Which Is Cheaper To Own, EV or ICE?, Inflation Down, Unlocking EV Range

Paul J Daly: 0:00

Here we are outside again. It's one almost one year ago we are outside at hawks Ridge Golf Course at the third annual beaver Toyota charity golf event to talk about a little bit of news too, but and then we're gonna go play some golf. Well, Kyle is gonna play some golf. I want to drive Patrick around in the golf cart all day. It's gonna be an amazing day.

‍Kyle Mountsier: 0:26

It's going to be fabulous. And there's like, just enough sun peeking through. It is the perfect golf, summer golfing weather without

Paul J Daly: 0:33

a doubt, without a doubt wild weekend. Yeah, we just a couple of days. It's just a wild weekend. So we had a little bit of an assassination attempt. We're not making light of it at all. But it's what we can do. Yeah, to not want to make Patrick laugh. The reason I brought up the wild weekend, obviously, there's a lot of heavy things going on in the country. And the auto industry is always in the middle of stuff, because they're in the middle of communities all across the country. So wherever your store is, and however things are playing out in your community know that this is a time when you can be a source of stability, and calm and rational thinking. And it's one of the things I love about this industry every day,

Kyle Mountsier: 1:13

I think about like just being in a store when there's any sort of like, tumultuous feeling in culture or politics or doesn't matter. And there's a level of like, stability that the leadership can provide in the type of communication in the way that they care for their employees. And the way that they just set the regular pace of the day. So that's important as leadership to set the pace of the day to day like if you're listening to this in the morning, how you set the tone for the types of conversations that happened in your store today

Paul J Daly: 1:49

is extremely important. Yeah, normalcy like I see the auto industry and just regular service drive opening in the morning. Sales department. There's like a sense of normalcy. I think that that just feels good. Yep, it feels comfortable. Okay, like where are we going to be we're going to be a lot of places and we're talking about a lot of things this is the first one on the list. Yeah, that's

Kyle Mountsier: 2:06

exactly it. So we're gonna be here you're you're flying to Moscow, Idaho, not Russia. It's hard to get too hard to be at the don't event what to expect when brand building that, man, I'm kind of jealous of all the people that are

Paul J Daly: 2:22

gonna I don't know, I don't know what to expect. It's gonna be just when Darren asks I say Yes, yep. And then we're on our way to name at event V con automotive amplifiers. We're judging the automotive amplifiers contest be fun and another get another golf course at a golf course shouldn't probably start playing golf. We start playing golf alright, but today we're gonna get to a news and then we. Have I want to add a battery? No, That'd be terrible. Hold on. You know what? Maybe we're just going to pull this thing out. We're good. Okay, so while the upfront cost of EVs has been deterring some buyers JD Power analysis reveals that EVs are actually cheaper to own the gas powered cars over five years in every state in the US that cost less or own than internal combustion vehicles, basically, except mainland West Virginia. Yeah. And then bunch of hills shady power considered transaction prices taxes, gas and electric rates and zero emissions vehicle incentives as the incentives worked into their EVs averaged $57,584 in q1. About 13,000 more on average and gas vehicles. Some dealers like William no COO of Maroon isn't Morona Moroni, USA was seven dealerships in Colorado. See the entry price of EVs still as a prohibitive thing saying quote, even with the tax credit and incentives, it's really hard to come close to a low priced Ice Vehicle. Was back check one, two

Unknown: 4:54

There we go. All right.

Paul J Daly: 4:57

All right. We're just gonna get close to the camera now because no more handhelds. We're just on computer audio, do what we got to do.

Kyle Mountsier: 5:03

This isn't Hey, you know what, there's, there's a thing about just being scrappy.

Paul J Daly: 5:07

And how we got here. So, you're talking about?

Kyle Mountsier: 5:11

Well, yeah. So like, you're, we're still in an early adopter phase, right? When it comes to EVs, and then, you know, also, when you look at the way the consumer typically price factors, the vehicle cost, you don't see consumers looking at vehicle cost over time, as much, right? Even people not even really considering insurance costs into their purchase. No,

Paul J Daly: 5:34

I mean, probably like, gas mileage is one of the only ownership costs if you consider at some level, right? Like all this one gets 27, this one gets 31, it's kind of the same, let's keep going.

