Halfway Home, Charging Standard Light Speed, Costco’s Cheers and Jeers w/ Todd Caputo

Paul Daly: 0:27All right, it is the last day of the month, a Friday,close half of the year is going to be closed. We're heading into a long weekend while some people have a long weekend. So we're going to talk about these charging standard wars and Costco seems like a rare combination for Friday. But it'll all make sense. We have special guest Todd Caputo in the studio for his studio today,Todd. Good morning. Good to see you, my friend. Good to see you too. Good to see you, too. You got some new lighting on that picture behind you?

‍Todd Caputo: 0:54

Yeah. You recommended that. So I did what you told me.

Paul Daly: 0:58

Well, you know, I wasn't trying to get a compliment there. You know, your your store. You know, your store. It was so cool. Like you.So Todd crafted this used car store experience that had all this vintage, like these vintage photos, and it just had such an energy to it. You just always had a good good taste for that.And you're, you're one of the guys in the car industry. That's an actual car guy. Well of cars,right? Like an enthusiast not just a car guy, but like a car guy.

Todd Caputo: 1:26

I might love cars more than I like people, but I'm not sure.

Paul Daly: 1:30

You might I think you might like love cars more than you'd like people. But I think you still love people. All right,

Todd Caputo: 1:38

I do have a passion for cars, you know that.

Paul Daly: 1:41

We have an all out comment war going on. I'm just going to pivot through these because now it's a thing where everyone tries to get the first comment on the show. If you're if you're listening to the podcast, there's also a live stream in the morning. And LinkedIn seems to be where it's all going down. It's good to see you, Jordan Russell, Adrian,Bryant, man, everybody's just showing up for some fun. We're gonna give you a nice quick show today, we want to make sure that you know, though that a soda con is coming in hot today is the very, very last day to get the cheapest asoto con ticket prices go up and then they're going to ratchet up as we get closer, you can go to a so to con.com and get the cheapest ticket you can get today's the last day prices go up on the first which is tomorrow. And we're about to release, probably a list of about 20 speakers, 25 speakers that are confirmed, and we're talking about publicly traded groups, we're talking about people that you see on TV that you want to see in person we got Jesse Cole, the owner of the savannah bananas is going to be our main keynote. So first round of speaker announcements coming next week. So you're wanting to know

Todd Caputo: 2:44

like we talked about, there's a lot of conferences, there's tons of them, and you can get conference to death if you want to in this business. You know, that event you put on last year in Philly was just it was really cool. It was different in the social aspect of it, and the group of people that come is amazing that you're able to get together. So I'm looking forward to Baltimore this year, for sure. And I think anybody that wants to spend a little bit of time and meet some great people and just not go to a typical conference should definitely consider going because I think it's gonna be awesome.

