Animal Spirits Podcast - Talk Your Book: Need to Have Cars With Car Dealership Guy

Episode Date: September 9, 2023

On today's show, Michael and Ben are joined again by CarDealershipGuy to discuss: Ben's car leasing dilemma, leasing vs buying, why car prices have gotten so expensive, Tesla vs everyone, and much more!    Find complete show notes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.   Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com Past performance is not indicative of future results. The material discussed has been provided for informational purposes only and is not intended as legal or investment advice or a recommendation of any particular security or strategy. The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation. Information obtained from third-party sources is believed to be reliable though its accuracy is not guaranteed, and F/m Investments makes no representation or warranty as to the accuracy or completeness of the information.   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Riddholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Riddholt's wealth management may maintain positions in the securities discussed in this podcast. We were joined today for the second time by car dealership guy, our favorite car person who boosted out of the scene, I don't know, a year ago, two years ago? How long have you

been doing it for? Something like that. I would say he really, really blew up in about a year ago. Okay. Last time we talked to you, Michael talked about his new experience getting a Jeep, and I rode in it. It's a nice car. It's got a nice top that sort of fades away in the summer. Pretty. Michael doesn't like the EV, I guess, part of it. Something. you're wrong with it, right? I'm not quite regretting the purchase because I do, I like how it looks, and I love the electric top, but the electric part of it, like, isn't great. It shut off one time on the road, and I was like, I started sweaty.

I was very anxious. People were hunking. Probably not the greatest vehicle, but I like it. It looks nice. Thank you. So I think I actually, so my lease is coming up in early 2024. I lease a Ford Explorer. I need the room and I have kids.

It's like the Honda accord of SUV. for me basically, right? And I think, I think I should, and it's supposed to go up in April. Wait a minute. Wait a minute. Before we talk, get it, tell him your take. What's my take? If Ben could have any car in the world, he would have a Honda Accord. I'm an A to B guy. If I could, if I could just pick a car, I would drive in a cord. That is a basic B take. No one drives a sedan anymore. I want to drive a sedan, but I have three kids and they have sports and so I can't fit it. That's my goal one day. So I think I actually looked into ending my lease early and looking for deals because of one of your

tweets. I think you said, here's the biggest deals right now. And you have a list. And I saw Ford's on it. Like you were saying Ford is offering some rebates. So two months ago, I reached out to the dealership and said, hey, I know my lease doesn't end yet, but can we look into something? So they looked into it for me. They said, yeah, come on in and we'll talk about it. And we talked. And they said, it's actually cheaper for you right now to, like, build your own car through Ford. And it would be more expensive for you to buy a car that's already here on our lot than it would be to assemble a car through Ford and have them make it and then send it here. Like, all right.

So they did that. And you've been tweeting the fact that, like, auto rates are like 9% and saying fewer people are leasing because of this. And so I'm thinking, oh, crap, my payment went up, I think 12% or something from two and a half years ago. It was negligible. It was up like $30 a month. I was shocked. They gave me a bunch of rebates. And so I got it.

So I said, give me the same car I have now, just a different color. but like all the same features. And it was like $30 more a month. So I asked the guy when I was checking out of my lease, and like, why did I get such a good deal? What's going on here? Because I keep seeing how new cars are so much more expensive and the rates are so much higher.

And he basically said, you kind of got lucky. It's the end of the month. They were offering a bunch of rebates. And it's just luck of the draw, basically. I don't know if it's luck, but yeah, I mean, I think overall the, you know, if you just look at the industry right now, the domestic manufacturers, they're just, they're oversupplied, right?

They produce too many vehicles. So is that because they're playing catch-up or what? I don't know the specific. I mean, there's many factors. It's always supply and demand, right? So you may be producing too much and, you know, demand starts falling. But you're in an increasing interest rate environment, right? The average auto loan rate in the country is at like 9.5% right now.

You know, it's the average. That's the highest it's been since the early 2000s. Does that impact leases as well as? Of course, of course. Yeah, it impacts leases in several ways. I mean, number one, leases are made up of like, four major pieces in the equation, but one of them is called the money factor, which is pretty much a fancy term for the interest rate. And so it impacts that.

