Disruption Day for ASOTU, Carvana turns 10, EV Soap Opera

February 23, 2023
This Wednesday is all about disruption. Not the buzzword kind, but the real kind as we talk about ASOTU’s next evolution. We also blow out the candles on Carvana’s 10 year birthday cake, as well as give our grocery store magazine review of the soap opera that is the EV transition.
Listen On
Apple Podcasts IconSpotify IconGoogle Podcasts Icon
  • Automotive Ventures partnership and what is next for the ASOTUverse
  • Carvana celebrated its 10th birthday yesterday with an ironic stock price of $1 for every year the company has been in business at  $10.04
  • Intense focus on customer experience starting in 2013 led to CVNA being one of the  youngest company ever to debut on the Fortune 500
  • First vending machine appeared in Nashville in 2015
  • "Ten years ago, when we sold our first car online in Atlanta, Georgia, it was hard to imagine at that time just how far we would come in our first decade. Carvana’s core values and our belief in treating people better have led the way towards creating a better car buying and selling experience," said Ernie Garcia, Carvana Founder and CEO
  • According to a new study presented by Cox Automotive, in 2022, 81% of shoppers responded that the overall car buying experience was improved by online activities

  • As the EV world turns:
  • According to recent data, every $100 in Tesla revenue turns into $26 in profit which is far greater than its competitors proving a major competitive advantage. Despite the newsmaking antics of CEO Elon Musk and the company’s recent stock value reckoning, the value of Tesla still remains greater than Toyota Motor Co., Mercedes-Benz Group AG, Volkswagen AG, BMW AG, General Motors Co., Stellantis NV and Ford Motor Co. combined.
  • The current court case focusing on Elon Musk’s $56B pay package heard closing arguments yesterday in a Delaware court. Chancellor Kathaleen McCormick who is presiding over the case called the prosecution's argument “elegant” and a “kill shot” as they attempt to discredit the manner in which the board posed the pay plan to shareholders for a vote.
  • The defense argues that the package was tied to overall performance and shareholders have received over a 10x increase in stock value since the vote
  • Musk told the court that the pay package was a way to help fulfill ambitions for space travel saying "It's a way to get humanity to Mars," he testified in November. "So Tesla can assist in potentially achieving that."
  • A WSJ article is featuring the broad disagreement on how quickly EV adoption will likely occur, “Most car executives agree that the transition to electric vehicles is inevitable. How rapidly to make the switch is a central question, one that is driving divergent strategies.”
  • “We don’t want to risk missing the market,” Volvo

Get the Daily Push Back email at https://www.asotu.com/

JOIN the conversation on LinkedIn at: https://www.linkedin.com/company/asotu/

Read our most recent email at: https://www.asotu.com/media/push-back-email

Share your positive dealer stories: https://www.asotu.com/positivity

ASOTU Instagram: https://www.instagram.com/automotivestateoftheunion


Kyle Mountsier, Paul Daly

Paul Daly  00:32

What is up this morning? It is Wednesday. We got a lot going on for Wednesday. It's a big day for the future of the so do I guess we think so. cavada turns 10 And we're gonna wrap up the Eevee soap opera thing

Kyle Mountsier  00:48

soap opera we might like we might serve it on a platter to you but far from

Paul Daly  00:55

I kind of the only illustration that comes to mind is the magazines in the grocery store checkout aisle that wrap up the soap operas for the week, right and all the people that said Oh watch soap operas. I don't know who does but I don't know those people. But apparently people do and they got all these characters and lots of drama going on. And can you believe that Ryan's dating this person and all that stuff. So kind of got that little bit of that going on? It's what I had in mind this morning. Anyway, they call it a soap opera. That's,

Kyle Mountsier  01:20

that's very straight up soap opera.

