiences based on a programming network. So initially promised by the end of last year, the release was delayed and a lot of people are pointing at it saying hey, look, they delayed it so that the breakthrough update could happen. Their questions still be remained still remains whether or not this can actually be full self driving on the current hardware or weather requires a hardware and software update to make it really reality. Fred Lambert, the editor in chief of Eevee Reporting Site electric included v 12. An end to end neural nets is the last big step in Tesla's self driving environment. And if it doesn't work, it sounds like Tesla would have to give up the idea of making self driving work on its current hardware as promised. Okay, a lot of excitement, a lot of speculation, AI

Paul J Daly: 14:38

driving my vehicle. The premises is basically this right like they've had literally brooms and like giant rooms full of engineers analyzing video footage from cars and telling telling the software like what is what and what you should do in this situation. Now they've transitioned that to a computer who's learning itself and they've been they've really have been Elon Musk has been saying for a long time, like we have to let the car think for itself, if we're ever going to make it and this is a big part of the optimist humanoid robots too, you have to let it process what's going on itself because you can't predict every situation. They you know, the releasing to the beta drivers who are going to be more friendly, more familiar, makes a ton of sense. But legit like Tesla made the decision to not go LIDAR not go radar to go camera only. And say like, Hey, Elon Musk would say he said in the book, if humans can drive using only their eyes, then the computer the car should be able to drive using only its eyes. Oh, boy, I this is a big one, though, because it's the big one work and they have to start adding hardware. You can't update that over the year. You can't update that over there. And that's a big deal. Right. So

Kyle Mountsier: 15:48

that would I would take a total refactor on their part there. i If I had to guess there's like 33 articles lined up over the next month, ready to go on, like what the actual impact what to test have done, whether or not there issues, there's probably court, like lawyers already have the stacks of court cases ready to go for the first accident. All eyes are on it. Like I can't imagine the pressure from the engineers, the developers, Elon Musk that they must be experiencing, but they're always pushing the boundaries. So we'll see what happens. We will we'll

Paul J Daly: 16:22

see. Well, we hope you continue to push the boundaries today. Especially when it comes to paying attention to the people in your stores on your team because together we can make this industry about so much more than cars. We'll see you tomorrow.

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