Oct. 3, 2025 | Tesla sets sales record; Cox Automotive’s Andy Mayers
Annotations will appear as you listen
0:00
21:10
Term
subprime lending
Subprime lending is when banks give loans to people who might not have the best credit scores. Because these borrowers are seen as risky, the loans usually have higher interest rates.
Car
Tesla Model 3
Car
Tesla Model Y
The Model Y is another electric car from Tesla, but it's a bit bigger than the Model 3. It's designed like an SUV, which means it has more room inside.
Term
EV tax credit
An EV tax credit is money the government gives back to people who buy electric cars. It helps lower the cost of buying these cars.
Term
affordability crisis
An affordability crisis means that many people are finding it hard to buy new cars because prices are getting too high and monthly payments are too much for their budgets.
Term
incentives
Incentives are special offers or discounts that car companies give to help sell more cars. They can make buying a car cheaper or add extra features for free.
Term
price parity
Price parity means that electric cars cost about the same as regular cars. This is important because it helps more people decide to buy electric cars.
Car
Rivian R1S
The Rivian R1S is an electric SUV that can handle both city driving and off-road adventures. It has a lot of space inside and comes with cool tech features.
Term
midsize crossover
A midsize crossover is a vehicle that is bigger than a regular car but smaller than a full-size SUV. It usually has more room for passengers and cargo, making it a popular choice for families.
Term
auto financing
Auto financing is how people pay for cars, usually through loans or leases. When it's strong, it means banks and lenders are giving out more loans to help people buy cars.
Term
average price of a new vehicle
The average price of a new vehicle is how much most people pay when they buy a new car. Right now, it's about $48,000 to $49,000, which shows that cars are getting more expensive.
Term
extended terms
Extended terms mean that when you borrow money to buy a car, you can pay it back over a longer time. This can make your monthly payments smaller, but you might end up paying more in interest.
LIVE
This podcast is brought to you by proton dealership IT experts in dealership cyber security and IT management. Interested in a free cyber security compliance or IT consultation? Visit protontex.com. That's PRO, T-O-N, T-E-C-H-S, dot com. Welcome to Daily Drive for Friday, October 3rd, 2025. I'm Kellan Walker in Las Vegas, today on the show. Tesla sets a sales record.
In the third quarter, most EV defectors say they reconsider with a $5,000 incentive. And one in five new vehicle buyers now have monthly payments of $1,000 or more. Plus, Andy Mayer's of Cox Automotive talks about the opportunities for lenders in the subprime market.
We have seen subprime lending continue to grow, and I think that the lenders are really doing an amazing job at pricing their loans, and they know what kind of risk tolerance will take.
Let's run through all the news. You need to know to keep up in the auto industry. Tesla is reporting a record 498,000 global deliveries in the third quarter. That's up almost 7.5% from the same period last year.
U.S. buyers rushed to get the federal EV tax credit that expired at the end of last month. The automaker said the vast majority of sales came from its volume models, the Model 3 sedan, and Model Y crossover.
Nearly a third of consumers who are likely to buy an electric vehicle would either be much less likely to consider an EV or won't consider one at all without the federal tax credit. That's according to a September survey by the Harris poll, a market research company, most of the EV defectors surveyed 60% with need and incentive of at least $5,000 to consider an EV.
Nearly 30% would reconsider an EV with an incentive ranging from $2,500 to $5,000. 11% would settle for an incentive of less than $2,500, and the share of new car buyers who agreed to pay $1,000 or more a month for their auto loan has increased roughly 7 fold in the past decade.
About 2.5% of new car buyers committed to the high auto loan payments in 2015. From January to July this year it was about 17% of buyers who financed that amount with a loan.
Analysts say the growth in those steep payments is a symptom of an affordability crisis plaguing the auto retail industry in recent years.
And those are today's headlines. You can find more details on all those stories at auto news.com joining me now to talk more about Tesla's record third quarter and what happens now that tax credits have expired is Lawrence I live who covers Tesla and several other EV makers for us at automotive news.
Lonnie, welcome back to daily drive. It's great to be here. So Lonnie, Tesla has been in a sales slump for a long time now.
How surprising, if at all, was this bounce back in the third quarter and how much did the tax credit expiration have to do with it?
I think it was a surprise in the sense of the scale of the increase, right? I think everybody was expecting all the EV makers to benefit from consumers rushing out to get that tax credit.
And they were like lots of like insane deals and so it's perfect time to buy a car if you're in the market for the next couple quarters, right?
But I think it was better than people expected. You know, it was a record quarter. And one analyst, Gene Munster, he said that the tax credit could have added 50,000 units to Tesla and the third quarter, which is a very big number.
