Cruise Is Cruising, One Chevy Dealer v. The Sun, Retail Stores Continue To Close

‍SPEAKERS

Kyle Mountsier, Paul Daly

Paul Daly  00:29

Friday feeling time Friday. Awesome Friday. I'll tell you why. I'll tell you why today we're talking about cruise cruising one Chevy dealer versus the southern retail stores continuing to close. Oh, oh. Some people thought we got by that a little bit.

Kyle Mountsier  00:48

Repeat. And they were like post pandemic. It's all coming back. And Chicago was like, nah. We'll get to that.

Paul Daly  01:00

Kick. And while they're down, Kyle, kick. Hey, let me just mention the fact if you're watching today, you might notice something really unusual. And that's that I have a light color shirt.

Kyle Mountsier  01:11

I was literally gonna say that I was like,

Paul Daly  01:13

and I'm not even Danielle. Danielle walks in. She goes, Are you on vacation today? And I don't know about it. Because like, it was like, it was 85 degrees in Syracuse yesterday. It was one of the nests are you kidding me? 85 and sunny all week. It's been like, it's gonna be 85 and sunny. He gets no humidity. It's like perfect. But we walked somewhere. And I had my black T shirt on and jeans. And I was like this. I hate. I get I get nuts. I was like, Not today. Not today. I probably wouldn't leave this office all day, though.

Kyle Mountsier  01:43

Not Not a chance. Go on vacation with the light shirt. Unbelievable.

Paul Daly  01:49

She was like, uh, your vacation

Kyle Mountsier  01:51

must be on vacation. I know you don't you know someone who never takes a vacation. Or at least it seems like that's David Long. And we got to talk about because, look, we know what it takes to put together a show every single day. We did. It's hard work because like we're traveling and we're moving and sometimes we're doing things on the road or at night or different things like that. But for a live show to go on 100 weeks every Friday same exact time like sometimes we started a little early little late depending on what start at the same exact time David Long's clubhouse, all things use cars, that we get to power and we just get to get our whole team behind it recap that whole nine yards is having a 200th episode today. So if you're listening to the pod watching it or anything like that, make sure to jump over to clubhouse check it out. The title of today. I'm excited about it's just getting really refining on us cars, acquisitions. It's a topic that we can't grow old on for sure.

Paul Daly  02:59

Though, can we talk about it too much? All right. All right. Let's get into the news. Because we got it. We're gonna get over to a show in just a minute. Here are just a few minutes, I will spill my water. That would have been amazing. All right. G mbact. autonomous vehicle company Cruz is set to enter rapid growth phase targeting a revenue goal of $1 billion in revenue by 2025. That is the money that is the money. Cruz surpassed 1 million driverless miles as a February which is a lot of miles. They've been operating more than 300 autonomous vehicles in three markets, San Francisco, Austin, Texas and Phoenix. When you and I were in Phoenix last, we tried to catch one. And the place we need to go was just outside there. And it was, it's a shame because we were like we're doing this you're downloading the app like we're

Kyle Mountsier  03:46

writing, we'll make it happen. We'll make it. The focus

Paul Daly  03:48

now, though, that they've have all this experience and kind of understanding of how it operates is to shifting to scaling operations into new cities while preparing for volume production of that the little, you know, kind of capsule on wheels. It's called the origin by the way, at GMs factory in Detroit, according to calculations by Sam, Sam abuela is a way a way of welders are made. I think that's it Principal Research Analyst and guidehouse insights crews will need 5500 to 6000 vehicles operating on a daily basis to achieve that $1 billion revenue target. So you think about they have 300 Now they gotta get the 6000. So it's a lot of increase. It assumes crews operates intensities with 550 to 600 vehicles in each pretty easy math in said he said he thinks you need to charge a fare of about $2.50 a mile to reach it. And he says all of this is realistic. So

Kyle Mountsier  04:44

yeah, I mean, it seems realistic. You know, obviously the biggest barrier to their success is litigation. Right? Because Are we allowed to do this? There's no doubt that that a company like GM can produce that number of vehicles in the timeline. There's no doubt out that the charging $2.50 A mile is in line with Yeah, have you been

Paul Daly  05:05

Uber lately?