Oh, dude, hold on. It wasn't, sorry to cut you off. It wasn't you. It wasn't you. It was somebody else who told me when I'm, when you go into a dealership, and listen, I don't go into a dealership anymore. I use my broker. But if you do go into a dealership, you want, you want, you want to know that you're not fucking around, the person who's negotiating with you, ask him what the money factor is. And then he'll be like, oh, shit, I can't see this person over. He knows about the money factor. So what is the money factor? I don't have the technical definition for you. I'm sure the audience can Google it better than me.

Exactly. But it's essentially, you don't even know it. No, no, but I'll tell you what it is. It's essentially the interest rate. And then they divide it by like, I forget it. I think it's like divided by 365 or something. And you essentially get the interest rate and like. Yeah, it's just the discount rate basically, right?

Yeah. And like decimal format. That's what I'm saying. It's dumb. Like everything. It's just like the finance world. I talk about it all time. Like people make things confusing so that other people just like don't get it.

Right? like finance like all these derivatives and all this crap right you're just trying to get an edge on someone else but the bottom line is um so yeah look interest rates are seriously impacting leases leases are down if if we were leasing in 2019 like one out of every three new cars today it's one out of every five right that's a big difference that's almost you know that's you're talking about almost you know just half as much right so you've really seen that a massive drop in leasing but it's also due that, look, the manufacturers that don't have that much supply, they prefer to sell the car, right? They can sell that car up front. And so it's also, you know, an incentive

thing because, you know, you get all those upfront economics. And so, you know, leases are just down across the board. And you're seeing that the manufacturers that have supply right now and are doing more rebates and offering sales and discounts are the domestic manufacturers for Stalach's GM. Intuitively, you would think, not knowing anything, that, you would think, not knowing anything, given interest rates that people would prefer to lease instead of to buy, to finance it. But you're saying that leases are just as impacted by interest rates as as owning, as purchasing? It's tricky because on one hand, the average lease payment versus the average monthly payment, if you compare the two over like since like 2019, leases have gone up.

They've actually increased 10% more than a normal monthly payment would have, a purchase. What drives that? So again, like I said, it's, you know, manufacturers are disincentivized to lease the car. They're more incentivized to sell you the car. And so, you know, just naturally. You know, the other piece that helped me is I had more equity in my used car because used car prices are up. So they're saying that's a big piece of it, too, that the trade end of my old one,

the equity was still pretty high. So it was worth more than what they figured. It's kind of dumb because, like, you do have more equity, but then you're also paying more for another car. Right. Yeah, kind of like buying and selling a house right now, yeah. Yeah, the average used car is up like 45%. since 2019, from like 18, 19 grand to 28,000 now.

So, I mean, yeah, it's like, it's cool. Like, you feel good at the moment. Like, oh, yeah, my car. I drove this thing for 50,000 miles and it's only worth 5,000 less. Right. But then you're like, oh, shit, I got to pay $55,000 for Toyota Sienna. So the other thing they told me, I asked, I said, so how are you guys normalizing? Again, this is, this is one dealership in West Michigan, so take it for what it's worth.

And they said the biggest difference between now and pre-pandemic is their lot is never going to be full again. They're like, we're not going back to those days where we have a full lot of cars and you can choose. That's not true. You don't think so? That's not true. Okay. No, who said this? A Ford dealer?

This is like the guy signing my lease papers. Was he bald? He just said he thinks that they're not going to fill their lot like they used to and just have all these cars. And maybe that's just a decision that they made did not hold all the inventory. I'm just curious because I feel like I still see a lot of empty lots places or not not empty, but they're not full anymore. Look, I think that's like a utopia. perspective, like, yeah, like, we're not going to have fill up. Look, I'm not saying that lots, fine, I'll give him some benefit of the doubt. I'm not saying lots will be as full as they were,

you know, five years ago, fair. But at the end of the day, it's a free market. And, you know, I think that things will continue normalizing. I think lots will continue to fill up. Again, it might not be like it used to be, but I do think they're going to continue to fill up. And so I don't, I don't necessarily buy that like, you know, we're going to this like, you know, very minimal inventory on lots type of gig, because I just don't think that's the case. I don't think a free market is going to function that way where, you know, you're going to tell someone, hey, you can, you have to order this car online when my competitor down the street is offering it to me right now.

