OEMs stands for Original Equipment Manufacturers, which are the companies that make cars and their parts. They are responsible for building the vehicles we drive.
Range anxiety is the worry that an electric car will run out of battery before you can recharge it. This can make people hesitant to buy electric cars.
An electrified vehicle is any car that uses electricity to help it run. This includes electric cars that run only on batteries and hybrids that use both gas and electricity.
AutoVision is a company that uses artificial intelligence to help car dealers figure out the best prices for their vehicles and how to sell them better.
The average selling price is the typical amount people pay for cars. It shows how expensive cars are getting, which can make it hard for people to buy them.
A seven-year loan means you borrow money to buy a car and pay it back over seven years. This can make monthly payments smaller, but you might end up paying more in interest overall.
Macro economics looks at how the entire economy works, including things like prices, jobs, and how much money people are making. It helps understand big economic trends.
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This podcast is brought to you by AutoVision and its new AI Assistant, Avery. Avery delivers data-driven appraisals, pricing, and detailed strategies for every vehicle. Visit AutoVision.com to learn more about Avery, where precision meets profit.
This is an interview with Cox Automotive President, Steve Rowley. Well, between that and the recording of our following episode, our own Vince Bon Jr. landed an exclusive interview with Stellantis CEO Carlos Tavares, right after the announcement that the automaker was making its biggest investment since the founding of Chrysler Corporation 100 years ago. Naturally, we needed to run that right away. But this conversation between Steve Rowley
Crane and Automotive News Congress in Detroit had to make its way on the show. It's such an interesting look at how Cox Automotive is looking at the advent of new technologies and the changing market in 2025. With that in mind, here's a piece of that conversation from September in Detroit.
How are you thinking about artificial intelligence and where can it really, David had his own points from a direct retailer, but where do you guys see, what's Cox thinking when it comes to how artificial intelligence can really benefit the auto industry?
Well, look, I believe personally artificial intelligence in my lifetime is the biggest lightning rod that you will ever experience in technology. It is absolutely imperative to lock in on it. It is going to be comprehensive and it will touch every aspect of the organization. I really believe that.
If you think about how do you embrace that, you really have to embrace that top down and bottom up. And we're looking at it in a very big way. If you think about it, it's going to reduce all of the administration function in some fashion.
And the biggest thing for me is when you think about coding. You think about coding. It's months and years for coding to be done. We see people code today in a week.
We see, you know, the administration activities, manual functions change in a couple days. So it is really, really focused. We have this smart growth analogy that we're trying to push through the entire organization so that we have both top and bottom folks looking for for every aspect of that.
The operational changes are huge. Second big driver. Cash flow. You know, we've had some great years of profitability. No one wants to walk away from them. I think AI is going to be a catalyst for those functions. And then as you think about artificial intelligence is the umbrella.
You have a genic AI and generative AI. And the generative AI is asking the question, what does this mean and you get the answer.
You know, a gentick is creating an agency in your organization and with technology and that agency is a evolutionary reasoning that doesn't stop. It's like the, you know, the perfect employee, this, an AI assistant continues to learn, continues to learn and really learned your way.
And so when you have something that is that pervasive and has that knowledge and evolution, it's going to change the touch points in your organization in a big, big, big way.
Right, self teaching. I mean, you can go through every organization sales and, and suffer, but then the, the big point of that continuous learning for me is just the touch points around the customer, the customer experience, the personalization you'll get to see.
And so when we look at it, you know, we're looking at AI in a big way because you can say, hey, look, I went out to personally, I went out to auto trader. I looked at these cars.
I went and qualified my financing. You can quickly within minutes, generate an email, generate a text and send it to that customer with a much more personalized picture of what's available, what you can afford and really make, make it a change agent.
And I think it's going to be a big, big change for for the industry and for all of us, but embracing it is, is going to be a really big part of it.
Yeah, embrace it or die. Yeah, I'm, but you know, I don't, that was my words. Yeah, no, I've heard that too, believe me, but I don't, I don't think it's something to be afraid of.
