Suing the Treasury, High EV Repair Costs, Tesla Hires Geico Exec

Paul J Daly: 0:10

Hey, Wednesday, June 4, Kyle's back in his seat. So feel so good to be in your own studio. Today we're talking about automaker suing the Treasury high evey repair costs, and Tesla hiring an insurance person. So those two things probably go together somehow.

‍Kyle Mountsier: 0:26

They work actually, right in line with conversation

Paul J Daly: 0:31

every once in a while we get lucky with a show on the things where it's intentionally you here at the dmsc for a couple of days with a lot of really progressive marketers, marketing focus, you know, some new friends, some old friends, a lot of great industry partners, a lot of great deals, which take away one of the hot topics yesterday, you talked about, you know, large groups, having trouble implementing a CDP is not as easy as you think. But final thoughts, you had a little time to contemplate a flight home night's sleep in your own bed? Yeah,

Kyle Mountsier: 1:05

I mean, you know, you see this in marketing in automotive, and probably in every vertical where kind of there's a hot topic every one to two years, and everybody's trying to figure out the solution. And we've obviously gone into this, like targeted addressable marketing, identity resolution CDP, segmented audiences type of conversation, and they all like they all wrap around each other in some way and, and, and feed off of each other. But it is, it's, it's, I think what's hard for me about it is it's really iterative, off of what we've done for the last five to seven years, but we're talking about it in a new way. And my fear is that we forget, like some of the basics and marketing of like, oh, we should send these one to one emails to particular people. But I think that's the most exciting part of the CDP. And particularly not just the CDP, but the identity resolution and data cleanup. Conversation is just reducing the marketing waste overall, where customer doesn't own car, you know, we've we've got a new car in the driveway or new email, different phone number, you know, yeah, we're not marketing money, where we shouldn't be spending our money. And like, as an industry, figuring out how to not just like overextend ourselves specifically on Google and Facebook, which is what we've been doing over the last six to seven years is just going need more leads, add more budget need more money in the bucket? Yep. How do we how do we make that bucket right sized?

Paul J Daly: 2:40

One of the things that that concerns me, is that, and this is general, this isn't just about this situation is that often when there's like a new Hot Topic, there's new vernacular, there are new words and phrases around it. And a couple of things happen. One people feel like, because they become familiar with the terminology, that they're actually doing something, right, but they're not. Number two is that the lie that you just said is that maybe like, the new shiny thing, is actually not even as much doesn't make as much change as you could if you focused on the things that you already know. So

Kyle Mountsier: 3:17

but if you get it, right, don't say, as an industry, like over the last, you know, I don't know I'm gonna call eight years, our desire to define a class of technology. So rigidly or by automotive standards is extremely dangerous. Okay, digital retailing, digital retail, it's a I CDP, right, we have to look more broadly crossed vertically to understand what the actual, like what the actual technology is, and then draft on that in auto, instead of like redefining it for auto, because then we get then we get super dangerous when clients are trying to go to multi vertical technologies, which are entering auto at a rapid pace, and then we're misunderstanding the necessity to like, bring those technologies into auto because we've we've kind of like misinterpreted the terminology. So that's my that's my biggest lookout I had that conversation a bunch this week. I love it.

Paul J Daly: 4:19

I love it. Well, there you go. A little bit of a marketing intro. We had marketing things, thanks to the passions for always being so good to us, and putting on great events and like caring about and serving their audience well for all about that, hey, one of the ways you can help educate yourself and learn about all these types of things, is our YouTube channel because we just uploaded all the sessions from a soda con, you go to a soy tube ASOTU dot B E and see all of the sessions. If you were there, you can see all the ones you missed. If you weren't there, you can see all of them because you missed them all. So you get to see them a lot of topics. A lot of topics like this where you hear some of the sharpest people discussing them. You know, live on stage. It's a lot of fun. And yeah So do that. Also, we have a webinar coming up. I don't I don't know if we have any details on that right now. But we do have another webinar. Who's it with?

Kyle Mountsier: 5:07

Is it activator, activator? Yeah, I'm really excited about that. activators like a little sleeping startup inside of a giant inside of a giant. And so I'm interested to see what the conversation a lot around the CDP and the use of that data for marketing automation. And you

Paul J Daly: 5:23

can go to our website, a soda.com, you can just sign up for that. It's free. It's fast. It's a lot of fun, free, fast and fun. There you go. So to watch webinars, it's pretty much what they are.

Unknown: 5:32

Alright, let's get into some new training. What a value prop US Senator

Paul J Daly: 5:36

Joe Manchin has urged manufacturers to sue the Treasury Department over its implementation of local content rules for clean energy tax credits, under the inflation Reduction Act, aka Ray. Boy, that was a mouthful. So basically, you know, the rules that tell you where you need to get battery materials from and whether or not you'd be applicable for credits layman's terms. Manchin, who has recently left the Democratic Party, and is now a full independent has criticized both major parties for partisan extremism and claims. The Treasury's final rules have the original content requirements in the legislation that do actual harm to us manufacturers because of the reliance on Chinese materials. And the requirements of what happens under the Act to get credits basically said, the rules permit automakers to use Chinese critical minerals for another year, which he says breaks the law. So there's this law in place. And they just implemented rules that basically stretched the terms. And so basically, he's saying now, automakers can use Chinese materials, and Evie batteries longer than the law actually is in place. So it's like, he's like, Oh, you just weaseled your way out of having to be accountable to the rules that you just laid on automakers. And they made investments to try to get us materials. So basically, he said, just directly to Janet Yellen, I'm encouraging every manufacturer to sue you. And I will even do the amicus brief on their behalf and you'll lose every suit.