Right, because most people want to see it first, right? Yeah. And look, brand loyalty is at an all-time low. That's a super important point to note, right? Because if I am at a Ford dealer who I only has five cars on this lot and then the GM dealer right next door has a thousand cars, a hundred cars, whatever. And I need a car, like, I don't want to wait two, three weeks a month. Who knows how long? Maybe I'll just go. That's the thing. I had to wait two months to get mine. There we go. So I don't think that's a practical perspective. It's nice.

A lot of dealers, you know, think that it's like, that's the utopian perspective. Yeah, let's get to that point. Like, you know, just in time, you know, you save on floor planning costs, you save paying interest on the inventory, blah, blah, blah. But I don't think it's that practical in an environment like this, that's more normalized. So interest rates for, you tweeted, the interest rates for use cars are 11%, which is higher than the overall market, which is higher than that. They're actually averages, average across the country is around 13 and a half, 14%. And so if you've got, if you have not great credit, obviously it's even worse. So you also, you also tweeted about the percentage of of loans that are 60 days delinquent. Now, if you're not paying your car loan, that's like the last

thing to go, right? Like you need your car to get to get from A to B. Are we worried? Are you worried? Are about the implications of higher interest rates impacting people to the point that they can't service their debt and that they're going to have to just give their car back? Well, first of all, you know, cars are not floating rates, car loans, right? So, you know, these are like simple interest loans. I'm not worried that interest is impacting people that currently have vehicles or anything like that. I think if anything, it impacts you, it impacts your daily life in other ways, right?

Like just general inflation across the board, you know, you're priced out of, you know, suddenly you can't buy a house, things like that. I think that's where how it actually impacts the, you know, the American consumer. I'm not an economist, but I'm close enough to this info that, you know, I have sort of that kind of pulse. And so anyways, I think that you're going to get squeezed. People are getting squeezed in other areas of their life, you know, student loan payments being resumed, all these things.

And I think then that then impacts your ability to pay your loan on time. And I think that's why we're seeing, we're seeing, you know, defaults, or delinquencies specifically, I want to say that like 60 plus day delinquencies for Asaback security loans are like 5% or so plus minus, which is, I think it's the highest since 2009. Now, that's on the public side. I know Cox Automotive also put up some data, put out some data. And they said that around 20 basis points of all loans are, you know, I don't want to completely quote just because I forget if it was fully delinquent, but the point is that the benchmark

is that a high number? Is that a high number or low number? Well, so let me like, you know, bring that all full circle. The benchmark that Cox Automotive put out with respect to repossessions specifically states that we are back to 2019 levels. Okay. Which, yeah, which exactly, it's not like too concerning. So, so what I've been saying about this is like, look, something to watch. Delinquencies are rising. Repos are clearly rising. We're also, you know, stimmies aren't being thrown around left and right. But I'm not. I also don't think that we're, you know, it's at a crisis point or anything like that. Yeah.

I mean, there's still plenty of money in the market. You know, unemployment is low. If we see unemployment start to rise, that's when we should start getting concerned. Does this, I think you've tweeted this data before, but you can kind of give me the feeling on it. Are people just holding their cars on for longer now? Is like the average holding period of a car just extending now because of all this? Yeah, people are definitely holding the car.