I think it's something to embrace and understand and bring it into your organization in a thoughtful way, but I will tell you, I will tell you, we've seen it so often right now.
The frontline knows where the manual functions, manual functions exist, the paper functions exist and you can eliminate those and you can streamline those and that allow your people to create more value for the organization overall.
Yeah, 100%. Again, David and I spent some time this morning talking about EVs in the US government trying to interfere with some of the ways that consumers would like to shop.
When you guys think about supporting the shift in powertrain, you know, it's, people always talk about EVs, but they don't think about the whole life cycle. When you guys talk about life cycle, what does that look like?
Re-sale, life cycle, the whole loop? Well, look, I mean, we've made a big investment in EVs.
You're clearly at an inflection point right now. I think, you know, you heard Jonathan spoke up earlier, talk about, you know, we'll probably have the best third quarter of sales in electrification, hybrid EVs in general, and we'll probably have a slower fourth quarter.
But when I think about EVs, the thing that's lost sometimes is technology is not a straight line. I will tell you that. It is up, correct, course, correct, and just the advancements already over the last couple years that the OEMs have made in EVs is amazing.
Range in a host of other things. I still think some of the big things that whole people back are more around range anxiety and things of that nature, and as that system gets more and more build out, I think we'll be there.
But I still believe in an electrified future. I really do. I think this year we'll have a quarter of the sales that will be electrified, you know, both EV and hybrid, about 9% of those being EV only.
But we've got about roughly 5 million vehicles out in the car park today, and we think it'll reach 6% of that by 2030. So we believe in that electrified world.
Some of the other things that we look at is what the consumers are feeling about EVs, and you know, if you talk to a person who has an EV today, 71% of them says I will buy another one.
So there's strong demand from that perspective and adoption. Yeah, adoption. The other way I look at it though is, you know, we have 280, 180 million cars in the car park, and you start thinking about households.
There's about 130 million households that have two plus cars or vehicles. And I do think if you just said 60% of those households are going to move to one electrified vehicle.
That's 90 million cars to the overall sales. So I just think there's great opportunity there. For us, you know, we've built a pretty expansive EV partnership.
We've got five locations, well over a million square feet dealing with EVs. We've touched over a million batteries for many of the OEMs in the industry.
And we continue to look at diagnostics, remand, storage, recycling, and logistics. And, you know, as you said, it came in as a rush, as a regulatory, never a good thing when something is pushed on you.
We saw a lot of folks, the lifts couldn't even hold these EVs up. So no one probably, you know, from a regulatory perspective, we're really thinking along the long tail of how this affects OEMs and car dealers and a host of those things.
What's that infrastructure and everything? Well, if it's technicians, we've heard about technicians today several times in the intellectual capital of how do I think about this EV, it's not an engine. I've got to be trained and learned and so that has been really transformational.
Coming up, we'll hear more of this conversation between automotive news publisher Casey Crane and Cox Automotive President Steve Rally.
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We just heard 40 minutes on tariffs, and you and I were kind of having our own tariff conversation out in the hall. Again, I really think you guys have a unique vantage point, but talk a little bit about what you think the impact will be on some of the biggest players.
Well, you know, we've talked about this. Jonathan Smoke was up here. He can riff on this for days. But, you know, they have the old chicken tax that was from 1964 and never got rid of it. We laugh about it. I grew up in Chicago, and the tollway system was going to be there for 10 years, and after 60 years it's still there.
The one that I have for you. What's that? Good old government for you. Yeah, right. We're sound and true. But look at the roads that you have. But I think the one thing is true is that the tariffs are going to stay around because, you know, we heard today it's going to generate 100 billion plus of revenue, and no one's going to want to walk away from that. So that's the reality. I think the obvious thing is just tariffs add cost, and they're going to add cost to the business.
And I just think what we're going to see in the short term is an uneven playing field because, you know, this new tariff came about in a very fast way, and depending where your plants are, or depending where your suppliers are, it's going to create an uneven playing field early on.