Kyle Mountsier: 5:46

So still a lot to be done. But why I'll just see, like the five year cost of ownership is quite clearly lower. With all that big 10 We're

Paul J Daly: 5:53

gonna learn a lot more as we go forward. There's some good news. However, on the inflation front, the Consumer Price Index fell, fell, the inflation fell fell by point one in May slowing the annual and freight inflation rate from 3%. To 3%. From 3.3% marks the first monthly decline since get this May of 21, driven by falling gas and car prices, primarily. So the auto industry did its part to get them up. Yep. Now we're doing our part to bring it back down the core CPI, consumer price index that excludes energy and food also showed more than expected, rising only point 1% from May. So when you take energy out of the equation, costs seem to go up. But even that's kind of stagnant shelter costs. Are we going? Oh, yeah, this is a big one. Auto insurance rates surged 19.5% In the past year, with national average for full coverage, nearly $2,300 or $100 9190 a month, higher vehicle repair costs, riskier driving behaviors, how are you riskier now than we've ever been, and increased in 30 involvement in accident claims? So all those billboards on the billboards, that's what I first thought it's business must be good. Yep. Because insurance is going up. So in the end, you're paying for it. And yeah,

Kyle Mountsier: 7:08

this is it's wild to me that you see the consumer price index come down, but when it comes to vehicles, so gas prices and insurance rates still staying relatively high. I, this is like going back to the last story, the consideration of consumers are starting to factor in some of these alternate parts of their purchase, right, where it's not just the monthly payment that they're concerned with. And definitely when you think about, you know, 19 and a half percent year over year, and then probably over a five, seven year timeline, these rates going up almost double at this point. You know, I mean, I remember my parents being upset when they had to pay 55 more dollars a month for my insurance back in the day, right five a month like a new driver, right, which is not so you know, you think about the difference in what consumers are having to grapple with in the showroom on their total monthly budget. Use car prices, new car prices really, really high V in there, it's thrown Evie in there and throw an insurance rate. Just something to be considerate of when when you're walking through that process with shoppers speaking of evey upgrades yet, segue. Tesla is now offering what they're calling an energy boost software upgrade for recent model wide rear wheel drive owners to unlock additional battery there the whole time is that all the time, it is seeing significant changes, including fluctuating prices and the introduction and cancellation of the standard range model. When the standard range model was cancelled, Tesla announced that the batteries were larger than advertised and planned to offer software software unlocks to increase range by anywhere between 40 and 60 miles for 1500 to two grand. And what's wild now is the one time costs, the upgrades are available with owners getting it on their dashboard. Seeing offers like 1600 bucks to add up to fifth 50 miles.

Paul J Daly: 9:08

Yeah, they're seeing the offer on their dash on their dash Oh, my

Kyle Mountsier: 9:12

different volumes have ranges at different price points or 1000 bucks to add up to 30 miles. So there's like different figures that 40 to 60 is kind of

Paul J Daly: 9:23

I wonder if it's like the crediting habits. Can you can you like tap on the screen and be like by now?

Kyle Mountsier: 9:29

Oh, yeah, we got it out.

Paul J Daly: 9:30

That's I think this is the thing that automakers have dreamt up when it talked to software enabled vehicles where they could actually make money from subscriptions and software sales. But there was an article last week at the just said, like, hey, this this was like the big dream of everybody, but no one's really doing it. Yep. Right. Tesla's doing it.

Kyle Mountsier: 9:48

It's was there. It was

Paul J Daly: 9:50

there the whole time. It'll be easy. We were talking to one of our EP I can think maybe it was John Foley. And he was saying like, we just might find out that they all have the All this range baked in, they put the same battery in every single vehicle. And they've just been doing it and no one's known, but then they're going to start paying to unlock.

Kyle Mountsier: 10:07

Yeah, I mean, I got some insight on that from our friend Jimmy Douglas i Okay. And he said, the fact is that many of these things have anywhere from 100 to 200 miles of additional range just ready to go.

Paul J Daly: 10:19

Can you imagine that the just discipline it takes to end the vision it takes from a business strategy to not talk about how many miles your car can get and outperform everybody else and they just drip feed it out. It's like afternoon, right? You have the technology. So you'll see it. You'll see a three iterations from that because we got to pace ourselves. While I think that's where we have raising themselves I think the shotgun start is I see the carts lined up clubs in the back. Let's roll the outro Oh, there it is. Look, we'll be out here but as always, whether you're in the store, you're serving some dealers take care of the people that may be a sense of normalcy in your community, because that is exactly what the auto industry is.

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