I mean, we're at an all-time high. I think it's like around like 13 years for the average car specifically. That's an all-time high. you know it's been a tailwind for service facilities repair shops they're booking you know record record profits there was a bit of a dip in july specifically so it seems like maybe like the summer lull or something it could also be that people are just opting into going to more independent shops and you have to remember that you know throughout the last three years we've undersold roughly 8.5 new car 8.5 million new cars and so those are all cars that would otherwise be on the road

today and would go be, you know, using their warranty at the new car dealership. And when you don't have a warranty, you might not go to the new car dealership because you're just going to go to a lower cost vendor. And so it's tricky. You know, we've seen this increase in service and then now we're seeing this dip. But nonetheless, I mean, it's still overall, I'm still very bullish on the whole service side of the business because you got to remember that, you know, people don't want to buy a new car. They don't want to lease something for $750 a month that they could have leased for $400 a month a couple years ago. And, and they They just, they're trying to kind of, you know, extend the lifetime of their current vehicles.

So let's talk about how expensive cars are getting. Ben and I spoke about your tweet a couple of weeks ago that some people are paying mortgage payments for fancy cars. And I really, I'm struggling for words because these numbers are so astronomical. In Florida, somebody is leasing a 22 Accra NSX. It's a three-year lease for $5,600 a month. A Mercedes-Benz-I said no one bragged about an ACRA and people corrected me on that. saying no, no, no, it looks like a Ferrari. It's a great car. I mean, but, like, go ahead with these cars. It's crazy talk. Yeah, well, look, I think you'd be surprised. So this is actually kind of

funny, right? Like, those cars, those loans actually perform better typically than the lower end, because those are people that have money and they can afford it. And those are clearly like, you know, I saw this data. I was like, what the heck? I was like, this is crazy. Let me just, I want to tweet about it because it's, it's very, it's aggressive. So, you know, it's obviously a very kind of, you know, strikes out of you. But this is the thing, right? people are still paying crazy you know crazy amounts for cars nowadays right like when you when you look at the average um the average new car today is like around like 50 grand just a little bit under right we have no more cars under $20,000 right you can find cars that are for sale under $20,000 but

not one transacted in July under $20,000 what are the cheapest cars is it like a Honda Civic is it kind of that range is that yeah I mean it would be that class not Honda Civic to be specific you know like maybe like a Chevy or something but you have to have to have a remember in Nissan, but remember this, that Mitsubishi, their Mirage, which has been the cheapest car in the market, they just announced for discontinuing it like a week or two ago. So we are entering an environment where, we've been to this environment where, you know, a new car is becoming more and more of a luxury good. And you have no choice but to go use, to go higher mileage, to go a bit older.

If you look at the supply on used car dealer lots and you look at just assortment, you see that dealers are carrying older cars with higher miles as a percentage of their total inventory today than they were four years ago. You just have no choice as a dealer, right? Like there's a lack of supply on the use side. You need cars to sell or after you're not making any money. And so you're going deeper. You're going older. You're going higher mileage. You have no choice. The average, you tweeted this, the average escalade sold for around 70 grand in 2010. 10. And it's just been a almost straight line up until the right since 02, since you have this data was 50 and 02, 70 and 10 crossed 90 in 2020 and now it's 115. I mean, it's like

a college tuition or something. Like, what's going on? I'm sorry, but isn't an escalade suburban with a Cadillac on it, Cadillac symbol on it? Come on. Right? I think you're going to offend a couple people with that one. No, look, escalates are hot. And so all the full signs SUVs are hot, pretty much all of them. I would say, you know, like all the GM, full-sized SUVs, super hot. Yes, I can't fit into parking lots anymore because these cars are too big now. Yeah, it's, you go to a suburban parking lot, a suburban strip mall. I mean, you see like a wagon near next to an escalate, next to this, next to that. It's true. I actually tweeted that as well, like a couple months back. But look, here's the thing. Escalate, all these full-sized

SUVs are still super in demand. Like, again, people that have money want them. They want the newer ones. And it's, they're still hard to get. Believe it or not, like, you're still paying markups on some of these things, and you just can't get them. You know, it's funny because, like, where we're seeing the supply kind of crunch is we're seeing it on the high end with these full-size SUVs and whatnot, and then we're seeing it on the low end. But then kind of in the middle is where you have all these, like, you know, cars and stuff that are, you know, moving up in day supply. Specifically, I would say, like, luxury vehicles that are not full-size SUVs. We're seeing those that are. I mean, look, I'm just going to make up an example, right?