So it's putting a lot of pressure on OEMs to think differently. I think as tariffs fully get implemented, I do think that OEMs and others are going to be looking at the go to the segment level of their vehicles, and really start bringing profitability in there as well. Who's profitable? What's profitable? And it's going to cause folks to think about that a little bit differently as well.
But, you know, I just think in general, the industry is very, very adaptable, and it'll be able to move through that in a unique way as well.
It's actually incredible how adaptable the industry is. It is that some of these guys are asked to do in a very short amount of time.
Yeah, I was thinking like Telcom, which has been a big space, and you think of a regulatory mandate across all of it, it would collapse, really would in some fashions. I mean, it is amazing.
We just figure it out. They do. They figure it out in a quick way.
Just shifting gears for one quick second as we kind of wrap up here, you know, when you think about all of the impacts, artificial intelligence, EVs, tariffs, it's all going to affect affordability.
New use cars, new cars, use cars, hybrids, EVs, what is the story maybe that some of the top echelon of leadership need to hear about affordability?
Well, I mean, I'm not going to tell them they don't know. It's a real factor. I mean, it is a real factor, and I think unfortunately, the economy is the upper right hand quadrant is doing well.
The lower quadrant is getting day by day, and it's becoming a tough place for people to afford new cars at $49,000 as the average selling price on average and use cars hitting about $29,000, which is even higher than pre-pandemic.
It puts stress into the organization, for sure. And we're seeing loans, seven-year loans now are at almost 22%. So those are big numbers.
But to me, it's going to be innovation. I really do believe that the AI, the technology, the automation that you're seeing so many, so many folks in the OEM place put in, we're just going to build a more efficient car.
We're going to create lower costs, and I think that AI is going to play a big role in that and help drive that. And you've seen, also, with EVs, we're first coming out, there was this theory that someone would build a skateboard and partner will use it.
I do think you're going to see possibly some more partnerships of how do I get more creative about this drive train so I can get the economies of scale and be able to use that along.
It may not be a skateboard, but it may be an engine, or it may be something else, and the industry's done that before. But I do think you're going to see more and more ingenuity and creativity as you think about how do I continue to get more efficient.
But I do think it's a real one, and because of the macroeconomics, we never know where those interest rates are going to be, and so it puts pressure on the business for sure.
So, five years in, you mentioned some of the lessons learned, what's the thing you liked the most about the auto industry?
There's a lot. What I love is the most senior folks are totally out in front. Whether it's the dealerships, the OEMs, the suppliers, people really understand their business here in a detailed manner, and they're in the meetings, they're a very, very impactful part of the business.
Cox is a 127-year-old family business, so we believe in the front line and the consumers in the community, we spend a lot of time there, and we see the automotive industry right alongside that.
It's amazing the things that the automotive industry does, and the dealers do for the community, which I think are so impactful and so critical, and probably not acknowledged enough to the value they bring to the table.
What's a relationship business? Beyond belief. Steve? Beyond belief. Thank you for your relationship.
Appreciate you. Thanks for being here. Congratulations.
Thank you.
We should.
Cox Automotive President Steve Rowley spoke with our publisher Casey Crane at Automotive News Congress in Detroit.
Thanks for listening to this bonus episode of Daily Drive. We'll be back on Monday with a brand new, full episode of the show.
About this episode
Cox Automotive President Steve Rowley discusses the transformative impact of artificial intelligence on the auto industry, emphasizing its potential to streamline operations and enhance customer experiences. He highlights the importance of embracing AI for profitability and operational efficiency. Rowley also addresses the evolving landscape of electric vehicles (EVs), the challenges posed by tariffs, and the need for innovation to maintain affordability in a changing market. His insights reflect a forward-thinking approach to navigating the complexities of the automotive sector in 2025.
Automotive News Publisher KC Crain sits down with Cox Automotive President Steve Rowley to talk about how artificial intelligence is shaping Cox’s business and the rest of the industry, as well as Rowley’s view of the impact of tariffs on the market.
