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It's noon here in Ventner City, New Jersey
and in New York City, New York.
This is Car Edge Live for Thursday, September 4th
with your host, me, Ray, in Ventner City.
And well, Zach, that travel in CEO in New York.
How are you today, handsome?
I'm doing pretty good, Pops.
How are you doing this one?
Hopefully you can hear me A-OK.
Let me know.
In the chat, Dad, very grateful to be-
I would hear her tell the room, but where the hell are you?
I don't know where I am, man, if I'm being honest.
So we're just going with it.
Hopefully the Wi-Fi's OK.
Fingers are crossed.
We're doing our best today, folks.
We are certainly doing our best.
Today's show brought to you by caredge.com
by a car without the headache.
Check it out back at caredge.com.
Pops, the big story I wanted to talk about this morning
is a continuation of something we talked about
a little bit yesterday, which would
be that we are seeing these EV automakers starting
to cut back on their production.
I'll start here.
General Motors to temporarily cut production
of two Cadillac EVs in Tennessee.
I've also heard, I've got to find it here, Pops,
the Chevy Bolt also seeing production cutbacks there
as well.
And then obviously, yeah.
And yet Chevrolet or General Motors
sold more EVs in a month than they ever had last month.
So there are certain segments of EV land
that are doing really well.
And our suspicion is that will end in about 26 days.
Yeah, you can see right here, DadGM,
to cut EV production amid expiring federal tax credits,
plan to scale back production of the Chevy Bolt,
the Cadillac EVs as well, which we've seen.
And then obviously, we talked about it yesterday,
GMC, electric vehicle as well.
So let's talk about this because there was also
the Polestar story yesterday, the new billion dollar
write down over at Polestar that they are taking a loss for
because they're no longer going to bring to market.
There, Polestar 3, electric SUV.
So let's talk about this, Dad.
America refuses electric vehicles.
The automakers are starting to panic.
Obviously, some month of September,
we think EV sales are going to be through the roof.
Yeah, what happens after that,
that there's starting to be a lot of concern?
I'd say concern is an understatement.
Pessimism is running rampant within the dealership network,
both for new and independent dealers.
There is a real fear that after having invested
millions of dollars into setting up EV networks
within these various dealerships to attract the EV buyers
that that's all going to wash away in a heartbeat.
There hasn't been this type of pessimism towards EVs
probably since, I don't know, Tesla first came out.
It is remarkable how dealers went
from having a positive expectation
as to what EV sales would be in the United States in 2021
to it is now a very negative pessimistic view
of where we're headed going into the fourth quarter of this year
after the federal tax credits expire.
To your point, Dad, here's the headline in automotive news.
Auto dealers reveal record level of gloom
about Q4 EV markets, Cox poll.
Finds, and if I scroll down here, Dad,
we can see it right here.
Dealers have grown more pessimistic
about electric vehicles.
Cox Automotive's dealer sentiment index surveyed,
asked 477 franchised and 414 independent dealership professionals,
quote, what do you expect the EV market in your area
to look like three months from now?
Index results greater than a 50
indicate respondents viewing conditions
as positive or improving, a score of 50 is neutral
and scores below 50 indicate conditions
are negative or weakening.
Cox began asking this question
in the second quarter of 2021.
Look at that line, Dad.
We're at 33 and 28 respectively
as the score down significantly
from where we were just a few years ago.
I mean, the pessimism to your point is palpable.
Oh, it's, listen, a lot of these dealer groups,
especially Ford dealers,
when Ford announced their big EV initiative
and in order to be able to sell the EVs
that Ford was going to build,
you needed to invest anywhere from $700,000 to $1.2 million
in EV infrastructure at your dealership
to have things available for your EV customers.
You could either go with the lower tier
and be guaranteed 25 new EVs to sell a year
or you could go with the higher tier at the 1.2 million
and receive all the EVs you could ever want.
So we went from that to where Ford then said,
how the hell would that program?
Any dealer that wants EVs can have them.
And now the dealers are saying,
hell, not only won't we want them come October 1st,
we don't think the American public
is going to be willing to buy them come October 1st
without all of the incentives.
Now, the one thing that stands opposite of all that
would appear to be Tesla.
Their sales are, they're off to some degree.
They're not having the same zest that they had in the past
but they are still far outselling
every other EV manufacturer, especially in this country.
So will that continue for Tesla?
Will the bloom come off the bud
starting in October even for Tesla?
That's something that I think everybody's waiting to see.
And I know there will be comments that will say,
but there was a time when Tesla's were selling really well
and they didn't qualify for the federal tax credits anyway
because they had exceeded their maximum sales levels.
