Auto Intel, Dropped EV Base Price, Baller Billionaires

SPEAKERS

Kyle Mountsier, Paul Daly

Paul Daly  00:23

it feels like forever since we have both been back in the studio with Sony actually it's been a while since they were talking about the auto Intel record that just dropped a dropping Evie price starter and Fowler billionaires, the baller billionaire who is in love.

Kyle Mountsier  00:43

Somehow that works into like the rap song that we're creating with the mashup of everything from the last 18 months or whatever, you know,

Paul Daly  00:50

we can do that. Follow our billionaires. We'll get to it, we'll get to that story. Last is were alluding to it's so much. Welcome to Friday, it has been a strange week for a lot of people because of Memorial Day. So a different sales kind of day was also like the last day of the month in this week. There was some travel on our end, I think, generally speaking, people felt like this week has been compressed. Oh, anybody else? Show of hands?

Kyle Mountsier  01:16

So hands, actually. So I'm gonna I'm gonna throw this out there just as a note, so my wife and kids, they love to watch back the pod and they'll watch it later in the afternoon. And my wife looks at me this morning. And she goes, Jack said, Jack's my son. She goes Jack, tell him about Wednesday. And I was like, tell him about Wednesday. And Jack goes, Oh, Dad, guess what? Paul said it was Monday on Wednesday. And I really, I guess, so we'll have to watch it back. But you know, everything's where were we were. We were in a hotel. I was there and I forgot I missed it.

Paul Daly  01:56

It's great. It's Monday, but on a Wednesday, it's on a Wednesday. Hey, for those of you that missed the stream yesterday, we use a platform called stream yard and we got through the whole episode. And then it realized it didn't have any audio. And then it also didn't record to the cloud. However it was running through. So it was a big mess. So your audio only yesterday. So

Kyle Mountsier  02:18

you know if you didn't and look, here's the thing, if you've never listened to the audio on the pod, yesterday would be the day to start because we got off of having that conversation. And Paul and I just feel like it was a really valuable conversation both for us and for the industry. So I would just say you know, if you've never downloaded the pod yesterday is the one that you might just want to go do and and drop it on, you know, one and a half speed listen to us talk fast and get some of those insights because it was just a genuine good conversation for us. And we'd love to share those conversations.

Paul Daly  02:49

Let's talk about the reason we're really here today. Let's go that's it is National Donut Day. Of course, that

Kyle Mountsier  02:54

is absolutely the day actually. I can't handle National Donut Day when I'm when I travel. It's like everything sideways. My wife said this morning, she said, What do you want for lunch? Now? I was like, I don't know, food just doesn't sound good. It's just you know, bad when

Paul Daly  03:10

you get to that point. And yeah, it's just travel food. Because sometimes if you work in the auto dealer world travel food with dealers is usually pretty good. Great. Yeah, without a doubt, but it's still just the way you wouldn't usually eat. Right? Yes, I'm terrible at that. So if you'd like donuts or even if you don't, you get a free donut today and a lot of donut place as it was worth mentioning. So getting it some more serious news. So today we're going to talk about the June's auto Intel month, annual or monthly what is the automotive ventures auto Intel report? Right? We're gonna put that up that's we're going to talk about that stat that was just flashed up when it gets flushed up. But we're gonna talk about that. But one of my favorite things about this report that Steve Greenfield leads and puts out, is usually included a little quote in the beginning of today's quote, just hit me right between the eyes. It's from a Formula One driver. We've been talking about Formula One a lot this year. But Brazilian formula, a Formula One champion, Ayrton Senna is what I think you pronounce his name are amazing art. Amazing, quote. You can't overtake 15 cars in sunny weather. But you can when it's raining. I was like, if

Kyle Mountsier  04:19

you know anything about racing, you know that's true. And also, like the implications. I've read that when you put it in the shownotes this morning, and I was like the implications of that, currently in business are so dynamic. Like we talked about this yesterday, literally every day, there's some level of change required. It's always right. You know, our friend Brian benstock David Spees. Zack they keep saying this like, fix the roof when the sun is shining. And from a like an from a just like industry level profitability, things like that. It's a very sunny world. But what Rain means in racing is that there are that there are the unknowns that there are the things that can happen, that typically wouldn't happen. Everything kind of slows down. The ground is leveled, right, almost like everyone's playing on the same playing field, your car, like the capacity of the car is a little bit less, you know, dynamic, right? So all of

