President Trump has extended auto tariff relief for American automakers while imposing new tariffs on imported trucks and buses. The episode also covers a preliminary investigation into Waymo's robot taxis for safety violations around school buses and the appointment of Porsche's new CEO, Michael Lighters. QNX COO John Wall discusses the impact of software recalls on vehicle technology development, emphasizing the need for a standardized platform to address evolving cybersecurity threats in software-defined vehicles. Insights from the latest auto industry confidence index reveal mixed sentiments among automakers and suppliers regarding tariffs and production margins.
"...gross margin on vehicle production, and also the average transaction price and incentive pressures they're feeling."
The average transaction price is what people actually pay for cars after all the discounts and negotiations. It helps understand how much cars are selling for in the market.
The average transaction price (ATP) is the average price that consumers pay for a vehicle after negotiations, discounts, and incentives. It reflects the market value of vehicles and can indicate consumer demand and pricing strategies.
"...gross margin on vehicle production, and also the average transaction price and incentive pressures they're feeling."
Gross margin is how much money a car company makes after paying for the costs to build the cars. It shows how profitable they are.
Gross margin is the difference between the revenue generated from vehicle sales and the cost of producing those vehicles. It is a key indicator of a company's profitability in the automotive industry.
"...and also the average transaction price and incentive pressures they're feeling."
Incentive pressures are discounts or deals that car companies offer to help sell more cars. They can lower the price you pay but also affect how much money the company makes.
Incentive pressures refer to the financial incentives that automakers offer to encourage sales, such as rebates, low-interest financing, or lease deals. These pressures can affect profit margins and overall pricing strategies.
"Do you believe the legacy OEMs are falling into a trap? They've got to find a way to, in some ways, build new airplane while they're still in flight."
OEM means Original Equipment Manufacturer. These are the companies that make the cars and parts that go into them, like Ford or Toyota.
OEM stands for Original Equipment Manufacturer, which refers to companies that produce parts and equipment that may be marketed by another manufacturer. In the automotive industry, OEMs are the car manufacturers themselves, such as Ford or Toyota.
"...a cost-cutting tool built for auto with DMS integration and CSI protection in mind."
DMS means Dealer Management System. It's software that car dealerships use to keep track of their sales and inventory. When a tool has DMS integration, it means it can easily connect and work with that software.
DMS stands for Dealer Management System, which is software that helps dealerships manage their operations, including sales, inventory, and customer relationships. Integration with DMS means that a tool can work seamlessly with this software to improve efficiency.
"So it brings in a very dynamic nature to updating software and the need for constant monitoring of the systems. And so now you'll see that car companies..."
Software updates are changes made to a vehicle's computer systems to fix problems or improve features. These updates are important to keep the car safe and working well.
Software updates in vehicles are crucial for maintaining security and functionality. They often include patches for vulnerabilities, improvements, and new features, which require constant monitoring to ensure the vehicle's systems remain safe from attacks.
"And for those who don't know what a CVE is, what is that acronym? So CVE is basically common vulnerability..."
CVE means Common Vulnerabilities and Exposures. It's a way to identify and rate security problems in software, so companies know which issues to fix first.
CVE stands for Common Vulnerabilities and Exposures, which is a list of publicly known cybersecurity vulnerabilities. Each CVE is assigned a unique identifier and a severity rating, helping organizations prioritize their responses to security threats.
"You mentioned the sort of evolving way that developers have to approach security and there was a part of the survey that found that recalls have changed..."
A recall happens when a car company finds a problem with a vehicle that could be dangerous. They then ask owners to bring the car in for repairs or fixes.
Recalls in the automotive industry occur when a manufacturer identifies a safety issue or defect in a vehicle. This can lead to changes in how developers approach software and safety features, as they must adapt to address these issues promptly and effectively.
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Today on the show, President Trump extends auto tear for leaf. The U.S. investigates Waymo over safety around school buses, and Porsche names a new CEO. Plus, QNX COO, John Wall, talks about how software recalls are changing vehicle tech development.
Power companies need to start standardizing on a platform that evolves as opposed to constantly changes.
Let's run through all the news you need to know to keep up in the auto industry. 25% tariffs are now in place on imported medium and heavy-duty trucks and parts.
The Trump administration has also slapped 10% duties on buses. But the White House also extended a key tear of break for American automakers.
Companies that produce and sell completed vehicles in the U.S. will get a tear of discount through 2030. Trump's directive also sets in motion plans to apply the same offset for trucks. There are more details on this story at autonews.com.
