Aug. 19, 2025 | NADA’s Paul Metrey interview; new study finds dealers losing confidence in industry future
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Welcome to Daily Drive for Tuesday, August 19th, 2025. I'm Kellan Walker in Las Vegas.
Today on the show, dealers are losing confidence in the future of the auto industry.
China's EV industry invests more abroad than at home for the first time.
And teamsters pick it in three states over non-union car carriers.
Plus, NADA's Executive Vice President of Public Policy, Paul Mitri, joins the show to talk about
issues affecting dealers, from artificial intelligence to environmental regulations.
We are pleased that efforts are being made to try to remove those unworkable standards,
hopefully get us to a level that the market can absorb.
Let's run through all the news you need to know to keep up in the auto industry.
Franchise dealership executives have gloomier expectations for the broader automotive industry.
That's according to the inaugural Automotive News Auto Industry Confidence Index.
56% of franchise dealership respondents said they're either somewhat or very pessimistic
about the industry's overall health in the next six months.
Dealership executives said they worry about tariff uncertainty, rising car prices,
and higher interest rates that could turn away customers otherwise interested in buying.
Last year, Chinese companies that have some stake in electric vehicles invested more overseas
than in China for the first time. That's even though foreign projects faced higher cost,
delays, and risks. According to a new report from research company,
Rodeum Group, companies in the supply chain invested around $16 billion overseas last year,
mostly in battery production. That's compared to $15 billion spent at home.
And teamsters from three union locals have launched pickets outside of three General
Motors plants. The pickets are targeting non-union car carriers at the plants,
which the union says are bringing down wage and benefit standards for unionized workers.
The GM plants are in Michigan, Kentucky, and Missouri. The teamsters said the
non-union operators aren't sticking to the wages and benefits agreed to by the union.
A union statement did not identify the non-union carriers.
In a statement, GM said, quote, while we respect the right to peaceful demonstration,
our top priority remains the safety and well-being of our employees.
We are actively monitoring the situation. And those are today's headlines.
You can find more details on all those stories at AutoNews.com. Joining me now to talk more
about our Auto Industry Confidence Index results for franchise dealership executives
is Mark Homer, who covers retail technology for us at Automotive News.
Mark, welcome back to Daily Drive. Thank you. It's great to be here.
So Mark, what are dealers saying is bothering them?
There are uncertainty. If you're going to break it down to one word, it's uncertainty.
They're uncertain about tariffs. They're uncertain about the effects of tariffs
six months from now. They're uncertain about high interest rates. They're uncertain about
what the future will be until these things are more defined for their business plans.
So what are the implications of dealer confidence going down?
The implications kind of head into multiple directions. So if you're a businessman or woman
and you are uncertain about the future, you may cut back your spending on new software.
You may cut back your spending on inventory because you're going to want to save your
money for the future just in case because there are headwinds that you don't really
know what's going to happen. And then customers in turn have some of the same issues not knowing
what the tariffs are going to bring. They're not always going to spend on new vehicles because
interest rates right now are still quite high. So then that leaves fewer purchases.
Well, there's a discrepancy between how retailers feel about their own businesses
and the broader auto industry. What's going on there?
That's an interesting result because while dealerships are uncertain and anxious
and showing lower confidence about the future of the broader industry overall,
they're very resilient in their own operations. They know how to keep things going through good
times and bad. So that is an encouraging thing, I think, because they see all of these things
ahead not knowing what the future is going to bring and they're all about thinking they'll be fine.
They'll make do. They'll figure out how to make decisions even though everything else around them
is uncertain. They know how to keep their businesses running.
Perfect. Mark, thank you so much for joining me.
My pleasure.
You can find all of our coverage of the Auto Industry Confidence Index at autonews.com.
Coming up, we'll hear about policy goals that might help dealers feel more confident
in the future. NADA Executive Vice President of Public Policy, Paul Mitre, joins the show next on
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There's been a flurry of activity from the Trump administration this year when it comes to
policies affecting the auto industry. Paul Mitre is NADA's executive vice president
of public policy. He recently spoke with our own Amari Gardner about the moves and what
dealers want to see from Washington going forward. Paul, welcome to daily drive. Thank
you. Pleasure to be with you. It's been an incredibly busy year for the auto industry
and for NADA and with the new administration in place in the White House. I want you to
tell us a little bit about what's going on this year. Certainly. Well, it's been super active
and really a lot of public policy accomplishments have been present in the first half of the year
that we really think will benefit franchise dealers and certainly their customers.