Throw like, I don't know, like an Audi Q7 or something, right? Like it's not a full size SUV. It's like a nice to have. It's not a neat to have. Again, I'm not taking an escalades that need to have. But if you're a mom and you have like three kids and you need a big truck and you don't want a minivan, you're going to go for like a suburban or like a, you know, a Yucondea or something like that. So it's a bit of, you know, like the Audi Q. Again, I totally just like, you know, I'm picking on that one because I have one.

That's my wife's car. And we're very underwater. I just, I just. That's why I did it. Dude, I just looked this morning because I got a call from my outy dealership because last time I went, all right, so last time I was going to get rid of a BMW X-5. You know what I mean? Like that class, it's like, you know, they're still selling.

I'm not saying to it or not. Of course they are. But you're just seeing those prices come down a bit faster than the full-size SUVs and stuff like that. So the Audi dealership called me yesterday, coincidentally. He's like, hey, Michael, last time we spoke, it didn't make sense. We have some new deals. I'm like, all right, well, I still owe $36,000 on this car and how much is it worth?

He's like, yeah, all right, maybe you're screwed. well get back to your your affordability stuff no one wants to drive them but minivans are still relatively affordable if you're comparing to the big SUVs correct depends what type of minivan you know like I said the sienna right now fully loaded you're gonna it's gonna run you

60K plus minus depends really that much yeah at all I would totally get a minivan my wife won't like a Honda Odyssey can you still get for like 40 probably I think I mentioned you I think I mentioned your last podcast we just bought a minivan

so here right let me preface this for a second. So my wife was against it initially. She was moving from an Audi. I've been a dealer in my whole life. I know that minivans are, again, like the Rolex, like we love minivans. They sell super quickly. People want them. It's, again, it's a need to have. It's not a want to have. Whenever you're selling a need to have product, it's an easier sell, right? People want it, people need it. They come. You know, it's just easier a car to sell. So we got it. We got to Sienna. We got a platinum, fully loaded. And it's pretty badass. I mean, I can't believe I'm saying this right now, but Michael's looking at me like, get the hell out of here.

No, I want one. And they're very practical. You know what? But listen, I'm, you know, the quote-to-quote car dealership guy, all this hoopla. And by the way, I had to order it from across the country. I had to get it. Like, it was hard. It wasn't easy to get it.

You know, I had dealers that I spoke with. They're like, yeah, I mean, I can't help you. They're all pre-sold. So it was not easy. So I can only imagine for the, you know, everyday consumer how difficult it is to get a if you had to break down the average, it's hard, obviously, to come up the attribution. But how much of the average car price. seemingly going to the moon in the last 10 years is because of bigger SUVs and not selling as many

sedans because what is it now two-thirds of all cars are as these and trucks how much is it how much is the average being pulled up because of that and how much is it because prices have just really gone higher i don't know the exact split there but i can tell you that look consumerism just uh you know the taste of you know the american consumer for an SUV a bigger a bigger vehicle um more well-equipped more technology more features you know that that impacts it's expensive you need more chips you need more this, you need more of that. And so, you know, we are not selling these base models anymore. No one wants them. And so, yeah, I mean, it's had a massive impact on prices. I can't quantify that for you exactly how much, but I can tell you that, you know, like, I think the number one

most requested feature from like moms in the country is CarPlay, Apple CarPlay. Yeah. You know, by the way, like my wife, huge test, like she was like, I want CarPlay, right? So you just see, it's these features and technology. People want to. So how much, if you did get the base model, like percentage wise, how much could you save if you just said, I just want no bells and whistles. I want it just a straight, whatever. Give me it off. Like, you could save, I don't know, 15%, something like that. I think so MSRP on a Sienna, I am looking is like 46,000. So maybe like 10,000 less than I paid or so. I'm forgetting all features and stuff. So, you know, it's not, it's a lot,

but it's not like 20 grand, 25 grand, you know, it's not that big of a swing. Right. Let's talk about Tesla and electric vehicles. All right. So you said, electric vehicle market share has been on a tear since 2020. So this is by year from 2020 to today. 1.7%, 3.1%, 5.5%, 6.9%. Nice. Is this new sales or cars on the road? This is new sales. Okay. So 7% of new sales are electric vehicles. You also tweeted for the first time ever Tesla outsold Toyota in California. But then I also saw a tweet over the weekend that was making the rounds on Twitter showing that at the start of the year, the Model S was 105, then it went to 94 in January, 89 in March.