And I think it's a flex by tax. I think they really pulled out all the stops with incentives and financing and lease deals and free supercharging and they really made it an excellent time to buy a Tesla.
How much did price parity have to do with any of this?
I mean, I think a lot. You really saw just some crazy good deals on Tesla's and you know, they're not famous for being, you know, crazy good deals, but they've really been bumping up the incentives.
And I think that's, you know, going into the fourth quarter and going into the future, the problem they have is product, right? And so when you don't have new fresh product, you can pile on incentives and you can move a lot of cars.
That's just the way the industry works. But I mean, they have like a new Model Y in China, which is longer for a third row. They release the Model Y performance in Europe.
We're getting a less expensive Model Y. So if you want to Model Y, you know where to go. But if you want something else, then you may have to find another automaker. And I think that's going to be the challenge for Tesla in the fourth quarter and next year.
And also Lonnie Rivian saw sales jump too, but stocks fell. Why is that?
You know, it was, I think it was kind of a last hurrah for Rivian in terms of their current product, right? Which are above 72,000 with shipping, right? They got to pick up and they have an SUV, great cars.
They haven't been selling well. They're very expensive. And so I think people rush to get those two who, you know, wanted one, but their real challenge is going to be next year when they come out with a more high volume car at about 45,000 base.
You know, and that means it's really like 50, 55,000 with equipment. But it's a much, much bigger segment. And so I think Rivian also has a product challenge.
So what are analysts saying about the future for Tesla and Rivian sales without the credit?
Well, it's interesting because, you know, Tesla had this big quarter and that's in all the headlines. And that's what we're all reading about.
But analysts, the mark, you know, the kind of broader Wall Street market is actually predicting that Tesla's global sales will fall about 10% this year to about 1.6 million.
They were at 1.8 million last year and a little over 1.8 million in 2023, right? So even though Tesla had a big quarter, they still got their underlying problems, right? Product.
And with Rivian, you know, I think they are going to see a big slump. And this is what the analysts are saying until they get their R2 going, which is a midsize crossover.
They say, you know, first half of 2026, but you know, ramping up these cars is hard work. So I think maybe 2027 is when Rivian could see, you know, if that's a hit, Rivian could see a real boost. But 2026 could be hard.
Perfect. Lonnie, thank you so much for joining me.
Thank you.
Coming up, Andy Mayer's of Cox Automotive talks about the state of the auto lending market, especially when it comes to subprime borrowers. That's 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-host 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.
Ketch shift available every Sunday wherever you get your podcast.
While you provide top-notch support to your team and customers every day, is anyone taking the time to ensure your sensitive data remains secure?
Just one click on a malicious link can place your entire dealership in danger.
In fact, the average cost of a data breach served past four million last year.
Stay one step ahead by understanding the threats and minimizing your risk.
Proton dealership by T works around the clock to provide you with support 24-7-365, operating out of a cutting-edge security operation center, located in the USA.
Proton continuously monitors detects and responds to your potential network issues or cyber threats.
You've got a lot on your plate. Keep your focus on where it matters most.
Your customers will handle the cyber support. Learn more about our comprehensive services at protontax.com.
That's P-R-O-T-O-N-T-E-C-H-S dot com.
Welcome back to Daily Drive. I'm Kellan Walker.
The balancing act of consumer affordability, lender risk, and dealer profitability is tighter than ever.
That's according to Andy Mayers, lender solution strategist at Cox Automotive.
Mayers spoke with automotive news senior retail editor Dan Shine about why this requires a wider network of lending options and smarter auto finance tools to get deals done.
Andy, thanks so much for joining me on the F&I Friday edition of Daily Drive.
Thanks for having me, Dan. It's one of those things I can now check off my list of great accomplishments.
That's right. Yes, of course. It's a bucket list of all people who want to be famous.
We had the Fed announced a rate interest rate cut, which was brought with great fanfare.
But to you and others, it's not the end all. It's not the great panacea that's going to fix vehicle affordability.
There are so many issues out there with people trying to still afford a car.
Tell me a little bit about what you see with interest rate cut.
What does it mean for loans and loan availability and the whole affordability issue?
I think what we've seen, even if you look at our credit availability index, the opportunity for people to get loans is out there.
We are seeing availability of financing for all types of credit quality.
The Fed rates really haven't materially changed that availability.
A lot of that availability is really the appetite of our lenders to be offering financing and looking for opportunities to monetize their industry and their space.
If you go back a couple of months or even now two quarters, in early Q2, there was a lot of tariff anxiousness yet demand and financing went way up.
That was driven by market demand and consumer demand.