So I don't know, I think it's a wait and see approach.
If I were the manufacturers,
I think I'd be doing what they're doing now,
which is cutting back on EVs
because you have to believe without that 7,500 bucks
that demand is going to crater to some degree.
That's what Cox Automotive thinks,
quote, October could be rough for EVs,
Cox Economist says that's the headline
of the subheading in the article on automotive news.
I'll just read briefly here, quote,
there has to be a hangover effect, Jonathan Smoke said,
but it's possibly year-end EV offers.
It's possible year-end EV offers could keep the slump
from ruining the entire quarter.
He said, I'm definitely in the camp
that if you have a longer time horizon,
this isn't going to be much of a speed bump for EVs.
He said, citing areas of the country
with EVs in operation due for replacement
state incentives for EVs also could expand.
He said, but I don't feel good about October
is what Jonathan Smoke said.
I think he's on to something there, Bob.
Yeah, listen, there's going to be so much
pull-ahead purchases and leases for EVs into September
that there just should be like,
people are just barely waking up for like a long sleep
and they're not ready to go out and buy an EV in October.
And the other thing that he said in there
maybe to some degree,
states will pick up the slack
as far as types of incentives are concerned.
I don't know, I have to believe right now
and I'm not an economist.
Hell, I'm not even a college, I'm a college dropout.
Okay, I'm a college dropout
and damn proud of it, ladies and gentlemen.
But I have to believe that states
are running into economic issues
that they had not anticipated.
There have been so many federal cutbacks in programs
that whatever money states could have found
that could have gone to EV incentives,
I think those funds will have to go elsewhere
in order to keep other things alive
and moving the way the public has grown accustomed to it.
So I don't really...
You don't see states stepping up to fill a certified...
They have the funds to do it.
I mean, you know, legitimately, at some point
you have to look around and you go,
where the hell's the money coming from?
Funds and also interest,
like what's the incentive at the state level to do that?
I don't think it's really there.
Dad, let's switch gears,
let's talk a little bit about the month
that has come and gone
because it does tie in to what we're seeing on EVs.
As you mentioned in a moment ago,
General Motors posted the best performance
they've ever had from an EV perspective.
And if I come over here to automotive news,
one of the key takeaways from Ford's monthly reporting
is that they also saw a tremendous boost
in their Mach-E deliveries.
We're also gonna talk about Toyota and Lexus here as well.
They continue to shine.
But dad, you can see here,
forecasters say that we saw an increase in August
because we were helped with Labor Day deals
and a surge in electric vehicle demand.
I think what's fascinating here
is really what we're seeing with the Mustang Mach-E.
So Ford saw their trucks and crossover sales
improved by 6.2% led by the Bronco Expedition Explorer
and F-Series sales actually declined 3.4%.
But then look at Mustang Mach-E deliveries
up 35% year over year for that month.
So we're seeing the pull ahead in the data here.
This is, I believe in my heart of hearts
that this is going to be one of the most unusual years
in retail automotive.
And what I mean by that is because of all the tariff talk,
we had huge pull ahead in sales
in the first quarter of this year
and into the second quarter
where people were trying to get ahead of price increases
that could come to fruition because of the tariffs.
So there was a tremendous increase in sales volumes
in April and May and June.
And then we anticipated that there would be
somewhat of a slowdown.
And there has been a little bit of a slowdown
but now because the EV tax credits
are going to go away the end of September
that there has been this push in August
and we'll see it for this month
of a pull ahead for EV buyers,
people that might have been in the market
in October, November, December
were suddenly finding themselves in the market
in August and September
in order to take advantage of that federal tax credit.
So there are so many factors
that have increased the amount of sales that we've seen
and move them to different times within the year
that I wonder what 2026 is gonna look like
if we don't have these pushes and polls
on people's behavior when it comes to tariffs,
tax incentives or whatever else.
I just think, I think 2025 is going to be
an anomaly and one of the most unusual years
we've ever seen in the industry.
Definitely puts into perspective for those of you
that are thinking about or shopping for a vehicle,
you've gotta stay on top of what's going on in the news
because it can totally change
when you're gonna get a better deal or a worse deal.
If you are not informed right now
and you're going into the market
to lease a new electric vehicle in October,
$7,500 bucks is a lot of money.
Doesn't matter who you are, $7,500 a lot, a lot,
a lot of money and to your point that earlier this year
there were also the tariffs last year and in prior years
there's been huge seasonality in the used car market
as a result of the chip shortage.
So I'm with you but then I wouldn't be surprised
that you and I've been doing this for five,
almost six years now.