Paul Daly  01:24

So what we'll get into that in a minute, good morning, Leigh Feldman Good to see you. It's always good to know you're just there checking things out. David. Good morning, Brian. Good morning. Oh, man, we're getting

Kyle Mountsier  01:36

ready this morning. Hey, showing up real quick. Just if you're watching if you're listening if you're whatever ring at 10 Eastern nine Central on Wednesdays we do think live. It's a 30 minute show it is. That's all that's all it is right. We get in we get out with dial it up. We got Steve Greenfield and Hadley gray Scott, people like our opinion, Eric Cole, coming in to moderate look at the tech that's entering our industry, you should be there. It is a ton of fun. We'll honor your time and you get like three demos without even having to schedule them on your own. No,

Paul Daly  02:10

no pressure. And you get all these other people that are thinking about angles, you're not thinking about asking questions. And where else can get three demos, expert opinions in 30 minutes, nowhere from actual practitioners to write because we keep the hands in the dirt. So we want people that are actually using and thinking through and trying things to get feedback and rankings on the show. So please join us go to clubhouse search automotive state. How do you get to an on clubhouse now? If you search tech will come

Kyle Mountsier  02:37

up. It's not clubhouse. It's on LinkedIn. Oh, we're doing LinkedIn now. I didn't Yeah, we're doing you gotta follow my profile, hit the little bell Bubba bomb and then you'll be there. Everyone's

Paul Daly  02:47

LinkedIn. LinkedIn is the place then. And we'll post them on our page as well. Just so you know, John Foley, thank you for commenting site looks good and fast. If you haven't been to a soda.com Recently, go to a soda.com. And experience how fast the stinking website it is ridiculous. Kyle has been in the background and like a mad scientist every, like sending me text messages, I just figured out one little nerdy thing that I don't understand. Right. And he does all that. And then I get excited because the site's fast. So check it out, just because and if you're not signed up for the email list, you can sign up for that super best too. We have an awesome announcement to make. Actually, Steve Greenfield made the announcement today. But we are partnering. We're in the middle or at the tail end of a second round of financing for a soda to move us into the next phase of the soda verse, we have so many announcements and people coming on board and shows that we're developing and about start shooting coming up. But Steve Greenfield, the team at automotive Ventures has really, you know, been a great partner over the last, you know, two years and they've just aren't there be they believe in what we're doing, which is really banding together the community in automotive that really believes that the culture and the perception of automotive is better and that our best is yet to come. And that there's a better version of ourselves right around the corner. So automotive ventures, we've given them the final allocation in this round. And their investment club is going to have the opportunity to do that. And if you want to be a part of that you can so you can just how do you get there? There's not can you get to the Investment Club website?

Kyle Mountsier  04:13

Yeah, so you can go to Steve's LinkedIn profile or automotive ventures.com and find the investment club there. You do have to register fill out the type form and then and then they'll kind of get you in their process. That's their, their portion of handling this. It's not something that you do directly through us. So make sure and check out that message Steve Greenfield or Andrew Gordon, if you have any questions.

Paul Daly  04:37

You know, there's a phrase that he us uses, but it just came to mind. We want to democratize automotive media, right? Like that's an element of what we're doing. So if you want to be a part of it on that end, awesome, but if not, we're just happy you're part of it. You get to be a part of it every day through checking out the podcast, talking about the topics engaging in social media showing up to the events and all that good stuff. Kind of we have a birthday to

Kyle Mountsier  04:59

talk about today. though Yeah, we got birthdays. Happy Birthday deal. Trick. Yeah.

Paul Daly  05:06

So Carvana celebrated its 10th birthday yesterday, with an ironic stock price we might add of $1. For every year they've been in business, they close the day at $10.04 on the day, which is actually up quite a bit from what it was in previous weeks, but Carvana has been a thing for 10 years, it's pretty well, you know, in 2013, there is intense focus on customer experience led to Carvana actually being one of the youngest companies ever to debut on the fortune 500 Their first vending machine which have become a bit of iconic and somewhat of a problem in some places. Actually, Kyle appeared in Nashville right here

Kyle Mountsier  05:45

in Nashville. It

Paul Daly  05:46

was a big talk at the town back I gotta say, I was like, tell me the story of Nashville 2015

Kyle Mountsier  05:51

I mean, it was everybody was talking about it, like it was on all the news, it was right on my drive to work and you saw it kind of going up. And you know, they did this whole back back then they like really, really got tried to get people excited about like, going there, getting their coin out, put in the coin and pulling this lever and then the car coming down off the thing and taking delivery. And then it just became like little holding spot and a big ol billboard on the side of the road is still there and they actually keep a good amount of cars. Nashville is a pretty engaged market for the Carvana. You know, like the buyer demographic is really really it's the right demographic, you know, the East Nashville, like younger, tech forward is really fit.