We all thought that, hey, that's going to cool down once the tariffs take effect.
But it really hasn't. In Q3, we saw strong financing opportunities just as well.
I think our lending partners are out there offering financing because there's a strong customer demand right now.
People still want to purchase some finance vehicles.
And they're not materially impacted by the rate cuts as much as they're looking at economic factors.
The stock market has been strong.
Consumer spending is still up. Consumer sentiment is up.
So those things are still driving our auto industry.
And I think as we've seen from a strong SAR, the auto financing is strong.
I think the affordability is a legitimate challenge.
I think that if we look at the average price of a new vehicle being close to $48,000 or $49,000,
there's not including service costs, insurance costs, and things like that.
So see with the only vehicle, I think that's a real challenge that our consumers are feeling.
And I think what we're seeing in the auto finance space is that some of our lenders are taking on that risk by taking on extended terms
and taking on higher LTVs on loans that they may have taken in the past.
So I think those are the things that are kind of shifting with the auto finance space, not necessarily availability.
But as much as how they're structuring the loans to be offering them to their customers.
I was recently at the automotive news congress.
So next to a dealer who told me that she thought 10-year auto loans would be a thing relatively soon, which sounds crazy.
But have you heard much about that?
We've heard extended loans, hopefully not 10 years.
I mean, that's really going to put a lot of burden on a customer, especially when you go into the non-prime space and your interest rates are much higher,
which is another area where fed rates aren't really affecting the rates for subprime lending, which is a pretty large portion of what we see on our network.
You know, those a quarter percent rate is not going to get translated down to a consumer that's doing subprime lending.
So, but I hope that we don't get to 10. I know we've gotten to eight at some points.
But that's a real burden on a customer to have an asset that long and not be upside down because with all the technology is changing and things like that,
and inevitably they're going to want to move into a new vehicle and they're going to have a lot of upside down equity.
So hopefully, 10 years is not where anybody goes.
So I want to stick with subprime a little bit that you mentioned.
It seemed like in 2024, the subprime sector kind of got squeezed a little bit.
And when banks kind of really were pulling back, it was a subprime customer that really kind of suffered.
And then you kind of just talked about, you know, this rate cut 0.25 percent is not really going to help them.
If I'm a lender, do you know, are there opportunities there in that subprime market that I should be pursuing?
I think there's always opportunities in the subprime market.
I think it's a matter of how much risk appetite each of the lenders have.
You know, I've used this statement before, like, there's never a void in auto-finance for someone to find financing.
So if one lender chooses to not participate in that space, whether in the prime space or subprime space,
there's another lender that's willing to pick up that volume and take on that portfolio.
So there's tons of opportunities.
I think it's more difficult for, you know, it's a little more hard to work for our dealers to get, you know,
financing for subprimes is a little more complex.
The complexity of the scoring and pricing policies continues to grow in a volume in our industry,
which makes it not as easy to just say, hey, I'm going to, you know, dance out there and get them financed real easily.
So I think it's a little more work on the FNI managers to actually get the structure in a way that makes it a profitable deal for them.
A lot of terms and conditions, a lot of steps are being applied.
And especially in the non-prime space, you see proof of income, proof of residence, or all things that you have to do.
So as a dealer doing a subprime deal, you have to do a lot more work.
There's always been special finance, finance managers for that purpose.
But there's plenty of opportunities for subprime lenders out there for consumers.
I think we're seeing a little bit more pressure to get a little more cash down for those customers,
especially if they want to protect their vehicles with atom market products.
As far as regarding delinquencies, have you seen a lot of movement?
I've always, it seemed like since the pandemic has always been this concern.
Oh, you know, the links are going to rise and repossessions are going to rise.
And it never has really materialized so far.
But I have been seeing some recent studies, especially about the Gen Z buyer,
who has student loans now that they're, you know, back into repain.
Has there been a lot of loans to kind of defaults?
And is that also give lenders kind of pause, maybe especially with a subprime customer?
I mean, I can't really speak, I mean, I'm not in the servicing side of more than the originations,
but what I can tell you from conversations with lenders,
the affordability is actually working in their favor a little bit when it comes to defaults.
Because replacing a vehicle is so much more expensive than maintaining the one you have.
So while they may be slower in their payments, and I can't speak to the actual data on that,
we have heard in conversations with our lending partners that customers are less likely to default on that loan
because they need that transportation and it's not as easy to replace, you know,
because the cost of these vehicles is going way up.
So I do think that that's, you know, for another person to comment on delinquencies and the causes there,
but just tangentially that's what we've heard from our lenders.
But we have seen the subprime lending continue to grow.
