Ford Materializes, Chevy Goes The Distance, Consumers Rein In Spending

Paul Daly: 0:00Yo, if you're so good that we're both back in the studio today, it's been forever. We're gonna talk about forgetting material contracts, Chevy going the distance and consumers reining in spending. Again,

‍Kyle Mountsier: 0:14

people were pulling back. I need this kind of when they see me maybe sometimes I've learned until I until I went on LinkedIn and saw eight general managers be like, everybody's out buying cars

Paul Daly: 0:34

they're not buying, they're not buying, so I can buy those cars. I've learned one big thing over the last week is that six days is like longer than I want to be away from my family.

Kyle Mountsier: 0:45

Oh, man, you put in the work last week you put in the work. Wait, wait, give us like, because we didn't get to really see you a V con give us like the the 92nd hot reaction of exactly what what went down? Yes,

Paul Daly: 0:59

I was able to capture a ton of content at V con, but I was so busy that I didn't get to post any of it. I'm gonna be posting it over the next week. But I've risked record a ton of man on the street interviews that soda will be releasing a lot of stuff. vibes energy of decon always great to be around other industries, so that you can kind of get your head out of the box that we live in on the day to day, talk to consumers see how other companies are doing events, see how other like tech companies are actually activating in the space and just seeing what people are into and paying attention to. So that was always good. I will say the VI Con this year, different energy than last year. And I think there were fewer people this year than last year, they crushed the Field Day, the day before the main event. I didn't see nearly as many speakers and stuff. I didn't go to as many sessions. You know, as I thought about I was like, you know, it probably has a lot to do with the fact that NF Ts and you know, crypto has lost a lot because it's

Kyle Mountsier: 1:51

like, it wasn't just promoted as like, you know, the Gary Vee conference, right? It's very, very, like heavy into web three NF T space was the target of that, particularly, it's not like a marketing conference or like a Content Cop. Yeah, it's very heavy into that as far as the promotion is. So I mean, waning

Paul Daly: 2:13

landscape lanes or side stages. And again, like I didn't purchase I had yesterday, last year, it was like, I always went to so many sessions. Yeah, so this year, it was definitely different. And I mean, it just goes to show you consumer sentiment really does affect what people are willing and not willing to spend their time on. You know, if you just think about it last year at V con NFT. values were high eath was higher. And especially in the Vayner organization right there. Nf t's the Gary's V friends have still held a lot of their value and people who bought early still are doing okay, but the people that bought at the peak, right, they lost at least half of the value, right? So like a lot of the other projects were went to zero, half or more. So you got to think, man, when you lose half your money, your enthusiasm,

Kyle Mountsier: 2:58

just just kind of like, Yes, I'll stay home this year.

Paul Daly: 3:02

Yeah, no, I believe I've seen. We'll see.

Kyle Mountsier: 3:05

We'll see if like the recovery happens in especially eath in the NFT world like and whether that changes the mood. I'm sure the energy just like the vibe around the event, the way the event was thrown was

Paul Daly: 3:18

I mean, the coolest stage I've ever seen in my life. But I saw the opening keynote was Jesse Itzler. And he destroyed and he shaved his head on stage. I get this big curly, like to make a point. He's like, I'm starting my life and going all in on everything I do. Guy comes out, he sits down. He's telling the story. Why he's telling the story about about Yeah, the dude just shaved his head. I was like, remember this one forever. It was cool.

Kyle Mountsier: 3:41

Because Paul texted me, I'm going to shave my beard

Paul Daly: 3:46

is crazy. I said, you're gonna shave your beard. You misunderstood my, oh, I see. Oh, hey, this Wednesday, this Wednesday, circled on your calendar 1pm, Eastern live stream of the premiere pilot episode of more than cars, we've been rallying support all over the industry. So you can be on the stream, you can just go to more than cars.tv join the LinkedIn live stream. You can see all the trailers and some of the behind the scenes content on that site. If we're going to change the narrative around retail automotive, we as an industry have to show up. So we try to automate this to give us a rally point where we can all show up and kind of be counted on that day on the stream so that we can get the rest of the series made. And the response to everyone who's seen the show or segments of the show so far have been like responses like this needs to be made.

