WEBVTT

1
00:00:00.840 --> 00:00:07.880
Good morning. It is Thursday, July 30th. It's the 30th. One day left. It's the Automotive State of the Union. I'm Paul Jay Daly. That's Kyle.

2
00:00:08.460 --> 00:00:18.340
Today we're talking about Carvana's record run Zoox, no steering wheel, that's approved, and some technicians starting, uh, pretty early in their career, I would say. We love it. We love to see it.

3
00:00:18.600 --> 00:00:26.340
Favorite type of story, actually. We love it. This is a great-- I mean, look, normally Thursday's a bit of a lull. This can be- This is a good Thursday... we got, we got a little, we got a little spice.

4
00:00:26.360 --> 00:00:32.089
If you started the pod just now and you're wondering whether or not to hang out, hang out. Hang out. We got good things to talk about today. We do.

5
00:00:32.119 --> 00:00:39.720
Uh, one of those, we talk about a lot of good things in our email every single day, and you should be on that email list if you're not. We actually have two emails that go out. Yeah. One is every day.

6
00:00:40.060 --> 00:00:52.000
You can get that by going daily.sotu.com, daily.sotu.com. That's our digest. That's the, the good morning paragraph that'll get you going, fired up. That's, uh, you know, there's fun facts and history at the bottom.

7
00:00:52.280 --> 00:00:56.080
There's something for everybody in that email. You really should get it. Yeah. Daily.sotu.com.

8
00:00:56.220 --> 00:01:06.990
And if you're, like, an AI nerd or even an aspiring an AI nerd or AI curious, we have- Or you have no clue what's going on and you're like, "Give me the basics" Yes, like what is an LLM? Yes.

9
00:01:07.020 --> 00:01:18.540
We had that question this morning, which is a good question. Large language model. Um, so you should get our AI email that is geared toward the automotive industry. Yeah. That is autoindustry.ai.

10
00:01:18.620 --> 00:01:27.060
We try to make it easy for you. A lot of great articles there. How did we get that domain? Also, a lot of useful prompts that we generate that you can use every week. Like, "Oh, that's a great idea.

11
00:01:27.360 --> 00:01:37.020
Let me just copy that prompt in, put it into my GPT or Gemini or whatever you use, and just watch it work." Just watch it work. All right. Just go. Speaking of work. Let's go. Let's talk about some news.

12
00:01:37.100 --> 00:01:45.800
Carvana-- Oh man, I had a segue into the first story. Oh. I said, "Speaking of working," and I missed the thing. It's always a good day when we have a segue- It's, it's okay. It's okay... into the first story.

13
00:01:45.860 --> 00:01:53.720
But this is great. Carvana just put up its biggest quarter ever, selling more than 197,000 vehicles, generating 7 point billion in revenue.

14
00:01:54.280 --> 00:02:05.260
They're scaling production, expanding their Odessa capacity, and says the long-term target of 3 million an- annual sales is firmly on the table. I remember when Ernie Garcia said 1 million was the goal.

15
00:02:05.360 --> 00:02:12.380
That was their big audacious goal. Q2 sales up 38% year over year, double the company's volume two years ago. Wow.

16
00:02:12.560 --> 00:02:24.450
Carvana's now, uh, pacing towards 800,000 vehicles this year while reaffirming its goal of reaching 3 million annual sales sometime between, we'll say, the year 2030 and 2035. Uh- We'll see...

17
00:02:24.450 --> 00:02:34.480
three more Odessa sites joined Carvana's retail production network, bringing the total to 19. They can support 1.5 million units of reconditioning- [laughs]...

18
00:02:34.489 --> 00:02:40.380
and distribution, with, uh, room to eventually hit that 3 million mark. Higher income shoppers are becoming a bigger growth engine.

19
00:02:40.720 --> 00:02:52.040
Customers earning, uh, more than $1,000 a-- $100,000 a year increased to more than six-- increased more than 60% year over year as they have now a mix of higher priced vehicles. The new vehicles probably help.

20
00:02:52.320 --> 00:03:03.150
CEO Ernie Garcia summed up the opportunity saying, quote, "The sales volume puts us at 2% market share of the used car market and 1.5% of the auto retail market as a whole."

21
00:03:04.160 --> 00:03:09.560
There's two stories that are super important for every single detailer, uh, retailer to be paying attention to right now.

22
00:03:09.580 --> 00:03:18.260
The story number one is how to get your reconditioning centralized and the throughput extremely fast.

23
00:03:18.960 --> 00:03:35.700
If you are a multi-location dealer and you're not thinking about reconditioning centers that are offsite, that are solely dedicated to make sure, the, making sure the throughput of your used cars is dialed in so that your merchandising hits early and that you can turn your used car inventory a lot faster than if it went through the regular shop, then you're crazy.

24
00:03:36.120 --> 00:03:37.840
That's what you can learn from Carvana there.

