Used Teslas Lose Their Charge, EVs Ditch Brand Loyalty Rules, Most Popular Xmas Gifts

December 28, 2022
It’s Wednesday on that weird holiday week as we talk about the continuing used car correction being led by Tesla. We also talk about what EVs are doing to the brand loyalty landscape, as well as reviewing the list of most popular Christmas gifts of 2022.
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  • The general used car market is seeing values decline, but not as quickly as the used Tesla market which is down 17% in Nov compared to 4% according to Edmunds Data.
  • In August 33%+ of all used Teslas on the market were 2022 models being flipped for profits of $12k plus (other brands were only at 5%).
  • A combo of rising gasoline prices, an increase in Tesla's output, and the growth of electric vehicle competition, are contributing to the pricing pressure
  • Tesla recently doubled its discount on new vehicles to $7500 to support new sales
  • Greg Profitt, a software engineer, purchased a new Model Y last year for $49,000 and was able to resell it three months later for $12,000 more. He then decided to order a new one, but ultimately ended up purchasing a used Tesla at a discounted price instead.
  • Carmax is also indicating what some are calling an used car recession, reporting an 86% decline in Q3 profit

  • EV buyers are more likely to switch brands than traditional car buyers, according to research from Edmunds.
  • 80% of people who bought Kia's EV6 traded in something other than a Kia, compared with 61% for all its models.
  • More than two-thirds of Ford's Mustang Mach-E electric sport-utility buyers had non-Ford trade-ins, compared with Ford's 42% brand-wide avg
  • Rivian said purchasers of its trucks and SUVs are about as likely to own a $30,000 Subaru Outback as they are a $100,000 Porsche 911
  • Limited availability is leading to buyers willingness to look elsewhere
  • “We’re seeing all kinds of trade-ins,” said Beau Boeckmann, president of Los Angeles-based Galpin Motors Inc., which owns one of the biggest Ford dealerships in the U.S. “Everything from BMWs to commuter cars, even some trucks.”
  • Chevy Bolt owner, Jason Kint recently had trouble finding his EV of choice to replace his 10 yr old bolt. He looked at the VW iD4, Kia EV6, and Hyundai Ioniq 5 landing on the Ioniq and saying he can see himself sticking with the brand

  • Most popular Christmas Gifts of 2022 according to google
  • Tech: Beats headphones and Nintendo Switch
  • Fitness: Adjustable dumbbells, pickleball paddles, massage guns
  • Apparel/accessories: health tracking jewelry, trendy boots
  • Toys: Expert-approved STEM toys and craft kits

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Kyle Mountsier, Paul Daly

Paul Daly  00:00

Oh really weird Wednesday in between Christmas, and New Year's right now, but we still have things to talk about us Tesla's losing their charge EVs ditching brand loyalty rules in the most popular Christmas gift. The people really want to solve that problem once and for all.

Kyle Mountsier  00:42

I don't know if you knew this, but I was in automotive news this year. I got my Unbeliev unbelievable. You know, hey, just speaking of this year, if you are an avid listener and avid watcher and avid reader, we're, you know, we figured we have to participate in the year and kind of thing that everybody does. spins on it, the list the most, the best, the superlatives, that type of thing. So, we're gonna be rolling that out the next couple of days in the podcast and the email on social media, we got a few different lists few different superlatives that that might just help you out. Take a little trip down the 2022. Member, we

Paul Daly  01:28

want to know what you think. So if you disagree with us, let us know. Because we had we had a little powwow yesterday, we're like, Okay, let's get some quick thoughts.

Kyle Mountsier  01:35

This would be like the one time that I had a history class and in like early high school, and I had to do a thing on the 90s, of which I was a kid of the 90s. And the teacher at the end was like, why didn't you do this? This, this, this and this, and I was like,

Paul Daly  01:50

it was only 10. All I could do was 10. It was a lot. I gotta say it was a lot harder than I thought it would be like, oh, yeah, let's do top five lists. Let's do best. Worse. Let's, how do we pick it? All of a sudden, you like you were like, it's easier if you do like the top 50. Right, because it's easy. When it's five people are like, Oh, those are really the five most important things to you. Just yet too early for that word Brian, or take a superlatives. Hey, too early for that word. I know it's it's more it's best worst most like that's that's a superlative. Brian. It's okay. It's okay. I had to ask too.

Kyle Mountsier  02:26

High school must have been must have been hard, Brian.

