VinFast Burns Rubber, Buffet Steps Back From GM, Farley’s Charging Epiphany

Paul Daly: 0:30All right, we're coming in one more time. We got Steve Greenfield on the show. Again, it's like Groundhog Day today. It's August 16. For Ronan Hawk gonna talk about vinfast Warren Buffett and Jim Farley's trip in an Eevee. Across the country, people really went far enough that he had a couple charging mishaps or hiccups. Steve, welcome to the show how you doing this Wednesday?

‍Steve Greenfield: 0:56

I am doing well, Paul. Thanks for having me back, my friend.

Paul Daly: 0:59

Oh, it's always a good time I have I have some special stories picked out just for you today as they tie in to what you're doing. First one, I want to just mention again that a soda con is coming in hot. And for those of you that might just think a soda con is like a lot of fun. And like when I say the south by southwest of the auto industry, it's not bands and parties. I mean, there will be a great band there. There will be a great party there. However, we have over 35 keynotes panels, workshops, covering a wide variety of topics. We're talking about scaling small groups into large group sales and BDC fixed ops, online retailing, what the heck are you supposed to do with the CVP? If you get one hour, some amazing people talking about that and representation from three of the five major public groups and these are practitioners, people that are in the dirt. We have, you know, Michael fader who is the VP of mile one holdings local there to the Baltimore area is going to be there on my Kabanov with Lithia driveway lies Abortionists, who many of you in the audience know very well. CEO president of Carter Myers, and Roberts, CEO of Bozarth Ford Lincoln, just about to release his new book mile one leadership, if you've never met Edie, prepare to have your life changed. And so many more, Steve, I think you might

Steve Greenfield: 2:14

be showing up to you're going to be I might be there my friend I might be there

Paul Daly: 2:18

just might wake wake. So look, if you haven't gotten your tickets, they're on sale until September one, they're$100 off. And you can go to a so to conduct comm to see our full list. Well, the full list of speakers we've announced there's probably about 50% of the speakers we're going to have there are live on the site. And just yesterday, we haven't I guess we're announcing it now. We're going to have we're having a custom guitar made. electric guitar made and it's gonna be auctioned off to support our charity Vehicles for Change, who's an amazing organization taking a formerly incarcerated individuals training them to be ASE Certified techs and they have a 100% job placement ratio. So that's pretty good.

Steve Greenfield: 3:00

So a great man, that's really great, good for you.

Paul Daly: 3:02

So a lot of things would be part of a lot of things to be part of. Alright, let's get into some news. So yesterday Vietnamese electric maker vinfast Evie Baker, they made a remarkable debut on the NASDAQ skyrocketing their valuation to$85 billion dollars, propelling it past automotive giants like Ford, and General Motors. The company shares went up over 270% from its initial spec IPO price, making it the year's top performing spec debut on the exchange. So basically, there's a couple characterizations, Steve are in need you explain some of this other Kakarot characterizes a low float company with only a limited number of shares available for trading. Post redemption makes the stock, they say really susceptible to fluctuations. The founder of vinfast is actually Vietnam's richest individual. So I guess he's like the Vietnamese Elon Musk, maybe I'm gonna control over the company only about 99% of it. Steve, tell us about vinfast in like, why should we be paying attention where they come from? Give us give us the breakdown.

Steve Greenfield: 4:04

We'll always be looking at new OEMs new automakers coming into the US. But yeah, I mean, I think we need to underscore this, this is a stock, it's gonna have incredible volatility. Don't go out there and start buying it right now. You know, that was a hedge fund manager taking long and short positions, you might bet that it might come back down to earth here, in very, very short order. I imagined that if you would ever have this conversation tomorrow, we're going to see a very different market today, because he said there's very few shares out there. So therefore, you know, index funds, et cetera, or even those funds that have to have some automotive placement had to buy yesterday, so they had to allocate some kind of fill orders yesterday and I think that we're gonna see it come back down to Earth doesn't make any sense for an upset automaker, who has only sold a handful of vehicles in the US to be valued more than Ford and GM, but we'll see how it plays out. But yeah, dealers should be paying attention to the product, frankly, and honestly, the products Pippin has been pretty lackluster so far. Vehicle ranges, low road and track, you know, looked at the vehicle and said the quality is really poor. But you know, with any of these first generation vehicles, we can't sort of under under estimate sort of what this company might look like in five or 10 years.