Paul Daly: 3:15

I'm glad you mentioned the city Baltimore.It's only about five minutes from the airport. We wanted to keep it convenient. So you don't have that like terrible one hour commute in a big city somewhere.land at the airport. Five minutes later, you're in the venue, September 26 and 27th. So put that on your calendar. All right. Let's talk about some news. So we're going to follow up on a few things. I think you're the perfect guest host for today because we're gonna talk about the charging standard. And you own a Tesla,Evie or a couple of them. So here's the story as the mass adoption of Tesla's nacsw, which is North American charging standard, has been dominating the news. The transition might not be just as simple as we think. So yesterday, a couple more people added to the list.Pollstar adopted the standard and the first only Evie motorcycle manufacturer ViRGE motorcycles, which are real cool. By the way, they announced their shift to the Tesla standard and then Electrify America, which is a majority.Volkswagen owns the majority of this company. It was basically kind of their their pennants from diesel gate, they they put this big charging network up,they announced that they're going to now include the NACS standard, all of their superchargers, which is about3500. Currently, they're going to change all those over to superchargers by 2025. Still going to have the the current CCS standard available as well.Now here are the challenges. So there's a great automotive automotive news article today,talking about the things maybe we aren't thinking of that make it a little more complex than just like okay, we'll just put the adapter on the end. It's not like the cell phone. So challenges software development on the vehicle, they need to be able to talk to one another because if you've never been to a chat Tesla supercharger, they don't have a screen or an interface. It just automatically connects with the hand the car and the handshake when you plug it in and your app so you got to be able to pay for it and know what's charging All Tesla charging points and all their vehicles and left rear of the vehicle, they're designed that way for uniformity. So when they you back into a Tesla Supercharger everyone can back in and align well as you may know, that's not the case some chargers are in the front grille, they could be on the opposite side of the vehicle across other manufacturers leading to like some at the current rate would have to take up two spaces in order to charge which is going to obviously cause some problems, maybe even some fights. You know, the pins are different in the plugs. So even though the adapter might look the same, you know, the pins are a little bit different.And you know, thinking of all of those considerations, that leads to manufacturing changes,potentially, with all these cars to route reports to the different side to stamp parts a different way. So, you know, a lot of different problems, Tesla released a statement and then Todd, I want to get your opinion, Tesla's statement said,it's always been our ambition to open the Supercharger network to non Tesla EVs, and by doing so encourage more drivers to go electric. More customers using the Supercharger network enables faster expansion. Our goal is to learn and iterate quickly while continually and aggressively expanding the network. So we eventually welcome both Tesla and non Tesla drivers to superchargers. Worldwide. Did you think about these questions,when you know when Ford announced, they were going to be able to charge and then you know, like one and on and on?

Todd Caputo: 6:19

Here's what you know, I think about it's not about the plug, and it's not about where it is, it's about how long it takes to actually charge your car. In order for these things to be adopted in mass, they got to charge really,really fast, like they need to charge as fast as it takes to go to the gas station and pump your own gas, you can pump your own gas in a very short period of time. minutes, four minutes,yep, you think people are going to line up and wait 20 minutes,half an hour, and there's going to be lines and lines of people?It's not going to happen? It just just won't happen. That's number one. I think number two,you know, I've been reading some stuff that Steve Greenfield has been publishing recently about,you know, the technology changes every year, the technology is going to get better and better with these EVs and you're gonna have cars that have longer range that probably charge faster,right, and operate just more efficiently and had better features. These used EVs may depreciate a lot faster if they don't have updated technology,because they're almost going to be obsolete. Does that make sense? It does. I mean, any car like it doesn't you can you can take and drive a 30 or 40 or 50or 80 year old car, right? I do.I got old cars, I just go to the gas station and pump it up and leave right and pump up gas. But if you've got a car that won't charge necessarily as fast as a late model one, I don't think it's going to be worth as much as what it takes to actually charge these EVs, which I think is the key. Can they build charging stations all over? Yes.Can they make a longer cord if the if the ports in the front or in the grille or in the left front fender, whatever? Yeah, I mean, that's their practical,can they figure out the software, of course, they can figure out the software. So it interacts with Tesla's network.That's not a problem. But I think the key to mass adoption with these things is they got to be able to charge faster,they're not going to be they won't be mass consumption until then.

Paul Daly: 8:12

Yeah, you know, it. I think it did mention something about that, in the article about the there are some vehicles that take power faster than a Tesla,like I think the pole stars will take power faster, and the supercharger will actually limit the actual capability of the vehicle. So that's, that's a great point to make. And, yeah,like think of the issue, the used car market is going to be facing in three or four years from now when they start to figure this stuff out. And they change the standard and all of a sudden, everything that's the new standard won't go as fast as the old standard. It's gonna

Todd Caputo: 8:44

look at look at what nada said the other day about the day supply of new EVs in the market. I wouldn't I want to say 90 days, I think it was yeah, they said it's above ice.Yeah, if you look at the day supply of us DVDs, especially Tesla's in most markets, it's,it's creeping up there, right?People are getting their taste.And I think at the end of the day, most people depend on where they live are going to have range anxiety. And there needs to be a lot more of these chargers. And then thinking about what about the grid?Right? Just think about

Paul Daly: 9:17

I've been thinking about that. I brought that up on the show yesterday. It's like no, you can't put the air conditioners on right now because it's too hot. Yeah,

Todd Caputo: 9:23

so it's got a long way to go and I don't think that these gas powered cars are gonna go away anytime soon.

