Ford’s Farley Discussed Plans, Rivian Opens More Service Centers, NBA is winning NFTs

August 1, 2022
Welcome a fresh, shiny new month as we kick off the last full month of Summer with news about Ford CEO, Jim Farley’s comments on a recent shareholder call, Rivian’s service center plans, and the reason NBA fans are helpling the adoption of Web 3 move forward.
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Ford CEO Jim Farley discusses battery and sales model plans in earnings call

  • In March the company announced plans to build 2M EVs annually by 2026. There have been many skeptics on how this could be achieved
  • In the July 21st call, Farley said the company has nearly everything it needs to make 600k vehicles in 2023 and 70% of what it needs to hit the 2026 goal
  • Farly says the company will focus more on upgrading tech and motors and less on body-style upgrade similar to Tesla
  • When discussing the franchise model, Farley said it puts Ford at a $2k per car disadvantage and will look to made-to-order model, and changing the way they market vehicles, pushing dealers to focus on delivery, education, and service to bridge the gap
  • Take away: Body style…you mean like BMW. Also, dealers could do well to lean into delivery, education, and service. Is there a revenue model here?

Rivian expands service centers in US and opens its first in Canada

  • "Post-sale support is a consistent challenge for startup automakers, as it's always more demanding, resource-intense and costly than startup CEOs can conceive," said Karl Brauer, executive analyst for iSeeCars. "This is one of the reasons the franchise dealership model has worked so well for traditional automakers — it allows the automaker to design, engineer and build vehicles, while dealers focus on selling and servicing them," Brauer said.
  • Rivian’s South San Francisco service center has become more than a service location as customers now show up to see the vehicles and even test drive
  • Rivian has 21 service centers open in the US, in larger metros such as: Atlanta, Chicago, Denver, Houston, Las Vegas and Orlando.
  • 6 more are planned by the end of the year as recent layoffs have not affected service operations. A second Bay Area service station will open soon in San Jose
  • Rivian is focusing on delivering 25k vehicles this year which is far less than it’s production backlog of almost 100k vehicles

NBA puts on a full court press w NFTs as the most progressive Web 3 Sport

  • Spencer Dinwiddie says locker room convos less about cars, girls and more about blockchain, tech, and investment
  • The NBA has built in collector mindset and lots of tech savvy owners like Steve Ballamer (Golden State Warriors and Mark Cuban, (Dallas Mavericks)
  • Another major turning point was a partnership between the NBA, its players association, and Vancouver-based Blockchain developer Dapper Labs in 2019. That partnership resulted in NBA Top Shot, an NFT marketplace where fans buy, sell, and trade highlight-worthy digital clips of NBA moments.
  • Take Away: Thinking through uses for NFTs is top of mind for us. Whether collectible, access, or general community, we are seeing more organizations press into Web3 tech.

dealers, nba, people, car, industry, service, centers, evs, august, oem, tickets, community, evie, technology, focusing, business, long, month, lean, vehicles

SPEAKERS

Kyle Mountsier, Paul Daly


Paul Daly  00:00

Oh if you've ever been to an auto conference, this is the one that started out if you're sick of auto conferences in general, or you just need something a little different. A solo con is the place to be September 11 through 13th. We only have a limited number of tickets, and most of our events have sold out. So exactly, we're just saying,


Kyle Mountsier  00:38

we're really excited. And we just hope that you'll join us because we want to craft something that is for the whole industry, not just for a substance,


Paul Daly  00:46

go to a soda con.com Get your tickets now. I can't think of a better way to start the first day of August, I can tell you about a soda con, because that's all we talked about, because it's gonna be insane. But we also have a few other things to talk about, like for rivian in the NBA. Of course the NBA NBA Whoa, NBA comm why wouldn't we talk about the NBA?


Kyle Mountsier  01:15

Absolutely. No. Why wouldn't we talk about the NBA because they they are trying to do a thing I will say and


Paul Daly  01:21

I've had a hard time with the NBA. Honestly, I have a real hard time with them. Yeah, yeah, real talk. I grew up going to Sixers games. One of my most like, my my best memories as a kid and went to a Sixers game with my dad. He bought me a Charles Barkley t shirt. It was like my prized possession. I was that kid that word every day. And in middle school because it was the only basketball shirt. My parents could find me. So it was awesome. But either way, I have a hard time with the NBA. Because the drama of the whole thing. I don't know what else to say. I mean, you're a soccer fan. Yes. So the drama, but the drama is soccer drama is different than basketball drama.


