ASOTU Triple Crown, Ford Cuts EV Prices, Hertz Hearts Denver

January 31, 2023
Time to close out strong as we talk about Toyota’s triple crown, Ford matching Tesla’s price cut moves, and Hertz brings the ‘try before you buy’ to Denver.
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Toyota gets the ASOTU Triple Crown this morning (is that even a real thing?) as they beat out competitors to hold the top spot as the world's top selling automaker, don’t have any questions at their make meeting, and show everyone what a healthy leadership transition should look like

  • 10.5 million vehicles followed by VW 8.3 million
  • No questions at make meeting (we mentioned this yesterday)
  • Longtime CEO, Akio Toyoda, 66 years old, announced last week he would be handing the reins to 53-year-old engineer Koji Sato to take over as president and CEO in April, while Mr. Toyoda would become chairman
  • “When it comes to digitalization, electrification and connectivity, I personally feel that I belong to the older generation…for me to take a step back is important.”
  • Earlier this year he said he believes he represents a silent majority who believe the EV transition is moving too quickly and being forced by Washington instead of consumer demand

After Tesla hit the market with a substantial price cut, Ford is following suit with discounts as much as $5600 on its Mach-E.

  • It had raised prices 6 months ago and has reversed course to maintain market share in the competitive space with an average cut of $4500 (about 6%) across trim levels
  • Largest cut is to the GT Extended Range ($5900)
  • All trims except the GT Ext Range fall under the $55k price point to receive the federal $7500 tax credit
  • Extended range feature cut from $8700 to $7000

A recently made “Try before you buy” partnership between rental car company Hertz and the city of Denver aims to increase EV adoption and provide significant data to inform charger placement across the city

  • “Hertz Electrifies” will bring some 5,200 rental EVs to the city as part of the program that allows residents to live the EV life for several days to see how it fits their lifestyle
  • “will also fund and oversee the installation of dozens of public EV chargers at Denver International Airport and other spots around the city, working with EV charging network BP Pulse”
  • Also developing future techs through “Denver’s Youth Employment Program and providing EVs, tools and training to Montbello Career and Technical High School for students enrolled in its auto certificate program. “These are people later down the line that we'd want to work for us,

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Kyle Mountsier, Paul Daly

Paul Daly  00:28

Last day of the month, everybody, January 31, I know you're ready for it. We're ready for it. We're going to talk about this new award we call the soda triple crown. We just made that up for cutting Ed prices and hurts, rocking tender

Kyle Mountsier  00:40


Paul Daly  00:42

or other things that we couldn't fit into the intro notes.

Kyle Mountsier  00:45

You know, we were just like, we were at nada. And everybody was handing out awards left the weight of 40 and 40 in the AW A's and things on the floor and all that type of stuff. And we're like, you know what, we were missing out? There's no,

Paul Daly  00:59

there's an award. There's an award. Hey, you took a little time off yesterday with the family. How'd you do?

Kyle Mountsier  01:05

Oh, man. I'm telling you what, it was wonderful. I mean, I've got a I've got almost 11 month old baby and you know, the, you know, recently when I take trips, she's like, Dad's back. No big deal, right? But this time, she was like, No, Dad is back. I'm on debt. So that was wonderful. pick the kids up from school. It was a great day. So I'm ready. I'm but I'm back. I'm ready to go. We got four days we got I mean, me and Nathan, our producer, if you don't know Nathan, you meet him in the halls. He and I were already like, we jumped in the stream yard. He was like, alright, we're doing the website for a soda con website for a soda wax. How we get tickets ready. He was like, we're timber ladies and gentlemen,

Paul Daly  01:44

got work to do to do to do it. It's funny. You brought that up about about your little one. I was going to take a little time with the family Friday. So I was in the seat yesterday morning. And my little guy Jaden, he woke up at he wakes up early and wants to sit on my lap while I build the morning show. And I was going to leave and he goes, Daddy don't go to work. I was like, where did that come from? Never said that before. And I was like, break my heart break my heart. But he knows.

Kyle Mountsier  02:17

You'll have nice time Friday.

Paul Daly  02:19

Absolutely. Hey, I mean, that's that's the thing about work. Yeah, something that about is like it takes sacrifice and working on balance. And like if he didn't want me to stay home, then I'd be doing it wrong anyway. There you go. All right. All right. All right. We

Kyle Mountsier  02:34

lean into that everybody. If your family don't want you home, then you're doing it wrong anyway.

