NADA Goes After VW and Scout, EV Charging Not Cheaper Than Gas?, Shake Shack Value Meal

Paul J Daly  0:01  
Good morning. It is Friday, March 7. It's a pretty monumental day. We have a very special guest on the show today. You may not recognize him, also talking about nada going after VW and scout EV chargers not being cheaper than gas. And our favorite topic, Shake Shack,

Kyle Mountsier  0:19  
which is, if you don't know, there's, like, a few things that Paul and I do normally if we're traveling,

Unknown Speaker  0:25  
two in one,

Kyle Mountsier  0:27  
if you've been if you've been paying attention. You know, Paul and I get ice cream every time we can place, every time we travel, no matter what we eat. It like little kids just happy on a playground eating ice cream. It's a joyous thing.

Paul J Daly  0:43  
I would I would argue that a big majority of the way we're doing business was concept that over an ice cream coat in Las Vegas at The Mirage. So,

Kyle Mountsier  0:49  
right. So right, it's wild. Yeah. The other thing that we do is we find a burger, and if there's a Shake Shack, it's happening. So what's

Paul J Daly  0:58  
our next trip? I'm hungry. Okay, so yesterday we gave our producer. Nathan had a production here at ASOTU. Total grief I started. We just ripped him up because he popped into the show and his microphone sounded terrible and all echoey. And I was like, Nathan, I love it when you're in the show, you should do it more. You should be a character on the show, because you already are, but you can't come in sounding like that. So what did he do? He got his mic. There's no, you don't understand, stay on. Nathan, there are lights in this room that he had. He had miles and Spencer, like, moving stuff out the makeup chair. He moved in there.

Kyle Mountsier  1:38  
It's wild. He's got, like, professional lighting. He's actually got a fan next to him. He's fanned off right now. It's unbelievable. Look at this. There's a fan next to him. Paul's about to run into the office just to prove there's a fan. He's got a massage therapist right there too. It's wild. Nathan, thanks for getting the glow up and thanks for it, man. You've been, you know, you've been pitching it on the show for quite some time. You come in and out. We just believe you're a character in the show. And I think, you know, I said to Paul, there's only a few people in the industry, legitimately that can hang with a show on a daily basis, because of the broad context that which they have for the industry. And you've been able to gain that broad context for the last couple years. So welcome to being a character with the purple background on the show. How's

Nathan Southwick  2:24  
your mic? So thank you. It sounds it sounds good, right? It does. It does sound good. It sounds great. Sounds better than it used to. Okay? It

Paul J Daly  2:31  
does. See now you have to make a little

Nathan Southwick  2:32  
bit a little bit better each

Paul J Daly  2:34  
each day, a little bit 1% better each day, and 100 days will be twice as good, right? That's not what they say. That's how it works. Well, good to finally see that you've, you've leveled up to the to the distinguished nature of this show

Nathan Southwick  2:49  
the amazing distinguished nature. Yeah,

Paul J Daly  2:52  
all right, well, let's talk about something else. So look what I got in the mail yesterday.

Kyle Mountsier  2:56  
Kyle, oh boy. Oh, you know, I'm excited. Stop,

Paul J Daly  3:00  
came out of nowhere. And I was like, I think I know what this is, because it's happened every year for the last three years. Oh,

Speaker 1  3:05  
the jersey. Oh, what's it say? ASOTU CON 25

Paul J Daly  3:12  
sono con 25 so man, our good friend Steven apocela sent started this tradition when we had our very first ASOTU CON in Philly. And I don't have my Eagles Jersey because I shipped it to Danny zawski so they could do the Eagles chanting with he's bad. I better get that back. That was, that was 22 and then we had, here we go. We got 2320

Kyle Mountsier  3:33  
and they Oh, my goodness.

Paul J Daly  3:36  
We have went Orioles, 24 and now we have back to 2025, you know, it makes me want to move a sort of con back to Philly, because I'd love to be used in English jerseys. You're like, I

Kyle Mountsier  3:51  
need a Phillies jersey, actually, instead of the eagle jersey, we'll just go back there.

Paul J Daly  3:55  
We gotta do a Sixers with the flyers. Stephen apocela, you are just such a gentleman, and you are such a thoughtful individual. If you don't know Steven apocela, a, p, p, i, C, E, L, L, A, follow him on LinkedIn. Check out all the cool things he's doing those companies. He is just top shelf, and he's thoughtful, and thank you for that. Meaning ASOTU CON, it is coming. We are 67 days. How many days away are we? Yeah, that's, I think that's right, good night. That makes me nervous isn't really in the 60s, no, 66

Kyle Mountsier  4:30  
hours. Oh, I'm so excited. Though. I'm just pumped. Like my kids are getting excited. They talk to me about ASOTU CON every day. So if you know, they're excited, other people excited too. It is