Kyle Mountsier  01:56

It definitely is. I mean, soccer drama is rich. Don't get me wrong like them international people especially they love will


Paul Daly  02:03

be going down. People will be going. Yeah, then I'm not the guy that doesn't fall. Who's the guy that never falls.


Kyle Mountsier  02:10

Messi Messi is pretty good at not falling like he will stay on his feet. But there's a lot of people that that


Paul Daly  02:16

have guys my favorite whoever that guy is, even if I don't know his name is my favorite.


Kyle Mountsier  02:20

Yeah, recently, there's been like a push to stay on your feet kind of thing. Okay, it's getting invoke. It's getting a hold of Stan, you're in Spain or Mexico. But everywhere else.


Paul Daly  02:30

I have a feeling. I have a feeling that shots fired that I just don't understand. Oh, welcome to the first day of August. Congratulations to everyone who finished the month out strong. We have a lot of promise and a fresh mouth. There's something about the first I got a new pair of sneakers showed up. So I like started off my month with a new pair of kicks. So oh, the technical term is flop and it's a soccer match. I have to stop calling it a game. Thank you for not correcting me every time I say that, Kyle. So we're having asotucon. I love we Metro


Kyle Mountsier  03:01

August. I were on August, just 12 years of being on the retail side of the business only 12. August is it's the month. It's just the month. And I'm excited to see and listen and hear what auto dealers do this month because I just think there's a lot of energy. And you know whether or not you've got inventory on the new car side, like the used car market is strong. I don't think that we're going to see any backpedaling and consumer demand. So I think that we are going to be keyed up for a strong August.


Paul Daly  03:35

prediction. You heard it here. Sean August the comments suddenly dinner lighten up this morning. Good morning, Nathan, Brooke, Brian, Jared. And people are just having fun in the comments. Hey, if you don't watch this on the live stream, you're listening to it later. Check it out on LinkedIn. And by the way, we if you don't follow us a soda on LinkedIn and you're in this community, you really really should. We went through the list today. And there are so many people that are part of the community that actually aren't following the account. You might see posts and things like that, but we need you to follow so you can make sure you get all the updates and get part of the conversation. It's more important than ever. And we'll tell you why in a little bit, but not just yet. We actually have some real news to talk about today. We're not just not just a soda con but we have to mention so


Kyle Mountsier  04:19

we got to mention a soda con actually the last three days have accelerated ticket sales way past any of the pace prior. So if you haven't got your tickets, especially if your industry partner, make sure you do that, but dealers as well. Both types of tickets are starting to accelerate. We dropped, I think nine or 10 sessions into the schedule on Friday and the next two days we're going to drop another probably 20 sessions in there. So between speakers and collaborators and sessions, it is filling out finalizing and we're just full throttle ahead ready for it. And we don't talk about this enough, but just that the price of admission is so Oh dialed in to me like if you are a dealer or industry partner to be at 399 or 599. So for $600 however you want to look at that is just it's nobody else is doing that out there you can go to for our half day events for that same price.


Paul Daly  05:15

Absolutely. And our room block, we literally locked down the entire hotel, they have 208 rooms, we locked down 196 of them. And they're giving us through for 165 a night. And these are like luxury brand new casino hotel rooms at are. They're beautiful. They're beautiful. So the rooms are inexpensive. It just felt like there's a South Philly Italian coming out of me, they are beautiful rooms, that it's affordable to get to the event flights are actually pretty cheap direct to Philly, I mean, you can be in and out of this event, we include all the meals, all the entertainment, we need to see you there, if you're an industry partner I buy now because they are almost con dealer tickets, they're a little bit more, a little bit more than less, but that's going to pick up in velocity really quick. And as always, we want to say a special thanks to our team and friends@cars.com for being the presenting sponsor, when we were about to break out of the gate, they stepped up real quick. And they were one of the reasons we had a lot of confidence, taking the big swings that we took initially. And then since then, man a lot of other people have stepped up to and and we're taking really big swings. So please, please, please, if you're in this community, come hang with us in person. And if you know someone who should be in this community, just get them in here, get them in here, because we need more people to think the way we think to do what we need to do. We also have our email that goes out and our 200th email went out today, Kyle,


Kyle Mountsier  06:35

man, what a 200 emails to you to our team, to Chris who writes the majority of our emails to everyone that like feeds us stories and, and things happening inside and outside of the industry. It's like a full community effort. But for you kind of like laying the groundwork, saying, Hey, we're just going to start with one. And then that grew over a couple of years of those weekly, and then go in daily. And it's a labor of love every single day. And if you don't know Chris Reeves, go follow him on LinkedIn, please do. That man writes his heart out every day for our industry. And then our whole team kind of leans in on some of the stuff and we get to write a portion of it every single day. And it is it's just what we want to give the industry as that refreshment as that thoughtful insight to their morning, and hopefully get a couple of laughs as well. So if you're not on the email list as ot you a soda.com, and you can sign up for free, it's our gift to you