We saw it initially with the fifth circuit which overturned the FTC's vehicle shopping
rule, which we had all kinds of concerns with. We've seen it on the tax front more
recently with the reconciliation bill. Several elements of the Big Beautiful Bill Act actually
contain provisions to help small businesses, and it's something that in many cases have been
made permanent. 100% bonus depreciation, the pass through deduction at 20%, and federal
stating gift tax relief and many other areas. So we're super excited about that. Also,
there were three congressional review act resolutions passed by Congress and signed
by the president that vacated the California heightened greenhouse gas standards that certainly
we're going to create quite a bit of havoc in the industry. So certainly a lot. That's a lot
that's happened in just a very few months. Well, I just wanted to start with from a regulatory
public affairs standpoint, what's at the top of dealers minds right now? What are their
concerns? A lot of them have been addressed through the actions that have taken place
so far, but on the state and federal level, but what are some lingering things that they're
discussing? What are they telling you? Well, there are really a array of issues, a lot going on,
as you pointed out. Certainly with direct sales, there's a lot of concerns about scout
afila. That's something that we think is unfounded and we think is not a prudent
decision. We certainly hope those OEMs are going to reconsider those decisions.
On the EV front, we talked about what happened with the California heightened standards. It's
also being followed by 11 other states. Those have been vacated. We're in the process of helping
the government defend those standards, but there's also the federal greenhouse gas standards.
Those came to us in March of 2024. They also set unrealistically high standards that cannot
be met. OEMs cannot get there. It's something that can create havoc in the marketplace.
It's something, certainly, we're going to work to try to get eliminated as well.
And that affects vehicle mix and dealership lots?
Absolutely. It certainly does. It's the type of thing where in order to meet the standards,
and these are standards that would affect model year 2027 through model year 2032,
OEMs have to have an increasing percentage of battery electric vehicles that are above
what the market can absorb right now, what the customers are expressing a preference for
and what they can afford and actually what they can manage based on lack of charging infrastructure.
So we do feel it's very important to try to get that at a level that reflects market realities.
That's been reported. California is roughly 20 percent market, but states like New York,
only 10 percent, even less regulations in the market don't seem to be quite in sync at least
at this moment in time. Absolutely. In fact, none of the 12 states that are identified as
carb states were capable of meeting the heightened carb standards, but even the federal EPA standards,
we don't believe any of the states to include California can get there. Each OEM would have
to have a very high percentage that certainly exceeds what's capable at the moment.
So on the topic of EVs, right now we're in a phase up period for the federal EV tax credits.
From NADA's perspective, from the dealer's perspective, how is that impacting dealers?
What are their, what is their feeling on the the eventual demise of those credits?
Well, as a preliminary matter should be pointed out, one of the things we pushed for and we were
pleased was included in the reconciliation bill was a phase out period for EVs.
Dealers have billions of dollars of inventory on their lot from EVs and the ability to manage
that inventory, particularly with affordability challenges is key. And you need some time to
be able to utilize the credits, whether it's in a leasing context or sales contracts,
to try to manage that inventory. So we're very pleased that a phase out period was provided.
It goes through September 30th. Right now is a golden opportunity for dealers to try to
use this timeframe where these credits are available to try to go ahead and move those
vehicles off their lots into the hands of consumers. After September 30th, I think we
could expect to see a drop off. However, it's unclear right now to what extent OEMs are going to try to
step in where the federal government has pulled out on the EV tax credits and provide
incentive money for that. We'll see how that plays out. Even though there's likely to be
some type of dip, we do think that in time EVs will pick back up in terms of market share,
but it nowhere near the pace that was contemplated by the government either in California or the
federal government when these standards were created. Yeah, it certainly will be
incumbent on the manufacturers themselves to release more affordable models. I know for recently,
this week has launched a plan to put a $30,000 electric pickup on the market and other OEMs
are also working on making affordable models profitably. I'm sure they hope that those on vehicles
will sell for profits for themselves. Certainly. Of course, it's worth remembering dealers have
really put a lot of time and effort and money into trying to further the sale of EVs. They
have purchased this inventory. They have purchased charging stations. They've engaged in training.
This year, franchise dealers, their share of the market will actually exceed direct sellers
in terms of the sale of EVs, the delivery of EVs. They're doing what they can to get there,
and anything that facilitates their ability to do that certainly is going to be beneficial.
Yeah. Let's talk briefly about something else that's not as immediate as the tax credits,
but still something that has bound the affecting industry at some point is the new tariffs
that have been imposed by the administration. There was a belief by some that they would just
be temporary, but now that they've been in place for a few months, it's going to,
it looks like they're going to be around for at least the longer term.
At a time where affordability is a concern to dealers and customers,
how are dealers responding to the potential of price pressures? We had some prices rise,
not the levels predicted necessarily, and it was early going, but in the long term,
they might go up. It just remains to be seen, but how are dealers dealing with that in the meantime?