Paul Daly  02:43

All right. So we've obviously had a number of days, we've had like more shows in the last five days, probably than we've ever had in the history of a five day period. My voice is almost back. It's getting there. But so today we're getting back in like the flow of what the show is usually and typically regular yesterday was kind of like we'll call that a transition episode. This episode, we're gonna give it to you. Okay, let's talk about this triple crown that we admitted. Let's do it. We're gonna, today is gonna get the asoto triple crown. And it is a real thing. Now as they beat out competitors to hold the top spot as the world's top selling automaker again. They did. So that's number one crown number two crown is that they didn't have any questions at their make meeting. Literally, we talked about this already. But yes, zero dealers asked the question are like, Are there any questions very opposite than most of the other big meetings. And number three, they're showing everybody would healthy leadership transition looks like so let's knock those down. So 10 point 5 million vehicles sold last year, followed in a distant second by VW with 8.3. So they really pulled away on that VW obviously had a few more issues. And Toyota just got their stuff together. So

Kyle Mountsier  03:53

that the 2.2 million, that's some like fairly major manufacturers that we talk about the total total sales going away. Absolutely. Unbelievable. Yeah. I mean, and what's the most ridiculous about that is they still have the lowest day supply in the market. I think the last time I saw the data, it was like a five day supply where the average day supply is up over 50. Now, so you've got, you've got the accelerant of sales, the highest, the highest recorded the retail deliveries, and still the lowest market day supply, like talk about a thing

Paul Daly  04:35

of less than the second crowd like we said, no questions at the make meeting and we don't have to go to that any longer. But the third crown is longtime CEO and this happened like a few days ago. But we were in the middle of nada so we didn't like cover to talk about we're going to talk about it now longtime CEO Kia Toyota, to Yoda. For those of you who may be curious, he has 66 years old and he announced last week he'd be handing the reins to 53 year old The engineer koji Sato to take over as president and CEO in April, while Mr. Toyota will become chairman. And he says this when it comes to digitalization, electrification and connectivity, I personally feel I belong to the older generation, for me to take a step back is important. So, context there, he has been a staunch advocate for a slow rollout of Evie technology, saying that he is part of, quote, the silent majority, that, you know, things are moving much faster than our practical. And I and obviously, he's taken a lot of flack for that, you know, he's said openly that he believes that Washington is driving the adoption faster than consumers actually want it. And so I think in the midst of all that, he wisely stepping back and say, hey, look, I know that I don't have the popular opinion, realizing that it's probably hindering the company if he's still the CEO, and has that position. So they're making some shifts and like, Man, this just feels like strong, self aware, well, extremely

Kyle Mountsier  06:03

self aware, self aware of what the company needs. And engineer is taking over, which is definitely like the lead on whatever is being productized on the other side, and then to continually say, hey, look, but don't forget our roots. And if you look at Honda as a manufacturer, and their level of penetration in the E in the hybrid market, you recognize, hey, they might actually know what the market is looking for right now, because of what they've been able to sell into the market. So I you know, as chairman, he's still gonna be extremely influential. Oh, and I can't wait to see kind of how this like new vibe of little young meets old and I mean, young as 33. Right. And he's 13 years younger than me. Yeah, exactly. But still like, it is self aware. And consistent with the brand's ability to like, have a long lifecycle. And man, kudos to crown baby, your triple crown. Yeah, that

Paul Daly  07:04

is a triple crown moment, if we ever heard one, if we ever heard one, just cutting ties with the old moving into the new speaking of cutting things. Segway. So after Tesla hit the market a couple of weeks ago with some substantial price cuts, Ford is following suit discounting, I said discounting cutting the price as much as $5,600. It's Mach II, electric vehicle and raise prices on this vehicle actually six months ago, and now is reversed course to maintain market share in the competitive space with an average cut across other trim levels of about $4,500, which equates to about 6%. The largest cut is $5,900, to the GT extended range, trim, and all trims now, except for that GT extended range fall under the 50,050 $5,000 price level, which makes them eligible for the $7,500 tax credit. Which means if you want that GT, it just became $7,500 more expensive in my

Kyle Mountsier  08:09

mind. Isn't that wild? So here's what's crazy is, and I was I was thinking back when I was looking at these discounts the volume of the discounts, how much on each vehicle. And we ran a story probably a few months ago, talking about the average profit margin on a Tesla and the average margin on its competitive EVs. And what I know is that the margin was less than the current discount that Ford is offering or the the the reduction in price that Ford is putting on these vehicles. So yep, they are so incentivizing this, that they are willing to take these vehicles at a loss to move them in the market based on the competitor, based on competitive changes in the market, like, you know, additional vehicles being offered by other manufacturers and Tesla's price cuts, but they're cutting into their margin into their margin so deeply that they're gonna lose money as compared to Tesla that still is making money on the loss of margin.