Kyle Mountsier  05:08

Good to go there, you know, getting 550 to 600 new vehicle or vehicles into a city from like a pipeline and all of that. All of that's the easy part. It's definitely the litigation, figuring out what those cities are, that are willing to accept this technology and put it in play with all the other drivers around whether or not you've got, you know, all of the things from safety regulations dialed in. But I still, like if they've got the proof case, they've driven a million miles, they know exactly what they can and can't do in those cities. It's a it's it's like the beta is done.

Paul Daly  05:42

It is it is I don't know, 2025. I mean, by the end of 2020. If you figure by the end of 2025, it's like two and a half years. I don't know if you've ever been a poor part of city litigation or court litigation. But it's going to take four if litigation is the blocker. I'm not that optimistic, but I agree with you, man. All the other stuff is like, they're like you got this all day long. You make these things give me I wonder what it looks

Kyle Mountsier  06:05

like. I want to I want to try it out. Like if you've tried it out, you listen to the pod. This video, we want to see exactly what that looks and feels like if you're in Austin or San Francisco or Phoenix. Go do it today. Send us a video, we'll put it on the Monday pod because we want to see exactly what we need

Paul Daly  06:21

to send AMJ out to find one of these things. There you go. That's what we should send her out and just like go right around. And one of these things. I want to record a podcast and what's so bad.

Kyle Mountsier  06:30

Absolutely. Yeah, like ask the driver. So what do you think today?

Paul Daly  06:36

Really, really? You shouldn't you shouldn't say that about Mary Barra. Right. Just go for that

Kyle Mountsier  06:44

would be a clutch interview.

Paul Daly  06:45

That'd be it. It was it was it was. I'm trying to think of a segue, but we can be much. Okay. This story is actually in our daily email today. It's It's so tight. Now we have a daily email, by the way, which is a lot more fun than this podcast. You can get it out of soda.com. And this is a little article that we pulled from that it's just a really interesting, unique story originally covered in electric, the website that we refer to sometimes the the Dimmitt Chevrolet team in Clearwater, Florida is pushing the board of innovation and launched an on site, rooftop solar array that will generate more than one I think it's gigawatts. one gigawatt of energy, there's a gigawatt is gigawatt. And actually thing is that just back to the future. I think that's the future we're gonna go to the grave. I think the word Jigga in an official term is like somebody got one by right. What do you think a lot of energy

Kyle Mountsier  07:42

departments knock that through? Yeah.

Paul Daly  07:45

So this solar array is going to generate more than one gigawatt of energy annually, which is enough to power 750 homes. So they installed over 2000 panels, it looks unbelievable. And they use they leveraged some tax incentives. They partnered with a company called energy services of America. And this is going to offset 156 tons of co2 emissions. Here's the more important thing it will cover 100% of the storage power needs fully renewable dealership, which is unbelievable. And it's going to pay for itself in under five years, which is this little part.

Kyle Mountsier  08:18

Unbelievable. That's a five year ROI dollars on the five years on a project like that. That's wild.

Paul Daly  08:25

I know it I know it usually that's like 15 years, five years. So all the between the incentives, I mean, the incentives probably had a lot to do it. We'll dig in a little further. But at the end of every article in our email, we have a little section called telling it like it is and this is where our writers Chris or Christie, they put like a little a little fun take on the news. And here's the telling like it is from this article. This class. It's something about cooling your showroom using solar energy is peak science using the sun to battle the sudden I was like, That's

Kyle Mountsier  08:56

rush emoji. Right? Yeah, because it's all these Chevron's have the massive glass and it's just like sun beating, and especially in Clearwater, Clearwater, Florida.

Paul Daly  09:06

just crushed me wearing I'd be wearing the light no black shirts in Clearwater, Florida. Yeah, no, no,

Kyle Mountsier  09:11

and you're doing shorts in the summer for sure. Without a doubt. I love this. I mean, any business that has that much square footage in in their rooftop, I think should be thinking this way. Right? You think of all the retail establishments that are that have the opportunity to basically power their stores and if and if recouping energy right now because of the types of tax incentives that are available for Charlotte for solo solar energy get it while it's good on money start putting that in the newspaper get a little earn media and electric and get a little backlinks action. Hey, I wonder

Paul Daly  09:44

what their charger situation is at that store? Like, you know what I mean?