Paul Daly  05:23

that, like everyone's got that base level of skill, right? Everyone's pretty even when conditions are perfect. Yep. But when conditions aren't perfect is when you find out very quickly. Who are the actual drivers? Yes, right. And you find out when it's raining, and the economy is doing weird things and supplies, doing weird things, you find out? Who are the actual operators, who are the actual entrepreneurs, right? Who are the people that aren't walking around, confused, but they're walking around with purpose. And they're walking around with like, ah, we have been able to get past this car, but they don't know how to drive in this. It's on now. Everything's out the window. So I thought that would just set a great tone for today's show. You can

Kyle Mountsier  06:01

say it like this market shares the opportunity right now. Oh, my gosh, there you go. And let's get into the news. Because the data that Mr. Greenfield lays out is always dynamic. So yeah, talk about it.

Paul Daly  06:14

So in his monthly report, it's linked up in our show notes, you really should get it. It's automotive ventures.com. You know, so basically, he goes through a few things. And one first point we want to talk about is you know, and we can only cover a few things in this whole newsletter, but the there's recommendations for companies and startups and young companies growing. So in automotive, there are a lot of tech companies. There are a lot of people moving and shaking in the shifting dynamic, saying with the market economic outlook, with markets doing what they're doing, you know, they're still kind of dry powder, financing capital available for startups. But saying that, no one's ever regretted shifting their strategy, and they see a recession or they see a downturn on the horizon. And they said, shifting it to, and I quote, default, alive. I was like, that's pretty stark. But saying like, hey, our whole purpose is shifting strategy to how do we stay in business, our business coach, David knows about this first rule of business, stay in business stay in business, right. So I'm seeing that shift. And the converse point there is that from a dealership standpoint, dealers are still showing a lot of stability into the future, because of the pent up demand. Go ahead, Isaac throw the graphic on the screen. So it's looking like there's $2.9 million in pent up fleet demand, and 1.9 million and not dollars units, one point million 9 million units in retail demand, which equals 5 million units.

Kyle Mountsier  07:42

Right? Yeah, that's fine. And not just that, but think of the prioritization level, typically, in, you know, in volume, and then think about what that does to the used car market in 12 to 18 months, which is the typical holding time of a lot of right now at least, it used to be a lot shorter timeline, but the typical holding time of a lot of rental companies. And so it's not just new cars that are content that continue to have pent up demand. It's this used car market for, you know, newer model used cars. Yep,

Paul Daly  08:13

that's absolutely right. And so, like, there really is, this element of like, retail Automotive is still looking very stable, right, although we had record proc profits, and they forecast shows like they'll drop a little bit but there's still gonna be record profits. If you take like the recent months out of the equation, and just the in the demand alone. The economic situation looks very stable. The real the real question is like will OEMs maintain you know, production discipline, big question, right? Are we ever gonna go back to 120 day supply we sure hope not right, and doing all kinds of crazy things with incentives but that that is the question to ask now. And everyone now says yeah, we're never going back

Kyle Mountsier  08:55

in the verbal is we're never going back right Jim Farley very clear like we're probably not going to have ground stock but man I think some OEMs love some wholesale. I'll tell you that

Paul Daly  09:05

human nature wrapped up in nature, right. And we'll see. Yeah, so you know, look, it's good time to be in retail automotive. If you're in a startup or if you're like kind of living that life. Don't say Steve Greenfield didn't tell you when it actually tell us about the bolt talking about oh man

Kyle Mountsier  09:23

this is this is really interesting because the bolt has come on under scrutiny a lot of times a lot of recalls. Yeah, so there is a one a kind of I see the bonus like an OG it is an OG it was kind of like leave them both me Oh g

Paul Daly  09:37

v, there's this there's a piece of G V. V.

Kyle Mountsier  09:41

But for the first time the boat is is approaching more of an affordability. So with all other vehicle manufacturers raising prices on vehicles, used car pricing going up new EVs like Tesla Rivia and all raising prices. We've got the bolt going to start at 28 195 For the LT, where it was almost $35,000. And the premium trim coming down over $6,000, from almost 39 to mid 30 twos. You think about that. It's like, that's a whole person payment.

