Carvana’s Best Yet, Hertz Dumps More EVs, Delorean Dispute

Paul J Daly: 0:18

I've never experienced anything like this. These are the first words we've uttered to one another every day or today. Talking about Carvanha is best hertz dumping EVs and the DeLorean dispute really won no weight to this story. Yeah, about the DeLorean. is unbelievable. Actually, it's wild. It's unbelievable. And

‍Kyle Mountsier: 0:41

I have an I have an injury. We haven't even talked this morning, I have a little injection about the second story that you don't even know exists in my

Paul J Daly: 0:49

mind, it's gonna be a great way. That's the best part of this. In our in our conversations this morning, we formed a new word called FOMO. momentum. Momentum. That is what ASOTU CON has, right now. It's got straight up full momentum, we've crossed into this. I personally, I know it happens, but I've never experienced this before. Where it's, it's like we've hit that inflection point that everything is just kind of not coming undone. It's coming together. So on tons of tickets, there gonna be lots of dealers there. We have sponsors, who originally said no, who are now reaching back and be like, ah, what do

Kyle Mountsier: 1:28

you have left out that area shouldn't be there. So

Paul J Daly: 1:33

we're trying to like and like all the print deadlines are passed, but we're figuring it out. And I went into our app for the first time last night while I set up our profile, but I browsed around the event app last night. It is next level.

Kyle Mountsier: 1:46

Awesome. There's so much in there. It's It's unbelievable. Actually, just the fact like the communication, the messaging between people, and the ability to set up a profile and see the event space and see all of that it's it's really, really cool.

Paul J Daly: 2:02

With points, I'm number one, I was number four. As of last night, I was like there's a leaderboard, I was like, let me start doing some of these things. You can post on it. There's a bunch of people already posting on it. I have a feeling there's gonna be a lot of communication going on in this app. That obviously you're only be praying we

Kyle Mountsier: 2:16

haven't even at the event. There's like, there's like 10 More things that were turned on putting into that app. Like we haven't even got started with.

Paul J Daly: 2:24

Can we put swag ordering on the app? Yes,

Kyle Mountsier: 2:29

you can. That's a great, that's a great plan. Yeah.

Paul J Daly: 2:32

What are your swag now? Gonna pick it up later. Oh, man. That's why the swag booth is going to be so much fun. But either

Kyle Mountsier: 2:37

way, my handy dandy notebook here like

Paul J Daly: 2:41

they're going to be awesome. No books in the swag bags. By the way. If you can be there at all, try your best ASOTU con.com. You will not be sorry, this is just going to be an amazing, amazing event. And we're two weeks away from the last day right now. Actually, today is going to be the last day of a soda con in two weeks from now. Wow. Oh, boy, that's a good way to start the day. That's why we're a little late with the show today. Because like I was head down and then I looked at time was like a better gift. Oh, we got some fun stuff to talk about today. Today is one of those days when you know, we built the show early in the morning. And like there's just things to talk about that are pretty interesting. And apparently you have something in the second story I don't even know about. Let's talk about the first story. First Carvana is latest earnings are signaling a substantial turnaround with a net income of positive $49 million in q1, which is a 17% increase and a significant recovery from the $286 million loss. They posted in the first quarter of 2023. With the new shares obviously went up but they went up a lot 37% So far in premarket trading, the q1 net income of 49 million does actually though include a $75 million gain from stock warrants and accompany route Inc. That's the finance company. What does that I can't remember what it is I think it's finance company. But without that, so if you figure that in, it's a $75 million dollar gain, or I'm sorry, $49 million gain. This part contributed to 75 million, it still would have been a $26 million loss posted for the quarter, but which is still a lot better than the $286 million loss last year. They sold 91,000 used vehicles increase of 16% year over year. They still have inventory shortages there get this the vehicles listed on their site are only there for an average of 13 days. That's

Kyle Mountsier: 4:39

how quick turn that's

Paul J Daly: 4:40

like what is that I have to point out something turns a month. See fo Mark Jenkins noted the inventory situation is still limiting their sales volume potential and the company plans to increase production to enhance vehicle selection. CEO Andy Garcia said this quarter validates our belief that the potential in the potential of online retail to drive industry industry leading profitability and customer experiences and roles and insurance all the people