And I think that, you know, the lenders are really doing an amazing job at pricing their loans,
and they know what kind of risk tolerance in their loan to take.
So they factor that into how they structure their loans.
And final question for you.
You have a Fed at this last meeting when they did that rate cut, you know,
kind of tip their hat that there would be future rate cuts coming.
Looking at the rest of 25 and maybe into early, you know, Q1 of 26,
what should dealers know when it comes to, you know, about lenders and what lenders are thinking about,
and what do you, how dealers should react to them?
Well, I really appreciate that question because I think, I think the rate sensitivity is clearly something,
you know, we have to watch.
I think we have seen a dip in leasing in the second half of this year.
I'm not sure that's because of tariffs, I'm not sure what, you know,
but lenders have pulled back a little bit of leasing.
But when you ask what lenders are really thinking about,
and this is what we talk to the lenders about all the time, you know,
there's a couple of things, one of the things that lenders are really thinking about is fraud.
They're very concerned about that and making sure they protect the, you know,
they're getting a customer and the asset is properly protected.
So as I'm a dealer going into 2025, 2026,
I know what lenders are asking towards.
They're going to have more efficiency between their dealers and their lenders,
which means deliver better service, you know, faster funding, things like that.
But they are also very focused on how do I eliminate fraud?
And the reason they want to eliminate fraud is because,
I mean, there's a financial risk to a lender, obviously.
But the OEM level, there's a relationship, you know, issue.
If I have to return, you know, contracts back to a dealer, it's a bad relationship
for everybody in the ecosystem.
It's a lender for the OEM and for the dealer.
So I think from a, you know, what am I thinking about 2526?
I think about, how do I deal with fraud?
How do I address and support the shift of consumers to do more financing online?
How do I ensure that I actually continue to sell my after-products, market products,
which have a lot more value as the cost of repairs go up and things like that?
So I think those are the things that are going to try your drive dealer behavior
and thinking about when it comes to auto-finance in the originations process.
You know, faster funding is always important because my cash flow is important
and maintaining that profitability to get in the FNI office,
which is so important to the dealership.
But definitely fraud is the thing that we're probably looking at as something dealers
need to be thinking about and help as the industry,
how do we help with fraud prevention?
Yeah.
It's kind of a game of whack-a-ble that you kind of tamp down some kind of synthetic idea of fraud
or something, then something new pops up.
So it's an ongoing challenge for dealers for sure.
Absolutely.
And it's only going to get more complex as AI keeps growing.
There's a lot of great things we in the industry can do for AI
to help our dealers be more efficient, help our lenders don't be efficient.
But that same AI is letting the bad actors be more efficient, too.
Yeah.
AI for good or AI for bad.
And you really appreciate the conversation.
That's a great information from you.
Thanks so much.
Well, thank you for having me.
I appreciate it and hope you have a great day.
That's daily drive for today.
I'm Kellen Walker.
Thanks to automotive news, executive producer Jake Nier,
as well as a wrong Lauren Seiliff, Riley Hodder
and Paige Hodder for their reporting for today's podcast.
You can get the latest news on dealership FNI,
sales results, and everything happening in the auto industry at autonews.com.
Come back over the weekend for our weekend drive edition of the show.
Our own Mike Martinez and Greg Lason talk about some of the week's biggest news stories,
including the impact of the federal government shutdown and the end of EV tax credits.
You guys in the America are in for a real wake up call into what that $7,500 US tax credit
meant to sales.
You are going to see declines and they are going to be huge.
We'd love to hear from you.
Let us know what you think of the show on the topics we cover today.
Set us an email at dailydriveatautonews.com
or leave us a voice mail at 313-444-2774.
And if you enjoy the podcast, remember to like, leave a review, and subscribe
so you never miss an episode.
Thanks for watching.
About this episode
Tesla achieved a record 498,000 global deliveries in Q3 2025, driven by consumer rush for EVs before the expiration of federal tax credits. The episode discusses how nearly one in five new car buyers now face monthly payments exceeding $1,000, highlighting an affordability crisis in the auto market. Andy Mayers from Cox Automotive shares insights on subprime lending opportunities and the complexities of financing in today's market. The conversation touches on the impact of interest rates and the challenges facing both Tesla and Rivian moving forward.
Original notes
Tesla sets a sales record in the third quarter as consumers rushed to snap up federal electric vehicle tax credits before their Sept. 30 expiration. Most EV defectors say they would reconsider with a $5,000 incentive. Plus, Andy Mayers, lender solutions strategist at Cox Automotive, talks about opportunities for lenders in the subprime market.
Automotive News Daily Drive
Automotive News
0:00
21:10