#679 - 🚗 Pine and Pizza

TOGETHER WITH

Well, Friends, we are one week away from ASOTU CON.

It simultaneously feels like we were just in Baltimore last week and haven’t seen any of you in 30 years. We’re excited to be with you all again soon and hope you have your app downloaded, your pencils sharp, and your mind and heart pointed in the same direction.

Keep Pushing Back
-Paul, Kyle, Chris & Kristi

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BUSINESS

News: The US, Automakers, and China

I live in Tennessee, and a common expression I am sure you've heard in your state is, "Don't like the weather? Wait 5 minutes." Politics seems to have a similar vibe, just much slower, like everything else about politics.

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The US: Minerals, Batteries, and Grants 

The White House has added more flexibility to the EV Tax credit rules in the Inflation Reduction Act. Automakers will have more flexible rules regarding battery mineral sourcing. 

Deets: 

• Difficult-to-trace minerals like graphite will be able to be sourced from China until 2027, but prevalent minerals like lithium, nickel, and cobalt face restrictions effective January 2025.

• Only EVs with minerals sourced from non-FEOC (Foreign Entities of Concern) countries are eligible for the $7,500 tax credit.

• Final rules are expected to reduce eligible EV models from 114 to 13 for full credit and 9 for half credit, with income limits and manufacturing rules applying to buyers.

• Dealerships can offer instant rebates on EV purchases, and leased EVs also qualify for the full tax credit.

In Detroit specifically, the administration has made $100M in grants available to small and medium auto part makers for efficiency and eco-friendly upgrades. $50 million will be from the Department of Energy's Automotive Conversion Grant, and another $50 million from the Department of Energy's Industrial Assessments Center Implementation Grants.

Automakers: Who's Doin' What? 

Honda's Smashing April 

Honda has kicked off 2024 with robust April sales, selling over 116,000 units. 

• Honda brand sales surged by 15.7% YoY, surpassing 106,000 units, with electrified vehicle sales exceeding 21,000 units.

• Acura brand records over 10,500 units sold, bolstered by strong SUV sales.

📈 At the time of writing, Honda Motor Co Ltd is up 0.71% in the market. 

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Toyota's Tundra

Toyota is delving into hydrogen fuel cells for Tundra-sized pickups, aiming for extended range. 

• Fuel cells may offer benefits over traditional battery-powered pickups, with the company showcasing fuel cell Tundra and Hilux prototypes.

• Tests with fuel-cell-equipped semi-trucks show promising results.

📈 At the time of writing, Toyota Motor Corp is up 0.80% in the market.

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Rivian's Plant Plans

Rivian secures an $827 million incentive package from Illinois for plant improvements, with plans to increase capacity and produce the R2 SUV. 

• The company reaffirms its commitment to the Georgia plant, showcasing various models since 2021.

• Rivian's Normal facility has produced over 100,000 electric vehicles since 2021.

📈 At the time of writing, Rivian Automotive Inc. is up 1.04% in the market. 

China: Gas vs. EV

China is home to the world's largest passenger vehicle market, as more of the country switches to electric vehicles, fuel demand is changing. That's "Fuel Demand", not just "Chinese Fuel Demand", but globally.

Fuel demand in China is expected to drop by half in 2024 in alignment with EV adoption, while the US fuel demand is projected to remain flat for the year. With so much market for fuel vanishing, fuel makers will adjust production to protect supply, therefore controlling demand and in turn, profits. So don't buy that gas cabinet just yet.

Speaking of China, GM had significant Q1 losses in the Chinese market. It is just the third time in 15 years that automakers have had a down quarter in the market. While the company is committed to China for now, mounting geopolitical tension and ever-increasing competition in the market could eventually see GM bail on China. 

📈 At the time of writing, General Motors Co. is up 0.81% in the market.

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Remember y’all: At any time, an industry has two main types of threats: Competent enemies and incompetent friends.

TOGETHER WITH SMARTWOLF CONSULTING

It Takes A Pack

There is nothing like introducing friends to friends and seeing them become friends. So, we are quite excited to announce Darrell Steed, President of SmartWolf Consulting LLC, as a featured speaker at The Automotive State of the Union Conference in Baltimore, MD. Darrell's experience and track record will make the panel session "How To Stop Losing Trades You Should Be Winning" one worth checking out! 

The SmartWolf Consulting team challenges mediocrity with their fresh approaches and proven processes. They are pioneers in enhancing dealership operations, used car strategies, and comprehensive market analysis.

Check out and contact Darrell now to see how Smartwolf Consulting can partner with you for a more successful future. 

MORE THAN CARS MOMENTS

Pine and Pizza

Thanks to our friends at Reineke Family Dealerships, some local Boy Scouts had their Pinewood Derby in style!

The showroom hosted the Boy Scouts of America and Black Swamp Area Council for the derby and partnered with Heavenly Pizza for an early pizza drop-off, so the refreshments were as good as the race. 

If you've been reading one day or from day one, you know we love seeing dealers do a little extra for kids and flex their creative muscles. This is a creative way to use what every dealer has - space, compassion, and a prime location to bless the folks in their community! 

Bravo, Reineke Family! 

AROUND THE ASOTU-VERSE

Making a More Than Cars Moment

What do YOU think “Love People More Than You Love Cars” means? Where have you seen it in real life? How can the retail auto community make it more part of our culture each day?

We’ll have the cameras set up for people to answer for the good of the whole industry! So bring your best answer to ASOTU CON 2024 next week in Baltimore, MD, and let’s compare notes.

CULTURE

Building Building Robots

Over the weekend, my daughter and I watched a time-lapse video of two bald eagles building a nest. (How do they make the first stick stay in the tree?!)

So I'm no stranger to watching building content on YouTube, but this is a first: A totally autonomous excavator built stacked stone walls on its own.  

Researchers at ETH Zurich have developed HEAP, an autonomous excavator capable of constructing complex retaining walls without human assistance. Featuring advanced AI, electric hydraulics, and a precision "wrist," HEAP assembles dry stone walls efficiently, albeit slower than human operators. 

This innovation could revolutionize construction by reducing labor needs and enhancing accuracy.

I could comment on how AI was supposed to bridge gaps between people and needs in order to point out the poetic interpretation of making walls, but instead, we will wish HEAP a great and productive career.  (so he doesn't build a rock wall around my house)

Quick Hits

• Players of the popular game Helldivers 2 voiced their disapproval of a Sony policy, and Sony actually changed the policy. 🏆

• Some teens are making friends with AI chatbots, which, in turn, gives the teens terrible advice. 🤖

• Stock values bump up on a report of the Fed possibly cutting rates. 📈

History

• 1945: Germany surrenders to the Allies, ending World War II. ✌️

• 1946: Tokyo Telecommunications Engineering (later renamed Sony) is founded. 🇯🇵

• 1998: Daimler-Benz purchases Chrysler Corporation for $36 billion. 💰

Thanks for reading, friend! It’s always a pleasure to start our day with you, and in one week, we will be doing so LITERALLY at ASOTU CON! Woo!