This is the office at the dealership where you go to sign the final paperwork to buy your car. It is also where the dealer tries to sell you extra add-ons like extended warranties, wheel protection, or anti-theft systems.
This is the main computer system that a car dealership uses to run everything. It tracks which cars are on the lot, manages customer paperwork, schedules oil changes, and handles the dealership's accounting.
This is Volkswagen's internal software company. Think of them as the team responsible for building the 'operating system' (like iOS or Android) for all VW, Audi, and Porsche cars, though they have struggled to get their software working smoothly and on time.
DRAM is the temporary memory (RAM) inside a computer. In a modern car, it acts like the short-term memory that helps the dashboard screens, navigation maps, and safety cameras run quickly and smoothly without lagging.
A top executive at Qualcomm, a massive tech company famous for making smartphone chips. He is leading their effort to put powerful computer chips and artificial intelligence into modern cars.
This is artificial intelligence that doesn't just talk to you, but actually does chores for you. For example, instead of you pulling out your phone to pay for a parking garage, your car's built-in AI can spot the payment code, log in, and pay the fee automatically while you drive in.
This is a complete computer package made by Qualcomm that car companies install in their vehicles. It controls everything from the touchscreen displays and internet connection to the safety sensors and self-driving features.
This stands for Advanced Driver Assistance Systems. It is the group of safety features in modern cars that help you drive, like warning you if you drift out of your lane, keeping a safe distance from the car ahead, or slamming on the brakes to avoid an accident.
This refers to an AI system where human engineers can easily look inside and see exactly *why* the computer made a specific decision. For self-driving cars, this is incredibly important so we can prove why a car decided to steer, brake, or accelerate in an emergency.
This is a self-driving car company owned by Google's parent company. They operate driverless taxis that pick up passengers and navigate busy city streets completely on their own without a human driver behind the wheel.
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This podcast is brought to you by Reynolds and Reynolds.
There are three waves of AI transforming our industry.
Explore what they are, where AI technology is headed,
and what these emerging innovations mean for automotive retailers
at rayray.com slash ai-waves for more info.
Welcome to Daily Drive for Monday, June 29th, 2026.
I'm Jake Nier in Detroit, in for Kellan Walker.
Today on the show, Texas is quietly closing in on California
as the country's top auto market. America's publicly traded dealer groups are going all
in on AI and smaller rivals are starting to feel the pressure.
And Volkswagen is pulling the plug on a billion and a half euro automated driving
partnership that never delivered. Plus, Qualcomm's Nicole Dugal talks about why
he thinks his company is positioned to become the auto industry's largest chip supplier.
It is moving so quickly that these use cases are now adding true value to the experience
because this is something that all of us have to deal with on a regular basis.
Let's run through all the news you need to know to keep up in the auto industry.
Texas is quietly closing in on California as the country's top auto market,
and it could soon take the crown. According to a new JD Power report,
Texas has been eating into California's U.S. light vehicle retail sales share
since 2019, driven by a taste for higher dollar pickups.
JD Power's Tyson Jomany says if current trends hold, Texas becomes the nation's largest auto
market. It was also cool, though, that we found that from a dollar spent perspective,
Texas has already surpassed California. The most dollars being spent by consumers in any state
is in Texas, and they love their pickups, and that's what they're spending their money on, of
course. But California isn't going anywhere. Analysts say it will remain the industry's
cultural and technological hub, the place where automakers shape design, electrification,
and software. We'll have more on this story in a moment with our own Claire Martinez.
America's six publicly traded dealership groups are going all-in on artificial
intelligence, and it's raising the competitive stakes for smaller rivals.
Group One Automotive leads the pack with more than 50 active AI projects, according to JPMorgan
analyst Rajat Gupta, spanning call centers, FNI technology, and technician productivity.