25
00:03:38.280 --> 00:04:12.840
The other thing that you can learn from Carvana is that if people that are purchasing that have household income over $100,000 are looking for a more convenient way to purchase because the rest of their life is oriented around convenience, Uber, Lyft, Uber Eats, DoorDash, because they have access to spend the extra money to get that, then how do you figure out how to make sure that high income earners are getting a, an additional level of convenience and experience through delivery or online retailing or a, uh, a better shopping experience that prioritizes the experience for them?

26
00:04:13.220 --> 00:04:20.480
Those two things are where Carvana is actually, i- is winning. They've only still got 2% market share, so it's not like they're beating everyone.

27
00:04:20.800 --> 00:04:27.370
It's just that they're doing the right things well, the things that they do best, and you can learn from them. Well, I'm gonna see your two things and raise you two things. Get, get on.

28
00:04:27.380 --> 00:04:35.180
First of all, my f- my first thing is how do you come up with these commentary points so quickly? I'm so impressed. [laughs] So impressed. That's my first thing.

29
00:04:35.240 --> 00:04:48.500
My second thing is, [laughs] the first time I met Ernie, he was talking about they, they had, I don't know, half a percent, a four tenths of a percent, and he was telling this room full of dealers, he was saying, "Listen, our goal is to hit 1%, and we think that's far out in the future."

30
00:04:48.580 --> 00:04:57.760
But granted, this was close to, I don't know, seven years ago, and they've surpassed it- Wow... and they're picking up velocity, and now they're saying 2030, 2035, right? That's pretty far out into the future.

31
00:04:57.780 --> 00:05:07.550
But I think one thing Carvana has proven is that they can weather the storm and they can execute. I think that's what we're seeing right now, is the- Man... the, the true- Weather the storm. Talk about it...

32
00:05:07.560 --> 00:05:15.980
the trueness of them being able to execute in the midst of headwinds, and I think that's gonna continue, and I think there's a lot for the industry to learn from Carvana, especially now that they're a new car dealer, right?

33
00:05:16.600 --> 00:05:27.099
Yeah. Oh. At the, at the table, folks. There's gonna be so much to learn. I know. Look forward to- Speaking of being at the table. Woo. Stop. Very nice. Segway. Time. [upbeat music] Feeling on a Thursday.

34
00:05:27.180 --> 00:05:31.220
Amazon Zoox, you know, that little toaster-looking autonomous vehicle- [laughs]...

35
00:05:31.290 --> 00:05:41.180
just cleared a major regulatory hurdle, becoming the first company approved in the US to commercially deploy robo taxis that are paid with no steering wheel, no pedals. Wow.

36
00:05:41.560 --> 00:05:57.028
Uh, it's a limited approval, closely monitored, and it still needs some clearance before passengers can start paying, but, uh, National Highway Transportation Asso- uh, something Association, NHTSA- They approved Zoox to commercially deploy up to 2,500 of these robotaxis a year for the next two years.

37
00:05:57.048 --> 00:06:07.007
Unlike Waymo, it's fully electric. It's like you step into this, like, little transport vehicle. There's no steering wheel. Seats face one another. It's a different experience than riding in a car, for sure.

38
00:06:07.588 --> 00:06:13.088
Uh, they carry test passengers. We see them when we're at the, you know, NADA show in Vegas. If you're in San Francisco, you've seen them.

39
00:06:13.648 --> 00:06:19.528
Um, but now this new exemption allows them to actually charge for the rides as well, so now it's like a full commercial unit.

40
00:06:19.628 --> 00:06:28.188
Um, you know, they have some added reporting requirements covering, like, crashes or if they stop improperly, but we know everyone else is having trouble with that, too. So, I don't...

41
00:06:28.208 --> 00:06:36.878
I wonder what those extra requirements are. Um, so NHTSA administrator, Jonathan Morrison, said, quote, "We have the ability to pull the exemption if we see major safety issues," so dad's watching.

42
00:06:36.908 --> 00:06:41.568
One thing I don't understand is, is how this differs from what Tesla's doing with the robotaxi.

43
00:06:41.668 --> 00:06:49.408
It, I think it's just because there's no steering wheel or pedals, and something new is always a little bit- Is that what it is? Yeah, yeah, yeah... un- Absolutely. That's, that's the only difference, really. Yeah.

44
00:06:49.418 --> 00:07:00.468
It's like this is fully autonomous with no way for someone to get... How, how do they- I mean, this is- How do they drive- Let, let me tell you... this thing if it's, like, like, not talking to the, the mothership?

45
00:07:00.528 --> 00:07:08.688
Do they just, like, pick it up? Like- You just gotta pick it up. Yeah... is there, like, a secret compartment where, like, a little joystick comes out? Whoop. [laughs] That, that's kinda how I imagine it to be.

46
00:07:09.528 --> 00:07:22.368
I mean, seeing these things run around Vegas, and having been to San Francisco, this is, for large cities that have, like, interconnected- Yeah... very, very resilient, like, streets, blocks- Boulevard and streets.

47
00:07:22.378 --> 00:07:32.868
Yeah... these things are amazing. So good. They, they are so easy to maneuver. They get in tight spaces. You think about their ability to just, like, pull up, get, grab a, grab a crew, and roll out.

