Ford’s EV Dealer Model Plans, Rail Strike Averted, Walmart’s Virtual Try-On

September 15, 2022
We’re back in the saddle talking about the ongoing Ford Dealer meetings in LasVegas regarding the shift to Model e. We’re also talking about the rail strike that may never happen, and WalMarts new tech that allows users to upload some ‘personal’ photos to virtually try on clothes.
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Ford Dealer meetings in Las Vegas this week have dealers driving EVs and reviewing their options to remain eligible to to sell Ford EVs

  • By 2023 Ford is requiring Dealers to invest from $500k to 1.2M dollars if they want to remain “Model e” certified
  • There are 2 levels, “Model e Certified” and “Model e Certified Elite”.
  • Both levels require no haggle, one-price models for all EVs
  • The investment money will mostly go toward the installation of fast chargers
  • Certified: 1 public facing charger
  • Certified Elite: 900k initially to 1 public and one internal fast charger, with a second public facing charger soon after

Sam Pack, CEO of Sam Pack Auto Group in Texas, said he plans to have each of his 4 Ford dealerships become Certified Elite. "The message I heard was one of optimism. Yes, there's a lot of questions that have not been answered. But we'll work through those. This is a learning journey."

  • From Jim Farley’s LinkedIn Newsletter post yesterday, Sept 14th: Our dealer network is our secret weapon, comprised of entrepreneurs who can deliver for customers all the way through the ownership experience. These are big changes, but we’re up for the challenge. With change comes progress – and success.
  • After 20 consecutive hours of negotiations, a U.S. railroad strike has been averted as a tentative deal is reached
  • A strike would have caused major problems for OEMs and Dealers as rail transport is a primary means of moving inventory around the country
  • Joe Biden thanked both unions and rail companies “for negotiating in good faith and reaching a tentative agreement that will keep our critical rail system working and avoid disruption of our economy.”
  • If a deal wasn’t reached, the Friday deadline for a walkout could have been halted by Congress under emergency economic regulations

Walmart's new “Be your own model” experience allows consumers to use their app to upload a full body image and browse what over 270k clothing items look like on them

  • Acquisition of virtual try-on platform Zeekit last year is powering the experience
  • Users upload a full body photo with tight fitting shorts and top and then enter their height in order to use the experience
  • “A single shirt can come in six different colors, seven different sizes and two sleeve lengths. Our technology captures all the variations and shows how they look uniquely on each individual,” says Walmart in a press release announcing the new feature.
  • The feature doesn’t support Men’s fashion at this point
  • Walmart did not comment on how it intends to protect intimate customer photos

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Paul Daly, Kyle Mountsier, Darren Doane

Darren Doane  00:39

This is not a conference because conferences become an excuse to get to the bar, you guys have said we're going to start at the bar. People usually leave conferences exhausted and overwhelmed. And our goal is that everyone here leaves inspired and energized.

Kyle Mountsier  00:58

They are so diverse is not possible without you the conversations, the communication, the collaboration,

Paul Daly  01:03

because the spirit of collaboration is one that we want to cultivate and foster within retail automotive.


relationships matter. The local system is the winning model. I want them to come into the store, experience what we have to offer and what our retailers have to offer

Paul Daly  01:19

shots fired.


The reality is when it comes to our heads, even though they lie to us, the sky's the limit. Your mind is the limit.


The history of innovation is the story of people in difficult situations in different industries and industries that are changing and they're forced to invent.


With an open mind and open heart and open hands, we can be more productive, more accessible and more gracious, but also more efficient, effective and statistically successful in what we do.


So be someone that other people want in the room, people will forget what you said people will forget what you did, but people will never ever forget how you made them feel.

Kyle Mountsier  02:08

It's our duty collectively to ensure that our culture recognizes the importance and value of the franchise retail dealer

Paul Daly  02:16

you belong here in this time to actually affect it and move forward so you can serve more people. So on behalf of everyone that you see on the stage, we thank you from the bottom of our hearts for being part of the very first asoto con que the music

Kyle Mountsier  02:35

you gotta be kidding me dude. We can start off

Paul Daly  02:40

the show back in the saddle like that. We got some news to talk about. But we got some news so to kind of talk about to


the people really want to know who is and who Id they stopped this day. Wouldn't they see me? Man this

Paul Daly  02:52

is the first day it feels like super familiar to be back in the saddle. It feels like we never left and it feels like a whole lifetime has gone on. In between the last time we were in our in our studios and not

Kyle Mountsier  03:05

doesn't know man I am. I'm happy to be like my wife asked me last night she goes, Are you are you excited to kind of have like, normal ish Day, which I guess there's no normal day

Paul Daly  03:16

around here.