AutoNation says AI helps save roughly $5 million in 2025. Lithia is switching its
entire store network to an AI native dealership management system. McKinsey senior partner
Inga Maurer tells Automotive News, quote, AI is no longer a forward-looking bet for dealers,
it is becoming a core defense play. And Volkswagen is pulling the plug on its
automated driving partnership with Bosch. That's according to a report from Germany's
Build newspaper, citing internal sources. The tie-up launched in 2022 through VW's
software unit Cariad to develop driver assistance and autonomous driving tech across VW's brands.
But Build says the project burned through roughly one and a half billion euros
without producing competitive technology. VW is now hunting for a new partner with a
contract expected by September. The move is part of a broader, cost-cutting push at the
embattled automaker. And those are today's headlines. You can find more details on all
those stories at AutoNews.com. So what would it mean for automakers and dealers if Texas
were to overtake California in new vehicle share? Joining me now is our own Clara Martinez,
who's been covering the story for us at Automotive News. Clara, welcome to Daily Drive.
Hi, thanks for having me. So right now, California has a lot of influence
because of its top spot. What would it mean for the industry if Texas took that lead in retail
sales share? Well, I think what we've seen is that some trends with what is most popular in the
nation are kind of shifting towards the Southern ideals of having these big trucks, American
automakers, a very traditional look. And so you're seeing foreign automakers that are coming in.
If they're tapping into that market of pickup trucks that follow that American look,
they're having a lot more success than other automakers that have kind of failed and trying
to revolutionize the pickup truck. But you're definitely seeing the love of trucks growing,
and dealers and automakers agree on that. It's interesting because it seems like
California and Texas sort of represent two different sort of, it's sort of a dichotomy,
right? It's California usually associated with cleaner technology electrification,
whereas Texas, like you said, we're talking more of a truck territory here.
Yeah. And it also, the whole EV market with the disappearance of the tax credit and the way that
has affected EV sales in Texas and California, the way that it's shaping the nation is really
benefiting Texas right now because the shift towards combustion engines is something that
Texas buyers have always kind of tapped into. And so now with the hybrid market really ramping up,
you're almost seeing the pickup truck become even more revolutionized in these other markets where
hybrids and EVs have taken the top spot. So you spoke with some dealers in Texas
about this. What did they say? They're pleased to put it briefly. They're really happy with what's
happening. And they've all noticed business is booming in large part because of population growth,
but also because, you know, they were saying people tend to come in with more disposable
income. Some California dealers were saying that people are credit challenged, increasingly not
really going for new vehicles, going more towards the used vehicle market and the data
reflects that as well. But in Texas, you know, people are coming in, they're ready to spend,
you know, six figures on a pickup truck. So it's been great for dealers and great for the business
in the state overall. It's going to be a fascinating story to follow. Clara, thank you so much for
joining us here on Daily Drive. Yeah, thank you. Coming up, Qualcomm's Nicole Dugall talks about
the AI features already built into new vehicles in 2026 and why he thinks Qualcomm is set to become
the auto industry's biggest chip supplier. That's next on Daily Drive.
Three waves of AI are transforming our industry as we know it today. Here from AJ McGowan,
Vice President of Research and Development at Reynolds and Reynolds on all three ways of AI
and automotive where we're heading and what the latest cutting edge innovations mean for automotive
retailers. So I want you to picture what it would be like on that same Tuesday morning that we talked
about earlier with a full agenic infrastructure in place. Your service manager wouldn't start the
day by reading reports. Ray hands them three ROs that need attention and tells them why. Your sales
manager wouldn't spot check calls. Ray already routed the ones that mattered. The GM doesn't
reconstruct yesterday. Ray reconstructed it overnight and gave them a summary. And your controller
doesn't have to pull the deal level analysis every Friday. Ray runs it on Thursday and flags
anything that's worth a conversation. Decisions can get made earlier in the day with better
information by fewer people. And that's what the agenic wave actually feels like in your store.