I think you laid out the two ends of this very well. At the moment, there's not been a dramatic
impact that we have seen in terms of pricing. Of course, there was a pre-buy. Many consumers
concerned about the effect of tariffs coming in to purchase or lease vehicles. Certainly,
that has been present, and OEMs have also been absorbing increased tariff prices. Now,
the question is how sustainable is that and what's going to happen down the road?
Certainly, our economists thinks that the second half is going to be rougher than the
first half in that regard. We can expect to see price increases that, of course,
can affect the SAR, that also can ultimately affect dealer employment, and 2026 probably
promises to be more of a challenge than 2025. Up to this point, it's not been a huge factor.
However, going forward, we have more concerns. Now, what we have been doing is to make sure the
administration is educated about the likely impacted tariffs going forward. As it makes
decisions and it negotiates these agreements with different countries and different aspects of
the market, it is focused on the fact that there is going to be an effect on the ability
to sell what are already vehicles at a price range that for many consumers are too high,
or certainly present affordability challenges. We want to make sure that that marker is present,
and we've met with the White House, we've met with many agencies to make sure that
as these decisions are made, they're fully informed. Recently, the budget bill passed
recently, and it's eliminated the fuel economy penalties for three years, which theoretically,
I imagine would make it easier to have a different mix of or a better mix of cars,
one that's more market aligned on put down dealers lots. But how does that translate in the dealer
world? Well, I think the real focus that dealers and really the entire industry has at the moment
has to do with the federal EPA greenhouse gas standards that we were talking about a moment
ago. Just to give an order of magnitude here, it's a little different on the federal side
in terms of how they're regulated. Those 12 carb states, you had to hit a certain percentage
of battery electric vehicles every year, starting with 35% in 2026, it climbed by about 8% per year,
up to 100% by 2035. This is not the same scheme. This is not that dramatic, but it's still
as unreachable, which is a problem. One example, the first year this takes effect is
model year 27. Of course, we will see those vehicles fairly soon. We're probably about a year
out. When you consider the challenges that OEMs and dealers will have, regardless of how
they get there, and there's different models, the way the federal government regulates it is
you have to meet certain standards regarding CO2 grams per mile. It's not a certain percentage
of battery electric vehicles, but nevertheless, to get there, a certain percentage of your
fleet has to be battery electric vehicles. The way that this was modeled by EPA when
they finalized their role in 2024, they looked at different scenarios, but for the first year
of vehicles that are affected, model year 27, pretty much OEMs, regardless of what their
product mixes, has to be at about 25% battery electric vehicles. They're not going to get there.
If they're not there, again, it's going to create problems. You have issues of having
to purchase expensive credits to try to get there. You have a situation where you're
looking at potential fines. We talked about NHTSA. There's also EPA in the mix. Of course,
moving forward, you always run into the risk that you have to shrink your denominator of overall
vehicles to meet what the requirements are, because they do climb every year between 2027
and 2032. Yes, there is a big concern here with regard to what EPA is doing, and it's
something that we are pleased that efforts are being made to try to remove those unworkable
standards, hopefully get us to a level that the market can absorb.
Okay. All right. And then just lastly, just want to shift gears a little bit. We hear just
constantly about AI. It's everywhere, and AI is making its way into the automotive retail world.
It certainly can be used for increasing productivity, for increasing profitability,
but it also has the potential to be abused. Are you seeking any guidance from the government
on regulating AI? Are there other regulatory policy concerns surrounding AI?
It's certainly something we'll look at. At the moment, we are trying to get as smart as possible
on AI, understand what its potential is to benefit dealers, understand what some of the
vulnerabilities are, what areas might need to be regulated. Right now, we are trying to get
as smart as possible on the four corners of the AI world, and then look to what might be
necessary. So, I know we typically approach public policy issues that way. We want to understand
the marketplace, understand what the situation is, and then determine if governmental activity of
some sort is necessary. How is it best targeted to address the problem without having a lot of
corresponding consequences that would be problematic? Okay. Well, Paul Metri, really appreciate you
dropping by to our Detroit offices to chat a little for a little while, and thanks for joining
us. Thank you Amaris. It's been a pleasure. All right, thanks. That's Daily Drive for today.
I'm Kellan Walker. Thanks to Automotive News executive producer Jake Neer, as well as our own
Mark Homer and Mary Corey for their reporting for today's podcast. You can get the latest news on
public policy, dealer sentiments, and everything happening in the auto industry at AutoNews.com.
Come back tomorrow for a conversation with Maserati North America general manager,
Andrea Soriani. I think the name of the game now is to manage the uncertainty. Listen, if you
know what is happening, you can plan accordingly. With uncertainty, you need to be nimble and fast
to react to the changes, protecting the value of the brand and your consumers.
We'd love to hear from you. Let us know what you think of the show and the topics we
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