Velocity Beats Volatility In The Used EV Market with Jimmy Douglas

June 14, 2024
Jimmy Douglas, founder and CEO of Plug, joins the conversation
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In this ASOTU CON 2024 session, hosted by Elena Ciccotelli from the "EVs for Everyone" podcast, Jimmy Douglas, founder and CEO of Plug, joins the conversation. The discussion revolves around the evolving EV market and the opportunities and challenges it presents for dealers. Jimmy highlights the importance of focusing on used EVs, leveraging the 25E consumer tax credit, and the necessity of dealer expertise in EV technology and customer education.

Jimmy emphasizes the significance of inventory turnover, noting that successful dealers often sell used EVs within 30 days. He also discusses the diverse demand for different EV makes and models, and the geographical distribution of EV sales success. The conversation concludes with Jimmy's personal experience and the role of firsthand knowledge in selling EVs.

0:00 Intro

1:47 The opportunity for EVs and dealers in 2024.

3:10 The impact of the 25E consumer tax credit on EV sales.

4:06 Addressing volatility in the EV market.

5:05 Importance of inventory turnover in EV sales.

6:26 High-demand EV models and market specifics.

7:44 Surprising insights from dealer experiences.

8:56 The role of firsthand experience in selling EVs.

10:07 Jimmy’s upcoming trip to Italy and EV rental plans.

Thanks to Effectv for making this episode of ASOTU CON Sessions possible! Learn more about Effect here:

Unknown: 0:00

You're listening to the asotu con sessions by Effectv live from asotu con 2024,

Elena Ciccotelli: 0:08

my goodness, my goodness. The man, the myth, the legend. Look

Jimmy Douglas: 0:13

at the crowd you draw. All

Elena Ciccotelli: 0:15

right. Crowd that you I mean, this is, this is the power of just what did Paul Daly call us? Did he call us Evie nerds?

Jimmy Douglas: 0:24

Round of applause. If you actually here to see

Elena Ciccotelli: 0:26

Elena? No, I don't think so. That was sorry. Numbers don't lie. Now I'm all flustered. Okay, so let's talk.

Jimmy Douglas: 0:37

Thank you, Jimmy. My bad. So

Elena Ciccotelli: 0:39

no, but I want to talk about, you know, the the things that are really top of mind for dealers these days, right? So, we've, we've got, we've got this huge, I think, in my view, this huge EV opportunity, whether you're looking at it as an opportunity, or maybe not an opportunity, or maybe a thorn in the side, but if we frame it as an opportunity, what for you? Jimmy Douglas, oh, and I got so flustered that I did not even, I didn't even give you a proper introduction. That's on me. Jimmy Douglas, founder and CEO of plug and and I also forgot to mention that I'm Elena cicatelli, and I'm here at asotu con in collaboration with Effectv TV. Okay, checked that box. Now, moving on, let's talk about what you're seeing an opportunity for EVs and dealers. What does that look like today in 2024 because it looks a little bit different than it did last year.

Jimmy Douglas: 1:47

It sure does. What

Elena Ciccotelli: 1:48

does it look like today?

Jimmy Douglas: 1:50

May I be a bit opportunistic and speak specifically to the used EV market? Let's do it. Yeah, it's huge. There are two basic categories of dealer sentiment in here, and it's either I'm all in on it or I'm not so all in on it. And the first thing that I'm going to say is, either way, you're right, it's perfectly fine to be on either side of the equation. In fact, that's the safest place to be, the only categorically unsafe to unsafe place to be, for my observation, is somewhere in the middle, because if you're going to be in then you can do it really well and profit handsomely. But it does require a different tool belt, a different set of skills and experiences and firsthand experiences to draw from when educating customers. But the biggest change between right now and a year ago, when I said effectively the same thing, is how the 20 5e consumer tax credit has become a bit of a gateway pill for dealers who were EV curious, to quote John Foley, to convert EV curious into EV experts, because that is an enormous swath of exciting opportunity for a new category of buyer that previously did not have access to a compelling EV product, and with the help from the federal government, their payments can be far more affordable, and in some cases, the more affordable option than a comparable ice unit.

Elena Ciccotelli: 3:10

Yeah. And I think also, too, in what we had talked about, I think in one of our one of our panels, you know, we take the show on the road. We're on tour. We're on tour right now. And so we had talked about this a little bit, I believe, two weeks ago, with the ease in which that point of sale tax credit now can be applied. And I remember we were sitting on stage with Dan Sadie from norm, Reeves, and he was like, this, this is so easy and and we, I asked him the question, like, you're working with the IRS. How is this? Is this difficult? No, it's easy. So with that in mind, what are some of the maybe other obstacles that dealers are coming to you with and saying, like, Jimmy, but there's X, Y and Z problem, or it's the volatility. I don't want to get burned. What are some of the challenges that you're that you're hearing? Yeah,

Jimmy Douglas: 4:06

let's talk about volatility. It's real. Yeah, it is. It really is. This is a different asset if, if you sit on it for 60 days, 90 days, the likelihood of something bad happening is very high, and that's going to be the reality for a while. There are so many dynamics at play with technological advancements and tax credits and foreign automakers aggressively entering the chat. The best weapon against volatility is velocity, and this has always been true in the used EV game, the dealers that we observe who are doing the bulk of used EV transactions are turning this inventory in under 30 days, very consistently. Okay, can

Elena Ciccotelli: 4:47

you repeat that one more time? Yeah, yeah,

Jimmy Douglas: 4:50

the dealers who are doing the majority of the used EV business that we observe are turning their inventory, on average, in under 30 days. But I'll do you one better the top point. One. Percent oftentimes gets it closer to two weeks or less.