Paul Daly: 9:30

They go well,speaking of I don't know. I know we're gonna go back to your comment about range anxiety speaking of anxiety and stuff.Okay, so Costco has identified intensified its enforcement of its membership policy with employees now asking to see shoppers membership IDs, with their photo on it at the self checkout lanes, drawing both cheers and jeers. So basically,when the company opened their self checkout lines in the stores They noticed an increase in card sharing and just like that Netflix password sharing,basically you give a friend a card they go in and get all the benefits of a membership. So,what you may not know about Costco is business model is they sell their products show. On such a thin margin, the only profit they actually make as a company is from membership fees.Chief Financial Officer Richard Galante said during Costco is May 25 earnings call that at some point, we'll raise rates on the membership. But inflation is a reason that we're waiting. He said, our view right now is we have enough levers out there to drive business and we feel it's incumbent upon us to be a beacon of light to our members in terms of holding the membership fees down for now. And so, what one of those Levers is obviously they're going to enforce the membership requirements a little bit tighter. One shopper says I'll pay extra to shop somewhere to get good prices. And she said it's not fair to have multiple people using one membership card because if you know Costco like they do sell a lot of items she's like now these non members that aren't paying are getting the item that I wanted to buy you know, some other people said You know, it causes anxiety now that I feel like I'm getting kind of policed at the checkout lane and so tight I know you have a Costco membership I don't know how often you go, I've noticed I don't mind because I like I'm uh, I like following that rule because that's how they make their system work but what's your think what's your what's your thought on like, is it worth hassling your members to enforce you know, the non members?

Todd Caputo: 11:25

I mean, I don't know first of all, I hate shopping right? I hate driving it Amy goes my wife she she she goes to Costco and I just you know, they can say that they only make money on membership fees but aren't necessarily believe that I find that very harmful you

Paul Daly: 11:44

know, it's their profit their profit they run it like a one a one to 2% margin.And when you look at their membership count it's billions and billions on the membership fee that's just how they structure the business that that is like kind of business

Todd Caputo: 11:59

so from a membership standpoint, I feel like if you have to be a member to shop there then you should just pay for it right I think it's dishonest to use somebody else's card to get in there and shop so I guess I can understand why people that are members you know feel that way and um, what does it cost for a membership for you? I don't even know 60bucks a year. I mean, come on 60bucks a year. Yeah, I mean,people should just pay

Paul Daly: 12:21

and actually if you get the Costco credit card you make way more than that back in like the refunds they give you you know, one of the things Costco has been so known for is their return policy which is one of the reasons they need the extra the extra margin and they allocate like their their sales margins toward that because you can return anything at any time for any reason they will literally take it back. I saw I saw plants I saw like a stack of trees that was returned they were never taken out of the pot.Somebody probably just left them out and didn't water them and they were returned they'll take that back two years later something breaks they'll take that back and so you know I'm a big fan of Costco my family shops there a lot and like hey systems don't work when you when you don't follow the rules,which is why Netflix cracked down to on Password sharing.

Todd Caputo: 13:04

Sort of I think people still found

Paul Daly: 13:07

I don't have Netflix anymore. I just find I find other ways

Todd Caputo: 13:15

overall, right I mean, it's it's 60 bucks 60bucks a lot of money. Don't get me wrong, but in the grand scheme of things if you could shop us for a weekly basis, you can afford the 60 bucks.

Paul Daly: 13:25

John Roper comments needed this exclamation point.Ah, stop letting the non members use my card. No, John, you don't need to do that. You just need to get them a disguise so they look like the picture on the membership card when they go through. Well, that's the show for today. We're about to head into the all things use car with David Long clubhouse room, go to clubhouse, search it up. We'll be over there jamming on us cars until then. Have a great weekend and welcome to July tomorrow.