California Dreamin Of All EV 2035, Fed Speech Incoming, Tesla Splits, Elimination of Dead Zones

August 26, 2022
Lot’s of fun this Friday as we breakdown California’s 2035 EV rules, Fed Chair, Jerome Powell’s incoming speech from Jackson Hole, WY, as well as the Tesla stock split and Space X’s T-Mobile tag team.
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California’s new law will limit supply of passenger vehicles to be exclusively EV’s by 2035

  • The original regulations were announced as an executive order from Gavin Newsom in 2020 and met strong opposition from both the federal government and carmakers
  • The Trump administration sought to make it illegal for any state to set standards more stringent than the fed and was supported by automakers such as GM and Toyota
  • This time around, the regulations received near support from some automakers including GM who stated they have a similar vision for an all EV future
  • The Biden administration has placed a voluntary goal of 50% EV production by 2030
  • The new California law will require 35% in 2026, 68% by 2030, and 100% by 2035.
  • EV sales still account for only around 6% of U.S. new-vehicle sales, they were 16% in the second quarter in California
  • California remains one of states losing population the fastest
  • Take away:

Fed Chair Jerome Powell will deliver a speech at the Federal Reserve’s annual Jackson Hole, Wyoming, symposium and is expected to have a stronger tone than in his last in June where he is expected to reiterate the Feds position to keep their inflation-fighting rate-hiking strategy in tact

  • “The challenge for Powell is going to be the tone he adopts. I think he came across as slightly too dovish, not hawkish enough in July,” said David Page, head of macroeconomic research at AXA Investment Managers. “I think he wants to avoid that now, with markets expecting him to be relatively hawkish. ... It’s a very difficult game. It’s a game of expectations. ... It becomes a fine tune issue.”
  • After the last announcement there was a stock rally and Powell wants to avoid this again since the misinterpretation that inflation is over can actually cause more inflation and impending recession

Tesla shares had a 3 for 1 split yesterday, the second since its 5 for 1 split in 2020

  • A split doesn’t change the value of the company but makes it easier for more investors to get in the game
  • $900 to $300 range

Space X and T-Mobile are partnering to provide satellite based cell phone coverage to remote areas announced by Elon Musk and T-Mobile CEO Mike Sievert

  • in a press release that the new plan would "provide near complete coverage in most places in the US — even in many of the most remote locations previously unreachable by traditional cell signals."
  • Musk tweeted that the service will eliminate dead zones worldwide
  • The program will begin with text-only service mid 2023 when T mobile begins using a new mid-band network
  • Tesla vehicles will also be able to connect to the satellite service

SUMMARY KEYWORDS

consumers, california, veterans, eevee, markets, tesla, evs, shares, leans, cars, soda, driving, t mobile, auto, gm, check, people, announced, thinking, automotive

SPEAKERS

Kyle Mountsier, Paul, Paul Daly


Paul Daly  00:22

I don't know if you noticed, but it's Friday. We made it to Friday. We have a lot of things. We actually four stories today, talking about how are we talking about 2035? Tesla, SpaceX, Federal Reserve, all in one show. All in one show. No. They stopped.


Kyle Mountsier  00:40

I'm just mad at California for messing up our song. They were like 2035. Yeah, yeah.


Paul Daly  00:54

We'll get they will tend to attend. I won't say my next comment. I would just say something about California and changing things. Yeah. Okay, so, so look, we have a lot of things going on. But we want to really lean in and feature something we haven't talked about yet. Um, yes, it does have to do with a soda calm, but it has much broader implications than just a soda con. At our welcome reception Sunday night, September 11, we decided we were going to do something really special for for veterans. And we wanted to find somebody to support that would tie in with our automotive passions tie in with our support of our veterans. And so we actually we didn't find it. But one of our soda community just randomly reached out right when we were thinking, Who are you going to going to feature for our charity, and we've got a dealer founded charity called light up to live. The reed family out of Texas founded this group, we have a link of the website, we're gonna get a quick link for you. But if you go to a soda con.com and just hit the menu button in the upper right hand corner, you can see some more information. There's a great video on there, and we're going to be supporting them. What did they do with that? Therapeutic lights? Yes,