Kyle Mountsier  03:19

New there's always something like dream state we've got we're literally on Slack. Before we even get started. Our whole team is planning a brand new podcast, right? And so all of these things kind of circling. But it feels good to kind of like sit in a space and go okay, we're gonna go after the next thing and get kind of our heads out of the dirt of soda con. But, man, that conference was unbelievable. I had Hadley, Texas last yesterday, he was like, I think a soda con is gonna break LinkedIn.

Paul Daly  03:50

Yep. I wonder if we could just mention, like, somehow aggregate all the asoto con posts and impressions and, you know, backdrops that we've, we've seen, I don't even know how to quantify it. I don't even know if there's a way to quantify it. But hey, if you're listening to the podcast, you're not following us on LinkedIn at us. So to please do we really lean into the LinkedIn community, we love all our communities, Instagram, Facebook, tick tock, even, you know, we're trying to get things rolling there. But LinkedIn is where I'm kind of like the bulk of the conversations are happening around posts. And we're going to make a post today, which is, you know, like, either post your favorite asoto con photo and tag the people in it or tell us about your favorite DeSoto kind of experience. And hopefully we can get the people that were there or even the people that were experiencing some of it virtually to talk about a little bit. So if you're not on LinkedIn with us, follow us so do so you can be a part of that thing when we release it later on. You know, one of my biggest takeaways was this Kyle at the end of I don't have the brochure here with me, but if you had the brochure in the open, you got it right there. Kyle read the last paragraph in the intro. Let us show the folks on the livestream the intro letter, you open it up in your letter. It says this event did not exist 120 days ago now. That event just happened. And maybe the

Kyle Mountsier  05:02

paragraph, the very last paragraph says this, may the result of our time together resonate into the new future of retail, automotive, where dealers are strong, and consumers see them for who they really are, which it's like, no, we don't that, yes. Is there a subset of them automotive that has to redefine the way they interact and the way that they operate? Yes. But there is a growing and like, real set of dealers, that all that needs to happen is the broader culture, not the individual. I believe the the individual that interacts with these dealers knows the auto dealer network, like it should be. But the broader culture, the entire of culture that consumers understand that that's the reality, that retail automotive, you know, I told the team a story, actually yesterday, where I was wearing the love people more than you love cars shirt at the air is a great, great story. And I'm going through the line and every Smashburger story is great, by the way, I met Smashburger, right, and I'm going through the line, and I'm recognizing the cashier, she just kind of like punch in her card, right? She's just receiving the orders receiving the orders, blank stare on her face, and I come up, and she sees my shirt and just like this broad smile, and the smile that I know, she's like, You better tell me why you're wearing that shirt. So I give her a little bit of backstory, and she just starts chuckling like, belly laughing. And I was able to tell her like, No, this is actually how dealers perceive the culture. And there were over 400 people that gathered around that and there's even broader in our community. And she was just like, she just kind of said, okay, okay, there's people like that. And I said, Yeah, and she said, that's amazing. And until the end of the story, well, Oh, yeah. So everybody's getting their food. Right. And she kind of goes like, it's like Mark, Sandy. Paul, right. And she's like just handing everyone their food and mine comes up and it's a milkshake naturally. And and and she like singles me out doesn't say my name just goes yeah, yeah. You and smiles again and hands me my milkshake. Anxious. Yeah, it was like she knew she there was a community that she felt a part of, which is really cool.

