The first day of CES in LasVegas included several concepts and reveals from legacy automakers as well as new partnerships, here’s the rundown:
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Paul Daly, Todd Caputo
Paul Daly 00:23
Hey, it is Thursday, January 5, we got a special guest host Todd Caputo in the house. We're gonna review ces announcements they made yesterday also talk about Amazon laying people off taking a loan. All at the same time. People really want to know. So we'll get to that story the Amazon story at the end. But Mr. Todd Caputo, thanks for joining me today.
Todd Caputo 00:46
I should have worn my black hat black T shirt grown a beard for this
Paul Daly 00:49
shouldn't that well, the hat and the t shirt could be expected. I've never seen Have you ever had a beard?
Todd Caputo 00:53
goatee? Like back in the day like 30 years ago,
Paul Daly 00:56
but you've never had a beard? Never. How about your dad ever had?
Todd Caputo 01:02
You know, I just I don't think I'm a beard guy.
Paul Daly 01:04
You don't know what to try? Yeah.
Todd Caputo 01:07
I don't think anybody would like that. Too much. Beards are happening.
Paul Daly 01:13
Quite not quite. Yeah. Well, we have a lot of things to talk about. You know, if CES, the Consumer Electronics Show if you don't know what that is. It's the biggest show in Las Vegas. They haven't at the same place that nada is every other year, the NADA convention center. But I mean, it to contextualize it nada show is about 30,000 people. CES is about 100,000 people. So I'm just thinking the scale of this is massive. And it's across all technology. A number of people in automotive. Have you ever been there, Todd?
Todd Caputo 01:41
No. And I've always wanted to go with on my bucket list of things to do. I should actually think next
Paul Daly 01:45
year. Next year is the year I think we were talking about. We should who do we know that's there like David Kane is there right now. Oh, is he? He has Oh yeah. Well, this son and he's you know he's posting pictures is making us all jealous. So next
Todd Caputo 01:58
year, you bring miles I'll bring Anthony will bring our phones and we'll go they go
Paul Daly 02:01
we'll bring an iPhone. And we'll just live report from it. So CES is rolling heavy this year. And you know, we had talked about a couple shows ago that it's so automotive heavy now that EVs are in the forefront. It really has pushed automotive culture back into the public technology, culture and just culture in general. And so this year, I think automotive accounts for like something crazy, like 15 or 20% of the show. 400,000 show floor square feet are accounted to the automotive industry alone. And so yesterday, you know, the announcements, the press releases of a live demo start to wrap up. So we're gonna give you a little, a little bit of a rundown on what happened yesterday. And then we'll hear Todd's as usual unfiltered feedback on all so so it kicked off. First one we're going to talk about is Sony, the Sony Honda mobility joint venture between Sony and Honda. And they revealed what the brand is going to be for the joint venture in the car they're developing. It's called a Phila, a fe l. a, there's a picture of it on the screen that looks like a Porsche kind of has like that fastback look of the Porsche with the kind of looks like a Lucid Air. It's got 45 cameras and sensors on both the interior and exterior. It's got a media bar on the front that actually can like communicate messages and colors and things like that best in class entertainment, they're saying it's built on something that I want to look into a little more Qualcomm's Snapdragon chassis, which is like supposed to solve the like the constant connectivity issue. And we'll do a quote here and then we'll talk about it. Yesterday. Hedy Mizuno, CEO of Sony Hello mobility said, I feel it represents our concept of an interactive relationship, where people feel the sensation of intelligent mobility and mobility can detect and understand the people in society by utilizing sensing and AI technologies. They go it'll be built in the US order start in 2025 with delivery slated for the same year. What do you think of that car today?
Todd Caputo 03:54
I think the car it looks like one of those old yellow ugly Walkmans. Remember those old Sony Walkman things that you put on your head? Oh, my God, I think that cars like these cars need personality, that car doesn't have it for me, but as a former dealer and someone who's definitely an advocate for dealers, you know, who's going to fix these cars? Who's going to sell them who's going to service them?