Paul Daly  06:33

Yep. Well, here's a quote from CEO order Garcia. 10 years ago, when we sold our first car online in Atlanta, Georgia, it was hard to imagine at that time, just how far we would come in the first decade. Carvanha is core values. And our belief in treating people better have led the way toward creating a better car buying and selling experience, according to a new survey just released by Cox Automotive in 2022 81% of shoppers responded that responded said the overall car buying experience was improved by online activity. So congratulations to Carvanha for 10 years, they've definitely helped the industry, move the needle forward,

Kyle Mountsier  07:07

blaze the trail, that no matter how much they hate on the franchise dealership system, they've moved the needle for the entire industry first.

Paul Daly  07:14

Yeah. And so hey, when you're trying to focus on people and love people more than cars and all that, guess what? You got a friend and a fan. In a so too. I'm thinking of a segue. We had such a good day of segues yesterday, man, I don't want I don't want I don't know.

Kyle Mountsier  07:30

Good, right? It's okay,

Paul Daly  07:34

it was so good. So I just, I'm just going to do that because we don't have a segue, I want you to do it. But sometimes we like to aggregate news in a particular area because because there's a lot to talk about. So as the Eevee World Turns we'll call this today. According to recent data, every $100 in Tesla revenue, we haven't talked about Tesla in like four days now. Every $100 In Tesla revenue turns into get this $26 in profit. That's amazing, which is

Kyle Mountsier  08:08

net revenue. I'll take that business

Paul Daly  08:10

which is far greater than its competitors and proving a major competitive advantage. Despite the news making antics of CEO Elon Musk, and the company's recent stock value reckoning the value of Tesla's still remains greater than that of Toyota, Mercedes, Volkswagen BMW General Motors, the Lantis and Ford combined. So he's still got that the current case.

Kyle Mountsier  08:32

Combined, we just wanted to make sure people get it's not like more than each of those. It's more than each of those combined added up

Paul Daly  08:39

together. But it's obviously not without its downfalls and drama, there's a current court case, focusing on Elon Musk's $56 billion pay package. They heard closing arguments yesterday and Delaware Chancellor Kathleen McCormick, who is presiding over the case called the prosecution's a final argument elegant and a killshot. Like that sounds like a lot of drama, as they attempt to discredit the manner in which the board posed the pay plan to a vote for shareholders. The Defense says hey, like we were upfront with it and by the way, shareholders 10x Their value since the point where they approved the pay package so they actually got a lot of consideration as a result of the great pay package. And then Elon Musk during the hearing told the court that you know the pay package was helping him realize his full ambitions too as a way to get quote get humanity to Mars. He says so so it's I mean like if that's not a magazine worthy I don't know what it is.

Kyle Mountsier  09:36

It's for drama it's like every single week I like Carvana or you know Tesla stock price up Elon Musk going nuts right and I don't know what to think of it it you know, when when you have a company that's running at that type of margins, you know, it's going to continue to you know, play fair really with stockholders, but I just can't imagine how long they can like stockholders and the public can continue They're kind of put up with the antics alongside of this. I mean, it is a full on soap opera. You know, it's, it's, it's wild because like everything, everything he says kind of like is scrutinized to the nth degree, but also like he continues to keep to his word at some level, you know. So it's really hard to I don't even know I don't know how to pin it down.


I don't but on March 1, in the shareholder earnings call on March 1, they have teased the fact that they're going to make some level of announcement on a cheaper, lower level more affordable entry level. Evie. So I think everybody's on a little bit of pins and needles to see like, what's that swing actually going to be? Like? Are they going to come out with a sub 30,000 model Tesla If so, that'll obviously be a big deal.

Kyle Mountsier  10:47

Well, and there was news this morning that like someone I can't remember who the research was done by but basically the model three is four grand lower than the average Evie price right now. So they're already like they already have the lower end product and so to potentially come out with a you know, a more cost efficient product below that would definitely disrupt the market especially if they have their margin somewhere in the neighborhood of where they have their current margin is like nine grand or whatever it I know

Paul Daly  11:14

it I know it Okay, in the last story in this kind of Evie World Turns bringing it back to kind of establish what are we calling traditional automakers working? We weren't gonna call it legacy. Yeah, I can't remember what we're calling it. But you know, great

Kyle Mountsier  11:27

word for it. Someone remind us of that one.

