Energy storage system batteries are like big batteries that hold energy for later use. They can be used in electric cars and to store energy from sources like solar panels.
The Tesla Model X is a big electric car that can carry a lot of people and has cool doors that open upwards. It's important because it shows how electric cars can be both fun to drive and practical, but now Tesla is stopping its production to make room for new cars.
Electric vehicles, or EVs, are cars that run on electricity instead of gas. They are better for the environment and are becoming more common as technology improves.
The Tesla Model 3 is a less expensive electric car compared to the Model S and Model X. It's popular because it offers good performance and features at a lower price.
The Tesla Cybertruck is a new electric truck that looks very different from regular trucks, with a sharp, futuristic design. It's exciting because it shows that electric vehicles can also be tough and useful, and it's trying to change how people think about trucks.
The Santa Cruz is a small pickup truck made by Hyundai. It is designed to be useful like a truck but also comfortable like an SUV, making it a good option for people who want both features.
The Maverick is a small pickup truck made by Ford. It's designed to be affordable and fuel-efficient, making it a good choice for people who want a truck without spending too much money.
DIYers are people who like to do things themselves instead of paying someone else. In cars, this means they might want to customize or fix their vehicles on their own.
The Ford Ranger is a medium-sized truck that can be used for work or fun, like carrying stuff or going off-road. It's popular because it's strong and can handle different jobs, and people often compare its size to other trucks.
A midsize truck is a type of pickup truck that is not too big or too small, making it easier to drive and park while still being useful for carrying things.
The Toyota Tacoma is a popular medium-sized truck that many people love for its ability to go off-road and its long-lasting quality. It's a good choice for those who want a truck that can handle tough conditions and still be reliable over time.
LIVE
This podcast is brought to you by Reynolds and Reynolds, the industry leader in automotive
technology. Learn how Spark AI, Reynolds Unified AI data layer, can help you unlock your full
potential by visiting rayray.com slash spark dash AI. That's R-E-Y, R-E-Y dot com slash Spark dash AI.
Welcome to this Weekend Drive edition of Daily Drive for the final week of January,
2026. I'm Kallen Walker in Las Vegas. We're breaking down some of the biggest stories in
the auto industry for the past week and looking forward to what's in store in the days ahead.
Joining me today are Larry Velikwet, who covers Toyota, Mazda, and Subaru for us at Automotive
News. Larry Legend, always good to have you. Kallen, it's great to be here. I finally figured
out why you call me Larry Legend. It's because I'm a, I'm a crap talker, right? Just like Larry
Burn. Yes, you finally put it together. I finally figured it out. And Michael Martinez,
who covers Ford and the UAW for Automotive News. Mike, welcome back to Weekend Drive.
Thanks for having me. I just hope I never see Larry in those 1980s NBA shorts.
I don't know if them shorts are holding all that in. All right, before we get into this week's news,
Mike, is there anything from your beat that caught your attention this week?
Yeah, Kallen. The Ford beat, they announced this week that they're forming Ford Energy,
a new business unit, and that Lisa Drake, a longtime executive, is handling that. It's all
part of their pivot away from EV batteries to energy storage system batteries. They built a
bunch of battery plants and now the EV demand isn't there. So they're pivoting. We'll talk in a bit,
I think, about Tesla kind of pivoting its business. Sort of interesting here from Ford. We'll see
what happens as it evolves, but they certainly have an accomplished executive running it.
Nice. And Larry, same question for you. Anything worth highlighting before we jump in?
Only this Toyota finished its calendar year, not its fiscal year. Once again, the world's
largest automaker by a lot. Number two, Volkswagen, that Delta grew a little bit,
and then with Hyundai is number three, and they're just kicking it on all cylinders
globally. Just hard to knock unqualified global success.
Does a bubble like that ever pop? Yeah, certainly it does. But in order to pop,
you really have to trip first, right? You've got to do something wrong.
And so far, you know, there's an adage in this business, right? You will go broke
betting against Toyota. Well, yeah, yeah, I know, right. All right. Well, let's start with Tesla.
Elon Musk announced this week that Tesla is ending production of the Model S and Model X
next quarter to convert the Fremont factory space into an Optimus humanoid robot assembly line.
Mike, what's your reaction to this? Well, kind of have some competing
emotions here, or thoughts, I guess, maybe not emotions. But on one hand, I think it's
completely reasonable to get rid of the S and X. They're selling horribly, their time has sort of
passed. And we can talk a bit, they were landmark products that will be remembered
in automotive history, particularly the S for getting everybody else to think seriously about
EVs. But on the other hand, it doesn't really make a lot of sense to me because I get that Tesla is
trying to pivot to become an AI company and a robotics company. But I just don't know that
you can bank on the Optimus robot being so successful that you'll need millions and millions
of units per year and all that factory space in Fremont. So I understand getting rid of the
products, but I'm not sure I really get that robot strategy moving forward. Can I just say that the S
for all of my Tesla biases, let's put it that way, my thoughts on Tesla, the S, pardon me,
was a damn sexy car. And really was, when it came out, there was nothing that looked like it.