Paul Daly  02:28

I don't know. Dude, I don't think superlatives are in like high school, or senior year of high school. If that's what you learned in senior year of high school. I think you're already doing it wrong. You're definitely not remembered. Yeah, most likely to cause trouble us through. Foster.

Kyle Mountsier  02:45

Thank you. Great. Well, we

Paul Daly  02:46

can't put that on our own list. It's a little self aggrandizing. I don't think we can go there.

Kyle Mountsier  02:50

Right. Paul, Did you know Did you know that na da is less than a month away. Right now. He's

Paul Daly  02:58

a dude. I didn't know that. Because you're starting to get like the emails. Like make sure you're registered and you're seeing all the action starting to really ramp up like as soon as Christmas hit. You look at their social accounts. And now it's like all eyes are on Dallas. Yeah, every vendors

Kyle Mountsier  03:12

like booth number 385.

Paul Daly  03:15

Booth. Number one, come see us 6675 Like I know. You're gonna put you gotta put something

Kyle Mountsier  03:24

I know. But like, how many people are gonna be like, Okay, I'm writing down 3843 I'll find that one at the show. No problem,

Paul Daly  03:31

zero. precisely zero. But what else you got to put? It's okay,

Kyle Mountsier  03:35

it's okay. Maybe one day we'll write booth number 3004, which

Paul Daly  03:39

is, well, we'll be at several booths while we're there. We'd love to get our little list together because we're going to be running around with a like a major size crew. He's just going to be podcast to get interviewing and covering things and causing trouble and whatever else we're going to do, but I'm excited that we're going to be there together this year. Because last year, you had a baby and you go

Kyle Mountsier  04:00

all right, well, hey, look, as long as southwest flights don't get canceled. We'll be there.

Paul Daly  04:06

I took my first southwest flights ever this year. And I was so excited like my expectations were so high and let's just say I had $150 credit voucher from my first flight. Don't give those away because you had a great time. Prior to takeoff he said aggrandizing sorry Brian's using too many big words for by let's let's dumb this down a little bit. I was on automotive. Did you know that okay,

Kyle Mountsier  04:33

yeah. Unbelievable. There you go.

Paul Daly  04:38

It is it is but actually Eugene fields president of named Matt who was who kind of has a cameo in the shot of you and I background actually, we just be flanking him on the right the left. Eugene one of these mugs is on its way to you because apparently our crew ordered three. So they were thinking Going ahead. Alright, let's talk about a little bit of news before Brian or as an aneurysm. So another big word got him. That's too much for Wednesday. Sorry, that was not intentional, but you're gonna expand meaning of being too much. Oh, gosh. Segue. All right, the general use car market is seeing values decline. It's something we're all not known and are talking about quite a bit, but not quite as quickly as the US Tesla market, which is down 17%. These are November numbers coming in, I guess compared to the 4% of all the other use cars according to Edmunds data, in August 33% of all use Tesla's on the market get this were 2020 two's current model, a third of all the Tesla's on the market were current model years, and they're being flipped for profits of 10,000 12,000. While other brands, only 5% of the cars on the market were of the same model year. So now it's you know, on the look at gasoline prices, Tesla, increasing their output, you know, Evey competition, all that stuff is really driving down this price of used cars. And you know, they've recently again doubled their discount. We didn't talk about this yesterday, because they're in there don't call it a discount of 3500 is now 7500 To match the Evie tax credit, because people who have ordered Tesla's might not be taking them. And now the people, you know, anyone who had a Tesla was going to be delivered was like, hey, I'll take delivery. Why? Because I can flip it if I want. This, this Reuters article, guy named Greg profit, I didn't really get his last name until right now, very nice. Software engineer, he purchased a new model Y for 49,000 was able to resell it three months later, for $12,000. More, he then decided I'll just order another Tesla, right, I'll do it again. But ultimately, he didn't take delivery of that new vehicle. He ended up buying a used Tesla and the prices are lower. And in the article he talks about, you know, just I think I think everyone's a little uncertain about what the economy's going to do. You know, as a little side note to car Max is also indicating what some are calling us car recession. It was first time I heard that term, but kind of makes sense. Right? 86% decline their q3 profits. So use car market is definitely receding. Tesla, though, is beating everybody.

