FTC Won’t Let Ford Be, Tesla’s ‘adjustment’, Kid’s Don’t Want Cash

December 2, 2022
It’s time for a Friday as we talk about one Senator's plan to sic the FTC on Ford. We also talk about Tesla incentivising customers to take delivery now, as well as the growing trend of kids passing on cash for meta-stuff.
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US Senator from Connecticut, Richard Blumenthal shared his plan to petition the FTC to launch an investigation into Ford’s new EV certification program under suspicion that it is violating US franchise laws

  • In a press conference he and other Connecticut legislators, along with the Connecticut Automotive Retailers Association asked for to once again delay their Dec 2nd deadline for opting in or out of the program
  • CARA co-chair Jeff Aiosa told Automotive News, "Dealers look at their sales and service agreements with the manufacturer as a partnership to represent all the brand's products as long as they're in good standing,"To unilaterally change that agreement for a program is patently unfair."
  • Ford responded by saying there would be no extension: "The voluntary program empowers our dealers on when and how to enroll and we understand that some dealers operating in markets with limited EV penetration may chose not to enroll in this round," and also noted there will be another entry point in 2025
  • Don’t call it a ‘discount’ but Tesla is giving a rare $3750 ‘credit’ as a ‘price adjustment’ to US consumers who take delivery of a Model 3 or Y before the end of the year

This appears to be half of the upcoming $7500 EV tax credit which will come into play next year and is likely in response to consumers canceling or postponing orders due to wait times or the upcoming credit

  • Likely don’t want to be sitting on inventory at the end of Q4 as demand is likely to remain very high into next year
  • As reported yesterday, Tesla's profit per vehicle is $9500 as opposed to it’s nearest EV competitor Toyota at $1300

While adults struggle to find good use for the metaverse, Kids are easily socializing and spending money there as they are turning their nose up at allowance cash in exchange for virtual currency to spend in metaverse-like games such as Roblox.

  • “They were handing it right back to me and saying, ‘Can you convert this to Robux?’” said Mr. Robleto, a 46-year-old web designer in Rockville, Md. “I don’t even need to have cash in the house. I can just go online and put $5 into their accounts.”
  • 12 yr old daughter Kaylee bought virtual Louis Vuitton handbag and her 10 year old sister bought a Gucci jacket both cost under $5 each
  • About half of Roblox’s 60 million daily users are under the age of 13
  • Many brands are jumping in developing games for Roblox including the “Chipotle Burrito Builder”, Walmart Land,  where kids earn virtual coins for “verch” such as headphones as well as clothes from Walmart’s in house-brands for their avatars and Nikeland modeled after it

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Kyle Mountsier, Paul Daly

Paul Daly  00:00

Oh Friday December 2, rounded Now I love this is the first week of December not talking about the FTC won't let Ford be Tesla's adjustment in price and kids don't want cash anymore. I can't wait to talk about that. Today, day,

Kyle Mountsier  00:47

all things use cars talking about aged inventory. So if you're watching the live stream right now or you're listening and have the clubhouse app and didn't get to listen to it, I would pay attention because everyone that I know that's a car dealer that has used car inventory is going, oh, boy, we got inventory. So it's I think it's going to be a riveting discussion. I'm excited for it.

Paul Daly  01:10

Yeah, I do too. I mean, it kind of pivots off the discussion we had a couple of weeks ago with Dale Pollack was on talking about market pricing. So if you don't know how to get to clubhouse, you can download it on the App Store, Google Play, it's called the clubhouse app or just just clubhouse it'll be the first one and then just search all things used cars, it'll pop up, tap on the button, come into the room, and it's gonna be a lively discussion. Yeah, that's coming up in at 9am. Eastern time today, Friday, December 2, or if you're listening to this later on, you can listen to the replay by doing kind of the same exact thing. So you're not out if you can't be there live. It'll be archived and ready for you to listen to. We'll try to maybe grab a couple of clips, maybe even launch a special Saturday episode of the podcast. Yeah, a couple of those nuggets. Couple things urine extravaganzas coming in hot we're starting to get the guest confirmations and the tech confirmations and the sector is gonna be fun. It's gonna get a lot of fun on fun. Yeah, it's gonna be a two hour live stream on December 20. Tuesday, so even if you can't be there in our Yes, I'm gonna say it live studio audience which we will have. And you maybe can be in the live studio audience, you've got to go to the site, go to a soda.com Scroll down, follow the event on LinkedIn and just hit us up and we'll see what happens. But to our live stream on LinkedIn, December 20, Tuesday, we're gonna do a year review looking ahead have a lot of fun live band, Michael Cirillo beyond the mind on history. Yeah, Little Mike man, it's gonna some live appraisals in Nashville. It's pretty dope. Yeah, we're gonna make it fun. Because why shouldn't it be? Because it's the car business and the car business should be fun. Speaking of not having fun, so it's an Opposite. Opposite segue. I'm not even gonna finish playing it. US Senator from Connecticut. Richard Blumenthal shared his plan to petition the FTC to launch an investigation into Ford's new Evie certification program under suspicion that it is violating us franchise laws. You mean a senator