Paul Daly  10:18

That's 20%. price drop. I mean, that really flies in the face of all the conversations we've been having. So strange battery prices, right supply shortages. And for Chevy to make, I don't know, I think this is under talked about right now, honestly,

Kyle Mountsier  10:33

I think about this is who's going to be the first one to say, you know, like, technology is advancing, which means we can, you know, get prices more aligned, because you look at a lot of those like mid 30s, low 40s EVs. They're not like the most well built vehicles, they're not the most gorgeous type thing. But, you know, the, it was always like, well, battery technology, scaling that plants, more expensive r&d, all that type of stuff. And they're like, I have to assume at some point, the technology capacity will allow those vehicles to be sold at a better car. For

Paul Daly  11:13

every piece of technology, we write computer vs. Computer, everything of that, right. Eventually, you reach a point of production efficiency, where the price has dropped substantially. When it's not when it's not so new. I feel like you know, Tesla talk a long time about getting hitting the affordability mark, right. And Elon Musk was talking a lot about getting a vehicle, you know, lower lower lower price point to make it not a luxury vehicle anymore, but accessible to everyone. And we've seen the opposite happened with the model three. Right? We've seen it get more expensive this year. So I think for Chevy to come out and swing big at this. Like when was the last time you heard a vehicle to get a 20% price cut? is two

Kyle Mountsier  11:55

years I can tell you that? No,

Paul Daly  11:56

I mean aside a set incentives aside because this is not an incentive. Right? This is a base price reduction, price reduction, including shipping. Do you see that? including shipping, including shipping? including shipping? No dealer, tax tags license, some fine print there? No. So bravo to Chevy. I mean, this just goes to show us that just because the market, the market narrative, and the market dynamic is telling you, you're making you feel are tricking you into thinking like it can only be this way, like GM just showed us like it's a lesson for all of us, for every entrepreneur for everyone running a business that like if you focus on the right thing, you can still make changes in your business that are opposite of what the modern narrative is. And I mean, this one just just smacked me in the face this morning. We only have a few minutes left because we are about to jump into the all things use cars clubhouse room, how can they get there from just a show

Kyle Mountsier  12:50

from the show, I don't know. But you should just go down home download clubhouse and follow all of your automotive friends and find where they're at. Because if you're not in that room and you're an automotive

Paul Daly  13:00

DMS DMS send an email to crew at a soda.com We'll send you a link. But this last story baller billionaire, as we alluded to, at the beginning of the show, LeBron James just hit $1 billion in lifetime income, according to Forbes, with the sale on a minority stake, but a big part of the stake of his media and entertainment company, that Spring Hill company. He sold a minority stake to a group of investors and includes like Fenway Sports Group, Nike Epic Games, at a valuation of about $725 million. So he crossed the billion dollar mark like Gary Vaynerchuk is always like, what is the ROI of a basketball? It's like, well, for LeBron James, it's a billion dollars. For me, it's nothing. Like what is the ROI of a microphone of a camera? Right, have a price cut. And so I think that that's like a piece of pop culture news. But I thought it was important to talk about this. You and I, and pretty much everyone else in retail automotive. No more billionaires than the average person out and down. Like, how is it that I know? Doesn't billionaires that I can think of

Kyle Mountsier  14:02

is that I can call walk around in jeans? Some of them even still fly commercial? Because they have like this air of humility, right? If all of them

Paul Daly  14:13

well, three people at three dealer principals of large groups who are multimillionaires flood don't own a company plane. Yeah. And there's there's that reason for it. Okay. Right. And then you think of the community impact that those billionaires have, through their work and their effort and their humility, and their engagement in the community. And people just don't see that and they don't think that when they think retail automotive and they look at LeBron James, and it's like, you look at all the ego and all of the like the motion and

Kyle Mountsier  14:45

does a lot for the community like not yours, but like that's a one out of all of all of basketball.

Paul Daly  14:53

And it's just really high profile right? So all the stuff he does for the community is very high profile. So people are looking at it and but Oh, look, I thought it was worth giving some dealers some major props because we know quite a few billionaires who are in the Dirt Every Day that aren't a headline. And we just thought it was good to give them some credibility. Today, we're on our way to clubhouse to talk about the most cutting edge strategies in use car purchasing. It's all about how to get the money, how to serve the people. We'll see you on Monday. Have an amazing weekend out

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