There'll be something in 2026,
some sort of black swan event
that changes everything in the car market again.
And you know what?
Even if it doesn't happen
I'm sure we'll come up with something
to speak it into existence.
Now one manufacturer that is doing well
amidst everything that's going on, dad, would be Toyota.
Look at this, dad.
Toyota sales were up 13.6% year over year,
12.4% for Lexus and 13.8% for Toyota.
So the brand overall 13.6%.
Let's talk about this.
Is that for August?
Yeah, year over year for the month of August.
Wow.
So let's talk about this for a second, dad.
Toyota is killing it.
Like just continues to kill it.
I mean, even look at this Subaru
had another down month.
Subaru didn't used to have down months year over year.
Mazda down month, Hyundai Kia up,
as you can see here as well, almost 11%.
But Toyota selling the most cars, growing the fastest.
And obviously the dealers have the most pricing power.
So it's so interesting month in and month out
to just see Toyota continue to crush it.
And they're actually to our point about America
refused as electric vehicles.
I'm not mistaken, they're the automaker
that leaned in the least when it comes to EVs.
They were, they leaned in the most
when it came to hybrid technology.
And it really made that the forefront of what it is
that they thought the future held.
When they first came out with the Prius
and they've been able to maximize that technology
and put it into more and more of their vehicles
and use it as that bridge to eventually
perhaps get to full electric battery electric vehicles.
You know, it is
Toyota, nobody has figured out how to do it better
than Toyota when it comes to
having created a reputation for itself
which has been taking hits recently
as far as reliability and the quality of their vehicles.
But nobody has done a better job
of navigating that, navigating production
so that there is just enough production
to barely cover the demand
and to do it in such a way
that there's never more than a 30 to 40 day
supply of vehicles at their dealership facilities.
So they have found the secret sauce that,
well, Nissan would certainly like to have
and others to where they have basically put
monetary printing presses
in every Toyota franchise dealership.
Okay, those dealers are making money hand over fist
because there's barely enough cars,
there's more than enough customers,
the demand to outstrips the supply,
the dealers are less aggressive than they've ever been.
It is remarkable what they have been able to accomplish
than others have not.
And, you know, are they smarter than everybody else?
Apparently, at least marketing-wise, they must be.
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Daddy, do you want to hear something pretty cool?
In the past week, our AI negotiator has gotten 216 new Toyota
Altador quotes, okay?
From the first pencil to the last pencil,
what do you think the average savings is
that the AI has been able to negotiate on new Toyotas?
Six hundred and fifty dollars.
Two hundred and twenty dollars, okay?
I'm going to share this on the screen.
Two hundred and twenty dollars.
Now I'm going to do the same thing for Ford, Dad.
Ford.
AI negotiator reaching out to Ford dealers.
What do you think the average savings is
from the first OTD to the last OTD for Ford?
Three thousand dollars.
I wish it was three thousand dollars, man.
A thousand dollars, nine hundred and eighty seven dollars.
It's over three times that.
Almost four times.
Almost four times what you get at Toyotas.
So think about that for a second here to your point.
You know, we're getting structured,
organized data on this now.
And it's like just the Toyota dealers have so much pricing power.
And again, I do think it goes back to,
they did not go all in on EVs.
And I saw Justin put it in the chat here as well.
Right now they actually have a five days supply
of that BZ4X in the markets.
They're even the one EV that they do have.
You know, they've done a great job managing supply there.
And then of course you look at the year over year sales numbers.
They have the most vehicles sold and they're going the fastest.
That's a hell of a one to punch.
It is.
It just it just proves that nobody does better.
Nobody has figured out how to do it better.
And, you know, there was a time when
the monetary printing presses were at the BMW dealerships
because BMW dealers were making money hand over fist.
But today it really is at Toyota dealerships.
I mean, if the average additional discount
that the AI agents can get is a little over 200 bucks
from start to finish, where it's almost a thousand dollars
at Ford, I mean, that just gives you some idea
as to how non aggressive
the Toyota dealer has to be with the first offer
and and how the fact that there isn't
even greater than a thousand dollars difference
between the first and last at Ford is because Ford dealers
feel as if they have to be more aggressive
with their first offer than other brands would be.
Yeah, it's absolutely absolutely mind boggling.
Now let's come here to the chat.
We've had a thoughtful contribution come through from Andrew.
Thank you, Andrew. Thank you, Andrew.
I think certain areas will be affected more than others.
Like here in bigger cities in California, charging stations are common,
but thinking of areas where stations are less common.
So this is back to Americans refusing electric vehicles.