Kyle Mountsier  02:01

right. Dogs for for veterans. So both? Yep. I mean, it's a it's a great like the fact that it's owned by a dealer, it's for veterans, it's September 11. And they're they're serving, yes, serving in unique ways that, like I, they told us that the only veteran based organization that that takes care of veterans with therapeutic like, light. So really cool organization and excited, they're going to be coming. You know, the person that introduced them will be coming and sharing a little word about what they do. So definitely check it out. You can check it on the website, it's in the menu, or in the nav bar. And you can check it out there. You can go ahead and give if you'd like to, we're trying to you can


Paul Daly  02:47

be the first ones to give, right? Because we just made it live.


Kyle Mountsier  02:51

Like we're ambitious. We set ourselves a goal of $150,000 to give to these people in their like skirt. And we were like, Nah, you don't understand. These are auto dealers. So don't let us down. Auto families


Paul Daly  03:04

community can show up. The thing I like about this charity specifically is that you can wrap your head around what they're doing in micro increments. It's not a big initiative. It's like actually, each light costs like, what 1200 bucks. Yes, yeah. So it's a therapeutic light that the veteran can use it. It helps with stress, anxiety, physical ailments. And a service dog I think I can't remember was like 35 grand or something like that to train a dog or something like that. And so like, I love the fact that like, you can kind of contextualize your gift, right? Hey, look, I can provide two or three lights, I can provide a service dog. And so check it out. We're going to talk about it more, we're gonna feature them on the show in the podcast, we got a couple more episodes of auto collabs coming at you today. Today, we're featuring Jeffrey villa, one of the most interesting men in the automotive business. Don't miss that one. And also our friend Steven F. Cello who is also one of the most sincere people I've ever met, I can just say that one of the most sincere people I've ever met has a great story that I didn't know about ties in with my reconditioning. Ruchi gotta go check it out. We're live streaming on LinkedIn. Or you could just search auto collabs on your favorite podcast platform. Let's get into some news. First and foremost. So California you've probably heard about this somewhere. California's new law will limit supply of ice passenger vehicles, and they will be exclusively EVs by the year 2035. The original regulations were announced in the form of an executive order by Gavin Newsom in 2020. And they met strong opposition from federal government and from the federal government and carmakers, the Trump administration actually sought out to make it illegal for a state to supersede federal regulation standards are trying to homogenize the standard across the country. You know, GM jumped in the mix to get their back and resist that as well. But this time around, actually GM kind of like fell in line and said, You know what, we have a similar vision for an Eevee future very smart play, very smart play. What else you


Kyle Mountsier  04:56

got? ARDS as the car you know what I'm saying? And actually, I like this now. Yeah, I think that looks good. They probably gonna sell us some cars over there.


Paul Daly  05:09

Absolutely. The Biden administration actually put a voluntary goal of 50% Evie production by the year 2030. So, you know, so 50% by 21st. So here's how it breaks down in California though, because I was like, Well, what are the steps to get there like 2035 is, is far but close. And so by 2026, which is a lot closer 35% have to be EVs.


Kyle Mountsier  05:35

So basically because new new vehicle Evie sales in California were 16% Last quarter of all sales. We're talking about doubling Evie sales in three years in California.


Paul Daly  05:49

I mean, actually seems as long as this applies. That doesn't seem too crazy. In California, I mean, look, yes, it's funny this paragraph with a story, I


Kyle Mountsier  05:59

just still got those California residents how they feel about increased rolling brownouts


Paul Daly  06:07

for right, you can have an Eevee. But you're gonna have to sit in it if you want air conditioning,


Kyle Mountsier  06:14

reverse engineered, plug it into your house and maybe get some AC in your house right?