Paul J Daly  4:40  
we got, you know, get your tickets because they're gonna go and especially the hotel rooms are gonna go way faster because we only have, like, a third of the rooms that we're selling. Take maybe even less than a third in the event space. Go to ASOTU CON com. Get your tickets there's as cheap as they're gonna be right now. They're gonna go up, and you can still get in the event. Hotel, which is the place a lot of people want to be. We have a lot of other hotels too, and we do have a fun partnership to help get you around from hotel to hotel, but we'll tell you about that later. Thank you to our friends at Reynolds and Reynolds and goo goo for being the presenting sponsors of ASOTU CON yet again this year, because they know what's up. Thanks for stepping up and caring for this automotive community in such a meaningful way. We got so many dealers and speakers and industry partners and booths and activations and swag shops and sessions and topics to announce. Just stay in the know. Just stay on. It's

Kyle Mountsier  5:33  
been a wild start to the show. Y'all been a wild go.

Paul J Daly  5:38  
Let's go. Nada has escalated its opposition to scout motors direct to consumer sales model, sending a strongly worded letter to Volkswagen Group CEO Oliver bloom and other top executives. In the letter, Mike Stan argued that the franchise model would give Scout motors immediate marketplace traction through a network of experienced dealers the direct sales plan they currently have, which establishes a scout branded experience these experience centers is set to launch in 2027 with the traveler SUV and Terra pickup. The letter also highlighted potential fallout of their current strategy, including prolonged legal battles across multiple states, and, of course, the strained relationship with VW, Audi and Porsche dealers over 50,000 refundable reservations have been made so far for Scout, and they maintain VW maintains that scout is independent, but dealers question the extent, especially since they funded it and shared leadership. Stanton expressed disappointment over a lack of response to a previous letter he sent in July of 2023 noting that this latest message seeks a direct meeting with VW leadership. Here's a quote from the letter. The decision to directly distribute scout in the United States and compete with your dedication to dedicated dealer body is misguided. Violates well established state franchise laws, and is one that I strongly encourage you to

Kyle Mountsier  6:59  
revisit. Here's here's the thing. One, we know that consumers are, are, are attracted to this model at some level, some portion of consumers. Two, we are seeing consumers go back into dealerships, and so you, like the OEMs, are recognizing this too. You haven't heard the agency model come out of anyone scout in the last year and a half three, I don't follow scout on any of my social profiles. However, I've seen more Scout ads true on every single one of my social profiles than I can care to count. And I know how much those ads and if you and I are both getting it in separate states in, like, totally separate interactions on all this stuff, I guarantee they are spending hand over fist to get those 50,000 reservations, which even at $100 a pop, is $5 million which doesn't go that far on a national social media campaign. So you know who's paying for those ads? Family.

Paul J Daly  7:58  
Oh, no, dealers. Got them. Oh, you did get him. You know what? They probably put, they probably put the filter on it was like, guys with beards and flat brim hats, has to be do an automotive show. That's That's exactly targeting, right there. Nathan supposed to get targeted now that he's on the morning

Nathan Southwick  8:14  
show all the, I mean, I was just gonna say, I feel like I've seen a lot of stuff for Scott, and I don't follow them either. But, I mean, I am the same general geographic area as you. Paul, so unbelievable.

Kyle Mountsier  8:23  
Yeah, I know. Well, we'll see. I mean, like, without a doubt. Like, do you think they'll take the meeting? We should set up the meeting at a soda con. Why would they take some it's neutral space. Why would they take the meeting? I wouldn't take the meeting if I was them. There's no like, you'd be backed into a corner immediately. How much consumer publicity around that meeting? You would have to have so much significant consumer publicity around that meeting for the consumer to somehow believe in the interaction that you that you're driving like it would be so interesting.

Paul J Daly  8:57  
I have to think about this. We have to get our we have to get our strategic gorilla marketing hats on calm down. Give Mike a call,

Kyle Mountsier  9:03  
put them on the main stage, let them go at it, give them a couple gloves, speaking of things we'll be doing at AOT,

Paul J Daly  9:16  
all right. EV, adoption has been touted as cost effective and a cost effective alternative to gasoline, but rising electricity costs in several states are challenging that narrative. While EVs remain cheaper to operate in some regions, escalating residential and public charging rates are narrowing the gap charging an EV at home in Massachusetts. Is this mess? Is it Massachusetts or California? That's 116 I think it's California. In California, if you charge your EV, am I getting this data right? No, I

Kyle Mountsier  9:47  
think it's, yeah, it's

Nathan Southwick  9:49  
Massachusetts. Is the most, most expensive, correct? Yeah, hold on here. I've got a graph. Well,

Kyle Mountsier  9:54  
he's got, he's got a graphic.