Paul Daly  11:30

Yeah. Really, it was a really great way to spin it. But the people that have been around for a really long time before you and I were born. And all those companies that started like that Wall Street Journal article just featured a broad, you know, the broad disagreement on how quickly Evie adoption will actually or likely occur. Most car executives agree that the transition to electric vehicles is inevitable. how rapidly to make the switch is the central question, the one that's driving divergent strategies. That's a quote from the article. So basically, we have four different opinions or people that they mentioned. Volvo's chief executive Jim Rowan said, We don't want to risk Miskin missing the market. Right. So that's their possession, which is why you see Volvo like, totally get it all the way in and fast. Next up, traditional automakers are pointing to limiting factors as a whole, saying like, there's some things that are out of our control, specifically battery mining, you know, mining materials, battery materials, saying like, hey, there's going to be a bottleneck that we actually can't control the supply chain issue for sure, trying to take time and I think we're only beginning to see the fruit of that one Subaru who has earned the trust of a traditionally very green customer base is taking actually a more measured approach. But a very attentive approach. Our good friend, Mr. Tom doll says we are feeling the pressure, but we have to make sure that the market is really going to tip toward it. So I was like man of experience.

Kyle Mountsier  12:51

I think that's the trick and and and, like, we talked to Santosh from Delaware, you know, last month and he was just saying like, we need to be leaning on the market tendencies and more than this, like over dramatize politicized. Move toward EVs and I understand like from from Volvo's perspective, and GM and Ford is like, hey, in Tesla's doing this, you know, BYD is doing this vinfast. And these, these auto Mark automakers and other countries are pushing the boundaries of Evie adoption by kind of forces force feeding the market. But can the market actually handle that force feeding? Or is there a tipping point where we actually can't get past the early adopters at a at a rate that that assumes what the production is? And I think that like, that's a balancing act, that we're not finding a very good, you know, middle ground on, especially when you start talking to the the actual dealers and what's happening on the ground and what people are asking for as they come in the showrooms? You know, Mike Manley, CEO of AutoNation, said that there's been more communication than ever between OEM execs and dealers, but it kind of seems like that they that they're coming in a little bit late with the news. It's like, Oh, guess what, we've been working on all this stuff. Right. And here it is, eat it, and have fun with it. And so I think that like, just early and often communication, understanding what's happening on the ground, not asking leading questions of the consumer public. And, and, like, we just have to take a more measured approach. And

Paul Daly  14:27

the, you know, I like Manley's comments, and just the, I think, the general sentiment of so many of the great dealers that are part of, you know, our ecosystem, and that just that we know, they really do understand that the OEM and the dealers have to be partners more than ever have to listen more than ever, just like you said communication early and often because in the end, whatever happens, every like dealers are still holding the bag, right? They still need the products to sell, they still need the OEM to make the right decisions. So they need to feed them the right information and there has to be a give and take of getting on board as much as you can to understand what the actual desires for the product and sometimes it is to like, Okay, we gotta like, fly the company flag for a minute here and like work together. It's a give and take. And I mean, it's easy. It's a little bit easy to stand on the sidelines and just, like commentate on things, right? Like, we're not we're not the quarterback, we're not in the huddle, we don't see the pressure, right? So we never want to come across like we know all the angles. We're just trying to encourage conversation and like, because we know, there is no more apt resilient group of entrepreneurs and innovative thinkers than auto dealers, right? Maybe we've taken some knocks, when you think of like our adoption of technology or adoption of certain things. But when you look at the long game, the last 100 years, I think it's pretty clear, like the right group of people are in the seat to try to solve this problem and give customers what they want. And frankly, just serve the greater good of, you know, our country in our community. So it's not easy, and you know, not easy, but it is it is like a soap opera. So Hey, guy for Wednesday, we're

Kyle Mountsier  16:03

just wrapping up the soap opera. That's all

Paul Daly  16:07

but I'm sure you have lots of stuff to get to from here. So hopefully you left with a smile a little bit more information, more than anything, a desire to go out and serve some people

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.