Kyle Mountsier  03:05

feels like that lead? Yeah.

Paul Daly  03:07

We've moved up. When he moved up past the state legislators. They were there too. But we're talking to US Senator now in a press conference. He and other Connecticut legislators along with the Connecticut automotive Retailers Association, I want you to record scratch for me there hit a record scratch because we need it. I said the Connecticut automotive Retailers Association. They're talking about car dealers car they've rebranded When did this happen?

Kyle Mountsier  03:33

That's amazing. When did that happen?

Paul Daly  03:36

I know I saw that. I was like, Oh good. Good on you connected listen to Tom doll. They did. They asked for the for to once again delay their December 2 deadline which happens to be today for opting out of the program. The retailer Association co chair Jeff IOSA told Automotive News dealers look at their sales and service agreements with the manufacturer as a partnership to represent all the brand's products as long as they're in good standing. And to unilaterally change that agreement for a program is patently unfair. The Senator Senator Blumenthal called it egregious treatment. And it's said it's an issue of profound public interest. And he's convinced there's a case that needs to be investigated for did respond and said there'd be no extension. They gave one extension already. There's like, that's it. We're done. We'll see what happens today, I guess. And they said the voluntary program empowers our dealers on when and how to enroll and we understand that some dealers in operating in markets with low Evie penetration may choose not to enroll, but they'll have another chance in 2025. So it's really heating up today's the deadline and let the games begin.

Kyle Mountsier  04:37

I don't have much commentary on this except for the fact that I still don't think this is completely unprecedented. We've seen this with particular monitors and models. Now this is going to be a little bit more widespread more models coming in the Evie landscape in the next two years. But hey, look, I you know,

Paul Daly  04:55

so you've seen it with models before, like give some examples like obviously we've seen it like you know sub brands like saya right? Watch psi on if you want to sell psi on you have to have a piece of your showroom dedicated some training some equipment,

Kyle Mountsier  05:06

exactly. Like Nissan GTR. You, you know, the Subaru w wr X, I believe is at was at 1.1 of those. I could be stand to be corrected on that one. But yeah, so like, especially in the performance model, and so if you think of like an early adopter type thing, I mean, even even, you know, some even just in like, early availability of models was based on an a dealer's ability to estimate

Paul Daly  05:35

to deliver on it. Right. I know, it'll be interesting. And this is obviously a power train and a platform.

Kyle Mountsier  05:40

platform, it's, it's a lot more models, most likely even in the next two years for Ford. And it's a large investment now. I honestly, and maybe I just only know, you know, urban dealers or suburban dealers, pretty much everybody that I've talked to is like, yeah, we're in, we're gonna try. I mean, it's a give it a shot. Like in the grand scheme of things. When you look at the overall capacity for growth with the Evie landscape. It's what $900,000, which

Paul Daly  06:11

this day and age after coming out of a record profits season, right, right. No, the caches there. I don't think it's a cache issue. I mean, everyone's saying, well, that's really expensive. Like, I think you're right, your point is, right, it's not that much cash for cash rich dealers in this day and age, but going into uncertainty, and it is, you know, no one wants to say yes, on a principle that, you know, once you once you crack that door open, right, the water starts coming.

Kyle Mountsier  06:34

I think the bigger problem is what's on the other side, right? I think that's the question is this is a little bit too broad, a little bit too wide of a door crack. What's on the other side is the question. And so I appreciate that. There's some pushback here.

