New EPA Regs Announced, Cap 1 Drops Floorplans, Electric Burritos

‍SPEAKERS

Kyle Mountsier, Paul Daly

Paul Daly  00:34

Oh, you can't hear my music. Can you hear my music?

Kyle Mountsier  00:36

Oh, I can't hear your music.

Paul Daly  00:38

I don't know why isn't playing there it is. Wednesday, it's gonna drop the beat. So we just moved on whole day.

Kyle Mountsier  00:48

That was the best podcast intro I think we've ever actually

Paul Daly  00:51

that's why you know this show is actually live when we do it because stuff like that happens as we're

Kyle Mountsier  00:57

like cut music in down

Paul Daly  01:01

as we're winding down the last few seconds of the intro, I realized I had the wrong sound bank up from a trigger pad and when I like I like button panicked. Let's just start hitting buttons. And I didn't have my volume slider. But either way, it's Wednesday. We've already been working for several hours. Today we're talking about new EPA regulations finally being announced after all the build up to him and don't get your hopes up too high. Capital One's dropping their floor planning Yes, they are. That's kind of an interesting one and electric burritos, so that's going to be thing we'll save the burritos for the end. Like I read the comments on the live stream. Gotta have the music I know. It's like we're not even starting a podcast unless there's some music going on.

Kyle Mountsier  01:41

Hey, yeah, we've been haven't had I haven't had my last cup of coffee but I will make you jealous real quick because you see

Paul Daly  01:47

Oh, dude, just Kyle's hold up a cup that says crema on it. And if you don't know it's like the best coffee place in Nashville and arguably the East Coast. I got I got to go. I got to go there once. But thanks. I've seriously

Kyle Mountsier  02:01

had one better cup of coffee. And it was in LA at Go get them Tiger. And that. Nothing better. So Wow. Just calling it just I know. Copies copy but

Paul Daly  02:15

Oh, yeah. Now there's people are fighting over these comments. Easy, easy and everyday. But it's a matter of perspective. Oh, man, we're already we're already working hard. My hat's already backwards. It's only nine o'clock Eastern and my hat is working. Right? We're going to be in Tampa in less than three weeks. If you're going to digital dealer are going to be in Tampa or around Tampa. Please mark your calendar to come hang with us. On May 2 It is a Tuesday night. Tuesday night. It is a Tuesday night. And we're gonna premiere the show that we've been making that we just filmed the pilot that we have a name for now.

Kyle Mountsier  02:50

named Paul what the name, the name is more than cars. Because there's a lot of things that blank blank blank more than cars we say love people more than you love cars a lot. And it just expands past that it's the people is more than cars. The community is more than cars a lot is more than cars. There's probably like, at some point I see like on a website like blank, like all the little like traveling things that are blank more than cars, you know? Yeah. Oh,

Paul Daly  03:23

yeah. Scott trainer, thanks for weighing in. I look forward to seeing you at Tampa. By the way. I remember. I owe you a text message back. I'll just tell you that live on the show.

Kyle Mountsier  03:32

That's where we're gonna be every day. Hang in the comments. You know where to find that community right

Paul Daly  03:39

there. And so yeah, we're gonna be in Tampa. We're going to do a premiere of the show red carpet Step and Repeat banners. We've done the soda family reunion last two years a digital dealer this year. We're kind of pivoting it that to the premiere. So we're going to have a really awesome party. We're doing actually a little collab with digital dealer to help get more people there. We have the Tampa theater rented out. It is gorgeous. It is beautiful. We can fit like probably close to 1000 people. So we're gonna have a big old show. Big old party. We're working on some swag things that could be really really you know, we got we got it. I don't want to talk about it yet because I'm not fully sure we're gonna be able to pull it together. But if we do, it's going to be a little swag. A little retail. A little associate who a lot of fun. A lot of fun.

Kyle Mountsier  04:20

Exactly what's pulling things together.

Paul Daly  04:24

Segway got my trigger pad right on that one. Let's get administration has officially released the strictest tailpipe emissions regulations in history. The EPA has new standards for light duty vehicles 2027 and 2032 model years. So this is okay, I'm gonna save this first comment that I put in here for the last because it's going to be my favorite one. The regulations basically are focusing on cart grams of carbon dioxide per mile. Right. So like because there's been a lot of conversation on how the miles per gallon is actually benchmarked. When it's an Eevee, right you see these numbers that are like Oh, it's 280 miles per gallon. And then another thing comes in and says, Well, actually, it's more like 83. So they're they're moving measurements, two grams of carbon dioxide per mile. I still don't fully understand it yet. And I think a lot of people don't understand it. It was a blog post the Alliance for automotive innovation. This is, you know, on an alliance that's formed from OEMs, and things like that their CEO John Mozilla, called the EPA is proposal aggressive by any measure. He says, By that, I mean, it sets automotive electrification goals in the next few years that are dot, dot, dot very high. He wrote like that. He cites the proposal. He's both Biden's 50%, zero, Evie sales target and another goal that the administration or administration already outlined, and says how does the EPA justify exceeding the carefully considered data driven goal announced by the administration or in the executive order they had in the most recent national blueprint, basically saying, we had this really thought out thing. Now the EPA is gonna go way behind beyond that, when the first one was very thought out. And data driven. This is the final one,

