Tesla vs Toyota: The Tale of 2 OEMS in Early 2023, A Glass Cage Of No Motion In Denver

SPEAKERS

Kyle Mountsier, Paul Daly, News

Paul Daly  00:25

Yo, it is Friday friends. Welcome to Friday. We have a fun show. We had a fun show yesterday, a fun show today talking about Tesla vs. Toyota, glass cage in Denver and some other things that will show you the second the people who isn't who, you know, sometimes the news is tough to commentate on, because it's just like, all sad or negative. Yeah, I sing or there's

Kyle Mountsier  00:50

some times, it's Friday, January 13.

Paul Daly  00:54

And you're here with us,

Kyle Mountsier  00:55

and you're here with us and just get ready for it. You know, I'm saying,

Paul Daly  00:59

Oh, we got a couple of things to talk about. Man. I'm excited to go to Baltimore. On Tuesday, we're flying in for one day shot in Baltimore to check out the asoto con 2023 venue, circle the last week in September, block it off, tell your mom that you're not going to be in the basement at home because you're gonna be at a soda.

Kyle Mountsier  01:17

They're not gonna be there. Tell all your friends at the dealership, they're gonna have to cover for you, you know, all

Paul Daly  01:22

that stuff, all that stuff. And if you're within driving distance of Baltimore, it's right near the airport. You gotta go. I mean, you can drive you gotta go. So DC should be there.

Kyle Mountsier  01:31

Why not? Why not? And

Paul Daly  01:35

we're under two weeks before nada. under two weeks, two weeks from today, like we're already there. Like, we're

Kyle Mountsier  01:41

I got our 38 emails about nada yesterday. 44 of them 44 out of 33. Were inviting me to some sort of party.

Paul Daly  01:50

I know. I don't even know, hey, if we don't get to your party, and you've invited us it is not because a lack of care for you. I have no idea how

Kyle Mountsier  02:01

it's actually 97 parties happening. That's,

Paul Daly  02:04

I think you're probably right, it's gonna grow and go, I think you're probably right, well, it's 848. Eastern right now, which means it's 748 Central, which is the time zone for nada. So this time, two weeks from now, the floor, like the opening ribbon cutting is about to happen. We're going to bring you all the news, all the fun stuff, if you're going to be at nada, look for the pirate ship of people wandering around like a little crowd, we're going to be making a lot of content, please say hi. If you're not going to nada, please check out follow us, we're going to bring the show to you on our LinkedIn, Instagram, Facebook. And just so you know, we have a couple of changes with our social media. Our if you don't follow a soda, on Instagram, follow us on Instagram, it's a lot of fun. It's a lot of fun. Also, there is a new account called uh, so two events. So if you search for Soto events, that's where whenever we're on the ground at an event somewhere, we have some archives there already, it used to be our Soto card account. So check that out as well. And that's the stuff we're like you can be in the stories. You can see what's going on on the street. And you know, we want to we know most of the people in this industry can't be there. So we want to bring it to you. Yeah, exactly. All right. All right. All right.

Kyle Mountsier  03:13

We'll get to it. We got we only got 11 minutes till all things parents. That's right. Well, yeah. Speaking

Paul Daly  03:17

of that, all fake news. Just next. But let's let's talk about some Automotive News. This is a fun contrast. So Tesla has Siri, you've probably seen this already on LinkedIn. Yeah, everybody everybody's saying like right Big news. Big news. Don't have some important context and texture and perspective to bring you on a Tesla seriously slashed the price on its best selling model wide, long range after a year of quote, Elon Musk embarrassingly high prices, the company announced a whopping 20% price cut to its most popular model wide long range, bringing the price down from over 65,000 to under $55,000. Now, if you think about it, it's eligible for federal tax incentive, which is bringing that car into the mid to upper 40s 40s. It's entry level one is actually 45,000 for a model why? Wow, so big, big difference. 20. I mean, 20%. I mean, that's a heck of a don't call it an incentive. That's a heck of an

Kyle Mountsier  04:17

incentive or power or anything like that. It's

Paul Daly  04:22

it's a price cut, it's a it's a market adjustment. So a base model, their model three, also the price was cut on that. So now it's 43. Nine, which would make sense it's got to be cheaper than the model Y. And their big, big time Model X SUV is only only only going to set you back 109,000 Now, Kyle, yeah, I finally pulled the trigger, because I

Kyle Mountsier  04:43

was struggling at 120 You know? So, yeah, look, stocks dropped, right, four and a half percent yesterday. You know,

Paul Daly  04:54

I had the opposite response to it. Honestly, I was like, I think it's probably puts them in a better position to

Kyle Mountsier  04:59

crush it. I without a doubt, it's a better position than they probably should have, they probably should have started this way. I mean, like, I just think about the relationship between the comparison between Tesla and like Apple always thinking premium, never adjusting prices. And this is kind of the first shot on the bow. And I also am now seeing like BYD in China is set to overtake them for volume of sales this year, because they have expanded their model lineup, they have a quicker line of production. They're, they're less expensive. Tesla's already, you know, has already made the price cuts overseas, and now they're coming to the US. So there's obviously some legitimate competitors knocking at the door, and and Tesla's, like making some big moves to change where they sit in the market. And I think, well, here's the thing, like, how many more people are now able to look at this as viable purchase option? Because of the price? Because price cuts? Hey, look, and here's the thing, there's still so early in the market, as far as you know, just like adoption. Yeah, that I don't think it's really going to turn people away or make that or make their stock just completely crash because it will be something where

Paul Daly  06:11

I think it will end up making it I think it will end up holding the stock up because of the decision. That's not investment advice. But in comparison, now we're going to speaking of companies that start with T. This is the other half of the comparison. So we have Tesla versus Toyota. In contrast to that story we just told you Toyota's Jack Hollister executive vice president of sales is talking about all the pent up demand for Toyota and Lexus. It's almost like he's rubbing in it, but he's not at their normal price. Dealer Steve Gates, the 2023, Chairman of the Toyota national dealer, Council and owner of the elevens store group gates auto family in Kentucky, they have three Toyota stores and Alexis store he told Ward's automotive that his Toyota and Lexus inventory has been zero or close to it. At the end of most months. He says it's kind of been a point of pride for us. One of his stores ended Toyota stores ended with only seven vehicles and inventory a few of them already pre sold. And he said pre orders alone could carry them through the first six months of 2023. So there's a bit of a contrast between those two stores.