Paul Daly  06:46

Definitely some pushback here. I really want to segue to go into this, but we don't have one. So I'm just gonna go. I'm just gonna hit stop. All right, let's talk about semantics for a second. Like submit words are important, we'll call it a discount. Air quotes, don't call it an air quotes. Credit either don't call it a discount, but Tesla is giving a rare $3,750 credit, but they're calling it it's just a price adjustment, just just an adjustment to US consumers may will take delivery this month, so have a model three, or a model Y before the year ends Tesla's saying we will give me will make a $3,750 price adjustment, it appears to be really in response, it appears that numbers half of the upcoming $7,500 Evie credit that will come into play next year. And basically people are delaying delivery of their vehicles because this credit is coming next year, which makes all the sense in the world. And Tesla saying like, No, you have to take delivery, we've had this inventory you've known it's coming, you have to take delivery and they're saying Fine, then we will cancel the order. So Tesla's just obviously trying to move and adjust and say, Okay, how about if we adjust the price to half of this to so you can take delivery now. I mean, the worst thing right now, when there's a stack of people that want to buy is having inventory sit at the end of q4. So you're telling me

Kyle Mountsier  08:06

it's still inventory, sales goals, and rebates.

Paul Daly  08:16

It's just a price adjustment. If the price is just just a price adjustment, let's not go there. It's just let's not call it a rebate. It's so harsh when you say it that way. It's so harsh that way. But eventually, Otto when you call it a rebate, right? It really is. And before you know it, they're gonna have service centers. Oh, my goodness. Oh, my

Kyle Mountsier  08:38

gosh, you mean they might have

Paul Daly  08:40

parts delivery people physical locations, where you can walk in and drop your car off and have it serviced. You know what, it'd be cool to think about this. They need like the Deploy button once the autopilot gets into like, oh, just like, hit the little button, you pre schedule your car to just leave your house go to the Tesla place for service that would be nice shows that that's going to happen. Why would that happen? Without a doubt? Why would that happen? That'd be awesome. Just random cars just showing up at the store and like knowing where to file in line, knowing which Bay to drive into. That's gonna that's like the, that's the future world right there. But, you know, as we talked about, like two or three days ago, this week, you know, Tesla's per vehicle profit is $9,500. Their next closest Evie competitor is Toyota at 1300. So Tesla has a little bit of room to make a price adjustment, just to get through the next you know, next 29 days. I feel like Dr. Evil like this, this whole

Kyle Mountsier  09:33

section, we should just call this the air quotes

Paul Daly  09:36

section. Yeah. Yeah. And next segment is air quotes. We should we should have a segment called air. We should I mean, I kids do it. Why can't we do it? Speaking of a good segue.

Kyle Mountsier  09:50

This was fun. This one's kind of silly. Yes, it is, at least in my world,

Paul Daly  09:54

because it's really, it's I'll tell you what, in my world. It just lives. I live this story. Alright. because in the story that talks about a 12 year old, 10 year old sister, I have a 13 year old and 11 year old so I just went through this. So while adults, including Brian Kramer, find a struggle to find good use for the metaverse these days, kids are socializing and spending money there. And they happen to be now turning their nose up a cash. Remember when you read like, Hey, you do some chores. And here's a there's a crisp new $5 bill. My day was like a $1. Bill, like when I was a kid. They don't want the cash anymore. You know what they want? They want virtual currency. So they can spend in Metaverse like games like Roblox, you know. So there's a great Wall Street Journal article and this parent Mr. Robledo? 46 years old, I'm 43, I can relate he says they were handing it right back to me the cache saying, can you convert this to robux? The way the way this works in my house, is, what is my Elise, she's my 10 year old or she lives. She's 10 She's actually he's 11 Here, she walks up to me, I'm like sitting watching TV, you're talking to my wife, and she just walks up holding your phone, and she'll just hold it up to be and it needs me to confirm, right like putting a little passcode to confirm the five bucks or whatever. So, you know, so here's the deal. Like the story talks about the 12 year old daughter Kaylee and his 10 year old her 10 year old sister. They bought get this a Gucci bag, a Louis Vuitton bag and a Gucci jacket. I was wondering how my kid knew about Gucci. I'm like, Why did my kids like they see Gucci like at a store? Or someone's got a Gucci bag or Louie Vuitton? I'm like, How did you know this?