Paul Daly  06:20

At least 35% by 2026 68% by 2030 and 100%. By 2035. You know, and just worth noting California remains one of the state's losing population the fastest. Just a little data point in there. Look, I think in the end, consumers are going to decide if they want an Eevee or not consumers are going to dictate the Eevee rollout. Not only consumers, right, that's the ultimate that people are going to vote with their wallets, their pocketbooks where they live, right. But they're also going to be you know, see how the the supply chain can keep up? How just mass adoption in the statewide infrastructure. We talked yesterday, like you can't even drive through West Virginia in an Eevee and get charged. We actually did a podcast with someone who lives in where was it was it was Hannah, Hannah Montana, Montana, where there's like, I think only a few 100 EVs are sold, you know, and like the kind of cars are clustered around. So we'll see there a lot of questions there. But regardless, that's the law in California now. So we'll see how that plays


Kyle Mountsier  07:19

out comments on this real quick. Let's do it. We can do first comment first comment, consumers drive demand, let the consumers drive the demand. That's an opinion piece. It's an it's this is this is an opinion piece. Okay. So second,


Paul Daly  07:33

I think most of that story was an opinion. Yes.


Kyle Mountsier  07:35

For you without without second is second is, if you don't think that manufacturers like GM are going to push their chips in when they can ship inventory on mass to you, then you're very wrong. Yes. Because if they can flip from like, Nah, we kind of like what Trump Trump is saying about the Fed thing to like, Ah, we're all in put the chips in on California, then you better believe that delivering vehicles is the primary way in which they get paid and they will see to it that they can do that in volume.


Paul Daly  08:10

I like that comment. I also like this comment from our one of our viewers right now. John roper. What's up consumers go consume that is the Dead series


Kyle Mountsier  08:19

to consumers. John, do


Paul Daly  08:23

you know where that comes from? If you don't know we actually have a sticker that says consumers go and do what consumers gone do so you can go to the website, check that out and get one or just refer somebody to email and get one. Alright, next story. Fed Chair Jerome Powell is going to deliver a speech at the Federal Reserve's annual Jackson Hole Wyoming symposium and is expected to have a stronger tone than he did in June where he's expected to reiterate the Feds position to keep stay very bullish on inflating fighting measures like interest rate hikes. So what I didn't realize about this is that you know, last the last announcement interest rate hike the markets actually went up and people were like, hey, like maybe a little ding dong the witch is that kind of like is are we beating this thing? No, we're not but what happened because he was too dovish. In his announcement, everyone, like kind of read into it, and was like, Hey, we're doing good. And so the markets went up and they need to make sure the markets don't do that because when the markets go up and inflation hasn't stopped that actually pushes inflation even further makes it more likely we go into recession so I mean, this is just a really big like drama game. Yeah, right. I don't know nuance have is crazies gonna


Kyle Mountsier  09:28

throw this out there. I saw gas prices under $3. Last I saw that two 399 There's so many factors to know to know under three here, under three not under four under three. Wait a minute, is gas that much cheaper to aim for in Tennessee? It's anywhere between 289 and 319. So reality, you know, got excited. He's bouncing these news stories. I'm just bouncing it out everybody. It's gonna be alright.


Paul Daly  09:59

I'll just say Not that I was like, I thought 399 was awesome. 299 is awesome.


Kyle Mountsier  10:04

Well, here's the thing. Here's the thing, just going into this weekend, and thinking about the way consumers perceive the market and perceive buying is you're going to be looking at consumers, especially on a Saturday that have read the news heard the news, watched on social media, maybe even seeing the speech from Powell today. So that's going to influence buying decisions influence buying behavior, and the way that they approach the market. So just be aware of that in conversations with your team, and in conversations with customers that you come in contact with them this weekend.