It's been coming down, down, down. Today, it's 75. So again, 105 to start the year, the Model S. Now it's 75. What the hell is going on with these Teslas? I think Elon Musk is either putting on a masterclass or he is, I don't, actually, I don't know what he's doing. I have zero idea what he's doing.

But here's the thing. Like, he's definitely doing stuff that's unprecedented in this industry. Like, he is taking goods that are, you know, $100,000, $120, $150, he's discounting it by like $10, $20, $30,000 with one swing. I think, I don't think many, many companies can't even do that, right? Elon Musk, he has that autonomy, he has that power to pull off these moves. He's clearly a long-term thinker. His goal is clearly to put cars on the road over short-term profits. So you have to be, you know, you can't underestimate this guy, man.

I mean, he's just, he's being very aggressive. and we don't even know the ramifications of this. Like, he just lowered prices the other day. How is that going to impact dealers? You know, I can tell you one thing. Every dealer that had Tesla's in their inventory, again, just lost a ton of equity on that. Everyone just took a big, you know, just imagine, right? Like, your neighbor, your house is worth a million.

Your neighbor just sold his for 700,000. It's the exact same house, hypothetically. Your house is not worth a million anymore. So I just think that he's doing, what he's doing in the industry, We're going to know over the next couple of quarters how it impacted in hindsight. But he's just putting a ton of pressure on prices. Tesla Bulls would say this guy's moving so quickly. He's a genius.

He's not letting anybody else enter the market because these prices are so low that competitors wouldn't dare do it. Or bears would say, well, yeah, he's lowering prices because there's more competition and maybe less demand for Tesla's. Do you think it's somewhere in the middle or it's? Yes. Look, both are true. But I think that, you know, having, you know, been, you know, being a CEO and having that, just going through your head and thinking like, do I want to, you know, am I optimizing for top line? Am I optimizing for bottom line? What is most important? What am I incentivizing? Elon is clearly going as aggressively as possible after the top line at the expense of some of the bottom line. And I think that he's going to continue winning market share that way. He wants to be top of mind. He wants Tesla's to be everywhere. He doesn't

want you to go down the street and buy from a competitor. He doesn't even want you to think about it. And so I think that net net, I think it's a smart move. Are competitors following suit, though? Are they lowering prices in their EVs already? I mean, we saw it earlier this year. Ford immediately lowered prices on its vehicles to a loss. So Elon and Tesla, they're actually not losing. So I think, again, I'm here on the sidelines. I don't own stock in any of these companies. I'm just literally observing. I'm commentating. I'm looking at the chess moves. And you know, I'm a student. And I think that, you know, I'm overall, if I was a Tesla shareholder or whatever, I would be happy as long as my, you know, time horizon for my investment was like over

five years. If I'm a ball, Tesla bold, this would make me very excited because everything is constantly in flux with this guy. And you can't, you can't value this company at any sort of steady state because it's still so early. And look at the insane moves he's making. So you can't do any sort of discounted cash flow, because who the hell knows? Is he going to have a monster market share? It's possible. He's definitely, you know, increasing the range of probabilities here. You're absolutely right.

And so I think it's a good move for Tesla. I mean, I just do. Like, they need to fight right now. And they could potentially bring some OEMs, you know, car manufacturers to their knees, especially those that have invested a lot in EVs. Look at Toyota, right? They've been very like EV shy. They haven't really made any investment there.

They've kind of stuck to their hybrids. They're kind of letting everyone kind of fight the war, kill each other, and then they're going to step in. Well, Michael mentioned that the EV side of his Jeep maybe is not up to snuff quite yet. Which other car manufacturers do you think are, like, getting close to being like Tesla in terms of quality or any of them there? Is it Ford? Is that the simple one? Who's there? You know, I'm not, I'm just, I'm more in the business side.