NHTSA is opening a preliminary investigation into about 2,000 Waymo robot taxis at reports that they may have failed to follow traffic safety laws around stopped school buses.
According to a media report, a Waymo vehicle stopped next to a school bus with its red lights flashing, stoparm deployed, and crossing control arm extended. But instead of staying stopped, it maneuvered around the front of the bus as students were getting off.
A Waymo spokesperson said the company has, quote, already developed and implemented improvements related to stopping for school buses and will land additional software updates in our next software release.
And Porsche has named Michael Lighters its next CEO. The 54-year-old Lighters is a German engineer who has honed his luxury car skills at McLaren Automotive and Ferrari to steer a turnaround.
They'll take over in January, replacing Oliver Bloom who will remain CEO of Volkswagen Group.
And those are today's headlines. You can find more details on all those stories at autonews.com. Automotive news is out with our latest quarterly auto industry confidence index.
It comes as fast-changing conditions, royal day-to-day operations, and many parts of the industry.
Starting today, we'll go over results for automakers, retailers, and suppliers. Here to talk about the overall results and drill into how automakers are feeling is our own Larry Velliquette.
Larry Legend, welcome back to Daily Drive.
Cal, it's so wonderful to be back here. I seem like I just saw you a couple days ago.
I know, I feel like you pay rent here.
Right.
All right, Larry, so what are some of the most interesting takeaways to you about the overall results?
So, just like last time, Cal, the results are better for where we are now than what respondents are looking at in the coming six months.
The overall index only ticked up one tenth of one point.
We went from 55.5 and our initial index in Q2 to 55.6 in our Q3 index.
What's interesting is how that number got made up.
We had a much worse score for automakers, a downgraded score for automakers this time, and an increased score for franchise dealerships from the previous quarter.
Larry, how are automakers feeling and how do their sentiments compare with the rest of the industry?
So, what you see is automakers and suppliers, too, really feeling the effects of tariffs in this most recent survey, and really feeling the effects of how they keep their numbers up when they're paying these tariffs and how they're going to pass them along.
That's some about a number of different areas, including very importantly, gross margin on vehicle production, and also the average transaction price and incentive pressures they're feeling.
So, how much they're raking on their cars and how much they're able to sell them for.
And in both of those instances and both of those subcategories, automakers are really feeling a pinch.
In terms of gross margin on vehicle production, only 9% of respondents from automakers said that rated their margins right now as excellent.
And 32% found them good, right?
But we also had 7% that found them very poor and another 25% that said poor.
Those numbers are down previously.
Looking forward in the next six months, you're seeing automakers cast a really worrying view both about their average transaction price and incentive pressures, as well as their gross margins on vehicle production.
Interestingly enough, what you do see is that automakers feel that they're running their plants efficiently, their production capacity, their labor costs and availability.
Those have kind of leveled out as issues.
They're running their plants as efficiently as they can.
They may have the occasional problem getting parts, which is a whole other topic that you'll talk about with John when you talk about supplier issues.
But right now, the plants and their operation are not their problems.
Their problems are tariffs and trying to find margins and keep their pricing pressure for their vehicles.
Well, one thing about the auto industry, it always finds a way to adjust, and hopefully they will in this situation.
Yeah, well, they're certainly getting practice in new areas.
Yeah, definitely.
Larry Veliquette, thank you so much for joining me.
Thank you, go.
We'll talk about retailer and supplier results tomorrow and Wednesday here on Daily Drive.
You can find all of our coverage of our latest auto industry confidence index at autonews.com.
Coming up, the transition to software-defined vehicles faces some serious cybersecurity challenges.
We'll hear from QNX, COO, John Wall, next on Daily Drive.
Automotive news shift podcast brings you the latest on automotive technology, trends and transformation.
I'm Hannah Lutz.
And I'm Molly Boygon.
We're the new co-hosts of shift, and we're excited to bring you new conversations with experts and industry insiders,
like this one, with Larry Dominique, president of LD Management Consultant.
Do you believe the legacy OEMs are falling into a trap?
They've got to find a way to, in some ways, build new airplane while they're still in flight.
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Welcome back to Daily Drive. I'm Kellan Walker.
A new survey shows software developers are concerned about cybersecurity as the industry pushes forward toward software-defined vehicles.
The survey comes from Q&X, which makes operating systems, development tools, and more for the auto industry.
John Wall is the company's COO. He spoke with our own Molly Boygon on the latest episode of the Automotive News Shift Podcast.