Kyle Mountsier: 4:41

Yeah, this needs to be made. Well speaking of making things, so yeah. Segway

Paul Daly: 4:46

Oh, it's been so long since we've had the Segway button. Like at everything all right in a strategic move to bolster Evie production Ford has announced a series of supply deals for lithium based battery materials as they ramp up Evie production to 2 million units by the year 2026. And that 2030 deals include a one with Namaskaar lithium for supply of 13,000 tons of lithium hydroxide a year. I don't know exactly what that is, but it sounds Spence's some big number sounds expensive. Also another one with the energy source materials for lithium hydroxide in from their Imperial Valley, California plant supposed to be operational and producing by 2025. They also got a five year contract with our Albemarle. That's a hard word, Albemarle. That's a hard word, of course, to surprise over 100,000 metric tons of battery grade lithium hydroxide sufficient for this gave us a little context sufficient for 3 million Ford Evie batteries, they're expected to lose as reminder $3 billion from their electric vehicle sales this year. But, you know, they say we're gonna have that's, that's all, man. But they say they're gonna still hit nine to 11 billion, billion dollars of adjusted earnings before interest in taxes and have 6 billion in free cash flow just floating,

Kyle Mountsier: 6:08

they're gonna be okay, they're gonna be fine is the point there. You know that we've talked about it many times. It's the Evie side is a startup ice vehicles and that, and that sales pipeline is still going to carry these brands for quite some time. But you see these like, really, really interesting partnerships and investments. The you know, keeping up, I, you know, I go back to Elon, you know, a few months ago being like, look, lithium refinement with three lithium battery mining is going to be key to entrepreneurship. And it's clear that these two companies, both of which probably did not exist, at least in their current capacity of their ability to mine and find these lithium resources didn't didn't even exist 710 years ago. And even if they did, they were just supplying like computer batteries and phone batteries. And so now to move to this and, and just open up new partnerships and new business opportunities. It's always just interesting to see the way the market moves and shifts, and we're gonna see the impact of that over the next three to five years for sure.

Paul Daly: 7:17

We had an awesome conversation with Jennifer kolstad, the global brand and design director for Ford, when we were in Las Vegas last week, and we're gonna release that episode soon on our amplify podcast. And we actually got an invite to go out to Ford's Experience Center in Detroit. So we go out there, maybe we'll maybe we'll see some tech and get a couple. A couple of secrets. But speaking of Eevee technology, yep. Segway I'll write in a surprise announcement. I love surprise announcements when they're good. GM released an upgrade to the Chevy Silverado Evie work trucks range boosting it to an EPA estimated 450 miles on a single charge. This is 50 Miles More than originally anticipated. They said hey, we're gonna we're gonna hit 400 mile range. But they said quote our engineering team long targeted 400 miles of range, but they were able to go above and beyond. To achieve the increase over the past several months extensive development testing unlocked an increased 450 mile range. This figure paired with the ability to charge at 350 kilowatts makes the Silverado Evie work truck the choice electric pickup for fleet buyers needs after all the truck wears I love this part. After all the truck where's the Silverado batch? It's made for tough jobs. Gotta leave it to the marketing collab on that one slam that

Kyle Mountsier: 8:37

marketing branding right in there, just you know, seven little PR words. This is, look, everybody has been talking about the key to success is getting vehicles closer to or above 600 mile range. And for a truck to be able to pull 450 miles out of its range. Quite impressive. I'm sure that there'll be a lot of energy toward this launch. I'm interested to see kind of how consumer behavior for reservations or intrigue or search results over this next week because of this announcement change. Because a 450 mile range truck. That's a bold proposition. I actually saw Steve Greenfield shared an article where Neo is finally announcing that they they believe they have a 600 mile range vehicle. Now, we talked to Neo last week, like those cats over there don't make cheap vehicles, you know. But, but even still like that moving consumer marketing, or the consumer marketplace into a 600 mile range is the target, but kudos to GM for putting in the work and and you know, like everybody was already excited about the 350 400 mile range but for them to go over the 450 great for the market, I think and it's going to probably bring more people into looking at EVs than maybe would have in That 350 mile range. So anecdotal story, I drove it to,

Paul Daly: 10:04

I drove a Toyota Landcruiser from Indianapolis to Syracuse, New York on Saturday, right? And Land Cruisers have that big fat Toyota V eight engine that that gets like 14 miles to the gallon. nomnom. Right. And I have to say if I had a 450 mile range, so if you'd been there, I would have gotten home faster, because I had to fill up twice. And wow. And one of those fuel ups, right, you'd have to stop and you get something to eat. Like it would have been no problem for me to quick charge, you know, for 20 or 30 minutes, and I actually would have made it home sooner if I was driving a 450 mile range. Evie.