Kyle Mountsier: 5:07

that got in like when this thing went to $7 Literally a year ago what is your remember that

Paul J Daly: 5:17

I do I because I know a ton dealers that were like forget that and then I knew a ton of dealers that were like we're buying a bunch of stock and they but most of them sold it like 2118 No

Kyle Mountsier: 5:28

118 It jumped from 80 something yesterday to 118 Oh my god like Carvana is on to the moon path. It's kind of nuts. They're not going anywhere firm

Paul J Daly: 5:40

cannot sustain I mean, I have to say there's a lot of respect for a company that can be on teetering on the edge of bankruptcy literally and edge and bankruptcy

Kyle Mountsier: 5:47

restructuring the whole nine yards and come back. Raging respect.

Paul J Daly: 5:53

Respect. I think a lot of people thought like, well, we don't have to deal with that anymore. But you know, I I think the mentality for savvy dealers are the same. And it's not like Oh no, another competitor. It's like okay, what can we learn from this? What best practices can we take away? What can we learn about the consumer and then implement through a model where people actually have somewhere to go and return things and ask questions and talk to people? Yep, give it to them. It's so good. Still gonna win at home it's so good. Human speaking is still good. So don't go away. Go and buy go buy buy hertz is set to offload a another 30,000 EVs from its fleet due to quote substantial depreciation and escalating maintenance costs. heightening some broader challenges in the Eevee market, but faced with an unexpected high maintenance costs, this is coming up again, the high maintenance. I've heard like conflicting arguments on the high maintenance cost for an Eevee. But also bigger probably is rapid depreciation The company plans to sell in addition, I'm sorry, an additional 10,000 EVs, beyond its initial projection of 20,000. So they're increasing their initial projection of 20,000 to 30,000. Hertz reported a $392 million loss for the first quarter despite a revenue increase of 2%. So a profitability depreciate depreciation charges significantly contributed to the downturn. Right so accrual basis. Evie, Hertzberg, hertz spokesperson said, we've had to adjust our approach to EVs as the economic realities have become clear. All

Kyle Mountsier: 7:25

right, you ready for this?

Paul J Daly: 7:26

I'm so here's,

Kyle Mountsier: 7:27

here's why this is extremely important to any dealer that is listening to this podcast. This is important because hertz is not just offloading this into the direct to consumer sales channel, which is one way that they go about

Paul J Daly: 7:39

this. So I already know what you're gonna say now, because I know who you had dinner with. Last night, I had

Kyle Mountsier: 7:43

dinner last night with Jimmy Douglas from plug x used car manager of the entire sales operation at Tesla. And he's created plug announced that last year at ASOTU CON, he had a call with hertz yesterday. And if you're looking I'm so excited about this yet a large amount of EVs at an extremely affordable price, I would figure out how to get in touch with Jimmy or Susan O'Rourke and get on that platform because that's going to be a massive place to find the opportunity to get these cars to you fast on the wholesale side of the market, and not just let hertz take the retail position on these specifically, lower price Tesla Model threes.

Paul J Daly: 8:32

I clap for I know right now,

Kyle Mountsier: 8:36

there's a dealer right now that is in Florida, that is completely owning the used Evie market, mainly because they've seen the opportunity with the US tax credits, and the lower price model threes to get people that are in mid to subprime buying, like credit, wow, and get them into these EVs because they can because of the price points and the tax incentives that they can put on the hoods of these cars. So like lievable this, this is a massive, huge car opportunity that if you're willing to take the jump into the Eevee marketplace, like is there for the taking. Gosh,

Paul J Daly: 9:20

I'm so excited. I saw I saw that invite to have dinner with Jimmy last night because the news in Nashville. I'm not I'm not even kidding you the moment I saw it earlier in the day, I checked flights It was so good. Unfortunately, by the time I checked, like the last direct flight getting to Nashville was like in an hour from when I checked 131 40 But I was like I was like they got that morning flight home like I was just like I'm coming.