Kyle Mountsier  06:06

I think isn't I think, Paul Paul, someone on the EPA board was watching our live streaming last. That's definitely not true. And they and they heard you say, we didn't hear it come here to bind. And they were like the

Paul Daly  06:21

challenge except maybe, maybe, but they put a little icing on that cake. They do say this will save American taxpayers one dot million, not billion $1 trillion. Exactly. Two, then when was the last time you trust them? At a time when the government said No, trust us? We're great at budgeting, expenses and savings. So I don't know, trust us, you're gonna say don't rely on this automotive

Kyle Mountsier  06:51

troublemaker for nothing. You

Paul Daly  06:53

know, I just fear the collective groans coming from all sides of the collective aisle and just the industry. But reality is, the industry has to move, which is a tough thing. This is you have

Kyle Mountsier  07:06

this what I think we have to realize is like at this point, there's no slowing the train down. It's going that way. So evey education, understanding the moves, understanding what's happening with the EPA, and with government regulations on the show floor in the service drive and knowing what's coming so that we can educate customers on what's on what's about to come around the bend is extremely important, because this is on the front page of Wall Street Journal. It's on every news channel. And whether your customers interested in Eevee or not. It's a thing that they're looking at and trying to understand. What what does this purchase look like? What's my next purchase looks like? How does this fit into my daily life? And all of those things are questions that people are going to be asking today, even if they're not buying nav. So understanding all of that learning on the show floor it extremely important.

Paul Daly  07:56

Yep, train can't be stopped until 18 months from now, if the administration gets replaced. It's tough, but we do like I fully agree with you, though. It's like EV whether it goes this level of velocity or it slows down like it's happening, right. And all those things are still accurate. And we'll see what happens. Hey, Linda, love how he mentioned education on the service drive that is like that. Let's double down on that comment.

Kyle Mountsier  08:26

I am going to double down on that. Check. We'll see it okay. So look, on a service drive. The the volume of questions that you get about current vehicle and future vehicle is sometimes higher, because there's a great real trust built up with an advisor and their customer because of the volume of the times do they support natural causes? It's

Paul Daly  08:48

more casual conversation. Yeah, exactly.

Kyle Mountsier  08:51

And so it's like, Hey, have you seen the things about the EVS you know, and if you're just like head down and not thinking about this, this kind of like eyes up a little bit on the service drive, you're gonna miss that, like that opportunity to educate and care for the customer even in the service lane. So absolutely. Thanks for throwing that out there.

Paul Daly  09:11

I know I love it. I love it. Yeah. So if you if you're not if you're just listening to live stream comments are happening today. Thank you for things that are absolutely happening are happening. They happen. So after over 25 years Capital One, they got a motive bank is winding down their floor plan lending they're closing the program, but will continue their auto finance operations, citing a renewed focus on their core business. floorplan lending only compromised about 1% of the bank's commercial business and not considered core to its longtime prior long term priorities. You know, so basically, I didn't know this kind of you did. But low interest rates in the 2010s and early pandemic actually allowed dealers to have a profit from floor planning their vehicles because they would be in That device to take more vehicles on and that those floorplan rates will be subsidized. So actually dealers made money from the floor plans, as interest rates started rising and 2018 floor planning shifted back to kind of becoming, you know, a cost. And you were saying kind of like you just New Dealers that were making a lot of money. Yep, the floor planning.

Kyle Mountsier  10:21

Yeah, it like once the pandemic hit, and our turns got really, really fast. We went back into making money from for planning. So just like an interesting piece out of the story, they're just, you know, and this is something that every, like, if you're in the dealership, and you don't care about whether or not who your floorplan company is, just know that interest rates, and the turn of the vehicles have a significant impact on the bottom line of the expense or revenue that comes from actually keeping vehicles on the lot because the majority of dealerships don't own those cars for cash, they actually they actually have them lent out through a floorplan expense that bears interest on that car and the interest graduates as the car stays longer. And that floor plan company also requires to carry interest for that floorplan. And so there's a lot of just like costs that are associated alongside having vehicles on the lot, especially as interest rates are rising. So you know, it kind of makes sense. Like if it's only 1% of your business, interest rates are rising. It's it's a place where a lot of manufacturers are actually pressing into getting more and more of their dealers on their own floor plan with their own bank and cap one doesn't isn't the captive lender for any OEM. I can see why hey, look, we're just going to take our hands off that one not press the gas on it, push into auto finance in our other ventures makes a lot of sense to me.