Paul J Daly  9:57  
Oh my gosh. I thought it was California in Massachusetts. Since I have to, didn't post, I made it's, it's 116% it basically 16% more if you charge your car at home than if you fill it up, fill up with gas at a station. New York, California, 92% and 90 respectively. So there's a little savings there. Washington, Florida, the most economical for EV driving with electricity costs at only 38 and 54% of gas costs. I think that's what most people think it is like. That's a lot, yeah, like, that's what I would kind of percent off. However, if you're public, if you're public, fast charging, it's way more there. Do you have that graph too? I don't know, but if you publish charge in California, it's like 80% more than it would be to fill your car with gas, which is the place they have the most EVs, and obviously the place where electrics the highest, homeowners with access to Off Peak EV charging like our solar can obviously save a little bit more. In Texas, last year, they had a program that if you charge your EV after peak hours, it was only $5 a month. There you go. There you go, Texas. But we will be talking about this at ASOTU CON.

Kyle Mountsier  11:03  
Yeah, we have a few conversations around around this. We've got conversations on the main stage and panels all about like, what the charging infrastructure looks like, how people can support that at home, what the education looks like for dealers to consumers. But it's still clear, you're still buying an O, L, E, D, v5, years ago, if you're looking at charging because you have to understand the entire network. You have to understand what your driving habits are, whether or not you can charge at home, what off peak hours like. It is a full matrix. It's an education. It's a it's like a, you know, you got to have spreadsheets to really save the money. So if you're I think that if consumers are after, oh, I'll buy an EV in order to quote, save money. That's not, that's not who's buying an EV right now, because you would have to go through so many loopholes just to figure that out, outside of the fact that, you know, the leasing is pretty aggressive still, but,

Paul J Daly  11:52  
yeah, cost of ownership can still be less, but absolutely, I mean, it's funny because, I mean, obviously, chronicling my EV purchase journey on LinkedIn, and and the very first charger I went to, it was, it wasn't even a fast charger. It was like 42 kilowatts. And I was disappointed by that. But then we went, had lunch, came back, I pulled the charger out, and, like, the total bill was like, 40 bucks. And I went from and I was like, but I was so, like, into the journey at the moment. I was like, I got it didn't really, yeah, but it registered. I was like, but what does it cost an F to fill up an f1, 50, like 70%

Speaker 2  12:30  
Oh, I mean, it's got to be close. It's got to be at least that, right?

Paul J Daly  12:34  
Yeah, the data, the data that we showed, it's worth mentioning that that data was compared to a very fuel efficient vehicle, like a Toyota Camry, it said. So obviously, maybe what a vehicle exactly like I'm getting out of a Land Cruiser. That thing gets like, six miles of the gallon. So you're doing better. Anyway, I'm gonna be doing all right. Speaking of doing better, stop segway, sorry.

Kyle Mountsier  12:56  
This is the story we really wanted. All right. So Shake Shack, known as the most expensive food chain in America last year we covered that a bit, has launched its first ever budget friendly combo meal to appeal to price conscious consumers. It's a get this 999, combo that includes the Chicken Shack sandwich, crinkle crop fries and the small soda, but the item separately would cost around $8 more. So if you just like go in and just buy that, it's an amazing deal. It's about a buck more than you can get a burger at Chili's today. The deal is part of a broader trend in the fast food industry, which competitors like McDonald's Burger King, Wendy's also introducing more value meals. Going back to that value side, obviously, inflation has reduced dining out, prompting restaurants to compete with affordable options. Christopher high tech, Tulane, University School of Business on the research, since price is also increasingly a consumer for consumers, value mirrors are one logical way of doing so, and that being reducing the price burden on the consumer. So all right, here's the value meal at 999. Paul, here's the behind

Paul J Daly  13:59  
this play. I went to Shake Shack like last week when I was in Orlando, because we don't have one at Syracuse. Thank God, thank God, you'd be broke. It would be I'd be broken heavier than I am now. I'd be broke on the inside and the out. Here's the brilliance behind this play. If you stand in line at a Shake Shack and you just watch the orders coming across the counter. How many chicken sandwiches Do you see come out for every

Kyle Mountsier  14:24  
20 burgers? Probably, yeah, like one or two. Maybe,

Paul J Daly  14:27  
yeah, maybe. So they took their lowest. They're never going to do this on a burger, right? All the margins there, they took the chicken sandwich, which very few people order and very few people have tried. I'd probably actually try one now that it's this, but they put it now, they have a 990 they get people to come into the store and try it. You know, they're still going to buy the burger if they want. It's the lowest sales item. I wonder what the margin is, or if this turns into more of a loss leader, full on loss leader, yep. However, like, what's going to happen if the chicken sandwich gets more popular is it's probably going to be $13 by the end of this year.

Kyle Mountsier  14:58  
Absolutely, it's a great. Chicken Sandwich. Get put like it's going to be a whole bunch of tick tocks around the chicken sandwich.

Paul J Daly  15:06  
Chicken sandwiches are a thing. Remember, if I'm back, baby, this fights a Popeyes, remember that

Unknown Speaker  15:10  
chicken sandwich challenge? Do it

Paul J Daly  15:13  
in your stores. It's Friday, heading into a weekend. So that means, if you're in a dealership, you're prepping, you're getting busier, you're getting ready to go. Go to Shake Shack at the $10 meal. Send us a picture. Let us know how he goes. We'll see you tomorrow. You.

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