You know, it feels and sounds a little bit like science fiction, but at the end of the day it's
not. It's just a faster Tuesday. If you're interested in exploring how AI can improve
operations at your dealership, visit rayray.com.ai-waves. That's r-e-y r-e-y.com.ai-waves.
Welcome back to Daily Drive. I'm Jake Neer. If you've been listening to the show lately,
you know we've been talking quite a bit about the DRAM chip shortage lately. That's the race between
automakers and AI infrastructure companies for memory supply. Today, we're zooming out to the
bigger picture, how AI is reshaping the vehicle itself. Nicole Dugal is Executive Vice President
and Group General Manager for Automotive, Industrial, and Robotics at Qualcomm. He spoke
with our own Molly Boygon at Qualcomm's Investor Day in New York and makes the case that agentric AI
in vehicles, cars that can think, decide, and transact on your behalf, is already here.
Here's a piece of their conversation on the latest episode of the Automotive News Shift podcast.
So yesterday at Qualcomm Investor Day here in New York City, you mentioned that Qualcomm is on
track to become the largest auto semiconductor supplier. What timeline were you thinking for that?
So, you know, our business in automotive has really tracked the pace of change of central
computer architectures. We've been driving this over the last decade or so and we are now finding
that every automaker is adopting the Snapdragon Digital chassis that's become the standard
mainstay architecture that most modern vehicles are built on. So over the coming years, I think we
are well set to become one of the largest in the automotive industry. Over the coming years,
got it. You also mentioned yesterday that OEM and other auto industry partners are increasingly
seeking satellite connectivity for their connected vehicle functions. Can you talk a little bit
about why that trend is emerging? I think as connectivity becomes more and more important
for every vehicle, especially in the context of commercial vehicles, vehicles that have to operate
in remote environments where connectivity is part and parcel of the service offering of that
specific fleet, always on connectivity is a requirement. And we've started to offer satellite
connectivity across a variety of different constellations over the last few years. And so
business customers that have that need, this has become a very interesting value added feature.
Do you expect that satellite connectivity will enable
features across the automotive ecosystem or is it going to be used for emergency functions,
OTA, update redundancy? How sort of granular or broad do you expect?
Probably the latter to start off with. But I think as connectivity, as satellite connectivity
becomes more ubiquitous, I do expect that ultimately this could become something that
all vehicles would have. But I would say over the coming years, it's probably more of a feature
that will be needed by certain vehicles that either operate in environments where cellular
connectivity is spotty or where the use case requires you to have backup connectivity.
You also mentioned yesterday in your presentation, this scenario whereby in the future,
a car would be able to scan a QR code and pay for a service. I was curious about how you're
thinking about, I understand that that's not necessarily a present-day reality, but something
that's not too far off. How are you thinking about enabling those types of features while there's
not a lot of clarity on the liability and safety certifications for that type of agentic behavior?
So actually that isn't in the future. That's happening now already. And the use case that I'm
talking about actually isn't really connected to safety. I mean, the use case of you driving
into a parking garage and typically taking your phone out to scan a QR code and then pay or take
your phone out and touch the phone to the car reader. The car can now do that for you. And it's
done because the models are intelligent enough to figure out what the QR code is, scan them,
go to the link, and then agentically complete the transaction. If you trust your car to be able to
make that transaction for you, the agent will essentially do that in the background.
The tech, I guess my point yesterday was the tech is only here. It is moving so quickly
that these use cases are now adding true value to the experience because this is something that
all of us have to deal with on a regular basis. And this is where AI is being applied in a real
world use case. And so I think that use case is sort of, as you said, not so tied to safety. It's
a financial transaction. But in the future, I think you will want your agent to be able to
do various vehicle controls. That's right. What is the movement towards standards or
certifications for agent behavior in the vehicle? That's true. So I think with any new technology
and you're aware of this from ADAS, any new technology that brings in a certain level of
automation, it requires transparency, it requires the ability to understand what was the decision
making logic, how transparent was it, how much of a white box is it. Those same rules will apply.