It was really just phenomenal and complete white space in the market.
They took a big chance, a big swing coming off the roadster with the S and it just came in and
kicked ass. But it's like everything in this industry, you have to keep reinventing yourself
and they stopped doing that with the S. And I'm going to say that the X was a
miss altogether. I think it died the minute they put those going doors on the back.
But the S was really spectacular when it came out. They just stopped investing in it. And
anytime an automaker stops investing in something, that's when trouble starts.
Well, Larry, I'm not even sure that they needed to continue investing in it because they continued
to evolve just with other products. The three was even more of a smash hit than the S when it
first came out. And that was really where Tesla wanted to make its money on the lower end of the
market once those early adopters all picked up the S and X. So did they need to keep evolving it?
Could they have kept it around longer? Sure. But I'm not necessarily sure they wanted to
because they had those other products. But at the same time, they had some misses too.
In that same category as the S and X, it's not selling well. Why keep it around?
But they did continue to evolve just in different ways.
Yeah. From a purely aesthetic standpoint, I would have given the Ziggy to the
Cybertruck before I would have given it to the S. But I get your point.
I have a question, guys. Because of Elon being such a polarizing figure and being the face of
that brand and when you see the T, you think Elon, do you think if him getting into politics,
all the Twitter stuff, just all the noise that surrounded Elon, if none of that would have
happened, would we still be having the same conversation right now?
I'd like to think, yes. I think you can argue that he's lost sales because a lot of people
have been turned off to what he's done. But at the same time, he's made new customers.
He's probably tapped into a lot of conservatives or Republicans that wouldn't otherwise consider
an EV, if we're being honest, if now that he's made his politics known. So for everything he's
lost, he's probably gained some. So I don't know if it would net out just to be neutral at the end
of the day. But I think the underlying business factors remain the same. So we would still be
talking about this. And I think he still would be pushing the company into that robotics AI space.
So we would still have this announcement. As we said, the Model S launched in 2012.
It puts Tesla on the map. What does this signal about Tesla's identity going forward?
I've been trying to figure out Tesla's identity for years. And the one thing I can say is,
I don't think you're going to know what Tesla's identity is by Elon Musk telling you what it is.
All the products that we, A, are still waiting for that are how many years old and never delivered.
I think if you look at what it is just by its products that's on sale now,
there's a nice, there's a big player in what is now a niche market, right?
And a niche market that is under real stress because of the Chinese globally.
I mean, you look at, just look at what's going on in Europe and you know what's coming to Tesla
and why they're suddenly pivoting to humanoid robots, right? I think, I think with Tesla,
it's all about the stock price. It's always, always been about the stock price.
But isn't that everybody though, Larry? Isn't everybody about the stock price though?
Well, yeah, they're all, yeah, they're all about the stock price. And that goes,
and I gotta tell you, that goes back, that really feeds my distrust of the stock market in general
to begin with, right? Yeah. If you listen to the stock market, if you design cars for the stock
market, you deserve what happens to you, whatever happens to you. Well, guys, live real quick.
Let's talk about Hyundai. So the company is getting rid of the Santa Cruz
compact pickup just after one generation, sales plunged 20% last year to 25,500 units,
outsold 61 by Ford's Maverick. Mike Edmonds, Ivan Jury, said a Hyundai quote,
push too far in the direction of oddity versus conformity. Is that fair or was it just bad
timing in a tough market? Well, I don't know if the market's all that tough given the Maverick's
performance. So don't count me as somebody who will go against what Ivan Jury says. He's a smart guy.
I think the Santa Cruz's issue was they tried to get too quirky in a weird way, whereas the Maverick
was quirky in a useful way, right? Ford really tried to tap into the young hip city dwelling
DIYers, people that liked to mess with their vehicles when they needed to go to Home Depot and
get some two by fours or some mulch or whatever. So they had a lot of useful stuff in that Maverick
that you could even add yourself. They just left the space for you. Larry can speak to it,
the slots in the bed, the different areas where you could build your own cages or partitions,
and the inside you could lift up the back seats and lock and store things, even I think like a
soccer ball or a basketball if you're traveling with kids for sports. So I think Ford did an
excellent job really catering to the kind of customers that want that kind of product,
whereas Hyundai maybe didn't do that as well. Larry, you own one of these things. Hold on,
before you say anything, Larry, you own one of these things. Okay, first off, I want to know
your reaction is to this. And what did you, what were you really putting in that flat bed? Because
that flat bed is probably the size of my desk. It is not big at all. It is not big. Now, to be
clear, when I want to, I want to address your pronoun, I own a Maverick. I don't own a Santa Cruz.