Paul Daly  07:33

a time gift to you. I like to put that and just to clarify. It was about a year ago and weekly. And then when Kyle shouldered up next to me, he was like, I think we need to go daily. And we're like, Oh, okay. Oh. And so we did just like we started everything else. Okay, I guess we're doing one daily. And then every day, we just gathered together for the last two hours of the day, and we just curated an email and got it out. Now we have a couple other people to help out with that, which has made it just so much for plus, I'm just gonna do that again. So much better. We gotta get. We got we got some news to talk about today. So Ford CEO Jim Farley discussed battery sales and model plans in his earning call last week. Now in March, the company, if you remember, announced plans to build 2 million EVs annually by 2026. And there were a lot of skeptics and JP Morgan, and people are like, we're not quite sure that that's realistic. But addressing that, you know, finally said the company has everything it needs to make their 600,000 EVs that they predicted in 23. And that they've secured the raw materials to make the $2 million dollars and 2 million EVs by 2026. So they said we're 70% there. And so like, there's a couple elements to this new story. That's the first one called Oh, wait, I know, that's why I stopped.


Kyle Mountsier  08:49

So you've got 70% of what you need to get 2026 done, but we're still having trouble delivering vehicles to dealers today. And 2022 is that 2020 Do you know, I know that raw materials and that, you know, there's difference between like the chips that have to go in cars right now and securing supply chain over a period of time and just locking down all of the raw materials. But this is where, you know, managing that ice and Evie business is really interesting to me, especially as a dealer right now trying to get business done. You know, it's interesting. Who are we talking to last week were essentially most businesses, like forecasts predict work on plans. 234 years out there. Oh, yeah. What's the horizon so much as a business and we are just so locked into this 30 day cycle, and you know, just recognizing that the OEM just has a much longer life cycle of what they're looking to do for customers and trying to figure out how you start to perceive your business in that same way, is going to be really important because we've got to get aligned with the brand in order to understand like, if that's what they're doing in four years, reverse engineer what you have to do now in order to be prepared for how they're going to be interacting with customer base and Ford.


Paul Daly  10:19

That's good man, like the savvy dealers that we get to spend time with. It's amazing how they're taking moves today that really do set them up for success in three to five years, and not so focused on 90 days. You know, we had Glen Lundy, as a guest on the auto collabs. podcast. Yeah, so we're talking to and that's gonna be released this year. And he was just talking this week. Well, this week is within the year. Not entirely untrue. Probably today or tomorrow, actually. And he was talking about when when he goes through, and changes like the team dynamic in the sales team dynamic. He says, like, look, this is you got to sign up for a 24 month process, right. And that is difficult to get people to commit to because you're going to start, and I'm telling you, it's gonna happen in 60 days and 90 days, somebody's gonna quit that everybody likes, and he's got this whole, he just understands that change just takes this time in this effort. Continuing on in the story. Finally also says the company will focus more on upgrading technology, and things inside the car, like screen display, software updates, even maybe motors that make things go faster, instead of focusing the time and attention on body styles, body panels, and things that he says are really expensive to change and shift on such a regular basis, citing the fact that Tesla does a really good job with it. And it seems like consumers continually get excited about that inside the cabin experience, as opposed to the outside experience. So like, Okay, I feel where you're going with that. I feel where you're going with that. And that is love that he


Kyle Mountsier  11:56

cited Tesla there.


Paul Daly  11:58

Yeah, he does. He did reality is is I'm over


Kyle Mountsier  12:01

here looking at my iPhone. I'm like, okay, they've been doing the same thing for a hot minute. Like they get right. And then I'm over here really looking back. And I'm like, has who's seen a body style update on a BMW in the last 20 years?


Paul Daly  12:18

Come on now. Come on. Now. They've updated those. I mean, the grill is way different. And the grill two and the grill even raise that


Kyle Mountsier  12:26

headline by like two inches. Right?


Paul Daly  12:28

I mean, come on. Now the grill, the grill is different. And the tail lights, the taillights, and the tail lights and the grill and the way you think about that


Kyle Mountsier  12:35

that's a drivers card. Like they focus on technology. That is comfort. That is


Paul Daly  12:40

that is responsiveness. Yeah, the engine tech, yep. That for


Kyle Mountsier  12:43

sure. The drive style of that vehicle. They're constantly testing, you know, to get better dynamics with for the driver, right? Because it's the drivers car. But this isn't a new theory. Right? This is what's new for it's new for Ford to be talking. It's new for any OEM that lives in a 20 to $35,000 primary average price point, because they are constantly constantly working on these body style updates. But I think that we're recognizing is that the body style isn't so important. As long as you have the right one you can't like Miss. But what's actually going baked into the technology or the driving dynamics or anything like that are probably more important. Think about this. How often do you spend How long do you spend looking at your car as opposed to driving?