I think Andrew's spot on.
We've like tons of research that talked about range anxiety.
Can I actually charge somewhere?
Heck, man, I had the Mazda CX-90P have for a week.
I couldn't charge it a single time.
They delivered it to me with no charging for the for the EV component.
I tried to charge it in one place, but it wouldn't work.
It's tricky.
Well, and and EV sales, whether
my my supposition is that the new car franchise dealers
that that were at like thirty three percent being pessimistic.
Well, they were in places other than California.
OK, there are certain pockets of this country
where EVs have sold and probably will continue to sell well
because of the infrastructure, not only because of the federal tax
credit incentives, but state incentives.
I believe Oregon has some pretty hefty state incentives.
I believe Washington State, Colorado, have some hefty incentives.
I'm pretty sure California must.
So it is it is.
There are certain states where you're always going to sell
a higher percentage of EVs than other states, just because in some states,
people are more willing to look at and adopt new technologies
as opposed to some other states where they're less likely
to be open to something like that.
Yeah, I forget if we mentioned this the other day,
but Volkswagen is also doing pullback on their EV production as well.
So it's state specific, it's automaker specific,
but the general trend here is there's a slowdown coming to that part of the market.
And again, makes the folks over at Toyota look like total geniuses right now.
Dad, let's come here from Boricua.
Thank you for this.
Hi, always nice to see you guys.
I'm having a hard time getting a good lease on a Honda ProLog in Connecticut.
Help. By the way, I love your dad talks to you.
It's so cool. Great dad.
Great. He is a great dad.
This is a friendly reminder to everyone that tunes into these shows
and everyone in the car edge community.
We offer all sorts of car buying services back on our website, caredge.com.
20% off car edge insights, which can help you get that lease deal
or our car buying, which are also car leasing services.
They're 20% off for a few more days here to take advantage of that.
We also do have the AI which can reach out to dealerships on your behalf too.
You can access that from the car edge car search as well.
So I would just say we've got tools, we've got services.
We're here to help and look at this, Dad.
We've got this from Labrador country.
Hello, Rain, Zach.
I bought the insights as well as the negotiator for the month.
I have to say, well done to you guys and your whole team
for putting this together.
The AI got one dealer down $9,000 and it kept asking for more.
My wife and I decided on a different vehicle,
but that was amazing to read the back and forth between the dealer and the AI.
It's pretty magical, man.
When it works, it really works.
And then you take over and you transact.
It's a pretty cool experience.
Well, here's the thing with the AI, at least at this point.
It doesn't suffer from emotions.
OK, there there's no fear in asking for more
because it doesn't know any better.
Oh, no, it's one job is to operate on your behalf to get you the best deal.
It's pretty cool.
Yeah, so so there's like no built in bias or fear of missing out.
They're just going to keep asking.
It's it's just going to keep asking until it realizes it's asked
as many times as it can and the dealer can no longer afford to give up anymore.
So it's pretty remarkable because it takes all of the emotion out of it.
Every one of us as human beings, when we're purchasing something,
when we're spending money, there's emotions attached to it.
And and so when you're going back and forth with a dealer,
trying to get an out the door price, you know, at a certain point
when the dealer says, oh, really, there's no more to give.
And the next email I get will be somebody that wants to buy it.
You know, suddenly that triggers the emotion of the fear of missing out
on on what the dealer has suggested is a great deal.
Well, the agent doesn't suffer from any of that.
OK, it doesn't know from that.
It just knows that I think I can get more and it's going to keep asking.
And so that is one of the most wonderful aspects of the AI agent.
It just it doesn't get it doesn't allow emotions to interfere
with what it's trying to do.
I bet you, you know, there are probably some of the emails
that go back and forth.
Somebody in a dealership is probably doing its best to take shots
at the AI agent, thinking it's going to insult it.
And the AI agent just really doesn't give a damn.
I think you're on to something, Bob.
I think you really are.
Hey, one more note when it comes to our E.V.
headliner for today, dad, VinFast, did you see this?
Their quarterly loss widens amid heavy spending on ambitious growth strategy.
Did you get a chance to pick at this?
Well, so I did not because to me, like, their their ambitious
growth strategy might be going from one dealership to two.
OK, it is it.
I don't I don't believe there's any other E.V.
manufacturer out there that is as much of an afterthought
as VinFast is at this particular moment in time.
The only other brand that I can think of
that would be an afterthought like that was Fisker.
You know, I mean, because VinFast has been threatening
to sell EVs or lease EVs or do whatever the hell they wanted to do
with EVs in this country for the longest period of time.