And I feel like you're going to have two different types of behaviors. I think one is
things that we get used to in our consumer lives with our smartphones, with our PCs.
Once that level of trust is built, for those same use cases to transcend over to the car is
actually very straightforward because the car is really just another surface area where a consumer
is living their life, executing a transaction. Then there is the aspect of AI being used in
autonomous driving, where the more autonomously AI is managing a vehicle driving function,
the more important it is for you to know exactly how a decision was made. And there,
I believe there is going to be a tremendous amount of scrutiny in terms of making sure
that those decisions are white box decisions. And then there are going to be the uses of AI,
especially for improving the behavior of the vehicle. Think about fuel consumption. Think
about battery management. Think about improving the capability of the powertrain suspension.
There is so much of data that the car generates and the ability to improve those subsystems
require you to be able to deploy AI and extract insights from that. So I think of AI mostly in
the context of it's a tool that is going to create a level of efficiency, productivity, automation
for a consumer. And the consumer can be a machine, it can be a human, it can be the vehicle itself.
So you have to look at it in that context. Do you feel that the current development of
ADAS and autonomy will stand up to the scrutiny that you described, where the expectation for
agent decisions in ADAS and autonomy will have to be a white box, will have to be transparent?
I think it's a very good question. And I think that this will apply broadly to pretty much any
area that we start to apply AI to, to take advantage of the pace at which AI can get things done.
I do believe that there is going to be scrutiny and even regulation in specific areas where we
must make sure that we understand the decision making logic. However, I think as humans start
to trust technology more and more, I think you will get to a certain inflection point where
while the technology may not be perfect, it'll be close enough to where over time with more data,
it will just keep getting better. I think if you look at the cases of Vemo and Vemo's are now
deployed, the capability is getting better and better. They have a tremendous amount of redundancy.
They are designed to do no harm. They're designed to make sure that the job of being able to manage
transportation is something that they complete. The challenges then become you run into unstructured
environments. You run into a scenario that was not planned for, there's construction, there are,
you know, and that gets solved over time. But the fundamental purpose of being able to
apply a robot taxi from A to B in a predictable environment is actually solved. I think it's
like any other tech. Once you start to believe in the tech, once you start to trust it,
then it becomes second nature, but there will be a window of time when the transparency will have
to be there. Qualcomm's Nicole Dugal spoke with our own Molly Boygon. You can hear their full
conversation on shift wherever you get your podcasts. That's Daily Drive for today. I'm Jake
Nier in for Kellan Walker. Thanks to our own Clara Martinez, Lindsey Van Holley, and Mark Holmer for
their reporting for today's podcast. You can get the latest news on automotive tech and innovation,
the Texas, California auto market battle, and everything happening in the auto industry at
autonews.com. Come back tomorrow for a conversation with JD Powers Tyson Jomany about why he says
chasing sales volume records is no longer the goal. We have had discipline before at various
points in time in the industry, and it's always proved in the end that we overbuild. Overbuilding
means inventories rise, and when inventories rise, dealer margins fall, and incentives increase,
and that leads to worse profitability. We'd love to hear from you. Let us know what you think of
the show and the topics we covered today. Send us an email at dailydrive at autonews.com,
or leave us a voicemail at 313-444-2774. And if you enjoy the podcast, remember to like,
leave a review, and subscribe so you never miss an episode.
About this episode
Texas is on the verge of overtaking California as the nation's largest auto market, fueled by a massive appetite for high-dollar pickup trucks. Meanwhile, major dealership groups are aggressively adopting AI, leaving smaller competitors to play catch-up. Volkswagen is shaking up its software strategy by ending a costly automated driving partnership with Bosch. Finally, Qualcomm’s Nakul Duggal joins the show to discuss how the company plans to dominate the automotive semiconductor space, highlighting the rise of satellite connectivity and cars that can make financial transactions on their own.