Paul Daly  13:32

I'm driving, I guess for most people, it's like, I drive my car, I drive and I look at it inside. Exactly. I look at the inside. Definitely


Kyle Mountsier  13:40

the driver experience. And I think that that's what people are recognizing that if you get a good enough exterior experience, that the driver experiences,


Paul Daly  13:48

yes, you have to be good enough. Good enough. Yeah. And he also mentioned autonomous driving is something in there that consumers would be excited to add autonomous features. So the conversation didn't move on and started talking about what is the hot topic for our industry, right, the franchise model and splitting, you know, Evie and blue and saying like, what does that actually mean for us and, you know, discussing that Farley said it puts forward having a franchise model he says from a manufacturing standpoint, puts forward about a $2,000 per unit disadvantage. He said now, that's $2,000 $2,000 per unit manufactured disadvantage. How do you feel when you're like you know what, you all actually are disadvantaged? Well, no, I won't go all the way there because he didn't say that we could like throw grenades. today. We are actually I just jumped on that one and pulled it back.


Kyle Mountsier  14:40

He's like, I read that one for you guys. Don't worry.


Paul Daly  14:44

We'll see. No, so from a pricing standpoint, and he proposed some ideas that they have where they think they can actually close that gap. One is not having big inventory on dealer lots. And he did say moving dealers to more of what we've all already been hearing as a made to order, you know, test drive education service experience, you know, focusing on the dealers doing that super well is a way that he thinks they can mitigate that price difference and continue to be competitive.


Kyle Mountsier  15:17

So thinking for years ahead, how do you get ready for that? If this is the move that whenever it's clear for dealer, right, yeah, and you're a Ford dealer, lean into what's my delivery experience look like? How am I educating my employees and my customers? And how am I executing just the absolute best from a service perspective? Because that if that's the measure of your priority in in anything with the manufacturer, especially from a Ford perspective, then you better measure well right now, and not just hope that you do four years in the future.


Paul Daly  15:51

Without a doubt. Look, man, we've been saying this for a year. The playing field is wide open for any dealer in any market to establish themselves as the Eevee center as the center of Evie knowledge and education and support in their entire community. It's anybody's game, it doesn't matter what manufacturer you are, you can actually build that brand in your local area. So regardless of what the manufacturers decide, you are definitely going to be positioned and you think you could do a good job of that over the next 36 months. If you put your mind to it. Heck, yes, you could. All right. Speaking of service experiences, and EDS segue want to give a shout out to Brian Ortega, because I saw him in the thread. He actually made that song for us. He is the reason that we have that we're like we need a Segway song. And he kicked that back in like six minutes. And we kept it and we love it. So thank you so much for that. So rivian is expanding its service centers in the US and it opened its first one in Canada. I had a friend over the weekend sent me a picture of a rivian truck up here in New York. And he was like, Is this what I think it is? And I was like, oh, yeah, they're out there. So in I don't remember they said there's probably an earnings call. And who said this? So this is actually his quote we have is from a consultant but they were talking about Perth post sales service being a consistent challenge for Evie automakers. We've been saying that a long time. What are they gonna do when something breaks? Don't look right. And so it's resort it's so this I'm all caught up in my Carl Bauer, executive analyst for ice car said post sales support is a consistent challenge. As always more demanding and resource intensive and costly than startup CEOs can conceive. This is one of the reasons the franchise dealership model has worked so well for traditional automakers that allows them to design engineer and build vehicles, why dealers can focus on selling and servicing them. Boy, that sounds like we are all friends. You know how to borrow a car if you have another son, I think you should name car. Such a good guy. I like it. But But I think Carl IC card like Carl understands the broader picture. And he's kind of outside the drama a little bit. And that does make a whole lot of sense. So ravine has a South San Francisco service center. And you know, it's kind of naturally become more than a service center. It was a place where you could drive your car, right? And they do all kinds of things. Yes, that's why what Yeah, right. So what's happening is people are starting to show up there to like, see the product and maybe drive the product and sounds a lot like a dealership doesn't it at this point.