Paul Daly 04:16
You still haven't said they still haven't said Yeah, so if I
Todd Caputo 04:19
if I have 100 franchise, I'm thinking geez, okay, am I going to be delivering these cars? Am I gonna be servicing them? Who's gonna pay me how am I gonna get paid? If it's very interesting that they're doing this with Sony for sure, but I think that cars just bought ugly and it looks like it's gonna be very expensive.
Paul Daly 04:33
There you go unfiltered let's move right on to the next one. If you like that one, you're gonna love this BMW, the eye vision D which is d e standing for digital emotional experience. I would say it gives a nod to the hard lines of the older BMW think just real like boxy, but adds quite a few curves to kind of make it look sleek. It's pushing the boundaries of integrated tech featuring, this is cool, a full windshield display. Obviously these are concept cars, but basically you yours can slide between an Augment like no display or just a standard heads up display, or an augmented reality display where it's going to show things across the windshield and overlay, you know, maybe like directions, or a fully virtual experience where it's just a screen and you're not even looking at anything in the real world. I'm Steven direct their group, Senior Vice President of the connected development said, when integrating technology in the car, we think about the customer experience who creates and the problem we want to solve, we want to deliver the information you need, right at the time, you need it to give the perfect experience. That's what people are asking for. What do you think of that car?
Todd Caputo 05:35
They tell people don't text and drive. So now they want to put stuff up on a windshield for when you're driving a car. It looks like is it a living room on wheels?
Paul Daly 05:46
No, no, it's smaller. It's smaller. I mean, it looks like a smaller BMW, but like, takes a lot of these comments are like, very generic. Like, you know what I mean? Like, think about, like, we want to give people tech that integrates with the life just when they need it. It's like, yeah, yeah, that's the point of the technology.
Todd Caputo 06:05
It's a concept, right? So we'll see what happens with that one. But you know, again, like that last car, we looked at people that are, you know, higher levels of income that can afford some of these cars, they like cars with personality. Yeah, they like cars with with some horsepower. And I think a lot of them just like simplicity to they just want to kind of get in the car and go the automakers they just don't lose sight of that. These are guys and girls just kind of want to go fast and look cool. And I don't think either one of those cars look too cool. To me. It's just my opinion. Anyways.
Paul Daly 06:37
All right, let's move on to the next one. The VW newly named ID seven, I think it was called the ID arrow at the concept. It has a fully lit exterior. Now this is super concept. It literally has an LCD screen on both the panels and the windows. This is just something that VW does at the CES shows this is not ever going to go into production. But this vehicle, the ID seven is supposed to be a Tesla Model three competitors straight on, it's got a full a heads up display, not full windshield, but all the way across the windshield, at least on the bottom. And you know, a pretty big 15 inch touchscreen, smart climate control that you know heats and cools the cabin when they've thinks the driver is heading toward the car. So when you get in the car, it's either heated or cooled. You know it kind of that made a big deal about the air vents, and how they can direct and disperse air. But it reminds me just like, basically, the interface looks like just what the Tesla Model three has already. And it has an expected range, which is the largest that they've announced in any their lineup of over 400 Miles actually, I think it was like 450. But that's based on the European standard, which is a little more liberal, so we'll call it 400. But that definitely looks like I don't know, a more normal car if you take away the LED panels.
Todd Caputo 07:48
If it's 4050 grand, it'll sell.
Paul Daly 07:52
Yeah, it kinda reminds me of like, not sized sedan?
Todd Caputo 07:55
Yeah, no, I think it's cool. I think it'll sell. But the only other thing that I think of going in the future, right is these cars are going to be so sophisticated and so complicated with all these electronics and LED lights and all these sensors and all these cameras, they're gonna be very, very expensive to insure, right? Like, how was an insurance company going to value some of these cars, if they get in an accident, and as a dealer, or, you know, an independent repair shop or a body shop, you're gonna have to have some serious tools that are probably tech tools, people to actually fix these cars. I mean, you know, I've got a Tesla, right. And it's right. Yeah, I got an S and my son has a three, and his car got backed into a Chinese restaurant. About four weeks ago, it's still sitting at a body shop in Charlotte, there was only three body shops in Charlotte that can actually fix it. And it's one of many Tesla's sitting there, and the only ones who can fix it, what's it waiting for just time parts and honestly just time and having someone actually able to work on it, because there's just so many of them sitting there. It's, it's a big deal, right? If you own an electric car, and one of these cars that are so tech heavy, it's going to be expensive to insure and if you get especially in an accident, I think you better be planning on waiting a long time to get the car back. Wow. So till the
Paul Daly 09:14
industry catches up. That's a massive consideration. I mean, even the cars I mean, look all these complicated windshields how often windshields get chipped or cracked or something like that. And then, man think of another complexity What if the windshield gets chipped, and it messes with the heads up display and all of a sudden, it freaks out and you can't really see clearly out the windshield, it's a whole other level of safety issue.