Kyle Mountsier  07:16

Yeah, we've been paying attention to this. And there's a market correction happening. Tesla's obviously beating everybody. But when you have such highs to come back down to such lows. And I mean, here's, here's the thing, this is we see low, it's normal, right? We've been seeing this over and over in industry, when you put large incentives on your vehicles up front, you start to see a larger decrease in the value of the used car. In prior model years, and this is something that auto manufacturers have had to balance for a long time. It's not it's not a new normal, it's just like, to the way things always are. And I think Tesla is kind of the first ones to experience this type of feeling in, you know, in this recent

Paul Daly  08:03

recent history, right? I mean, they always follow each other, right? New cars, new cars are almost exactly the same price. Right? So why wouldn't you buy a new car? Well, there's a limited supply, well, then the used car prices drop, puts pressure on new car pricing, which leads to what you just said, discounting incentives, and the prices get closer together, right. And then the used car prices will fall. And this is the cat and mouse game that we haven't really had a play. You know, you look it's gonna be a year of that, right? Getting back to the things that were normal in regular life, but we've just kind of

Kyle Mountsier  08:35

exact 24 minutes, people were flipping cars for 12 grand over list price and average list price was around 50 grand that 17% is about 10 and a half $1,000 I think so, you know, you're you're basically right, citing that market adjustment that was up, back down to normal. It's not, I mean, still, we're still not seeing them, like discounted past, you know, new car value. So there's still the market still high. But we're going to continue to see a market market turn. The interesting thing for me with Carmax being down at 6% in q3 profit, like, you just know, you looked at the way that car Max and Carvana were buying cars, they were buying way ahead of market values and trying to grab up inventory and I think they are kind of caught with the buck because I'm not hearing that same type of thing from a lot of franchise dealers at this point. They're

Paul Daly  09:28

still really disciplined with their turns. Right? Yeah, exactly.

Kyle Mountsier  09:31

I mean, there's we're seeing motor vehicles, we're seeing a little bit slower of turns. But we're not I'm not hearing this like massive loss at this point. It's just it's it's a slower turn for franchise dealers that have been more diligent with what they're used car inventory, I

Paul Daly  09:47

believe. Well, I mean, I think there's there's one thing that's for certain is that 2023 is going to be like we're gonna see who the real us car operators are with ad right. It's about we're about to find out the truth. The truth is coming All right, we're gonna see some some I think independents gonna have a hard, hard time. The savvy operators, right, they're saving expenses they have up, they have already optimized operations and we're gonna keep leaning into operational savings. And, you know, hey, you fly high, but a little too close to the sun, right? It's gonna come back and get you in and just happens that happen all at once. And as much as you try to like, stay away from it, it always, if you could predict what it was going to happen, right. Well, you know, I'll be rich. Yeah,

Kyle Mountsier  10:27

I mean, we've we've been trying to predict when this is going to happen for nine months, and it's finally coming. So we'll see. Yeah,

Paul Daly  10:33

that's true. Well, speaking of VVS segue. Wall Street Journal article. Today, Evie buyers are more likely to switch brands than traditional car buyers. According to research from EDWINS little word that we like to call conquest 80% of people who bought key as Evie six traded in something other than a Kia. Typically speaking with the kids less down there 50 or 60%. For the rest of its models, but 80% conquest customers, more than two thirds of Ford's mock II traded in a non Ford as opposed to about 40% of their other vehicles. And rivian just said purchased I mean, obviously rivian is like anybody that trades any advisor revenue is going to not be trading in a rivian. But they said purchases of their trucks and SUVs are just as likely to own like a $30,000 Outback as they are likely to own $100,000 Porsche 911. So it's like all rules are off when it comes to EVs. Right? Really driving driven by availability, right?

Kyle Mountsier  11:33

Well, it's availability. It's like, hey, look, if my brand that I currently support doesn't make the Eevee or doesn't make the Eevee style that I want doesn't have it doesn't work. Yeah, it doesn't or doesn't even have it available, but I want to move to that type of vehicle. I'm gonna move to that type of vehicle and it's that opportunity just be experimental. And if people are willing to be experimental with brands like rivian, and Tesla and vinfast, and those, then they be experimental with the rest of the OEM brands. So for for me, this is like all the more reason to stay connected to your customers to stay connected to your client base. Because you never know when they're going to when they're going to switch or want to switch and you got to be in front of them at the right time.

