NADA Ribbon Cutting, DeLorean Blast From Past, & Shift in EV Buying Process

March 11, 2022
Last night, the ASOTU Crew got a little crazy at the NADA Welcome Party at Allegiant Stadium. The show goes on today and the show floor is about to open! Kyle Mountsier is joined by Ben Hadley to take a tour around the news coming from around automotive today. Anyone ready for a ride in a time machine?
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Tesla Price Hike more gentle than Rivian

  • Raw material accessibility is an issue.
  • 20% price increase in 1 yr for Model Y

Pre-market is up on hopes of ceasefire talks

  • Russian President Vladimir Putin said that “certain positive shifts” have occurred in the talks.
  • The main event on the economic calendar Friday is the preliminary reading for the University of Michigan consumer confidence survey, expected to nudge higher to a reading of 62 from 61.7 in February.

Autonation CEO encourages a shift in the buying process

  • "If we've learned anything from the last two years," Manley said, "what we should have learned is that the traditional thinking around the automotive industry is just not applicable — completely not applicable" in a period of massive change and disruption.
  • Shift to EV will push late adopters to used vehicle purchasing

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Kyle Mountsier  0:07  
It's Friday, the first day of the live show. Nada. We're coming in hot. Got a lot to talk about repeat. lean a little walkway today. Come twice. Twice in one week. Welcome

Ben Hadley  0:30  
to bounces the back to back,

Kyle Mountsier  0:32  
bounce. It's Friday. The Friday bounce this week just feels so much more energetic. You you might have missed it last night. Check this out before we get too far into the episode this morning. And we don't have a lot of time because we're headed to a clubhouse room. But last night, we send Paul Daly and Michael Cirillo into Allegiant stadium for a live stream, which was supposed to go 15 minutes, ends up lasting an hour. We meet like, literally 10 Eagles fans out totally out of the blue, which you know, Paul is a massive Eagles fan. He's like, what, what, what's your team? They're like the Eagles like How is this even happening right now? Literally for an hour. Michael Cirillo is standing on chairs. People are getting stickers. We got a sticker counter, literally coming up on the live stream. I love like, you know how, you know how, like the threes counter on ESPN? We're doing one stickers. 13 stickers. 17. Another one. It was just it was everybody on the East Coast. Everyone who's streaming it. We were all sideways. All of us wanted to go to bed there in Allegiant stadium. There on something we'll call it it. We don't really know what it was. But yeah, just so much energy around automotive.

Ben Hadley  1:53  
Man, dude, I've been watching some of these live streams. And, you know, in some ways, it's it's alleviated the FOMO. Right. Yeah, I'm like, I'm here at my house. I'm like, Oh, my God. In other ways. It made it worse, to be honest. Oh, cuz then I'm watching it. I'm like, I want to be right there.

Kyle Mountsier  2:14  
Let's go. It's absolutely nuts. Right. Yeah. And last night, you and I got a photo of we designed. So if you don't know, Ben and I are working on this project called Auto genius. And we've got a membership community of marketers, auto But Ben and I earlier this week design a shirt that we that we sent to all of the auto genius members out there, and we get a photo with that shirt. And we're like, Wait a second. So the people who designed it, and it's like it's out of Vegas, and we don't have this shirt. So this this is this is the FOMO that is that is realized by us today. Hey, just a couple of housekeeping notes. If you want to follow along the automotive State of the Union live streams today. Follow at a, you can check out all the live streams there or at ASOTU across social media platforms. We also have a Twitter account as of this morning, which let's go keep that quiet because it's going to get really sideways really quickly. We're going to have probably the most fun over there. We've got a rider that is excited about just having some fun on Twitter starting conversations across automotive. So Ben, I know you're pretty pumped about that.

Ben Hadley  3:26  
I'm so pumped man. I think automotive and Twitter were meant for each other and with wild to me is that this isn't it? This doesn't happen sooner. Like right got graven

Kyle Mountsier  3:38  
great when you say that it's with automotive. The change is so quick. And and the way that we converse is very, I call it like avant garde, right? The way that we just have conversations in automotive is very quippy is very one line, one hit, you know, you know, back and forth, jabbing at at ideals and ideas. And I think that I think that you're right, someone curating that conversation is going to be really good. So hopefully with

Ben Hadley  4:08  
Elon Musk of auto, right, however many followers he has. And when we're not there, we got to be there.

Kyle Mountsier  4:17  
We're gonna be there. Good. Good. Also, one more thing. There was a DeLorean at the NADA show. Cool, and not just that, but they had Marty McFly. A guy that looked exactly like Marty McFly. Standing next to the DeLorean. I don't know how they found him. They might have brought him like blast from the past in maybe it's a real time machine. I'm not really sure. But it was pretty wild last night at nada. Alright, let's get to the news. Go track with me. Just a week after Rivian drops a price hike. Tesla drops a price hike, but they did it the right way. So the Tesla's They're going up, like a grand here. 1200 overseas, right? So it's not it's not crazy, but nobody got up in arms about it like the Rivian price hike.