They were going to sell direct.
They were going to create a dealer network.
They were they were not.
They were they it's like nobody knows anything about VinFast.
VinFast doesn't know anything about VinFast.
It is it is the most nondescript, unheard of E.V.
manufacturer trying their best to sell two or three visa months
to this country. I'm sorry.
Was that the and that's in my opinion, ladies and gentlemen.
Thank you, Bob.
Excuse me, the EV automaker or whoever they are reported
a net loss of eight hundred and twelve million dollars for the quarter.
Fifteen percent more than the previous quarter.
They did deliver, dad, thirty five thousand eight hundred and thirty seven
vehicles in the quarter, which is that worldwide.
Yeah, yeah, yeah. That is that in this country.
No, but that I mean, like, you know, five five hundred and thirty seven
might have been in this country.
They they're losing. What's that?
Let's run rate that eight hundred million times four three point two
billion dollars a year.
And they're right up there with Lucid. Yeah.
Yeah, I know a guy that if you pay him enough,
he can show you how to lose even more.
Mr. Rawlinson, I'm sure would make himself available
because Vin Fast is supposed to be a very, very, very wealthy company.
You know, and and let's face it, who does it when when you think E.V.
OK, who doesn't say to themselves, I'm going to Vietnam for that?
I mean, really, who who has not said that that Vietnam
is the E.V. cutting technology capital of the world?
OK, nobody, in my opinion, nobody ever jumps to that conclusion.
It was like when the Ugo came out,
where people supposed to suddenly think that, oh, yeah, well,
if I want to get really great up to date automotive technology,
I'm going to Yugoslavia, that wasn't the case.
And it's not the case with Vin Fast.
I mean, God bless them.
I'm glad they have as much money as they have.
And sometimes it's really impressive how much money
companies are willing to lose in order to make themselves
seem bigger and better than they really are, in my opinion.
Keep the lawyers off my back.
You're crushing it today, pops.
You've got from Charles.
Can we move on from talking about E.V.s?
I know it's news, but it's the same news.
Hey, today shows what it's about tomorrow.
Obviously, we'll be back with something different.
Appreciate you tuning in, though, Charles.
And from Labrador saying, I had to stop because they asked
for another thousand dollars off and a few months of oil change
is another maintenance.
Who knows if it would have gotten it or not?
Again, so fun, what we've been able to build
and how it's helping people back at CarEdge.com.
Again, from the reminder, if we can help you in any way,
check it out back on the website, CarEdge.com.
And remember, if you're not in the market to buy a car,
but you're just like hanging out with us,
you can track your vehicle value.
Just click on what's my car worth.
And you can see a projected future value,
as well as when to potentially sell your vehicle
back on CarEdge.com.
Click on what's my car worth.
We can help you save money with insurance,
warranty all that fun stuff as well.
Pops, let's call it a show.
Okay.
I'll be back in Washington, D.C. tomorrow.
My normal studio, not sitting here
wherever the heck I am.
So looking forward to doing that
in our normal environments.
Oh my goodness, are you training back today
or tomorrow morning?
6.30 a.m. train tomorrow.
What times that gets you into D.C. around 9.30?
9.30.
Yeah.
Well, that gives you plenty of time to get home,
get changed, get showered, get,
well, you don't really shave,
get showered, get shaved.
Yeah, and make your way to the studio.
Oh, I am so looking forward to it.
Oh, and for everybody out there
that happens to be an NFL football fan,
the season kicks off tonight, ladies and gentlemen,
not too far from where I am,
about 60 miles from where I am
at the link in Philadelphia.
It's going to be crazy.
Fly Eagles fly.
There you have it.
Happy NFL season, folks.
All right, Pops, I love you, enjoy the day
and I'm sure I'll talk to you later on.
But if not, I'll catch you tomorrow.
Absolutely, love you too
and see everybody back here tomorrow
at noon Eastern in Ventura City, New Jersey
at Washington D.C.
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About this episode
Concerns about the future of electric vehicles (EVs) dominate the discussion as automakers like General Motors and Polestar announce production cuts. The episode highlights a growing pessimism among dealers regarding EV sales, particularly as federal tax credits expire. Despite a surge in sales in August, experts predict a significant slowdown in October. Toyota's success is contrasted with the struggles of other manufacturers, emphasizing their strategic focus on hybrids over full EVs. The episode also touches on the challenges faced by newer EV companies like VinFast.
Today on CarEdge Live, Ray and Zach discuss the latest news on EVs. Tune in to learn more! Hosted by Simplecast, an AdsWizz company. See https://pcm.adswizz.com
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