Paul Daly: 5:13

They're certainly very well resourced. And, you know, they seem to be pretty good at the PR game too, which I think is is easy to underestimate. But like all the buzz when they brought a bunch of reporters over to really wine them and dine them, show them the product, and they they shipped their first shipment of cars over to the US I think it was like 999 or that, you know, some number over in this big branded barge was awesome. And then, you know, I think the data was like the first vehicle sold in the US right now they're tracking it cost them about$500,000 per vehicle to sell in the US. So they're definitely correct, but they got they got a bit of a PR game going and people are paying attention. Speaking of PR people who I think have mastered the PR game. Segway might not expect it but Warren Buffett is one of those that I feel like has mastered the PR game and his Berkshire Hathaway significantly reduced their stake in GM by 45%, slashing their shares from 44 million to 22 million. The move is revealing the recent SEC filing comes amidst growing investor concerns about GMs notable stock fluctuations. The motivation behind the sale is undisclosed. So GM chose not to comment on the reduction but Berkshire Hathaway also didn't say anything. So the exact reason is undisclosed. However, we can see that they also bought about as much stock in home builder company. So it looks like it's kind of an asset allocation. But regulation is he worried about the strike or they just kind of tired of the GM stock? What are your thoughts on the trip on the move?

Steve Greenfield: 6:52

Yeah, so what Warren Buffett obviously someone to watch when he makes moves like this, I mean, arguably the best investor the highest performing investor of all time. And you know, remember also Warren Buffett has no no neophyte when it comes to, you know, automotive investments. He he owns Berkshire automotive here in Berkshire Hathaway automotive here in the US. He's formerly Ben tile. And so he has exposure to the retail channel so intimately knows what's going on with

Paul Daly: 7:16

also owns what progressive or GEICO right,

Steve Greenfield: 7:19

go owns Geico. So the insurance side, and then, you know, also made a significant investment in BYD, which is the world's largest Evie manufacturer, now over in China, and has battery technology investments to that other automakers are using so and he's largely drawn down from that investment and done extremely well. So I mean, this is not somebody who is new to automotive whatsoever. So yeah, Paul, it probably is some combination of one, you know, maybe he's realized most of the value that he was going to capture within GM stock is been captured. And now he's he's rotating it in other vertical, but also, he's also an investor that typically buys and holds 1015 years is not atypical for him. So he might be looking at this and say, Look, there's enough uncertainty. Yes. In the short term, as you said, with the the UAW talks, but longer term, you know, we need to be really thoughtful here around what does this mean, if the world's best investor is saying, I'm not really willing to take a position in an automaker a US based automaker for the next 10 or 15 years. We know we talked about all the time, Paul, there's a lot of change going on across the automotive landscape right now. And he may not be best served, he might like the retail channel better than the OEM channel, given all the uncertainty that's going on.

Paul Daly: 8:30

Right, that makes a lot of sense, for sure. I mean, no one would ever call Warren Buffett a reactionary investor. And I think that's a key critical point. And his access to data and trends is is far beyond what I can think of, but I'm sure it's just incredibly sophisticated. And he's got a heck of a track record. But again, I think the the lack of I don't think there's going to be a lot of market panic over this because I think savvy investors understand like he's playing a different game of 3d Chess. ruber does have a door maybe not rumor, like he's a GM driver. He drives a Cadillac. Right, right. I mean, He still owes 20 million shares is still a decent stake.

Steve Greenfield: 9:06

Yeah, exactly. Right. I'll be going over to vinfast anytime soon.

Paul Daly: 9:10

I don't think so either. Oh, well. Speaking of transitioning to an Eevee segue. So Jim Farley, recently took a road trip is a great again, back to even like people who are really great at PR and doing a great job with getting brand attention without paying any money for it. Ford CEO Jim Farley recently took a road trip in the F 150. Lightning Evie along Route 66 testing the capabilities and during his journey, he encountered some challenges with charging, able to charge that's pretty great. In a video posted on X, formerly Twitter finally described the charging issues as a really good reality check on the difficult difficulties consumers are facing with public chargers. And to address these you know, some recent announcement for collaborating with Tesla Giving Ford vehicles access to the over 12,000 superchargers. And their certified dealers are installing fast chargers. But this is this is a real fun one to see him going out there and kind of validating a lot of the hesitancy people might have in this adoption curve.

Steve Greenfield: 10:17

Well, good for him being so transparent. I mean, he didn't have to really report on this at all. But you know, as we saw, you know, a couple of months back JD Power came out and said in q1 of this year, 21% of Chargers were either offline or incompatible or not working with consumers tried them. And then that compared versus 4% for Tesla users on their Supercharger network, so Wow. Yeah. Huge difference. Right. And I think a lot of that has been a tailwind for a lot of these automakers, including Ford announcing they're going to be moving towards the Tesla standard overall, right, which, which should help you there's other issues there. You know, Elon Musk may have more control and visibility into who's charging on this network, and may be able to throttle different charging speeds to two GM vehicles, or Ford vehicles versus Tesla vehicles. But I mean, we've got a big problem in America where when 1/3 1/5 of the Chargers don't work. And I think Farley is putting his finger on that, right. It's more validation for moving to the Tesla standard, and good for him for being transparent about this problem, because his customers are going to be feeling this firsthand. And it's great that he's highlighting it. I

