Wheels Up to Philly, EU Going EV, Balancing Budgets, & Brad Pitt Racing

June 9, 2022
We’re in the City of Brotherly Love this Thursday and are talking about ASOTU CON plans, the EU going all in on EV by 2035, the financial sense of an electric lifestyle, and Brad Pitt driving Formula 1
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EU lawmakers vote to ban sales of gasoline cars by 2035

  • “The auto industry plays a vital role in Europe's economy, accounting for 7% of gross domestic product and supporting 14.6 million jobs in the region.”
  • The proposal to allow only zero-emissions new cars to be sold in the 27-country European Union after 2035 will mean that cars with gasoline or diesel engines, including hybrids, will essentially mandate sales of all-electric models, which have no emissions.

An electric car finally makes financial sense

  • “For instance, the Environmental Protection Agency estimates it will cost around $2,900 a year for the average American to fuel a 2022 BMW 430i sedan. (The base model 4-series sedan gets 28 miles per gallon in combined city and highway driving, and it uses Premium fuel, which the EPA calculates at a national average of about $5.39 a gallon.) The estimated cost to fuel a 2022 BMW i4 eDrive40, which is basically the same car but powered entirely by electricity, is about $600 for a year. That's one fifth the cost.”
  • “But, of course, you don't generally get a huge discount on fuel costs for nothing. The i4 costs about $10,000 more than the base model BMW 4-series with a gas engine, but the electric BMW i4 is also eligible for a $7,500 federal tax credit, reducing the ultimate price difference to just $2,500.”
  • Take Away: Educating your team on the cost difference between ICE and EV will help serve the questions all consumers are asking.

Brad Pitt to star in Formula 1 movie on Apple

  • The 58-year-old Pitt will play an F1 driver who comes out of retirement to race alongside a rookie driver and other top drivers in the sport.
  • It won’t be Pitt’s first foray into the world of sports movies: He was a best-actor nominee for his role as Athletics general manager Billy Beane in the 2011 baseball drama “Moneyball.”

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Kyle Mountsier, Paul Daly, Kyle

Paul Daly  00:27

Yo, it's called the City of Brotherly Love. Kyle and I are in Philadelphia today working on asotu con, but we're still talking about EVs and balancing budgets and Brad Pitt racing Formula One. The people really want to know. I don't, I don't know a lot about Formula One. But what I do know is that Brad Pitt looks like a Formula One driver,

Kyle Mountsier  00:52

he really does. And he's short enough to be one too because they're all like a little bit short, little bit scrawny, but like stocked up because they got to have like that thick neck to be able to handle all the bouncing back and forth. And so he's locked in.

Paul Daly  01:04

He's ready. He's, you know, he knows so much more than I do about Formula One.

Kyle  01:09

And we got the backward if you're not watching the video, if you listen to it, we got the hats on backwards today. going on today. It was something where we felt like it needed you know, when what, a lot of times what we get to is like the end of the day on Friday, and we recognize that there's this intentionality and this grit that has to happen. And since we're here, we're going we're in Philly. It's it's there's an extra grit that's happening today around the the asoto. World

Paul Daly  01:37

Andrea and I feel like Rocky I don't know if you ever wear a hat backwards. I gotta find out there's a video clip like that. That would but here's it now the hat the hat kind of. Did does.

Kyle Mountsier  01:47

He wore a hat backwards all the time.

Paul Daly  01:49

No, the movie over the top. Never was the arm wrestler. He flipped the switch when the hat went backwards. I knew there was something in there. It's it hat goes. It's been going backwards. More and more. I walked in the other day. My hat was backwards when I walked in. And Danielle was like oh, it's like that.

Kyle Mountsier  02:04

Alright, so that we already had it is kinda like

Paul Daly  02:07

its work mode. So we are in Philly. Today we're scoping out the venue for asotucon. Isaac roll the video of silica Subaru we are going to the grand opening of this beautiful Subaru store. siopa Subaru in the city of Philadelphia look at that atrium overlooking the cityscape. 100 service bays room for a bunch of inventory when the industry decides it can make some inventory. But that's where our opening reception is going to be for a soda

Kyle Mountsier  02:34

pop boss, so you're telling me

Paul Daly  02:37

that we're gonna have dealers

Kyle Mountsier  02:42

go to a conference and actually be at a dealership? Wow novel.