Paul Daly  12:11

Right Place. A little word from a dealer Bo Buckman president of Los Angeles base, Galpin motors is the biggest one of the biggest Ford dealerships in the US. He says we're seeing all kinds of trade ins everything from BMWs to commuter cars, even trucks on you know when people are coming and traded in for EVs. Nice little story. Chevy Bolt owner Jason Kent recently had trouble finding his Eevee of choice to replace his 10 year old bolt, I'm sure that battery is a little fatigued at this point. But so he looked at the VW ID for the key as evey six Hyundai's iconic fi or ionic five and he landed on the ionic and said you know what I really love it Hyundai is seems like a brand I really could get into and I could see myself staying with him for a long time. So right like hey, right now like you're making the V's brand conquest, go get some market share. It'd be interesting to see like what happens in the next cycle like somebody who like this customer who buys a Hyundai and has an Eevee like, I wonder if he like would buy an ice vehicle to from Hyundai, right? Like once you get in the brand like that bad? You haven't that bad. So kind of all bets are off, which makes sense everyone trying to get some to market because without a doubt. I mean, we're talking yesterday we talked about CES Consumer Electronics Show and how EVs and Evie mobility, you know, taking 80% of the whole show like 400,000 square feet. So the inventory thing and having something available for people to test drive, it's almost like brand bets are off, right?

Kyle Mountsier  13:38

We've got more just looking for something new cars hitting pop culture. Now it's time for a change. It's no longer loyalty. It's about it's about product and availability. True speaking of products and availability, segue Google has let us know what the most popular Christmas gifts of 2022 are. We've linked it up in the show notes for all of the exact for all of the exact stuff if you want to know what you missed out on. But just a couple things that are out there and tech Beats headphones Nintendo Switch were the winners in fitness adjustable dumbbells, I'm gonna come back to this one pickleball paddles and massage guns, apparel and accessories health tracking jewelry trendy boots kind of been that way since like 2010 I feel like and then toys expert approved stem toys and craft kids. We haven't talked a lot about pickleball in this on this pod oh I guess we haven't we talked about it way back when it first started cutting kind of hitting and saying hey look dealers if you're looking for some inexpensive ad space pick ball arenas it may be the way to go. I

Paul Daly  14:42

don't know I think beaver Toyota is I think he's digging out of pickleball court as we speak

Kyle Mountsier  14:46

right literally right now it's in the back end.

Paul Daly  14:49

Great addition to Beaver Toyota,

Kyle Mountsier  14:50

man what a thing. Yeah, but, you know, for consumers to be just like giving pickleball paddles at Chris mints like sports gifts are not a massive thing at Christmas, especially since it's winter. But pickleball gets played indoor and outdoor and it's just played and played it yet. A ton.

Paul Daly  15:10

Yeah, really? You've played? Yeah, I

Kyle Mountsier  15:12

used to play. I used to pay like once or twice a week for four or five years. Like so.

Paul Daly  15:18

Yeah. What back before it was popular songs. This

Kyle Mountsier  15:21

was probably like six, seven years ago that I played. Yeah. Oh, so


you haven't played for a long time? That was bad. I haven't played in a while. But but I played popular. Yeah. Wow. That's amazing. Did you get any the gifts on this list? Or in the household?

Kyle Mountsier  15:37

Well, I mean, we're like craft kit. Family. That's just kind of the jam that we do. We don't do a lot of like fitness or tech type stuff. No, most of my gifts center around coffee and clothes. So my

Paul Daly  15:51

to Isaac, our show producer says definitely don't know how Lego didn't get on this list. Because it is not the most popular just in your

Kyle Mountsier  15:58

world, man. Yo, in my world we got I'm not kidding you. 10 Lego sets between two

Paul Daly  16:05

kids. You Go Isaac, there you go. Let's see we on this list. We didn't get any of that. I did get a massage. Again. I didn't ask for it. My wife was just like, you always seem to like I wonder if those things are any good. But when we walked by one like Costco, so I got what actually it's not bad. I never tried it. health checking. Trendy boots. I think the fun part about this whole search list is that these are gifts that people search, right? So you have the stem toys and the craft kits for kids. That's definitely not what kids asked for. They're all up there.

Kyle Mountsier  16:41

And the Nintendo Switch

Paul Daly  16:42

says all the aunts and the uncles and the grandparents would be like, What should I get? My kids are like, Oh, something that make them smarter, right? Yes. That's when I looked at this result like that is not the kid searcher. That's the answer to Uncle searching to like, Hey, here's this magnetic Lincoln Logs thing that you can have. But either way, I mean, look, it's Wednesday. It's the week between Christmas and New Year's. There's a lot of people in the auto industry out on the hunt and on the grind. So if you're those people, we're with you on the hunt on the grind. We're gonna be dropping a lot of content this week. Check it out, let us know what you think. And for those of you who are taking a break, no judgement here, but you better be ready for 2023 because it's gonna be one

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