Oh, that's true. You own a Maverick. My bad. Yeah, I own a Maverick. And I gotta tell you,
I love it. I have a hybrid Maverick. And for what I need, it's perfect. As far as the Santa Cruz
goes, I get the decision because it was a mess coming out of the gate. I don't know how you say,
okay, North America is a pickup market. We need a pickup. Let's redo the Subaru brat,
right? Because that's what the Santa Cruz is, right? It's a Subaru brat with an extra seat.
And that was, that was not, that was not a sales success. Let's be honest,
Hyundai and Kia have been killing it from a design standpoint. For years, they have beautiful
products. This was not one of them. This was a rare miss for them. And it is good to see
that they're, that they're pulling the plug early, rather than try and, you know,
let it limp on for a while. These, their dealers need to need something to be
Maverick up with, right? And so far, nobody's, nobody's found one.
Well, Hyundai is not giving up on trucks though. They got a larger body on frame midsize pickup,
targeting the Tacoma and Ranger coming in summer 29. Mike, what do you make of that?
I think I already know your answer to this. Do you think Ford and Toyota should be worried?
No, I really don't. I mean, at the same time, this is, like Larry said, a big pickup market. The
appetite is endless, it seems, for America, Americans wanting these kinds of vehicles.
So could they have some success? Could they steal some share? Sure. But you look at Ford
specifically, they're going to be adding more trucks to their lineup. We have a new midsize EV
coming that's probably going to be more like Maverick size and Ranger. So maybe that wouldn't
be a good comparison. But they said there's going to be a new gas powered name plate, a truck name
plate that's not in the lineup already. Don't know what size that's going to be. So, you know,
Ford knows how to do trucks. I don't think anybody will argue that point. So are they scared? Probably
not. At the same time, could Hyundai find a lane for some success? Sure.
Can you know what? Can I say something here? I know it's, normally I just sit here like a
wallflower, but I just want to point out, there is white space, and we argued this couple weeks
ago, right? There is white space in the truck market, in the midsize truck market. And that,
with, I mean, Tacomas and Ranger, I'm imminently familiar with, they have both grown too big.
They are not, they're full size trucks from 15 years ago. Absolutely. And there is white space
for a small body on frame truck. Because if there's something, you know, if there's a
deficiency with my Maverick, it's because it's unibody, because it's front wheel drive,
even in the all wheel drive, it doesn't, it doesn't tow very well. There's room there.
There's white space and nobody has hit it yet. Interesting. Good stuff, guys. Coming up, we'll
preview next week's NADA show here in Las Vegas. What are the biggest issues facing dealers in
2026? And what should we be watching for at the show? That's next on Weekend Drive.
If you're an automotive supplier and you know your team is building the next big thing,
prove it on the industry's biggest innovation stage. Automotive News is now accepting
applications for the 2026 PACE program. PACE awards recognize traditional and non-traditional
suppliers worldwide for new product, process and business model innovation. And entries must be
innovations already commercialized through a sale to an automaker. Still pre-commercial but
past the pilot stage, PACE Pilot recognizes post-pilot pre-commercial innovations across
automotive and future mobility, products, software, IT systems and processes with the potential to
revolutionize an automaker's business. All submissions are reviewed by an independent
panel of judges and MIMA is the exclusive lead sponsor. Ready to be recognized?
Apply by February 9th at AutoNews.com.
When your AI tools are siloed, lost data, duplicate entries and confusion are inevitable.
Spark AI isn't another AI tool to manage. Instead, it's a unified AI data layer,
changing the game by ensuring your solutions are making life easier and working at their highest
capacity. Don't miss Spark at NADA. Watch Ray, our new AI assistant, bring everything together
in one intuitive command center for smart, fast decision making. Ray answers your questions at
any time providing instant messaging, insights, help videos or live support. Instantly analyze
your sales history and market trends or generate a sales report with one prompt. You can even ask
which cars to buy at auction today for the best return. Schedule an appointment at our booth
for everything from a short demo to a full retail management system demonstration using our core AI
Welcome back to Weekend Drive. I'm Kellan Walker with Larry Belliquette and Michael Martinez.
So guys, you're both heading here to Las Vegas next week for NADA. Let's start with the big
picture. Mike, what are you most curious to see or hear at this year's show?