Kyle Mountsier  18:31

And I'm like a dealership,


Paul Daly  18:32

like a dealership. So ribbing, there's 21 service centers in the US and large markets, they have six more plan by the end of this year. And a second one in the Bay Area is one of those opening soon. And there's I mean, let's talk about the massive disparity in how many vehicles are actually delivering, right? When something's this big, it's a lot easier. They've delivered 25,000 vehicles so far this year, and they have a backlog of about 90 to 100,000. So, Kyle, what should we take away from this article?


Kyle Mountsier  19:03

We should take away that auto is not easy, that the franchise system really does work. And that if we can get these things, right, and the OEM industry partners and dealers can communicate at the right level and understand the customer experience that hey, we might be onto something people it could


Paul Daly  19:19

be like this, it's some people are confused about what we do at automotive State of the Union what we believe in and at the core of it is everyone having a conversation together dealers, OEM industry partners, coming to the table, and like real talk, right? This isn't like let's just retreat and like talk about you did this I did this. He said she said no, we're talking about a real talk saying, Hey, we have all this innovative brain power in the industry partner and then the dealer, you know in the dealer realms and ranks OEM you have products you are keeping up with supply, you're making sure we have the things we need. We know that if we work to Gather really well and kind of can put some of the legacy stuff aside that we could crush, I mean crush any Evie new entrant period


Kyle Mountsier  20:09

easily because the network's they're like how long does it take to build six more service centers, that's not easy and higher for them dealing with 27 service centers as compared to 1000s of service centers 1000s ditches you just can't keep up with something like that. All the all the capital in the world doesn't have you servicing vehicles at the rate that you need to there's no way there's just no way.


Paul Daly  20:36

Now I know we only have a minute or two left. We went long in the beginning. We don't want to burden you so much on the first day of August you have cars to sell. But the NBA Yes, the NBA we started with this actually is putting on a full court press when it comes to NF T's and web three technology. And now pretty much the most progressive web three sport Spencer Dinwiddie says, locker room combos get this are less about girls and cars, and more about blockchain technology and investment. I was like that if that ain't a change indicator of like, what the dudes talking about in the locker rooms. They're like, Yo, look at this NFC project. Oh, look at this company I invested in Hey, I have some ideas. I mean, the NFL NBA really was the first one to jump on the bandwagon. Right, right on the web three digital world. And it kind of, yeah,


Kyle Mountsier  21:23

they did the ticket thing first, right? Yeah. Oh, yeah. They did like more perspective, right? And then the Superbowl kind of followed that. You know, I think we'll you know, we'll kind of wrap it with this. The interesting thing for me about NF T's is what the use is, and, and why people would want a particular NFT, whether it be as a collectible, or access, we're building community. And I think if you can kind of if you have a brand, that can lean into all three of those in a different way. You know, we've talked about NF T's as act as how your car stuff is stored, and everything like that, or access to a deeper level of community, or like a sporting event, hey, I was there, I can prove that I was there. All of those things are possible with the NBA, and they're really leaning in. And I think it's also very prudent of them that these partnerships are being made, not just between the NBA and developers, but also with the Players Association, probably because like you just said, the players are interested in this type of technology and investing in these types of things as well. So it's kind of a, it's a full circle thing. And if the players are exercising their brand awareness within this, you know, NFT blockchain world, then the brand associated with them would make sense to as well. I wonder how many people are in the dealership that are working in web three technology right now that you can lean into to connect that community to your community? That's


Paul Daly  22:56

trying to Yeah, I totally track with you. And you know, I know that this conversation sometimes is really over over the head of a lot of people. And they're like, Look, I'm just focusing on operations, which you should, I'm just focusing on all the turmoil in the OEM, really, what you should, but there is a quicker connector to NFT technology and what's going on, then then thinking of like, how far down the line is it going to affect like the nuts and bolts of the car business? And I think that that lane usually is going to happen inside of marketing. It's going to happen to inside promotions, right. A lot of dealers have, you know, agreements with sports players, you know, that are promoters and spokespeople, and look, and if if NBA is ahead of the curve, and we can just orient and look at that for a minute, realizing that fans connect with it with the players, and fans connect with the teams because of it. And if dealers are sponsoring players and teams, then the probably first place you're going to see some growth in this is some kind of NFT collab, right where the fans get a certain NFT around the player or team that's linked to your store. And that might seem a little scary, but I'm telling you that that's like the low hanging fruit. So we just want to orient your mind a little bit to start to think about that. There's a lot of stuff to think about. It's August 1. I don't know if we mentioned that in the beginning. Get your show to context because we want to, I mean, it's only like 40 days away. Aside from that. Start the month off, right, you get to choose how the month starts off. So go out there and start it the right way.