48
00:07:33.368 --> 00:07:42.568
Um, I, I, I see these going rapidly into many cities. $2,500, uh, 2,500 of them a year is not many, still.

49
00:07:42.668 --> 00:07:53.018
Uh, so I'm interested to see, like, when the ramp happens, because that's only gonna supply, you know, a few cities. Uh, but- I mean, I feel like this is, like- Man... this has Nashville written all over it.

50
00:07:53.048 --> 00:07:59.348
Bro, these, these would rip around- Bro, and they need-... downtown Nashville... like, a button- Are you kidding me?... that's, like, bridezilla mode, right? G- Yes... 'cause it's all the bride... Right?

51
00:07:59.408 --> 00:08:06.488
And just- Oh, dude, people would be branding these things all o- all over the place. And Amazon has a massive foothold in, in Nashville. They sure do. So, I see them coming here quickly. Oh, my gosh.

52
00:08:06.498 --> 00:08:17.067
So, and we already have Waymo, so it's like there's a, there's a precedent for some of this stuff. I wanna bring one of those big, like, gigantic JBL boom boxes into one of these. Oh. And, like, a little disco ball.

53
00:08:17.288 --> 00:08:24.948
[laughs] You know what I want? I want, like, a cowboy hat attached to the top of one. That's a g- You, you, h- Well, you came up with- We got a business... the toaster idea, too.

54
00:08:25.488 --> 00:08:32.268
Gotta get the one with the toast outside of it. Dude, yeah, you just got, like, bread sticking- Sticking out the top... out of the top. Oh, my goodness. Come on. Oh, we, the football helmets.

55
00:08:32.308 --> 00:08:41.488
Like, we can do the whole thing. All right. Oh. Speaking of childish ideas. Stop. Segway. Time. [upbeat music] Not really a childish idea. [laughs] This one we absolutely love.

56
00:08:41.568 --> 00:08:46.228
Sinclair College is giving middle school students an early look under the hood and into the industry's future.

57
00:08:46.648 --> 00:08:54.188
It's a three-day automotive technology camp that mixes practical owners, uh, ownership skills, helping dealers and schools build tomorrow's workforce.

58
00:08:54.668 --> 00:09:01.028
14 students, ages 12 to 15, are learning how to change oil, jumpstart vehicles, remove batteries, and rebuild small engines.

59
00:09:01.348 --> 00:09:09.188
Campers also experience ride-alongs in electric and self-driving vehicles, uh, connecting traditional shop skills with emerging automotive technology.

60
00:09:09.808 --> 00:09:17.888
Voss Auto Group sponsors the camp as part of its longtime, uh, partnership with Sinclair, and sees the program as an early technician recruiting pipeline.

61
00:09:18.488 --> 00:09:31.488
Sinclair says roughly 110 students work in their local repair, repair shops during any given semester, and 95- Woo... percent of graduates find industry employment within one month- Come on... 'cause we need them, fam.

62
00:09:31.508 --> 00:09:42.948
Yeah. [laughs] Let's go. Voss service manager, Tim Whalen, said, "We like to bring young people in and help them become a professional technician." More of- Snaps on this one... this in the industry.

63
00:09:43.008 --> 00:09:51.798
It is the easiest thing to deploy. There... You don't have to look around. I don't care if you're rural. I don't care if you're an urban dealership. There are students- Yeah...

64
00:09:51.828 --> 00:10:00.508
everywhere who are thinking- It's too easy... through and deciding what they're trying to do when they grow up. We know they're hearing a lot, "Is college worth it? Is it not worth it?" All this stuff.

65
00:10:01.048 --> 00:10:07.008
There are kids that are technically oriented already. Cars are so much fun. Ugh. EVs are even more fun.

66
00:10:07.088 --> 00:10:17.008
To get them in, get them around all the stuff, and be like, "Hey, you could do this every day, and make really good money, and get all the things that everyone says, like, you should have to wanna get when you're..."

67
00:10:17.128 --> 00:10:24.677
Like, get a house, and provide for you, get pets. Or if you wanna travel. And forget about all that college nonsense. If you want that electronic stuff, if you want your own car, right?

68
00:10:24.748 --> 00:10:32.228
All of those things are possible through this very lane. And, I mean, can't celebrate this enough. Hats off to the people of Voss Auto Group.

69
00:10:32.368 --> 00:10:39.928
Everyone else who's not doing something like this should reach out, pay attention, um, and, and do more of it. I mean- Done... gosh. Shift it.

70
00:10:39.938 --> 00:10:46.968
It's easy to make this an industry when people fight to join, when you're doing- It's easy... stuff like this. It's right there. They're not even fighting to join. They're like, "I'm in." They, no fight included.

71
00:10:47.028 --> 00:10:52.427
They're like, "I'm a part of it. You should be a part of it, too." We'll see you here tomorrow morning. Go get that email we talked about in the beginning, too.

72
00:10:52.488 --> 00:11:07.028
[upbeat music]