Here's a piece of their conversation.
So we are here to talk today about a very interesting report under the hood as DV developer report,
which had some really interesting stuff in there. Before we dive into specifics, I'd love to know what your main takeaway from the report was.
I think the main takeaway from the report is it's kind of a validation of what I've been seeing in the industry.
It highlighted a lot of the areas of concern that I've been seeing over the last four or five years.
And one of those areas of concern that kind of kept coming up over and over again was cybersecurity.
I found that really interesting. So the respondents in the survey identified cybersecurity regulations as the most challenging regulations,
while at the same time their biggest concern for the future of automotive software development was security threats,
and they're perceived biggest risk to STVs were cybersecurity vulnerabilities. So how do you kind of think about the tension between the regulations that people view as an impediment to development and the current concerns that they have related security and safety?
Yeah, so I think when you think of safety, which has always been a priority and has been around for a long time, it's difficult and it makes development difficult.
But it's something that tends to be static. Once you've reached a certain level of safety, you know, you have a load that you can put in the car and that you feel pretty comfortable that barring a major bug, something you missed, that golden load of software for the vehicle is going to be good.
I think the difference with cybersecurity is you now have evolving threats to software.
So you may be building software with components that today are considered secure and have no CVEs associated with them.
Then somebody reveals a hack months after you've delivered your software and you now find that there's a serious vulnerability within your vehicle,
which obviously compromises not just security, but it compromises safety as well because the concept of safety does not take into account bad actors changing your software.
Safety assumes that the software isn't going to change. So I think that that's a big challenge because a new regulations have come in and we've seen this in other industries such as medical and others where, you know, if a device has a certain number of CVEs,
that are considered serious enough, that device might be taken out of use until those issues are resolved.
So it brings in a very dynamic nature to updating software and the need for constant monitoring of the systems.
And so now you'll see that car companies, software companies have security groups whose jobs are to constantly monitor for CVEs and for attacks and then you have to mitigate them.
And for those who don't know what a CVE is, what is that acronym?
So CVE is basically common vulnerability and so it's assessed based on how serious the security threat is and it has ratings and obviously the higher the rating, the more serious it's considered.
And depending at what level the CVE is rated, it's something that has to be mitigated immediately whether that mitigation is turning off function within the vehicle or, you know, being able to provide a patch ASAP to address the issue.
You mentioned the sort of evolving way that developers have to approach security and there was a part of the survey that found that recalls have changed the way that developers are approaching approaching development.
And I guess I wonder if you took that to mean what you described sort of the constant monitoring or if there's some other change that developers have to make given the frequency of recalls that have happened in the auto industry related to software and just the sheer number of features and capabilities that are now software enabled.
Yeah, I think that the recalls obviously I don't have an exhaustive list of the recalls but the recalls that I've seen that have been, you know, high profile have typically been more around safety based issues such as rear view cameras that may freeze or rear view cameras that may drop some frames.
Obviously if you're dropping frames, you may miss something if you're if you're backing up, so I think what the recalls really highlight in my opinion is that the car companies need to start standardizing on a platform that evolves as opposed to constantly changes.
And I think that that's been a very and I think you and I've talked a bit this morning before that you know there's been a propensity in the automotive industry to restart restart it that's been kind of the nature of how software has been done in the vehicle.
You go to a tier one you give them a set of specs they build the hardware they build the software to your spec they deliver to you.
You enjoy that in the vehicle hopefully you'll get four or five good years out of that and then the next time you want to build the next system you go to a different tier one.
I so I think where we're headed on that front and this does include security as well obviously but is really to start extending platforms and to to really have something that's much closer to what you would see in handset which is iOS that evolves Android that evolves so you're not reinventing the wheel all the time you're refining as opposed to rebuilding and I think that.
A lot of the recalls have to do with things that are not evolving the things that are constantly changing or being redone.
You can hear QNX COO John Walls full conversation with our own Molly Boygon on the latest episode of the automotive news shift podcast that's available now wherever you get your podcast that's daily drive for today I'm Kellyn Walker thanks to automotive news executive producer Jake near as well as our own Larry Bella quet for his reporting for today's podcast.
You can get the latest news on tech and innovation tariffs and everything happening in the auto industry at auto news dot com.
Come back tomorrow for a look at everything you need to know about the next period chip crisis.
We'd love to hear from you let us know to think of the show when the topics we covered today.
Send us an email at daily drive at auto news dot com or leave us a voicemail at 313-444-2774.
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