Like, I don't do these, like, crazy reviews of the car. I don't really know at fine detail to give, like, a good educated opinion. And I can tell you that Ford is investing the most, almost out of anyone. They've just, you know, investing billions in EV manufacturing and improving their technology and all these things. Again, it's, they're not at, they're not at Tesla's level, but they are investing a lot. I can tell you that other manufacturers, like, for example, Nissan just announced that they're going to go for, like, this like, you know, hybrid model of, you know, some EVs, you know,

some hybrids, some internal combustion, like, they're kind of, you know, staying more, they're not kind of choosing a side. I think, I think Ford just, I think Ford's making very risky moves, you know, I just do. I think to go to, to be a legacy manufacturer, to put all your eggs in the EV basket, especially, you know, you're not the first to market. You don't have the strongest balance sheet necessarily. I just, I think it's a, it's a risky move. And, and your consumers are not necessarily asking for it. Go to the Midwest. Go to any four dealer. Ask it how is EV businesses. Come back and tell me the results. I get you, I guarantee it won't be great. Again, coastal cities a bit different.

But still, like, you know, I don't know if they're following the consumer that closely. I think it's a lot of politics. You mentioned business that you're a business guy. I want to get to your business in a second. But before we do, just two more things. Stick with electric vehicles. I saw this tweet from at whole Mars blog. Lucid 2022, revenue, $608 million.

Lucid 2020, CEO pay $379. That doesn't sound great. What was the pay? 379. Yeah, but that's got to be stock options, right? Revenue with $608 million. Yeah. I'm sure that was mostly not cashed, you're right, but nevertheless.

Yeah, who knows? Yeah, I mean, look, there's all these EV companies. It was like, you know, it was the EV bubble. And, you know, Lucid is, I'm not saying, you know, they're a Mickey Mouse company, maybe like others, but, you know, they actually have real cars. Started to see Rivians, by the way. Yeah, starting to see Rivians. I have to.

I'm also starting to see them. Yeah, you're right. They're not lowering prices to follow Tesla either? I haven't followed every, you know, that closely, but Rivian is still. Because Rivians are pretty expensive, right? They're very expensive. yeah. They're pretty slick looking, though. All right. What the, yeah, you have, I don't know if you follow this company, but Carvana

stocks up like almost 1,000% this year. What's going on here? You know, from what I understand, a lot of short covering. You know, the company has bought itself some time with, you know, the recent deal they did. They did some, you know, some restructuring and whatnot. So they have bought themselves some time. They still, you know, have their balance sheets, not still, it's still not in great shape, to say the least. They're still facing lots of headwinds, You know, like, you can go on Carvana right now, by the way, fun fact. Look up Carvana's Teslas. They cost more than new ones.

Like, they haven't, again, this is all just happened, but it's, but you see like this stuff is just crazy, man. The pace of things are moving here is become like a stock market and it's the car market. And so Carvana, yes, they, you know, they do. And I'm sure they're going to adjust these or I'd hope they were, I'm assuming they're going to adjust these, maybe not. But the point is, look, it's, I think Carvanas, they've built a very strong consumer brand. There's no doubt about it. They've scaled these vertically integrated, you know. use car operation, logistics, reconditioning tremendously.

And so, you know, they definitely have their place with a consumer. You know, what is good, what are they going to look like in five years? I don't know. Will they shed some business units, outsource certain things to, you know, become leaner and to lower their, their improved cost structure, maybe? But I think, I think we're seeing a lot of cost, a lot of short covering right now. And, you know, it's kind of, it's kind of been trading like a meme stock. So it's kind of tough to know where it's going to go next.

Sometimes it's just that simple. All right. So car dealership guy. You came on the scene, I don't know, two years ago or so and has had a meteoric rise in the content industry. You're doing car content better than anybody else. What has your journey been like? What's on the roadmap?