Paul Daly  02:48

I know. I know that Manila painted, you know, boxton workshop rooms are inspiring for most people. I

Kyle Mountsier  02:57

was really hoping for some of those curly curly. I wonder if Mr. C can get some of those curly cute carpet squares. So you really feel like you're in a conference

Paul Daly  03:05

room. So. So yeah, the events going to start on the opening night and reception in this beautiful facility with food and drinks. It's actually on September 11. We're going to do some charitable things. And it's going to be a memorable night in a dealership touch and feel the latest technology. So we're excited to be there this evening. We're going there tonight I think starts at 630. And who knows we'll meet there maybe Sylvester Stallone will be there. I don't know if he showed up for anybody. He's still moved for Mr. Su. was so you know, you're going to see

Kyle Mountsier  03:34

him for the dealership party. Yo, yo, Mr. C,

Paul Daly  03:38

that's gonna happen. We'll get them out. We'll get them out. I won't be surprised if Mr. C OCAD the rocky statue transported to the front of his building, just for this event sideways. So we're excited. We're gonna be announcing it does a thing to us. Over it is over. We're gonna be announcing a ton about a show to con this trip today is going to really buttoned down a lot of details right there. Multiple hotels were reserving blocks at and one of them's a brand new casino hotel near the venue. It's owned by the same company explained to the live so we're excited to get in there and see what's up. But you know, we got to talk a little news and little auto business because everyone can't be so excited about being in Philly because exact probably not here we're here so first story this is

Kyle Mountsier  04:22

gonna be enough somewhere where you're not segue

Paul Daly  04:28

it's good. I triggered it to

Kyle Mountsier  04:31

trigger What a mess but no. So one place where the majority of the dealers that listen to the this podcast or the industry partners were were mostly in North America. We're talking a little bit of European Union of which just as a note the UK is not a part of but the majority of Europe as a part of has voted recently to everyone's have if you're listening this podcast and you're ready might want to have a seat right but They voted to ban sales of gasoline or internal combustion cars 100% internal combustion cars by the year 2035 35, it's

Paul Daly  05:12

nice of them to give themselves an extra five, five years just to make sure most of them will be out of office by then.

Kyle Mountsier  05:17

Yeah, that this is the shocking stat to me. And I think this is similar in the US. And I think that whenever you do this type of major change implemented from a legal standpoint, from a government standpoint, impacting this larger than industry, the auto industry, it says, plays a vital role in Europe, Europe's economy, accounting for 7% of gross domestic product, and supporting 14 point 6 million jobs in the region. That's a lot of jobs. That's a lot of people. That's a lot of money. And when you're talking about overturning that in just 12 years, to a totally new business model, a totally new acquisition of parts, products, services, sales,

Paul Daly  05:58

totally untested energy source, it just kind of blows my mind to have a little bit, a little bit of things. A lot of things in your blow my mind, I wish to get benstock on the call, he spent a lot of time in Europe lately, he's probably got some insight into this. Let's bring him on the ship. Now. I wish he was queued up, I would have been sick about it. And he's not here today. I mean, we a lot of a lot of us dealers and the industry, right? We look to Europe as like a little predecessor of what could potentially happen here, we've been looking at it, as far as you know, the direct to consumer sales model we see you know, some, you know, some manufacturers and receive saying like, hey, all franchise contracts are going to be canceled, right? We know that that's a lot different in the US, the laws are different, however, right, looking to this and saying like, wow, this is, this is how it could potentially go or at least lean in that direction. Now, this is not law yet, right? There's a vote coming. So it could get struck down. But you know what it's like when things end up on the ballot, it actually makes everyone like pay a lot more attention and get a lot more serious about it. So um, this is just one of those things where it's on the ballot, it's getting voted for. If you had never thought it'd be possible, but guess what, it's on the ballot now. So hey, Ev, shaking a lot more, you know, I mean, just dominate so much conversation. It's just you can't get away from it. And we shouldn't we should dig into it. You know, but speaking about EVs and making financial sense in one way or another segue, let it play. Keep my hands off trigger pad midway. So a recent article came out saying electric cars finally make financial sense. So reading from the article that is linked up in the show notes, for instance, the EPA estimates it will cost around $2,900 a year for the average American to fuel a 2022 BMW 430 sedan, the estimated cost to fuel it, and an i Four with II drive 40, which is the same car but powered by electric is about $600 a year, which is 1/5 of the cost. So you know,