Todd Caputo 09:34
The model three we have the roof got a chip on it and we had to replace the glass on the roof, which is
Paul Daly 09:40
like special polarized argon. So would that would that do?
Todd Caputo 09:47
It was it was it was a project to get it done. I could not go through Safelite it had to be a specific vendor that specifically that will those only and again, wasn't simple wasn't easy, and it was an expense to the insurance. company and actually, I didn't even put it on the policy, I didn't bother claiming it. I just paid it out of my pocket because I want to raise the I want to raise my rates. But again, you know, I love electric cars, I think they're great. I think that the future looks bright for them. But unless it's affordable for everybody ain't gonna happen. It just yeah, just not.
Paul Daly 10:21
Yep. All right, one last one. This is not a full vehicle. But it's the Lantis revealed their version of their calling the cockpit of the future, noting that Chrysler will be the first brand to integrate the new technology of basically, you know, the, it doesn't look comfortable to me. But the main feature is this two seat cabin that has dual touchscreens that stretch from one side of the panel all the way across the other, it's about looks like it's about six to eight inches tall, goes all the way across. And the software is heavily focused on artificial intelligence, intended to alleviate a lot of the difficulties and stress associated with driving Chrysler's saying they're also leaning into fun and wellness features, including meditation, DJ games and get this karaoke. I mean, I don't even know what to say about that. Like, I think, you know, CES has a lot of fanfare, right? And they want to say something that's gonna get out there. But, you know, Chrysler being the first brand to get the state of the art, you know, new display, I think, I guess it makes sense. Right? You get the volume? Oh, no,
Todd Caputo 11:25
um, you know, I think for passengers, it'll be fun. You know, you know, what just came to my mind, Paul, I feel like we're going through almost like a renaissance in the industry. With with the technology, if you look back at the cars, you know, when cars first came out, you know, in the 20s, and the 30s, and the 40s. And how the technology just changed? Well, I think we're actually almost going through like a revolution now, with cars, kind of like we bet we went through literally 90 years ago. I mean, you know, I'm an old car, right. So I, and I love cars, I just I truly love them. But I feel like there's definitely a huge shift and change coming with cars, there's no more turn signal. There's no more, you know, you know, levers coming off a steering wheel. It's constant buttons everywhere. And again, I think it's awesome. But my only concern is like this stuff distracts people. screens can definitely be really, really, really distracting. I think moving the letter, you know, moving the lever to to make a lane change is one thing, but having to actually look at a screen and touch and swipe and stuff like that as a driver. Yeah, I think that's just, again, right. Like, you got to think about this stuff. People that design things, I normally drive cars, but a lot of times people that design things and in work for these large corporations, they almost live in a cubicle or a place where they don't necessarily think about what happens in the real world to someone who's just driving their kids back and forth to school or to a game or something like that. And that's, that's that's disconnect simmer. It's a disconnect. Yeah,
Paul Daly 12:52
it'll be it'll be interesting to see, because it feels like a little bit of the antidote to what you're saying, could be a lot of these autonomous features, or at least Driver Assist features and safety features that maybe counteract some of the distraction that happens, or at least the the change in, you know, the change in comfort level with, you know, maybe pulling a lever versus looking to the right. And so, I mean, I mean, I can't tell you how many times my semi autonomous features have saved me from a collision or maybe changing lane the wrong way. So, you know, I almost, I wish I would have included this, because I found this great video of a Tesla writer in Detroit driving their Tesla in the snow on autopilot, and it couldn't make it like three feet without going into the curb. It's just like, and he's like anyone that tells you full autonomy is coming. He's like, even in perfect conditions, right there a lot of questions. But even in inclement weather, like, you know, you and I are used to being from, you know, or having lived in upstate New York for a long time. Not Not even close. All right, speaking of not even close segue gotta get a segue. So Amazon has made two large announcements this week. One is that they're laying off 18,000 people, which is more than 10,000 that they had originally expected in November. And the other one, which was