Kyle Mountsier: 9:53

It was a great dinner by the way I yeah, like you know Susan, who's been who's joined this team who by basically built ACV you know, on the back of like going to every market in the US she installed over 57 markets in the US is now building out his channel partnerships and all these markets like they're going to be to the moon I can tell you that right

Paul J Daly: 10:16

well if you want to meet Jim is Susan coming to ASOTU CON are just human. Yeah, she is if you want to meet him both, they will be at a soda con and a couple of weeks and people like that. People doing things that are helping dealers and really pushing the boundaries. Speaking of pushing the boundaries. So segue this story by the way. If you click the link in the show notes and read the article on Wired, it's a lot longer than I expected when I first started reading it this morning, but

Kyle Mountsier: 10:44

worth it be worth it. So you may not know her name, but you know her last name but Kat DeLorean the daughter of the iconic cars creator is facing a trademark challenge and her quest to build a modern DeLorean despite another company owning her family's name. Alright, so when John DeLorean died, Steve when a mechanic heavily involved in the DeLorean brand secured the DeLorean trademarks in the 1990s, from John's disputed widow, cat had all been abandoned the vehicle and a young family what and had a young family and was working as a cybersecurity engineer. So if you remember actually, and we've covered this a little bit, but in 2028 on Joe Guerra crafted a modern DeLorean model during the COVID lockdowns in Spain. As a tribute, blending nostalgia with a little contemporary design. If you click on the article, or I think we might have a photo of it, you can kind of see, you can see that it's awesome. Now he's reached out to Kat, and she started going, hey, you know, maybe this is something that I have, right? Yeah, it's a little interested. She plans to make a remake of the DeLorean despite the trademark dispute that she doesn't actually own and leverage the new car project to fund an engineering education program. So it's like she's taking it to like the but feel good story side of this. Cat said the venture isn't just about reviving the car. It's about empowering future generations to innovate. So she's leveraged in a little culture, trademark dispute. And the so she's so cased as new design on social media. The proposed alpha five from the trademark owner has received mixed reviews from purists for deviating from the classic DeLorean features. So yeah.

Paul J Daly: 12:43

Ryan's out there.

Kyle Mountsier: 12:45

So you have to Lauren's coming to market not sure who's gonna win because I got trademark issues. It's wild. First of all, I

Paul J Daly: 12:50

have a couple I have a couple bullets here. Number one cat DeLorean may be the coolest name I've ever heard in my life. That's true. That's if you're gonna have a daughter and her name is Cat DeLorean like ke T DeLoreans. Catherine. She said in the article, she just never paid attention to the car because you know it was DMC was the the name of the company you know the company? She goes in my world those initial stood for destroyed my childhood. So weird. Well, Well, John, John DeLorean I found this out. It was like pretty legendary in vehicle design with General Motors. And when they initially designed the DeLorean, they were calling it a Corvette killer. So it was a vehicle that could actually like shoving a big engine into a car right? He actually had a lot to do with the the beginnings of the Pontiac brand and making that like a real car that

Kyle Mountsier: 13:38

makes a ton of performance based on the based on the look of the front nose of the car. However,

Paul J Daly: 13:43

John was a little bit of a wild wild child. He actually got like in trouble like with 60 pounds of cocaine and an FBI agent like it really her life kind of fell apart. Sadly, she ended up right. That's why she calls it like something that kind of wrecked her childhood is the way that she sees the car. But when you read the article, you realize it's just like gasoline and veins. You know what I mean? And so it's it's like, I don't know who to feel good or bad for this is definitely a Netflix movie in the making. Oh, yeah. Lauren's but, but I think we're following along and the DeLorean like the one that she's working on design is very true to like, what a modernized the one that that the Alfa five people are calling it like it just looks like another Tesla with goings. Yes,

Kyle Mountsier: 14:26

they are. They're not going to be cheap. It's a bit too futuristic is the other one. I agree. But yeah, hey, it's kind of fun. Like this is you know, the DeLorean is kind of iconic and in our history, especially because Back to the Future and all that so

Paul J Daly: 14:40

originally, originally this the again, the article was really long. Originally, they weren't Ford wanted to pay a lot of money to make Doc Brown's car a Mustang. That would have been and, and the director said no way. Doc Brown doesn't drive an effing bus. Dang, basically what a great way to wrap a show. Awesome story, go check out the show notes and read it. If you're not subscribed to the audio version, just go to iTunes, Spotify, get the audio version of this podcast. Without a doubt we're gonna be moving. We're all over LinkedIn today. We'll see you tomorrow.

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