Unknown: 10:43

I love that. Okay. Oh, that's a big story. Right now. However, now the lead gives out one of 18 in the country driving a 13 mile per gallon car still, but I'm

Paul Daly: 10:55

gonna buy bro now in about three months.

Kyle Mountsier: 11:00

Speaking of em, bro. Oh, man, amazing. Oh, man. Hey, according to some new government and earnings data, consumers are a little bit exhibiting more than frugal behavior, focusing on things like essentials and seeking affordable alternatives as inflation continues to squeeze. Even they're stating that high income earners are starting to pull back on large discretionary purchases. Neil Sanders, managing director of an analytics company called global data says a consumer slowdown is underway, growth is a lot more sluggish than it has been for quite some time. And retailers are reporting quite stark changes in consumer behavior. Now one of the stark changes is a little bit different in its tune, value base, Walmart is still winning, as they reported a 7% some over 7% year over year store sales increase. Their chief executive from Walmart us John Ferner, said we do see higher purchase rates of categories like prime beef versus regular grade beef, you see trade ups and apparel and marketplace. And that's definitely being driven by some of our new higher income customers. So the track down here is it's not that higher income customers aren't buying these things, it's just that they're moving to more affordable options. Really interesting, especially when you relate that to auto and the high heightening price point of new cars. And I'm interested to see the shift in value based shopping potentially happening in the auto industry, similar to how it's happening in the consumer packaged goods industry.

Paul Daly: 12:38

Now the article does also talk about that sales, like, you know, like cosmetics are still very, very strong, not showing any signs of waning, that's what they call it, it's like the lipstick effect or whatever they call like when, when you're paring back on some, you know, some some you know, discretionary purchases, there's still this element of like the things that give you like this affordable luxury, I'm going to buy the nice makeup, I'm gonna buy the nice beef. Those are that's that's coming into effect, you're starting to see that effect more and more where there's a decline, but in these certain segments, luxury goods, especially lower price, luxury goods are going up. And, you know, this, this is just it feels like it's been a very slow depreciation on the consumer mindset or purchasing because we've been hearing like stories like and around this for quite a while. But now that but yeah, continuing and dipping a little bit further. It's just like, it's like the economic slowdown that just like never ends, it's just like very

Kyle Mountsier: 13:32

well, because you would you would think, you know, according to like, what's happening with with rate increases and what's happening at the federal level. And the way the storyline goes is that we would have seen this like, massive deafening of of consumer interest in purchasing. But it hasn't been that way. It's just kind of been this slow trickle. And maybe, Hey, I'll tell you what, maybe that's the, I'll give maybe the fed a little bit of kudos in like this, this the slow walk of of infant, you know, toward a potential recession, and maybe we don't see it because like, nothing ever takes that full on drop off, right. Because, you know, people are still purchasing we're still seeing a great jobs market. I saw, you know, a jobs marketplace this weekend. One of the founders was just saying, hey, look, we got a lot of people still out there looking for jobs, a lot of employers still hiring. It's not like, it's not like it's all doom and gloom out there. So, you know, thinking about that is like, hey, in the your used car purchasing habits, is there the need to start recognizing at like a new price point for price savvy shoppers, people that are looking for affordability and all of their purchasing behaviors. So just starting to see like, hey, maybe just thinking about the way that we're managing inventory might have to be more relatable to an affordable shopper.

Paul Daly: 14:58

Now, right? Hey, we just want to make sure we always Like Michael, good morning. Hey, good morning, Michael Kirk said good morning.

Kyle Mountsier: 15:04

Just good say good morning back over.

Paul Daly: 15:06

Hey look, it's Monday. It's busy. Everyone's got stuff to do go to more than cars.tv so you can join us for the live stream premiere this Wednesday 1pm Eastern, go out there and crush it on the Monday.

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