Kyle Mountsier  08:01

they're like that's in year one. And the rest and so that's in one year, right? So the rest of the story is the difference in price, at least in the BMW between the the similar model in the internal combustion, the ice vehicle, and the Evie vehicle is about 10 grand now, BMW and other manufacturers still have the ability to to allow their their customers have the ability to acquire this the tax refund, which is 7500. All right. And so right now, you're recovering that cost in year one. Now, Tesla, GM have an interesting thing where they don't have the ability to recover our cost of that type of variants. So there are some manufacturers that are starting not realize that because of the lack of access to the tax credit

Paul Daly  08:51

was many seamount or 200,000 vehicles, was it? It was 750,000 deliveries, I think, right? Okay. Yeah. So if you're not, you're not following along. The tax credit that was initially put in place had a limitation on how many vehicles you could create and claim the credit on. That means the people that got an early start on EVs, right, they started racking up units that claim the credit. So for instance, Tesla's like, Hey, you're done. Who's the other one? That's almost done. GM I

Kyle Mountsier  09:21

think is already right. Already. They've already passed it. Right. Sorry. 200,000 qualifying vehicles. So both of them have passed it because of their current evey sales.

Paul Daly  09:32

Yeah, so I mean, there's a lot here. And you know, a lot of consumers are starting to pay more attention to the difference, especially when gas prices we talked about this the other day, $5 On average, six $7 In some areas, right, the balance starts to shift a lot. And you think like that the cost of the vehicle, it doesn't offset the cost of the fuel, and then there's like, Well, how long is the fuel going to stay this high? I remember thinking like during the Gulf War, like fuel was up to almost $5 a gallon and I was like, it's never going down. knocked down. But it did end up going back down to like $1.30. Also the cost of electricity staying where it's at is also another I mean, supply and demand basic right? When all this new electricity is needed, and there's not supply, that cost could change.

Kyle Mountsier  10:14

But I mean, think about it. If you go 50%, you go from, you know, $3,000 a year in gas prices to $1,500 a year in gas prices, right. I mean, that's a massive difference that we've discovered in two months. So saying that the long term viability of the financial benefit of an Eevee is, is there, it's only there for a small market time. And I'm guessing that there's going to be some reconciliation in overall gas prices. So, you know, I think here's, here's the big takeaway, right for me, and this is the takeaway from actually, the the European Union article and this article is that your people should be educated enough to have this conversation with everybody that walks through the showroom. That call is so good. Because here's the thing, this is the these are the new, it used to be auto Automotive News was like, you would only find it in automotive news sources, right? But automotive news because of EVs has come to the forefront. So you see it in the morning news, you see it in your news, every every news source is driving some sort of automotive news article on a daily basis. And it typically has to do with EVs. So that's what that's what consumers are getting in their regular drip feeds. Which means your our teams, whether it be industry partners, or dealers should be competent enough to have the discussions around around what's happening in real time. Because customers are looking for that answer. They're looking for the answers to the questions. Actually, this is this is interesting. We had a conversation with with someone maybe it was Brian paths, just saying like customers would come into dealerships mainly for so long, just to figure out that the option packages on a car, right, right. That's, that's a basic thing that they need support with when when purchasing a new car because the information is hard to it's hard to figure out that's hard to get make make sense of. So think about like the way that people are being inundated with news on the blockchain, right web three Metaverse and the variants of information that they're trying to like, download, and then offload into decision making. Like we should be a resource as an industry to make sure that there's a connection point to purchasing.