Kyle Mountsier  07:16

They're actually I know four or five Toyota dealers and every single one that I talked to is in the same situation either extremely low inventory or zero inventory on lot with pre orders pushing them out three four months in some cases. So I what's wild to me is it's not like they're like when you looked at automotive news came out late last year was just like production person, you know, as a as a supply metric. And it's not like they're that far behind the rest of the auto manufacturers. It's just that the demand is so stinking high they've done such a good job hiding into the hybrid market and understanding brand understanding their target audience and not overwhelming the dealers with inventory. Now I know dealers would love a little bit more inventory, just have some ground stock, but what story and I continued like I continue to say like I'm paying attention to what Toyota and BMW are doing in the market because it's taking a measured approach to inventory and Evie and I think it's doing them well.

Paul Daly  08:14

I mean, they're worse positions to be in speaking a worse position.

Kyle Mountsier  08:17

Oh, segue.

Paul Daly  08:23

We just got right clip. Should we just roll the clip? Okay, roll the clip.

Kyle Mountsier  08:26

I feel like I feel like the clip. Yeah, go ahead.

News  08:30

You build an office building and the company goes kaput, another business can just buy the space. You build an eight story cars on a car vending machine at Evans 925 And that company runs into trouble. And you end up with an empty eight storey Carvana car vending machine at Evans 925. Steve staggers trapped and check this out case of nobody comes. You can see it everywhere. Even on a foggy day. It still snags eyeballs on i 25. Though the interest factor in Carvanha is giant vending machine may be more about what's not inside these days. We refer to it as the bubblegum machine for cars. I love her simplicity. Blog blocking my Mountain View next door

Kyle Mountsier  09:20

lock in my

Paul Daly  09:21

Mountain View she doesn't seem better actually. She she was very kind. She seems like a very kind person if we ever go to. We have to stop and meet that store owner near their Carvanha vending machine. We were just talking about this yesterday, but after months, because we were in Phoenix and there was an empty vending machine or just have three cars in it. And this one, particularly after months of you know, convincing the zoning board that like this was a good idea. And you think like it's kind of a small. I mean, Denver is not a small town but it's on the outskirts. It's in an area where there's really nothing that's tall, and they constantly work the zoning board to convince them that it was a good idea to put the vending machine up They have a brand new but fully empty vending machine that's been completed for months and months. Or maybe open it. Yeah, it's not even open right now can't do anything. You know. So obviously, in that clip, first of all, I want to give credit to that opening statement and monologue, the way that that news anchor the way that just rolled off his tongue was kind of wishing I mean, I kind of think that's a that's a that's a good play for local news stations. So just lean into that a little bit, because it makes me want to watch the local news. Right, right. Not just when I'm in the doctor's office waiting for my appointment. So others, you know, further in that article, some people say, you know, it's just like, an expensive version of a wacky waving man or an inflatable gorilla. I was like, dang, is that how quickly the public perception can shift? What's why Yeah,

Kyle Mountsier  10:47

what's wild to me about that is like, it is the most expensive billboard and it really like, I never thought of it that way. It's it's literally like the newfound version of attention attention. Here we are, right, the waving gorilla, the you know, the, the waving inflatable man or the or the giant gorilla. And to relate it to that is kind of kind of shocking when they're all they've done is like, don't be like the car dealer in their advertising. But really, that's what it is, it's putting up a giant gorilla on the side of the highway. And, man, I look for all the craziness around Carvana. And I know that there's people that wish bad will and wish goodwill, they've done an incredible thing that nobody else had the idea to put up a big old car vending machine and and go after that market. But we are starting to see this, you know, not able to put inventory not able to open up these new solutions. We got Cassandra in the comments, and hey, they're empty here in Woodlands, Texas. They just went up a few months ago and still haven't started. So we're just starting to see these like pockets of the market where Carvanha is not able to execute business. So and I think, you know, the this, this news report alone, just saying like, Hey, if you're gonna repurpose that space, like you've either got to be a dealership, so cars or tear that can't read,

Paul Daly  12:11

you can't read develop it. And you know, you're saying subprime real estate, obviously focusing on prime spot. And it also goes to show you the power of brand and execution, I think this period is going to be looked at in general as a period where companies went too far. Right, even the stuff in the news with FTX and all the the thing that happened in 2022, and 2003, with everybody getting very aggressive, right on things and not being able to hold the operational soundness that is a contrast to just about every local auto dealer in the country who have been around for years and years and years. Operational consistency, consistent service. That's what done and if I'm the folks if I'm the CFO is over in the bean counting office and driveway, I am doing calculations on how I can buy every one of those vending machines and put a driveway sign on top of it. The color is already the right color. We hope you have an amazing Friday. We're heading over to all things use cars to have a discussion with about 150 to 100 200 of our automotive friends. But have a great weekend. We got an email coming for you tomorrow Saturday recharged

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