just at the end of the day yesterday, is that they are securing an $8 billion unsecured credit line. So for the next year with an option to to extend it another year. So let's break those two down. The layoffs are something that we had been talking to and looking at Amazon literally doubled the size of their company since the pandemic started right during the pandemic, online sales skyrocketed. People were stuck at home, they added hundreds of 1000s of workers. So they're laying off 18,000, which actually represents 1.1% of their workforce. And they said it's going to be pretty broad across the entire company, right? Like they're not just doing C suite, they're not just doing warehouse. They said it's pretty broad, just labor reduction. Now, you pair that with the fact that they're taking up this $8 billion term loan which by the way, that's a lot of interest right now 400 million interest in the year at at 5%. But they're doing this. And the quote was given the uncertain macro economic environment over the last few months, we have used different financing options to support capital expenditures, debt repayments, acquisitions and working capital needs. So that's what they're saying is for in q3, they have 35 billion in cash with 59 billion in long term debt. We don't know what that is at the moment. So what do you make of that dichotomy? laying people off borrowing cash for Amazon?
Todd Caputo 15:26
So some of this, I would say is probably above my paygrade. But you know, me I like just like to simplify things. Yep. If you're looking at this, from a business owners perspective, this is the year to really start focusing on expenses, because a lot of people in the auto industry have been really fat and happy. And you have to look at every single thing that you pay for every single person that you have all of your processes. And I would think Amazon, along with a lot of other companies are doing the exact same thing we've been hearing about layoffs now for the last three, four or five months. Yeah, I'll be curious to see what happens with a lot of the corporate layoffs that we've seen whether or not these people get rehired. And how quickly they actually get rehired. And who picks them up. If they don't, you're probably going to see the unemployment rate tick up. And then maybe what will happen is, you know, we might see interest rates start to not continue to go higher, because I think the government loves this see, the government so concerned that the employment market so hot, which to me, doesn't make any sense to me, I'd like to see everybody employed, it doesn't make any sense to me, we want to have such low employment or unemployment. But you know, I just don't, you know, here, again, we look at the basic fundamentals of businesses, you have to generate cash flow, you have to generate profit. And we're in a world right now, where it's not all about top line revenue anymore, because the cost of capital is not nearly as inexpensive as it used to be, and focuses not just on growth of folks, the focus in the investment community is really looking at companies actually make a good return on investment at all. I mean, we see it with with, with other people in the car industry, especially some of the online car dealers, and what's happened to them and, and their market cap has been destroyed, because the investment community is really not focusing on the sizzle anymore in the top line revenue growth or focusing on whether or not these companies can actually make money.
Paul Daly 17:18
I think that that's kind of the dichotomy of the auto industry right now, like even in the things that we talked about this morning, right? There's a lot of sizzle going on. There's lots of Eevee talk, there's a lot of technology talk. But the undertone that, you know, you hear amongst dealers who are really paying attention in the industry at large from an operation standpoint is it's very expense driven Now, like all of a sudden, we're back to where we were in 2019. You know, 2020 hits, and then this whole thing happens. But what happens when when things are uncertain? What do you look at, look at expenses, look at expenses,
Todd Caputo 17:51
for sure. Like everything happens in cycles, right business happens in cycles. And I think we're coming into another one now and the government's printed money for a long time, a lot of it. And, you know, I think some of its coming back to roost and those who operate their businesses, fundamentally, correctly, will be fine. And there's definitely opportunities for those that are sharp, but if you've been sloppy, no matter what the businesses that you're in, I think this year is gonna be a wake up call for people.
Paul Daly 18:18
Well, there you have it. I think that's enough for Thursday. People have some work to do. They have some expenses, the cut technology to pay attention, but more than all of that, we know that this industry revolves around one thing, and that is serving other people.