Paul Daly  12:36

Yeah, I think that that's advice that goes across all all points of conversation, but paying attention to the popular conversation, these articles that we're talking about. Like there are 1000s, and probably millions of people seeing on a regular basis. So whether it's true or not, whether it's the most relevant thing or not guess what it gets planted in their psyche, and it's in there. Maybe they don't bring it up, but it's in there. So look, that's one of the reasons we do the show, it's one of the reasons we do email, right is to get the conversation thread going throughout the dealership, not just the GMs office or the sales manager's office. But if you're a salesperson, if you're a BDC. Rep, if you're a service advisor, if you're a technician, these are the things that are in your consumers head. So even just having your mind around it be able to say, oh, yeah, I saw that article, I heard a story about that. And and here's some things that really lead me to question that right and guide them through the conversation. Or at least let them know that there's some like form thought behind it, it's going to just help you connect, like just just think of a a sales perspective. Right? If you can empathize with the customer, you're automatically in a better position to guide them to the solution, they start to trust you a beanie. So

Kyle Mountsier  13:44

So here's the thing, not everybody can communicate that across the dealership. So if you're listening to this, if you're paying attention to the newsletter, please share it like that. It's it's a carrot. Like we literally someone said this to me yesterday, they said, and it was on pitch tank, and they said, after pitch, like they just said, I appreciate the way in which you are just willing to give back to all of the participants on pitch tank. And I just, we are so dedicated, Paul and I to this desire to see the automotive industry be like brought together educated from every single person. And it is that desire that drives us to give these takeaways to give these actionable insights every day. And so we're just imploring you, like bring more people to the table, bring them to the table, you know, apps, whether it be our table or someone else's like find the right eat around

Paul Daly  14:40

the bigger table, right, the bigger table of conversation and since you're here and you're listening and you're reading Thank you very much. We've been using this metaphor a lot lately. It just kind of came out during one of the meetings we've been having. And it's basically this. We've been rubbing sticks together for a really long time. Like literally it's been a long much longer than The last few months, and we've been making a lot of smoke. But we believe that the people in this community and we're starting to see nuances of it with the asotu con coming up in the growing audience. Like we're like you're about to see some fire. You're about to see some fire. So, all right, last story today before we leave you and get rolling through the city of Philadelphia, Brad Pitt is to star in a Formula One movie on Apple, Apple purchased these rights and they're making a star about Formula One driver. Basically, reading from the front office sports article, the 58 year old Pitt will play an f1 driver who comes out of retirement to race alongside a rookie driver and other top drivers in the sport. It's the comeback story, right? Like old dog was like, let me get back in there because I got to teach the young dogs I love that

Kyle Mountsier  15:44

so interesting to me, because just four and five years ago, this was a NASCAR movie, right? Yes, our a brand build. The power of Netflix has an apple going let me drop some serious dime on Brad Pitt and none other than an f1 movie. That's the power of brand ladies and gentlemen.

Paul Daly  16:05

Yeah, and Brad Pitt like look, you're gonna watch a Brad Pitt movie. He's gonna watch it right. That's apple. You're gonna watch it? If you remember. Some power

Kyle Mountsier  16:13

movie associated with really fast cars there. Yeah.

Paul Daly  16:17

The best f1 I don't know. It was the f1 the scene in Iron Man two. When the guy came out with the whips and cut his car in half. Do you remember that? Oh, man, I wish we had a cute car. I

Kyle Mountsier  16:29

don't think Cindy I want to be an IndyCar. We're gonna

Paul Daly  16:33

we're gonna find the answer to this because everybody really wants to listen. Remember, Brad Pitt won Best Actor. He was a nominee and for Best Actor for his role as Billy Beane in the movie about the Oakland A's right and he did great. It was called Moneyball and he's a great so he's kind of got like a great a great feel for that the sports like the tension and like, we'll just see it's been a while since I've seen Brad Pitt in a good movie.

Kyle Mountsier  16:55

It was Ironman two, I look at Isaac coming in.

Paul Daly  17:00

Was Ironman Brad Pitt wasn't in that, but Ironman two, and it was f1. So I don't know we'll have to get that for you. But for today, like we said, go out there and share this content with somebody else. When you learn something about Evie, share with someone else. Get your dealership together so they can talk and so they can in the end, do one thing. serve other people