Paul Daly  09:07

Yeah, I mean, Tesla was 3x, the profit margin, right, right, it was three times so they can cut it out and still have a really healthy profit, may even so there's a little insight the extended range feature is something you can add to these Maki's right here with the extended range battery. They even cut the price of adding that feature by from $8,700 to 7000. And you have to think like there goes the margin and

Kyle Mountsier  09:30

there's no way there's right and there's any margin left on that. Yeah.

Paul Daly  09:33

So Marin, I don't know how to pronounce his name. I apologize if you're listening, but you're probably gonna go silently. jaja. Yeah, but I said the G but you just didn't hear it. Chief Customer Officer of the Ford battle II division said, we're responding to changes in the marketplace in a briefing with reporters last year, citing eligibility requirements. Yep. They said we want to stay competitive in the marketplace. So they're actually also added so they're cutting them out. margin is probably not profitable. And on top of that they're adding capacity to the Ford Mk II. And they expect to produce 130,000 of those for customers in North America and Europe this year up from the previous target of 78,000. So, I mean, increasing that by about 80%. So they're really making a play like, hey, it's

Kyle Mountsier  10:18

a volume model.

Paul Daly  10:19

It's a race to adoption. Right there. Like we have to get people in our vehicles, we have to get them in our vehicles. So Hey, speaking of getting

Kyle Mountsier  10:27

people in vehicles segway comes,

Paul Daly  10:34

BAM set up.

Kyle Mountsier  10:36

A recently made try before you buy partnership between rental car company hertz and the city of Denver aims to increase Evie adoption and provide significant data to inform charger replacement across the city. Huge. Hertz. electrifies is the program and will bring some 5200 rental EVs to the city as a part of the program that's going to allow residents to live the Eevee life for several days to see how it fits their lifestyle. Look, this is a partnership that I think we're going to see a lot more cities looking at because the cities are going to be bearing the weight of infrastructure. And wondering whether or not customers are willing to adopt this is a big part of like bearing the weight of that infrastructure. And like from just a like grid production as well as buildings and where we put these things and rezoning potentially all of that. So I mean, for Denver to take a crack at this. I think it's a I think it's a big deal.

Paul Daly  11:33

I like it, you know what I was just thinking about it. We could have given hertz the Triple Crown today. Ah, man, because this program could well the program in and of itself is like a triple crown because they're, they're working to do three things. Speed up, Evie adoption, right and make it more practical, okay, spend a few days in this thing. See what the Eevee lifestyle number two, we're going to use all the data we gather and how people use it and who's even interested in EVs to inform where we put the chargers and help the city put chargers in there partnering with BP pulse to actually install some fast chargers at the airport in some other places. And number three, my very favorite part, they're developing future Tech's through Denver's youth employment program, and providing Evie tools and training through a local technical high school. And for students who are on the certificate program. And the CEO, Steven sure says, these are people later down the line, we would want to work for us. So I mean, that sounds like a company that understands the road the path not only to, you know, adoption, and like, how are we going to take care of these cars once they're adopted? Like? Probably somebody's been paying attention. Paying attention.

Kyle Mountsier  12:40

You know, what's really ridiculous? That hurts was on the verge of bankruptcy a year and a half ago.

Paul Daly  12:48

Wow, that's just resiliency. I mean, custom cart, some car guy mentality right there. Right? Not necessarily. I mean, other dealers whole cities to figure out Evie adoption. The I don't know, any dealers that were on the verge of bankruptcy last year, though, that not a single one. Not a single one. But you're right. You're right. I mean, that just shows the ebb and flow and the resilient companies, right. They take the hits, and they say, Okay, we're not going to think about what happened in the past. We're gonna think about where we're going in the future. And how can we position what we're doing to go in that direction? It's a good thing. Look, we know we have three automotive stories. If you're new to the show, we usually try to like throw a little retail like non automotive retail, or a little pop culture. We didn't really have a lot of time to do that today. But we are going to throw one last note in there. Hey, remember Sam's Club? Oh, they're coming back. They're coming back Company announced that they are going to open 30 clubs this year.

Kyle Mountsier  13:44

So I can only put like one or two in a city. Anyway, think about the major cities that they go in and adding 30 New massive facilities that include distribution and

Paul Daly  13:56

did you have one that closed in your area? Do you we did some Nashville

Kyle Mountsier  14:00

was like Santa Bosco is our favorite. Right? But yeah, it's like, look, brick and mortar ain't dying. Yeah.

Paul Daly  14:07

I've always I've always wondered why, why they it's been taking this so long to get them. You just look at Costco, just going to Costco. And you'll see that it works. It works. Hey, whatever is going on, you got work to do. You got a month to close. We can do anything to help you. That's cool. Hey, follow us on LinkedIn at a so to get a lot of great content in the pipeline from nada and beyond. And we'll see you on the field.

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