Ben Hadley  5:10  
Yeah, I mean, I mean, I think we all in inflationary times expect price hikes. Yep. Man, it's just gonna naturally happen. I think this was within the threshold. But I think that the hidden story there is, is they didn't need to. They own so much of their supply chain that it puts them in a really competitive situation with they're not under the pressure Rivian is now to do these giant price hikes. They're like no, beyond enough of this thing that we can control enough knobs and levers here, you know, you know, we're gonna pass a little bit of this over to you. But we don't have to do this whole, you know, of a cliff thing.

Kyle Mountsier  5:48  
Yeah. Well, what's interesting to me is just thinking about the whole of automotive, not just the EV side and the new OEMs. Thinking about the whole of automotive. The automotive manufacturers have not raised prices on their MSRP. Right. But automotive as a whole has actually raised prices even higher than Rivian and Tesla have on their vehicles. However, Rivian and Tesla do not have markups that are third party markups on their product as. Right, right. So they're just taking advantage of market scale, but the visibility of it is not global. Similar the way that retail automotive comes. And so I think it's it's a really interesting storyline to me because nobody, nobody came out and and yelled at auto nation dealers for, you know, raising prices on their new cars over the last two years. But Rivian goes and does it. And everybody's like, what have you done? You know, Tesla goes and does it and, and it lands on the the main news stories, right. And so I do think that there's an interesting layer of complexity there that these new OEMs are held to thinking about, like, if, if an iPhone price goes up by $100, everybody knows about it, right? But if the price of milk goes up by 20 cents, you don't know about it until the average price of milk is so high that inflation matters. And that's the way that retail automotive has dealt with this. Nobody, nobody started reporting on the price hikes until we started to get quarterly reviews. But the way that price hikes with Tesla and Rivian happen are like other retail brands that are set price manufacturing. So I've

Ben Hadley  7:38  
never thought about it. But dude, I think the other thread that you're bringing up, which is interesting is just the, you know, manufacturers have to do a price hike in order to create negotiation down. Right, so a price hike is like, Oh, well, I mean, everything's going for MSRP. Now, maybe over, right? But typically you go, Hey, we got to raise that up, and then we know we're gonna knock it a little bit down. I think that's actually another piece of this is that, well, you know, everybody's price tolerance to non negotiation with either Rivian or Tesla. You're like, cool, I'm locked in at that price. Great. That's the expectation. And then all of a sudden, they're like, no, actually, it's this price. Yeah, like, you know, yeah. And I think the other thing Rivian was doing that to people that had already locked in that that

Kyle Mountsier  8:25  
was the biggest deal. No doubt. Yeah, Tesla's going future orders, which, I mean, when you order you expect to get the price that you that you expect, right. And so it's setting expectations. So communicating clearly and all that. But speaking of going up, segue this morning, good news in markets, the Dow is up over 300 points on news that talks in Russia and Ukraine could be coming to some level of ceasefire close. Vladimir Putin was saying that certain positive shifts around those talks have happened. And, and everybody's looking at the University of Michigan Consumer Confidence Survey, which is set to come out today. Expected to nudge actually even higher, which is crazy because consumer confidence has been at an all time high. which means which means what they're expecting is consumer confidence is going to raise in the midst of turmoil. Crazy. How can there's just there's literally we talk about this all the time on our podcast, Paul and I talk there's literally no written plan for today or tomorrow right it's just everything is changing at the speed of now.

Ben Hadley  9:40  
Yep, everything's real time everything's like it you know, I just don't believe any any sort of like Yeah, it's like not it's awesome that the markets thinking about this, but even in that sentence, right? Yep. forward looking. The market feels like everything's gonna. We'll see. You know, I mean, like, we'll see bye Four o'clock today. How how things really go. Like hour by hour.

Kyle Mountsier  10:05  
Exactly, exactly. Well, we didn't get to talk to the last thing we've got to get going because we're a little bit late today but the auto auto nation CEO, you can check it out in the show notes just kind of noted that the shift in the buying process has to happen for a new buyer for an EV buyer. Maybe we can talk about that at another time, because I know that you've purchased an EV even from a retail franchise dealership, and I think that the buying experience is probably something that has to be adjusted or at least paid attention to for a new set of buyers that are early market market adopters.

Ben Hadley  10:39  
Totally and maybe we can bring it up in all things use cars.

Kyle Mountsier  10:43  
I think that's good. So if you're listening live, or if you didn't catch this head over to clubhouse, because we're heading to all things used cars with David Long and a whole host of automotive troublemakers. Thanks, Ben for coming on filling in for Paul J. Daly this week. We'll see you around nada. Let's go. Let's go!