Paul Daly  07:20

So our to another little anecdotal story, our two we have two shuttle SUVs that constantly ran between the venue and the hotel just to shuttle our guests back and forth. And at the end of the event, I was at Danielle that told the story. One of our team told the story and they said they were talking to the drivers. Or maybe it was Emory. I don't remember. And the driver said i What was this conference, it was like something around automotive. And they were like I have never driven for a conference where the people were so nice and encouraging and pleasant, and uplifting and fun to be around ever in their entire career. I was like, oh, yeah, that's the car business for you. Right? You wouldn't expect that. And so I left the events, the hearing the stories, feeling the feeling, seeing industry partners collaborate, and people telling us like, you know, there's going to be some products that come out of the time spent here, which was our whole heart from the beginning, right, the great collaboration, and I had this thought, and the thought would do it just like this, we might just pull this off, we might, we might just pull this off. And when I say we might just pull this off, I met the community of people who know the truth about automotive might just pull off having consumers broadscale see dealers for who they really are. And that is the beginning of a soda calm probably marks the beginning of of a thing, where now this community is gotten out. There are people there, one of my friends said, Hey, a lot of people here, don't don't know who you are, right? And not like that's like, oh, everyone should know who I am. But you think like you're in this echo chamber of your community. And if you made it to a soda con, you must know who we are, right? Because we're kind of like the face of the brand right now. And I got so excited. Because number one, I realized, we the tribe is expanding like people found their way to a soda con from other tribe members. And they don't even know who we are, which is awesome, because now we get to tell the story of fresh again. And it's a reminder to keep beating the drum and telling the story. So everyone who made asoto a success, including everyone who followed along on social media, who follows us on the platforms who interacts with the content, leaves, comments, sends us questions and gets the daily email. If you don't get the daily email, you have to go to a that is our shot every day, our best effort to bring this whole thing that we're doing and put it in a way that keeps you informed and entertained a little bit and gives you a few minutes in the morning that remind you of the best things about our industry. So with that being said we do have some more assault auto collabs podcast episodes. launching today we have a podcast called Auto collabs where we have longer form conversations with dealers and industry partners, you can just search it on your favorite podcast platform or we livestream episodes on LinkedIn at noon and sometimes we do two a day. We also have another podcast series called The Soto sessions by effective that is coming out shortly, which is a

Kyle Mountsier  10:13

whole list of like it was like this behind the scenes like like, are we are I can I say more things here and people did it was great.

Paul Daly  10:22

Yeah. When no one's around in the podcast room you feel like you can like that. Let me let me dish what I really think. I can't wait because I only hosted like for them maybe five of the like 20 Something that we did? Yes. So I can't wait because they're like 20 episodes of you hosting and Michael Cirilo. A lot of Shante Glen Lundy, any other hosts, I missed, I think that's all of them. And we we just had people hosting podcast, so I can't wait to hear hear the conversations. All right, really good. But this show mostly for all the new listeners, this show is mostly about giving you a quick shot of the day's news. We had a little extended intro because of a soda con. But what we usually do is give you a quick shot of some news stories give a little commentary, kind of get some conversation going. So speaking of news stories, I just had a drop. Segue. I get it I too long.

Kyle Mountsier  11:16

It's an anxious, it's an anxious hit. We'll get we'll get a good one for you. And the second one,

Paul Daly  11:20

yeah, well, yeah, we'll get a real real a real segue for you. So a lot of people couldn't visit a soda calm because they're at the Ford dealer make meetings that are going on in Las Vegas. So Ford dealer meetings in Vegas this week, have dealers driving and testing EVs in new products, and reviewing their options to remain eligible to sell Ford EVs. There's been a lot of conversation and question like, What does that look like? So basically, here are the basics. By 2023, Ford's requiring dealers to invest between $500,001.2 million, if they want to remain what they're calling model II certified. Now the two levels model is certified and model II certified elite, it's very auto issue right there. Both levels require no haggle pricing. That means all EVs will be sold at one price with no negotiations certified dealers will. So two levels, the elite, the lower I'm sorry, the model II certified, which is the entry level one, dealers will not be allowed to carry inventory, so will be pre ordered only. And the certified elite will carry limited inventory and also have demos, the investment money will mostly go toward the installation of fast charger. So really high speed chargers, like Tesla superchargers certified will have to install one charger, and their five elite will have to install eventually, three chargers. So the certifications are I don't know if this is they'd be effective January 1 2024. So there's a little bit of time, a little over a year to do it. And it'll be effective through 2026. And then dealers who opt out of being an Eevee certified dealer can opt back in in 2027. So I don't know if it's like three year cycles.

Kyle Mountsier  12:58

Well, I think it's like, hey, look, we're gonna work. i It seems like kind of a beta test of a program, you know, and Oh, yeah. So it's like, Hey, okay, so we got these dealers, they want to do this, I'm guessing that you're gonna see the majority of urban dealers opting into this just because urban dealers are where you're gonna find a lot more even higher adoption routes, higher adoption rates, you probably going to see world, it's just going to be on an adoption curve. And interestingly enough, I would have expected, you know, people are like $1.2 million. You know, that's a lot. But honestly, like, when, when people got leaf certified back in the day, and if you wanted to sell leafs with Nissan, you had to install three chargers. Now, they weren't fast chargers, but that's still five $600,000. So, you know, I, it's honestly not as much of an investment as I thought it would be. Now, this doesn't this doesn't talk about like, all of the regulations on the servicing these vehicles and the type of training that your Tech's have to go through and the type of tools and all that type of stuff. So there's another, you know, level of investment here. But here's the thing for me, that the, the, the only thing that I think is interesting about this is that there is a segmentation of, at this point in the narrative of evey, that there's a segmentation of dealers that can sell EVs and dealers that can't it like that's just it's weird to me that that's still going on. I know why, like in the 2010s, that was a reality. I mean, even there have been, you know, Corvette or GTR or certified dealers where you can't you couldn't sell the car unless you were certified in that car. You had a salesperson and a technician. So this is not something new to our industry. I just want to set that as a precedent like OEMs have been doing this for a while. I think what's different about this point is that hey, look, I you know, it's like if we're going to be in this Evie game, it should just be an all or nothing type thing. That's kind of my opinion at this point. I think that That's a lot less