Elena Ciccotelli: 5:05

So yeah, so giving that information are you seeing now? Can we get into the nitty gritty a little bit more like, what are, what are the makes and models that you're seeing that are, that are going faster we I know. Shout out to car dealership, guy, you just did an episode about the how the Jeep four by E is not moving like what? What are some of the things that are like is it make model dependent. What are you what are you seeing on your side?

Jimmy Douglas: 5:34

The fastest moving vehicles are the ones that can be sold while harvesting that 20 5e credit, okay, anything that can be acquired at wholesale for below 21 22k landed is in the highest demand. And then beyond that, a lot of it is really market or store specific. Some stores have become experts on selling used Teslas, despite the fact that they might be carrying a franchise banner for another brand. While there's also EV focused independent dealers who might stock everything from the bolts to the ionics to the Teslas to the pole stars to the r1 T's really it's, it's all over the map. And there's no specific recipe that wins there. Oftentimes it just comes down to focus and expertise and culture within that team, and it can happen pretty much anywhere in the country.

Elena Ciccotelli: 6:26

I was see we've been on tour for too long, because my next question was going to be geography. Thanks, Jimmy.

Jimmy Douglas: 6:32

You're welcome. I'll tell you that we've observed a very small percentage of dealers who are moving majority of the market. It's about 10% of dealers who participate in used EVs are swallowing a majority of the profit. And I'll answer that the elephant in the room, 69% of those dealers are not in California.

Elena Ciccotelli: 6:53

Okay, are not in California. And what other states are they in? Pick

Jimmy Douglas: 6:59

one, nearly all of them, really. Okay, not every single one, but nearly all of them, nearly

Elena Ciccotelli: 7:03

all of them, minus North Dakota.

Jimmy Douglas: 7:06

I need to go back and check. I'm not sure if they're on that map, right.

Elena Ciccotelli: 7:09

I know, I know there was like one, one or two states that are kind of like in that weird outlier position. So okay, so we talked about velocity, anything for you that has been particularly surprising, you know, we've been, I've mentioned more than once that we've been to many conferences in the last, you know, six weeks or so. Anything surprising that you've may have learned from a colleague or from maybe a presenter or a dealer partner, anything that that kind of comes to mind.

Jimmy Douglas: 7:44

I get surprised every single day. And I think the most surprising calls that I get are from dealers who tell me a story about inventory turn time that exceeds my expectations. Like every now and then, I'll get a call from people that I've shared your stage with. I don't know if they want to be added, but they'll tell me, yeah, these vehicles sell before they even show up on my lot. Oh my gosh. And that's pretty counterintuitive against some of the broader narrative, but it speaks to the power of being focused and honing expertise and brand equity around becoming an EV Center of Excellence. If people know that by coming to you, you're a trusted source of the educational journey, then the velocity speaks for itself, and it doesn't need to come at the expense at margin. In fact, it's the opposite.

Elena Ciccotelli: 8:33

And then it Yeah. And so when we, when we talk about that educational component, is there anything that you and your your fantastically talented team at plug are doing to help dealers with that education component, because I have done so many episodes with dealers, and it's like, yes, but we can do better. Yeah,

Jimmy Douglas: 8:56

we're trying to help. And honestly, the best help is by helping themselves, by becoming an EV driver. Really, nobody is more qualified to walk you through the nuances of charging and range and total cost of ownership and the lifestyle delta between what you're used to and what you're moving to than someone who's actually living it. The biggest difference that I see between stores who are crushing it here and have made the investment and those who are not, is the ability for a customer to speak with any person on that team who will very confidently draw from firsthand experience and walking them through that journey, and we can give them information and training material all day long. None of it will compare to the expertise that you'll develop by living through the experience. Yes,

Elena Ciccotelli: 9:46

living through the experience. And I'm going to tell a quick story when we have our panel tomorrow, a quick plug of the plug for tomorrow's pick. Anyway. So last question for you, you will be taking a summer vacation. In Italy this year. That's right. And will you be driving an EV through Italia?

Jimmy Douglas: 10:07

I'm actually thinking about it. Oh yeah, no. I actually just started going through the process of renting a car in Italy, and I found out I need to get an international driving permit. Okay,

Elena Ciccotelli: 10:16

so I Yes, you do. And I remembered when shout out to my husband John pastamato, when we went to Italy and we didn't have an international driver's license, and SIXT was very mean. Whoops, yeah, six was very mean to me, and I think they're still pinging my credit card. So anyway, Jimmy Douglas, always a pleasure. Thank you so much. Round of applause for Jimmy

Jimmy Douglas: 10:35

Douglas. Round of applause for Elena. You. You.

Unknown: 10:43

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