Kyle Mountsier  11:35

Because they know it's

Paul Daly  11:37

because of Roblox dude. Because of Roblox lievable

Kyle Mountsier  11:41

It's wild. But like you think, Okay, think about that from a brand play. Right? Well, they, what are they doing? When they're 1820 22? They've got their first job, what are they saving up for

Paul Daly  11:52

IRL in real life

Kyle Mountsier  11:54

in real life,

Paul Daly  11:56

though it's true. If I got one of my kids, something that said Gucci on it or Louie Vuitton, they would be excited. And it would make me feel like really disgusting and weird, right? Like, why don't my kids know what a loot bag is? How does this even happen? I've done a lot. So developers quickly realized that if they were going to monetize a young audience, which is always questionable, right, if you're going to monetize a young audience, right, it's different than like, you know, they just monetizing their parents putting ads up for like super sugary cereal and be like it tell food, right? But yeah, so how are you going to do this? They they realize, like you said, the monetize for the parents. So what can we do to solve some parental needs, they should like build in like an allowance function, like $5 a week goes into this, like, that's what they should do. But a lot of brands like you said, are jumping onto the bandwagon. So like usually when a brand would want to like just get an advertising in front of a kid somehow YouTube pre roll or just on a good old fashioned commercial or movie pre roll. Brands are jumping in and actually developing games for Roblox. So Chipotle jumped in and they built a game where kids can build burritos. And they love doing this stuff I watch my kids do with all kinds of stuff.

Kyle Mountsier  13:03

Where should we go to lunch? Kids Chipotle,

Paul Daly  13:06

no doubt. And you watch the people build the burrito? Like, oh, I know how to do that. It's actually workforce training. Maybe there's a wash, we get a Hummer. That's what I'm talking about. Kyle, you just got right to the punch line. I don't know why we don't see any automakers in the space right now. Or even look some of the larger local dealerships you have the resources to develop a game that can be in Roblox and can be targeted. Like it's really, really pretty insane. Actually, the fact you can do it I think Nathaniel Grek needs to be a character in Roblox by the way. Also, we talked about Walmart land a few weeks ago, right. And Walmart land is this big kind of fantasy world where a blimp flies around and it drops like free stuff. Kids can collect and earn stuff others Nike land, where you can like play games like basketball and shoot hoops and you earn the ability to buy swag. So, you know, last little point from this article

Kyle Mountsier  13:59

is like land tropiclean land. That's, you know, just calling it like I see it, Paul. Yeah,

Paul Daly  14:05

I there's no way driveway should not be in this fight right now. It should be all up in there. All up in there. by Kevin, if you're listening right now. Get the developers together.

Kyle Mountsier  14:15

scrounge together a game and drop.

Paul Daly  14:17

We're counting on you guys? A little more than just grounded to scrounge together. Like get scratch game together cars dropping out of the sky with like, you know, lifted Jeeps? Oh, that'd be amazing. How amazing. Well, you're coming soon. In 20 In 2023 brands are going to be able to buy billboards in game. So in game billboards. Also, by this is cool. Can you buy a portal from other games into your world? So all of a sudden, like I'm playing, I'm playing this little whatever game I want to play and then all of a sudden, like there's a portal and it looks really cool. And you're like, come to Nike land and do this little bonus thing. You go on the portal and it just transports you right into the game. So the beauty of the modern SMA isn't gonna sell me cars in December. In one day it will sell the ROI in December.

Kyle Mountsier  15:07

It will sell you cars

Paul Daly  15:09

will sell me one December maybe not what this like first December. That's hilarious. That's hilarious. But I mean, it's indicative man times are changing, you know, look at just what we talked about today. Right? We're talking about franchise laws. We're talking about EVs talking about Tesla talking about Roblox.

Kyle Mountsier  15:27

Keep your head up. Keep your head on that in 2019. But hey, look, I think car dealers are savvy enough to handle it. Where it makes sense control and work on the basics and dial it in. So

Paul Daly  15:40

they go that's not reason to be excited to head into a Friday. The fortunate thing is that we all live in the real world every day, day in day out. We get to interact with people so go interact with some people and nothing feels better than a thank you

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