Paul Daly  15:00

than, like you said, there's there's an element of, I feel like relief, right? Because there was a lot of uncertainty, you know, at least when you're investing the money toward like, they're really putting a focus on infrastructure for just Evie and infrastructure in general. And there are likely to be some government incentives, and some, some money that can go to that. So you imagine all of a sudden that 1.2 million, maybe there's like some kind of 30% tax credit, or something like that, that actually gets the total investment to be a certified elite dealer, like it like 700,600 or 700,000, to be able to have the model? I mean, it's so much more accessible. Obviously, it's not it's not as big a separation. I think, as people were thinking it could be right like the the haves and the have nots, if you decide not to be maybe you're in a rural area, and you're like, look, I have zero, your North Dakota. Yeah, right. And it's just going to take a while, but for the general Evie infrastructure catches up with you. Um, so I mean, just getting some good feedback from

Kyle Mountsier  15:57

me real quick. I think. I think the bigger issue here is the requirement of no haggle one price. And the requirement of not carrying inventory like those, those two things up for the entry level. Yeah, there's those two things almost feel a little early for me. You know, that, especially the inventory thing, that thing, you know, but the inventory thing, and people still want to drive these things that we're still in research phase, people don't have demos that they want to do you know

Paul Daly  16:28

what I mean? You have to have demos, I guess, I guess, I mean, a dealer could always buy a car, right, you know, buy a car and there's your demo. I mean, in this environment, new car purchases, people are used to not having it right away. But the second the dealer down the street has inventory, you're at a disadvantage. Right. And Nissan dealer has inventory you don't people are looking for an Eevee. You can wait 3060 90 days for yours. Or you could drive it home today, because you

Kyle Mountsier  16:52

think about Tesla, like they have a whole row of demos at every single one of their stores.

Paul Daly  16:56

Oh, yeah. I don't know how you could do without demos.

Kyle Mountsier  16:59

It doesn't make sense to me. Right? That part

Paul Daly  17:01

doesn't, you know, so. Mr. Farley, said the main message to dealers, which he's never said before, because he never believed it was true is that you could be you could be the most valuable franchise in the industry. How about that? Stay on your for Do you know what I mean? Because you look at like the Darling franchises in the industry, like we had Tom doll at Subaru and like people trip over themselves to get a super franchise. So that's an interesting statement coming and it obviously packs a lot of vision in one dealer Sam pack. The CEO of Sam pack Auto Group in Texas said he plans to have each of his four Ford dealerships become certified elite. The message he says the message he heard was one of optimism. Yes, there are a lot of questions that have not been answered. But we'll work through those. This is a learning journey. And just yesterday, we picked up one of our team shot this over before we started the show. Jim Farley's LinkedIn newsletter yesterday said this and this, like, Let's lean in and see how how the practice comes with the preaching. Because you know, this doesn't feel like it really lines up with what we've been hearing. Maybe he's had a change of heart. Maybe he's paying attention to his sodium content, I don't know. But he says our dealer network is our secret weapon comprised of entrepreneurs who can deliver for customers all the way through the ownership experience. Yes, we agree. These are big changes, but we're up for the challenge. With change comes progress and success. So maybe seen a little different song over there afforded a little different than people expected, but time will tell how it rolls out. Speaking of rolling,

Kyle Mountsier  18:32

yeah, there you go.

Paul Daly  18:36

I that's what I call a segway. That's what I call a segway. After 20 consecutive hours of negotiations, the US railroad strike has been narrowly averted, as a tentative deal has reached now this would have caused major major major problems for OEMs and dealer as rail transport, as you all know, is a big way that cars get from the coasts to everywhere else, right? You load them up on a train. It's not like you can only fit 13 on a truck. Right? You're talking about moving hundreds of vehicles. Yes, across the country. Joe Biden thanked unions and rail companies for negotiating in good faith and reaching a tentative agreement. However, if a deal wasn't reached Friday was the walkout date. Apparently, I didn't realize this, but Congress can act because it's like, Nope, can't do it. Gotta go to work. Can imagine that Congress said I have to go to work today.