Unknown: 7:07

Wow. He had his like, somebody man,

Paul J Daly: 7:12

somebody invite him to that Ford thing that's happening this weekend. Well, you're gonna pull him up on stage with Eminem. Well, this

Kyle Mountsier: 7:20

this right here like for me, this is the story that I wish we could like in the political landscape drive home is partisan extremism is dangerous for our political climate and for our business climate like anything anytime you go extreme to one side or the other. It is extremely dangerous because you stopped to consider the other side's posture the the impact that the other side has as kind of a desire for and so I love that he's calling that out. Interesting that it's coming from mansion right with kind of everything that he was a part of really in 2023. But man, come out right man should come out and shoot it straight like that. Like, like snaps for that dude. Yeah, yeah, yep.

Paul J Daly: 8:06

Speaking of things snapping, segway. Repairing an Eevee is on average 30% More expensive than repairing an internal combustion vehicle according to q1 2024 insurance data. And here's why. Average evey repair claim in q1 was$6,066 compared to only $4,703. For ice vehicles. Basically, EVS declared total losses at the same rate of ice vehicles though so as about just under 10% EVs Nis the biggest cost driver on repairs is mechanical labor hours. Three point our 3.04 hours for EVs versus 1.66 hours. For ice vehicles. extra labor often involves maintaining, managing the high voltage battery situation, including de energizing the battery, removing it so you can safely do repairs without you know anyone getting electrocuted. EVS also rely more on OEM parts to make sense. Where vehicles proprietary parts there's not a lot of aftermarket solutions. So like 90% of Evie repairs need an OEM part versus 65% of an Ice Vehicle. Tesla Model three and model y are the top vehicles for repair claims followed by the Ford Mustang Mach II. No surprise there. They're just more of them on the road. Yes,

Kyle Mountsier: 9:24

so if you're not familiar with the actual like, necessity whenever you start working on one of

Paul J Daly: 9:30

these involves multiple people in a gaff.

Kyle Mountsier: 9:33

Yes, exactly. Yeah, you essentially have to completely disarm the elect the battery right? Sometimes even like removing it completely from the vehicle frame and setting it to the side in order to even work on it just for safety reasons. But then, like the the one thing and I have a buddy that works for Geico, he said the one thing that gets them in the most trouble as you get like a simple fender bender. that would typically be a few 100 bucks or something like that on an ice vehicle or really anything like 2021 prior and and one of the big impact pieces is not just the Evie battery but it's the technology required for things that include like LIDAR sensor calibration wiring harness has to completely be read, taken off, and then reconnected and then painstakingly tested within a like narrow tolerance of tolerance

Unknown: 10:34

in nano micro That's perfect. That's That's exact nano minute.

Kyle Mountsier: 10:38

Perfect. I

Paul J Daly: 10:39

know exactly what your bet. Yeah. Really, really, really small.

Kyle Mountsier: 10:43

Yeah, between between what you have to do with the evey battery and what you just in labor alone, but then they pointed obviously to the OEM parts not having a ton of aftermarket on this stuff. Like it's, it's, it's one of those things where I think, you know, with the affordability on the actual purchase price, it's similar to like, Oh, we got oil OLED TVs for $3,800. And now they're 900. Right? Yeah, you just see like both things needing to get scale, get aftermarket get efficiency in the purchase side and the repair side. So not a big surprise, but still, like a consideration that people that are buying an EB sportability need to be thinking ties

Paul J Daly: 11:26

back to affordability and I think the insurance can be a surprise on what are the V costs. Speaking of trying to lower insurance costs for EVs and Geico, you had a friend who worked for Geico, we can use that, man

Kyle Mountsier: 11:40

just we're just leaning right into, it was taking a strategic step to actually reduce these high insurance costs because of high vehicle repairs for its vehicles by hiring a longtime GEICO executive. So the 20 year veteran of Geico, his name is Alan Laban. He's joining Tesla as the head of insurance partnerships. Their goal Tesla is to make vehicles easier, more economical to insure by partnering with insurance companies and collision shops. So his goal will be to lower the total cost of Tesla ownership and support the transition into to sustainable energy as well. Tesla, if you don't know also has their own insurance. They launched in California in 2019. And it actually uses real time drive driving data, which some other insurance companies have had, with like their get a little plugin or little things to determine insurance rates. The insurance product, though, has been controversial, due to the reliance on the real time driving Data and Safety scores. So here's a quote from Alan, my goal is to make Tesla vehicles easy and economical there comes back to ensure so I

Paul J Daly: 12:47

mean, they're gonna they're gonna vertical, I mean, but this is interesting that they're hiring him to lean into the partnership side of it. You know, they tried to go it alone, they tried to go vertical, that's probably an okay product in certain scenarios. But obviously, it's getting more complex, and costs are going up. So they bought I mean, like, I trust the guy from Geico, when you Well,

Kyle Mountsier: 13:05

I would just and also you think about all of the people that are buying us Tesla's from elsewhere. And so Tesla partnering with these insurance companies, gives them more access to better data, and more parts for the collision shops. Yeah, making it easier for them to also ensure the used side of the market. Yeah, great. So you know, if you think long term, and you're thinking about retention, and you're thinking about getting PRs use Tesla's number of vehicles on the road.

Unknown: 13:36

All of that's important. You know, they should have just heard flow.

Paul J Daly: 13:44

I would love to see a conversation between flow and Elon Musk, that'd be amazing. Well, yeah, that

Kyle Mountsier: 13:48

would be that would be stellar. Just put them in a room and see who talks more. You know?

Paul J Daly: 13:55

The unbelievable and we hope we sent you away with something to think about something to smile about at the show. We know you have a lot of work to do. Go out there. Love some people more than you love cars, but take care of the cars too.

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