Paul Daly  10:34

Speaking of the markets, segue


Kyle Mountsier  10:40

for the cheapest price $300 per share, you can now get in to the Tesla game, they they announced a stock split, they finalized they didn't announce it, they finalized a three for one stock split yesterday, meaning the valuation of the company has not gone down. But they made it more accessible for more investors to get in at that lower price and made access to gain for those current investors a lot more quick, as Tesla shares go up again, and their shares just have that more value over time. So you know, hey, look, they did a five for one stock split in 2020. Now 2020 to three for one stock split. I would say that when it gets low, and this is not investment advice, but when it gets low it always. Hey, and look, you know,


Paul Daly  11:29

it has historically,


Kyle Mountsier  11:31

I actually I had a conversation with someone yesterday. And just like, you know, he leans in, I had coffee with a gentleman that used to work for Ford and he leans in and goes, Kyle, the glooming reality, the reality here is that Tesla still is worth more than the next three automakers combined. So well. Well, so well say,


Paul Daly  11:57

Hey, if you don't understand how stock splits work, just house basically imagine you had like a peanut butter and jelly sandwich, right? You have one sandwich and then you just cut it in the threes. You have the same amount of sandwich, you're just having three shares, and now you can sell one and someone else can buy 1/3 of a share. So


Paul  12:12

that's how stocks was worth if you didn't know. You know, Tesla initially entered the market at $17. A share in 2020 has gone through several splits at one point even after they split, you know, they did a five for one that five for one split shares went up over $1,000 Which kind of contributes to Tesla's you know, $1 trillion market cap.


Paul Daly  12:29

And you know, it's auto news. It's out there, so we thought we'd talk about it. But speaking of Tesla, segway it's definitely isn't this definitely isn't a Tesla show. Speaking


Kyle Mountsier  12:42

of being out there. It's like a double segway.


Paul Daly  12:46

We've never had a double segway double segway, y'all


Kyle Mountsier  12:49

double.


Paul Daly  12:53

Space X and T Mobile are partnering to provide satellite based cell phone coverage to remote areas. This was announced by Elon Musk and T Mobile CEO Mike Siebert, and a press release, the new plan would provide and quote, near complete coverage in most places in the US, even most of the remote locations previously unreachable by traditional cell signals. And then Musk tweeted that this will eliminate dead zones worldwide. It's going to start as a text only service that operates when T Mobile switches to their new mid band frequency. They're


Paul  13:25

going to give basically SpaceX a slice of that band. No new here's the crazy part. No new devices. Wow. I'm like how they pull that off. Yeah, I remember what a sat phone used to look like. I mean, you've seen the movies, right? Like I got a Coleman on the set phone. And it was from an auto standpoint, this is a big deal. I think Tesla vehicles will be connected, able to connect to it as well. So we'll talk about interconnectivity and what is going to happen there. This is I think, a little precursor of what we're looking at talking about connecting cars, getting all that beautiful, juicy data out of there so that we can send them hamburger ads when they're driving by McDonald's. Let's talk about what this is really about.


Kyle Mountsier  14:04

Right as generally what it's about ad dollars, because hey, look, we are like it was like it was like Facebook, Google, Facebook, MySpace, Uber cars


Paul Daly  14:16

done. Yeah. Chad Hart is just just thinking about like, the route you take the work, things like paying paying insurance per mile, like all these things that are going to come along with the commoditization or commercialization of your mileage. And I think it's gonna be where we get imagine that like, where we're going to eat your cars, like, you know, all of a sudden, order the local restaurants gonna be like $5 off, the security is gonna


Kyle Mountsier  14:40

play out in the middle, go over to the passenger seat, sit there, order. Go through the drive line. I totally want to order not while you're driving we're not having while you're driving in the passenger seat, again, not not driving advice.


Paul Daly  14:57

So today, we'd like to do several times This is an opinion piece not driving advice, not investing advice. We're not sure why even watch the show anymore. Hopefully if anything else we got you're ready to go attack the day serve the auto industry, serve some consumers and realize we're just getting started. The best days of the industry are ahead of us.