Paul Daly  11:52

Hey, and they got to say they got to make the move so they can pay for Weezer next year to nada. Oh, yeah, by the way, will always have a magic moment in my heart, because they put on the Weezer concert and nada, I probably took the best picture I've ever taken in my life of rivers Cuomo holding his electric guitar up pointing up at the Weezer sign and strategically placed above the Weezer site in my photo, one logo, Captain.

Kyle Mountsier  12:17

And on like, I think they probably had to pay double just to put their logo above that Weezer logo, you know?

Paul Daly  12:23

Oh, I bet they did. I bet they did. Because, hey, if you're gonna, if you're gonna let the man in on your rock set, well, at least the band is gonna write you a big check. Speaking. Speaking of brand moves

Kyle Mountsier  12:40

you know, the audio industry isn't the only one focusing on a move to electric Paul Chipotle is actually taking significant steps toward sustainability by piloting three, all electric restaurants powered by renewable energy, including the elimination of gas usage. A couple of the changes one electric grills, they're replacing the gas fired grills, which could be an interesting, you know, depending on how like that feel, and

Paul Daly  13:06

procedural changes, or procedural changes, they still make the chicken sizzle will still use us exactly.

Kyle Mountsier  13:11

Basically, they're gonna be able to reduce an energy consumption and carbon emissions, they're gonna start solar panels up on that thing. So they can generate renewable clean energy heat pump water heaters to replace the gas water heaters. So they, you know, they're leaning into that electric being able to take from solar panels, shading built into the facade of the, that was a good store, basically allowing, like, if you go to a Chipotle store right now that thing is all flat. But this reduces the need for a C, because you don't have as much sun hitting those glass windows and requiring you know, because they always have these big glass windows, and then redesigned exhaust hoods. So they're gonna have just kind of that's that's kind of a wild one to me is like, Wait, we can find the actual exhaust hood to cut no energy by 30 to 35% from a usage like why wouldn't everyone get that?

Paul Daly  14:05

Well, I think that yeah, I think that a lot of these things are like, just a focus on how can we make this more efficiently. And some of these are just like, basic mechanical changes, like the hood, right? They can put side panels on it. So it focuses the draw on where the smokes coming from.

Kyle Mountsier  14:22

Yep. Thanks, guys. That's Yeah, it's interesting, because, you know, you look at this at first glance, and it's like, okay, but what does that mean to me as a customer, or especially as someone else in a retail or, you know, industry that sells goods or has has a brick and mortar store?

Paul Daly  14:39

Because they said most of the changes, you won't even notice, like, unless you're really looking for them?

Kyle Mountsier  14:45

Exactly. And so, I think the bigger you know, the bigger thing here is like they're swimming in the stream of major news media. They got a whole bunch of earned media on three stores, right? Because they said hey, this is Something that we're doing this is something we're talking about thinking about trying to plan for. And so they're leaning into their marketing and messaging, which Chipotle has already done a really good job at like focusing on sustainability for slow growers. Yeah, yeah, exactly. And so this is just like an extension of that messaging. So I asked, as soon as, as soon as we said this, I said, Paul, and I'm a leanness into you. But I said, Paul, how does this get to? I'm a dealer ministry partner, I'm someone in the auto industry listening to this story. How does that get to me in what I need to practically be doing based on what I'm seeing these major market players do.

Paul Daly  15:40

And this, this is where, you know, our friend David Meltzer, calls this stage theory. And basically, it's just because you're doing something, or you have to make a change, how can you make it a part of the show? How can you make it something that actually gets the message out, and so dealers installing EV infrastructure, again, back to our first story, like this is on the front page of the Wall Street Journal of all these other publications, dealers are making investments in infrastructure to talk about it, right, because maybe there's a group of your customers that don't care, right? They're like, Oh, whatever. But there is a large group of people who really care. And so for you being able to talk about like, Hey, we're installing these chargers, we're a part of this movement, right? Like you'd like Chipotle, great. We're doing similar things to Chipotle in focusing on this future sustainability. And so the value that you get, like sometimes you look at the chargers, and right now everybody's like, this does not pencil, right? But this is a way you can actually extract a lot more value from what you're doing that doesn't have directly to do.

Kyle Mountsier  16:39

Send it to the local news sources, send

Paul Daly  16:41

it to the newspaper, send them some photos, let them know what you absolutely you could do a little event around the Chargers apps. It's it's some gold hardhat some shovels. Yeah,

Kyle Mountsier  16:53

yeah, exactly. Like we do that for building a building. This is just an opportunities to say hey, like, this is what we're doing to lean into what's happening in culture. So for AR Well, they there's the free one for the day. There's the free one. Today felt like

Paul Daly  17:09

a pretty practical show. Me got to take a couple shots as government give some marketing tips talking about Chipotle, I mean, this is a great start to Wednesday. We hope you have an awesome Wednesday and go out we hope you join us in Tampa Bay second.

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