Honestly, maybe this will be a strange answer, but Larry always talks about,
in his advice to the younger journalists that haven't covered NADA before, one thing he does
say is get a chance to get out and walk the floor. Aside from some other advice, I probably can't
repeat on the podcast. And I think there's some truth to that. The booths that you see,
you'll see the regular stuff year in and year out, the car wash stuff, the helicopter companies for
the rich dealers. But I'm particularly interested in walking the show floor and seeing what sort of AI
vendors and solutions are there this year and what they're trying to woo the dealers with. I think
it could be interesting. I'm sure most of this stuff won't come to fruition, but I'm curious to
see what at least will be out there and what will be pitched to them. So maybe it's not as much of
a newsworthy thing, but I am curious about that. What's on your radar, Larry?
So AI certainly is. And my big question is, how much of a dealer's business are you willing to
turn over to automation? And do you think that's a good strategy? There are companies out there
that are now doing, that are selling AI callbacks, right, that are selling AI, you know, AI lead
gens, lead returns. A lot of dealers are using AI-powered chats on their websites. But here's
my question. If you're in the business of building relationships with consumers, what happens when
they come into your showroom and say, hey, where's this person that I talked to? Because they said
something interesting. What happens when they say, oh, that person is AI, doesn't exist?
What do you say then? Then why am I here? I don't have a relationship with you. I had a
relationship with some bot on the website. It doesn't make any sense to me as a strategy going
forward. I think it's, I think there's a lot of faith putting in, put in two letters. And dealers
better be prepared to pull back fast. Well, our 2026 dealer outlook survey came out this week,
showed some pretty striking numbers. 87% of dealers are moderately or extremely concerned
about the economic downturn. That's up from 46% last year. Mike, is this going to be the dominant
mood at NADA anxiety about the economy? I think so. And we saw it a bit last year,
worried about what may be coming in terms of tariffs and other things. This year, we have a
little more certainty on that standpoint. But at the same time, I think a lot of dealers are worried
that this is the year automakers will start to pass along the tariff costs even more than they did
in 2025, which could drive up prices and could anger those customers who are dealing with AI
robots, if not real people. So I think the retailers are kind of worried about the blowback
they may be receiving. And the fact that their profits are probably going to continue to trend
downward. We talked a lot about how they were making money handover fist during the pandemic,
right after the pandemic, even through the chip shortage. And that trend, that arrow has been
pointing down for a few years now, it's probably only going to get worse for this point.
And the top three dealer concerns are affordability, recession, economic uncertainty,
and expenses. Larry, which one of those do you think will drive the most conversation at NADA?
Oh, it's all going to be affordability, right? If affordability is answered,
those other things go away, right? Because you've now priced millions of people out of,
in that view, the industry, right, has priced millions of people out of the new car experience.
It's just gone. It's not available to them. That means lower volumes, lower revenues for
everybody, lower profitability, lower used car availability. It means, eventually means, you
job cuts, both at the retail level and at the manufacturing level, you just cut
two, three million units off the SAR because of pricing, right? This is more than just a crisis.
This is something that can really spiral quickly if we don't come up with some
answer as an industry to this. Interesting stuff. NADA next week should be interesting.
I'm excited to see both of you and we'll be doing the show on the floor of NADA next week.
We can drive. So that should be really, really good, especially. I can't wait for the hecklers.
All three of us in person. That's going to be off the rails. Mike, Larry, thank you so much for
joining me. Thanks, Kyle. Kyle, awesome. Awesome to see you and I can't wait to see you in person
again. It'll be a good time. That's all for this weekend drive edition of Daily Drive. I'm
Kellen Walker. Thanks to Automotive News executive producer Jake Nier for his help on today's podcast.
You can get the latest news on Tesla's product strategy, NADA coverage and everything happening
in the auto industry at AutoNews.com. Come back on Monday for a closer look at our 2026 dealer
outlook survey and what it tells us heading into the NADA show here in Las Vegas. They're not going
down without a fight. Dealers think new vehicle profits are probably going to be flat this year
or maybe even go down a little, but they also think their stores will still be more profitable than
they were last year. We'd love to hear from you. Let us know what you think of the show and the
topics we cover today. Send us an email at dailydrive at autonews.com or leave us a voicemail
at 313-444-2774. If you enjoy the podcast, remember to like, leave a review and subscribe
so you never miss an episode.
About this episode
Elon Musk's announcement to end production of the Tesla Model S and Model X to make way for a humanoid robot assembly line has sparked a lively discussion among automotive experts. The team reflects on the significance of these models in Tesla's history and the implications of shifting focus towards AI and robotics. Additionally, they analyze Hyundai's decision to discontinue the Santa Cruz pickup after disappointing sales and preview the upcoming NADA show, highlighting dealer concerns about economic uncertainty and vehicle affordability.
Automotive News' Larry P. Vellequette and Michael Martinez discuss Tesla ending Model S and Model X production for Optimus robots, Hyundai axing the Santa Cruz after one generation, and what to expect at next week's NADA Show in Las Vegas—from dealer sentiment trends to the biggest issues facing retailers in 2026.