Paul Daly: 11:21

have an anecdotal story of friend of both of ours, Todd Caputo, a second gen dealer. He said he has a I think he has a Model S and he was driving on a road trip. He said I was at a hotel. And the charger was broken. So I couldn't charge it. And I was kind of I knew that the hotel had a charge and it was a nice hotel. So he figured it would work. He said the desk person went outside with a rubber mallet knocked it on the side. He said that's what we have to do to get it to work. Yep, very good. And then you feel good plug in your vehicle, and expecting a good experience. I'd like to talk for a minute, Steve had to wrap up the show about some of the work you're doing with the investment funds and the tech investments, specifically about one that you mentioned in your, your monthly or your weekly, your weekly email company called treehouse. Tell us a little bit about this because it helps us solve and address this issue.

Steve Greenfield: 12:16

Well, great. Yeah, I mean, fits very nicely into as far Farley conversation as well. So we're really excited that the latest investment that we've made out of our dealer fund, we're dealers are the investors and we're investing in solutions that help dealers is this company called tree house, as you can see up there, Paul's put up on the screen. And really, really excited. You know what one of the challenges as dealers feel firsthand is when you sell an Eevee. More often than not consumers are going to say, Well, what about the charger in my home, and many dealers have sort of worked with a local electrical contractor, to you know, dispatch them out to the consumers home to see if they can go put put a charger in the home and get it installed in a safe way that's consumer centric. The challenge is, you know, we hear horror stories all the time that there are cost overruns, Paul buys and f150 laning. You know, the Ford dealer says hey, I've got this electrical contractor, the electrical contract comes out says, ah, Paul, I gotta run more cable or I've got to put in a new fuse panel for you, it's actually going to be an extra$1,000. And then there's a lot of finger pointing there's friction, who's who's to blame is the dealer is it the electrical contractor ultimately, it doesn't look good for the dealer problem to solve. It's a tough problem to solve. And there's all kinds of companies out there helping dealers install Evie chargers now we're Treehouse comes in is they use data based on your neighborhood and the blueprints of your house ahead of time to give you an instant quote that they stand behind. So now, the dealer can be very transparent with the consumer very easy to integrate interface where a consumer can feel okay, there's not going to be any cost overruns of getting a price up front that's backed by this company. And it's very, very consumer centric, they roll in all the incentives, so make sure they optimize the incentives and they will negotiate the local permitting process. So there's no surprises with either getting a permit or the cost of a permit as well. So it's a very nice product. The last thing I'll say is you know, we're never going to be able to roll you know the cost of the Evie charger into a monthly payment.

Paul Daly: 14:18

Unless we said we're never going to be able to Oh, and less

Steve Greenfield: 14:21

and less and less we can guarantee that price up front at point of sale because how on earth do you roll it into monthly payment and then find out later it's an extra$1,000 Yeah, go back and open the deal jacket and then increase the monthly payment for the consumer. So we also think you know tree house is going to be pivotal to helping dealers at point of sale, roll that charging install into the the point of sale and into the monthly payment and enable f&i products to start to say, Hey, can can we also roll in, you know, maintenance and service of your Evie charger at home. So there's all kinds of new propagation new revenue streams that we think this will open up for dealers. And we're finding preliminarily, a dealer makes another 400 to $700 per sale transaction, not insignificant profit very significant when they bundle this in

Paul Daly: 15:10

very significant. I think that just the the question of it and be able to advertise an offer that like we can handle this for you. I mean, if anyone right now who tries to get work done on your house, I've had this situation happen lots of times in the last few years, I know a lot of other people have to work, it's tough to even get someone to come out and like change a window or get back to you with a quote. So the thought of having to navigate a contractor situation is already daunting, and anyone just haven't done it. It's like, oh, this is going to be tough. And then the pricing, and then the lack of familiarity about installing, like a relatively higher voltage, especially, probably somewhere that's there's not a lot going on. Right? And it could be I love the solution. I love that you've kind of like helping bring this to dealers to serve them. See what's the best way for people to keep up with what you're doing. Because a lot of times the investments that you're making helped me think in a different way about what's out there because you were all out on the frontier. Like looking at all these companies and seeing what they're doing. What's the best way for people to follow along with what you're doing?

Steve Greenfield: 16:07

Sure. You can find me on LinkedIn, Steve Greenfield or just go to automotive ventures.com and sign up for Intel report comes out once a week Monday mornings at 7am. And it's free.

Paul Daly: 16:17

There you go. Can't be free. We'll see. Thanks again for CO hosting the last few days. It's been a lot of fun. I'm sure we'll see you around in several places, most notably a soda con in September. If you haven't yet. Get your tickets. A soda con.com

‍