Kyle Mountsier  09:50

I don't know. But I'm if I had to guess they're probably talking about it, or at least installing a few and they're probably telling some people about it. Similarly, I want them about the show. The solar panels. I

Paul Daly  10:01

also wonder like there's an element when you take in solar energy. It's it's like direct current, it stores it as DC energy in a battery and EVs are powered on DC energy, your house and other businesses are powered by AC. And just there's a conversion that has to happen from one to the other that actually loses efficiency. So I wonder if they have DC energy coming in and DC energy going out? It probably actually makes it go faster and more efficient. I don't know. We're getting me too nerdy for Friday morning. But it'd be I'll tell you later why I know this. There you go. All right. Well, we got one more, we got one more,

Kyle Mountsier  10:35

we got one more let's let's speak in retail stores,

Paul Daly  10:39

and getting nerdy

Kyle Mountsier  10:41

getting way. A new study by UBS says that 50,000 retail stores are predicted to close due to writing design operating costs, and an increase move to ecommerce sales over the next five years, with specialty retailers such as clothing, consumer electronics, which would be the retail industry's hit the hardest chains like Walmart, Costco and target are expected to do fine and all of this as well as probably companies like automotive dealerships, because you know, you've got cars, you got to store and stuff like that. And you are retailers, they don't mention that. But exactly, exactly. Um, the the the other opportunity for these larger retailers is they have kind of the the ability to fulfill digital orders in a retail space that smaller companies can't keep up with. So it'll be a 5% reduction in overall stores across the US, which right now sits at about 940,000 stores. And they've also said they did mention auto parts stores and home improvement are expected to be good on emerging out of this, which makes a lot of sense, just because of the type of inventory and the type of research that you want to do around those things. So yeah, Paul, like, I think what's interesting about this is everybody kind of expected all of this to get crushed during the pandemic, and post pandemic. And we didn't see that happen. But the research is saying, hey, it's gonna continue this gradual move toward more ecommerce still. So

Paul Daly  12:16

what you know, there is, in small towns like there is this thing, like, I don't know, if you remember, like Christmas 2020, the small stores, word jamman, in upstate New York, like a place that had like little shops, they were like, we're having our best years ever, right? Because people were like, they'll remember delivery time slowed down, it was hard to get stuff from Amazon, and people flocked back to a lot of these stores here. And so like, at least anecdotally, in this area, it seemed like oh, like the small shops are on the rise, and then kind of everything snaps back. And, you know, we saw a bunch of retail space disappearing pre COVID. And then, you know, a lot of smaller operators did have to close, you know, some came back somehow to close. But I think we're seeing a very similar thing to what we're seeing in retail auto as well, in the sense that there's a consolidation, and the larger groups that can they can really leverage their ability to get space, their ability to, you know, invest in digital platforms, scale operations, get more technologically advanced, deliver and process better, like you're seeing that efficiency of scale, starting to even take hold in retail automotive. But one thing that this article talks about, I don't know, I don't know if he mentioned it or not. But it says stores the importance of stores is increasing, having a place where people can go, and whether that's to look at a product or to fulfill product from or to pick things up is actually on the rise and even digital retailers like Warby Parker, and people who have you know, started e COMM And then went into brick and mortar actually still going deeper into brick and mortar. So I think when it comes to retail, automotive, like in this whole thought of like, Oh, can you order factory direct and all that think the reality is this is very clearly paints the picture that people want somewhere to go,

Kyle Mountsier  13:59

yeah, what's that? I think I think people are going to be more, they're going to be more just keyed in on whether like what their gross profit per square foot is, the efficiency of their retail operation, how they're doing product placement, product sales and the opportunity to view products, where people may or may not be taking delivery, whether it's of consumer packaged goods or smaller retail goods or large retail goods like auto, whether they're doing that in the retail space or not, is yet to be questioned. I think that's going to be that blend between like an E commerce ecosystem and a brick and mortar ecosystem. But again, the retail brick and mortar is still important, especially because the article says ecommerce sales are only projected to rise to 26% of retail sales by 2028 up from current estimated level of 20% so that still only 6% of retail sales are going to happen solely online. So that's a whole 74% that still need brick and mortar experience.

Paul Daly  14:58

No, I like go to the store like being out and about especially for buying stuff that they were on our way over to the clubhouse room. All things use cars with a long just download clubhouse, search all things use cars. Have an amazing weekend. Have an amazing Saturday.

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