Carvana Not Focused on Growth, Leaked Rivian Release,

Paul J Daly: 0:12

Good morning. It is Thursday, March it's March 7, Kyle and I are in the Donald Terminal D of Atlanta airport. We're on our way to another state having a good time talking about some things happening today in the car business, I think maybe? I don't know. Maybe there was no music playing.

‍Kyle Mountsier: 0:31

Nathan, Nathan just gave us the thumbs up that we timed it right. I guess we'd been doing it long enough.

Paul J Daly: 0:36

But we were on the ground at a dealership yesterday, spending time with fixed ops people and service people in sales people and technicians and marketers and f&i be talking

Kyle Mountsier: 0:46

about the heart behind auto the heart behind why we do how we communicate it to the communities. And you know, that's just our favorite is getting in a showroom getting in a meeting room with dealers in the room. So much fun. And

Paul J Daly: 0:58

here's here's the secret that a lot of people don't know when you focus on these things like love people more than when you focus on those things. What actually happens is that you make more money. Whoa, really anything? No

Kyle Mountsier: 1:09

way. That's crazy.

Paul J Daly: 1:10

It is. But today, we have a few things to talk about first 68 days to Lesotho, con so if you are planning on going get your tickets now you can still get early birds. If you're not planning on going, you should be planning on going because

Kyle Mountsier: 1:25

you absolutely should be planning because we have some incredible speakers that you can go to the website now check out the speakers, check out some of the sessions. We there. We were talking actually last night with the deal that we were with about we'll get there they've read on reasonable hospitality, seeing him in person understanding how that all works. absolutely a necessity to be there for sure.

Paul J Daly: 1:47

Okay, so we are about to board a flight and say 10 minutes. Oh boy. Let's talk about a little bit of good news today. So as the market is continuing to tighten, Carvanha CEO Ernie Garcia is leading the company in a strategic pivot from a growth focus to a focus on per unit economics and execution and operations. How about that efficiency, it's a little bit of a common thread we've been hearing dealerships. Here's a quote from the automotive news article. Garcia says when investor support evaporated, he's talking about over a growth model, we clearly had to be capital independent, it forced us to basically reverse the priorities of just growing the company to becoming cashflow, positive and efficient. So the company aims to sell more vehicles in q1 of 2024. But just a few more focusing on cost stability, reduction and expenses, especially logistics. Garcia is identifying their logistics network as a key area, obviously, with their acquiring ADESA. They say vehicle transport costs a significant opportunity. Also having a larger share in EVs is also he saying this is an opportunity for them to show some well on

Kyle Mountsier: 2:55

the car side that you know if you can understand the Eevee market understand the price points, who the customer is why they want what they want, you have a significant advantage over someone that maybe has one two EVs in stock and doesn't really understand the market. This is where people like John Foley and Alex Lawrence are really like, that's their sole focus. And so if they're putting a focus on that, I'm sure there's a whole team dedicated data science, exactly how to do that. Move that through reconditioning the national audience, right? Not to the place where it needs to go. And Garcia,

Paul J Daly: 3:28

he's optimistic, he says we couldn't be in a better spot. Wow. I mean, that sounds like a CEO that came from the brink of going under lead the company back and look so much respect for a CEO that can like, keep his calm and keep his poise exactly pushing forward.

Kyle Mountsier: 3:43

And this is like just the things that he stated are things that when I talk to dealers every single day, you see that as a pattern, hey, we recognize that margins are slipping, there may not be a massive growth in just total vehicles sold for me, but I can get really, really diligent about Operation offer operations and what he calls item economics, as opposed to just like growth by scale.

Paul J Daly: 4:07

That's right. Well, speaking of EVs for a second.

Kyle Mountsier: 4:12

So Vivian was set to announce today, there are two which was their lower price competitor, but a couple sneaky little developers got in there, and saw the source code to their release page and website that already had a whole bunch of stuff exactly about the vehicle. So we'll give you a little bit of the rundown. Before we see the full vehicle real reveal today. If you haven't yet, you should go to the RTR site and check out the branding video. They understand

Paul J Daly: 4:40

the difference between brand and sales marketing you can watch the video with sound off and still put you in the field

Kyle Mountsier: 4:47

totally get it so the R two is poised to offer a 330 mile range, a starting price of only $47,000. It's going to enter the market in 2026 302. 60 in three seconds, got most likely that's going to be for the top tier models, it looks like reviens, our CEO rj scaringe said that the vehicle is both smaller and more affordable than the r1, aligning with a lot of their financial forecasts for growth and scalability. The interesting thing is just this week, right before the announcement, they did let go of 100 of their primary people at their normal Illinois for factory. So there's still like, there's challenge, yes, growth, all kinds of highlighting.

Paul J Daly: 5:34

I mean, it sounds like the life of an entrepreneurial company. It is we understand what that fear startup, unlike I'm warming up to rivian a lot over the last six months. I think they understand their brand. I think that they understand what consumers want. They did the hard work to get a vehicle under 50,000. So when you start comparing like a Ford Mach II, a model Y, a rivian are two, they understand the consumer again, watch the video, it's

Kyle Mountsier: 6:00

almost 50% of the what the r1 is, right? It's 70 75,000

Paul J Daly: 6:04

every year. Absolutely. And I mean, we'll see what like what sacrifices they had to make and materials and build quality. Performance. It's obviously a little smaller. Yep. But I'll tell you what, I feel I feel optimistic and riverine. I haven't driven one yet.

Kyle Mountsier: 6:17

I know I have a good buddy with one. You do a little tribe will say the interior of the r1 is dope. That's tight. Yeah, it's super tight. So we'll see what they come out with. They will be falling along. Maybe we'll give you a little recap tomorrow on exactly what comes out today. Get some imagery and stuff. Yeah,

Paul J Daly: 6:31

I think Rivia needs to go dealer network, you know, thinking real hard about it. I was like, should they think of Rivia and be able to like kind of leapfrog and like riveting that Tesla, in my mind have a very similar vibe and energy to this. Minus minus eccentric CEO. Yes, yes. Right. And I think if reviewed adopted a dealership model, they figured out a lot of the quality issues that like Fiskars working through that we'll see vinfast is going to be working through some I think ribbing is far enough ahead that they went to dealer model. I think they would have a line out the door especially with Scout, especially with Scout coming soon.

Kyle Mountsier: 7:06

Right? heard it here first show.

Paul J Daly: 7:09

Okay, well, whatever you're doing today, whether you're traveling stay in port. We hope that you make people a priority, and see that as the path through more profitable and let's just face it, a more fulfilling and rewarding business. We'll talk to you soon

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