Kyle Mountsier  19:26

Like union. Okay, maybe

Paul Daly  19:29

we appreciate your efforts. Well, I

Kyle Mountsier  19:31

think I think this is a good sign. And I'm glad that it was reached and we don't have to like have a conversation on Monday about what are we gonna do about another problem? Right, another problem? You know, I think we're

Paul Daly  19:41

good there was going to be a call for every retired dude with the big sunglasses and the big fishing hats happen from every auction house. You know what I mean? You wouldn't get to see at auction auction old guys everywhere. Everyone's gonna be amazing cars like crazy. Yeah, auction old guy caravan. I'm going to be an auction. I'll die one day. Load guy, I can't wait, we're gonna go to McDonald's and get our CTO coffee. And we are gonna we're gonna drive wherever we want. Perfect.

Kyle Mountsier  20:12

Speaking of doing whatever you want Walmart is basically letting you do whatever you want on their website, they do stay a Be your own model experience that allows you to upload a full body image and browse over 270,000 clothing items with what you look like in them. Last year, they acquired a virtual Tryon platform called Z kit, and it's powering the experiences. So what you do is you upload a full body photo with a little bit of tighter clothing. So that makes it making sure that they can, they can throw that other clothes on you and enter your height. So you can use the full experience

Paul Daly  20:57

real, like, this is wild. To me, this is just well, you know, one of the things like you have all the different clothing types, and all the different sizes, right, which I think is one of the big things right? You can you can kind of do ar and see what that looks like. But the way the AI works and like does the way that the clothing drops, the way it shadows the way it creases, like that is one of those things where it's tough to tell. So like, Hey, do I want a medium or a large? Do I want this color or that color? And so I think this is just makes a ton of sense for retail. Like what an advantage and I'm surprised that it's coming from Walmart, I think for me, is the bigger take like Walmart's still like big time in the tech fight. Right? And that's kind of like to launch this out. You know, it'll be you get this from like

Kyle Mountsier  21:43

Lululemon but not Walmart first. Absolutely.

Paul Daly  21:46

Yeah, absolutely. So the fact that you can do this. Now, unfortunately, the feature doesn't support men's fashion. However, that probably says something about how often men shop for clothing online. You know, for me, I'm like, well try as a black shirt look like, alright, what is the other black shirt? That's so true.

Kyle Mountsier  22:07

I honestly, actually, if they could figure out how to tell me if I need a medium or a large because that is a massive issue for me like I'm in between depending on the depending on the shirt fit. So if this thing works, it could be a big deal. Like, I mean, my like the size pants even that I have, it's like sometimes they fit. Sometimes they're way too short. And I get the exact same ones every single time. And so I don't know if it's going to be that dialed in. But I think it's a cool concept. Want to see how many people have

Paul Daly  22:35

little demos cool. Click on the link in the show notes. We always put the links in the show notes so you can check them out. Walmart did not comment on how it intends to protect all of these could be relatively intimate photos of shoppers. I was going to keep those all safe,

Kyle Mountsier  22:51

but I'm not going to comment too much on that. But it was my first thought I was like, oh boy, that's a lot. Yeah, loaded photos that are that

Paul Daly  22:57

isn't uploaded photos, inside houses wearing whatever. But you know, if people are uploading the photo, then you know, like, Look trade off and convenience, or mean like privacy and convenience is always a trade off. Yep. It just always is. Right. And so like, I think that the numbers will show that there are quite a few shoppers that are just like yeah, hey, let's see what these clothes look like they trust Walmart, honestly, Walmart is, in my opinion, a more trusted brand, like with data and privacy than Amazon. Really you think? I think so? I think people are, I think because you think in my mind. This is how my brand mind thinks right? And this is just one person's opinion. I think. And this isn't always like this isn't holistically true. But I'm thinking like Walmart, Arkansas, family owned business, right? Conservatives still right. And then you think Amazon Bezos, like trying to move data around trying to leverage people's data? Like, I just feel like people think like whatever Amazon's doing, like, probably, I'm probably there.

Kyle Mountsier  23:58

Yeah, I guess you're right. I mean, at this point, like if someone's got data there that utilizing that maybe we haven't seen No, I know. We haven't seen the Walmart ad network. But come on, come it's coming

Paul Daly  24:08

in. A couple of data points aren't consumers. couple, two, three, to treat. Well, that is a show for today. If you're new to the show, thank you so much for joining us today. It's usually a little bit shorter, a little bit more punchy. But you know, we got to you got to welcome the new people in probably go out there make some trouble. Let's show people who deal is really our

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