What do you got going on? Yeah. So first of all, appreciate that. Yep, on Xer, as they say now, I'm at Guy dealership, G-U-Y dealership, so you can follow me. Look, so, you know, it's been a very interesting journey. Like, I came into this as just for fun. I was literally, I remember this day, I was just sitting in bed with my wife.

It's like, whatever, like 9.30 p.m. or something. I'm on my phone. I'm like, you know, let me just create this account. I know a lot about this industry. I've sort of been on the ground floor, you know, like started just as a lot porter selling cars, da-da-da. And I've also been in the boardroom, you know, raising capital, doing all that side of things, you know, institutional investors, blah, blah, blah. So I have a way to kind of see the stuff that the car person will see, quote, unquote, but then to like distill it in a way. in a more sophisticated way, share it with the audience. Anyways, long story short, it's grown a lot. The account has, you know, 400,000 followers now.

Amazing. Not too thrilled about the, you know, I think someone called it like the algorithmic deflation on Twitter right now or X, you know, like you're, you have like 400,000 followers. You tweet something like 50,000 see it. It's kind of annoying. But it's definitely opened up tons of doors, you know, needless to say, overall, like X, Twitter has been, you know, a huge, just amazing thing that happened in my life, you know, sort of building this brand of, you know, just raw, candid, automotive insights that you

couldn't really find a year and a half ago. You know, the industry has some news outlets, you know, much respect to many of them, not all of them. Most of them are stuffy. But the reality is they're more like old school. I want to say their average, their average reader or listener is like 50 plus. And they don't speak to normal people. Yeah. And like my audience is, you know, 28 to like 44. And so, you know, I have a lot of the just a younger generation, you know, the PhDs, as they call them, the Papa has a dealership. That generation of leaders is following me. And so that's great, right, you know, ushering in all these new dealer principles. So look, overall, just having fun with it, sharing valuable knowledge and data. And just seeing where it

takes me next, I think there's massive opportunity here to build a very large, valuable brand around this, content engine of just sharing info into the car business. You seem pretty skeptical that things are going to change in the car dealership world in terms of just in time. Is anything really changing from business perspective? Is this the kind of business model that is relatively static over time and kind of hard to change? I mean, it's a loaded question because I don't think like, look, we are seeing the industry

continue to evolve. You know, manufacturers are kind of poking their nose in this to call like the agency model, right? which potentially is like the idea of like, you know, disintermediating dealers, right? Kind of buying direct from the manufacturers. I think that I think people miss a really big point here. Like, I think that dealers are going to evolve. They're not going to stay the same.

The dealership model. There's certain things that you don't need dealers for. There's certain things that you will need dealers for and you want good dealers for. And so, you know, I recently had a guy on my podcast. He's named Brett Morgan. He's the eighth largest dealer in the country. And I think he made a really good point, right? When you see a dealer that's outperforming in their market, there's a reason for that, right?

Like, this doesn't just happen miraculously, right? They, you know, have a very good system, great customer experience, good processes, whatever the reason is. I mean, I think the good dealers are adding lots of value. I think it's clear, you know, by their performance. And so, you know, I think that all these kind of maneuvers are just going to weed out the bad operators, you know, the bad apples. They're going to get bought out. They're going to, you know, whatever's going to happen. I mean, a million different potential outcomes.

But I think that reality is we're just going to, we're also, we're going to see more consolidation, but consolidation just continues, you know, increasing, accelerating. The industry is, is moving away slowly but surely from like this mom and pop industry like it used to be to more of, you know, just, you know, mega, these mega groups that have, you know, lots of stores, some of them public, some of them not. And it's also, the other part of that is just, you know, consumer demands are higher than ever. People have, people want more, you know, an easier car buying experience. They want to know more before coming to the dealership.

You need more sophistication. right you see dealer groups now have chief information officers like these terms that like who would have thought about that in like a dealership a chief information officer what do they even mean so you know I mean things are changing and I think net net is going to be better for the consumer over the long run awesome great place to leave it we're talking with at guy dealership on Twitter that's car dealership guy CDG thank you thank you guys it's great Thank you. Thank you.