📰 Our Favorite Headlines From Today

BUSINESS

Our Favorite Headlines from Today and What You Need to Know

The electric vehicle industry is rapidly evolving, and today's headlines highlight both the opportunities and challenges that U.S. auto dealers need to keep in mind. From company shake-ups to shifting consumer trends, here's what's happening.

Canoo and Rivian: EV Manufacturers Face Major Setbacks

Canoo

EV startup Canoo's co-founder and Chief Technology Officer, Sohel Merchant, has reportedly left, just as Canoo closes its Los Angeles operations. Most employees are being offered relocations to Oklahoma or Texas. With Merchant gone, only one co-founder remains, underscoring the instability that can come with younger EV companies.

• Canoo's chief engineer, Christoph Kuttner, is now the company's last co-founder.

• The company's restructuring is part of a broader strategy to consolidate operations and cut costs.

--

Rivian

Over the weekend, a fire broke out at Rivian's Illinois factory, damaging around 50 EVs parked in the lot.

Fortunately, the fire didn't spread to the plant itself, and no one was injured.

• Firefighters extinguished the blaze by midnight, but significant damage was done to the vehicles.

• This could impact Rivian's production timelines, something dealers will need to watch closely.

Consumer Trends: Leasing and Technology Preferences Shifting

Leasing on the Rise

Nearly half of all new EVs in the U.S. were leased in the second quarter of 2024, with leasing now accounting for 48.7% of transactions.

This surge is driven by federal tax credits and attractive leasing rates, especially for luxury brands like Mercedes-Benz and BMW.

• Leasing offers a lower-cost entry into the EV market with a subscription-like payment model that appeals to many consumers.

• German luxury brands are seeing almost all their EVs leased rather than purchased, which could influence inventory decisions for dealers.

--

Technology Under Scrutiny

A recent J.D. Power survey found that many consumers aren't thrilled with the high-tech features of new vehicles. Features like passenger display screens and gesture controls were rated poorly, while more practical technologies like backup cameras and blind spot monitoring were favored.

• Consumers appreciate AI-based features like smart climate control but find many other advanced systems unnecessary or difficult to use.

• Dealers might want to focus on models with more traditional, user-friendly features that align with consumer preferences.

EVs vs. ICE: Cost Considerations for Dealers

While EVs generally cost more upfront, they can offer significant savings over the long term thanks to lower maintenance and refueling costs. However, these savings vary widely depending on geography, model, and charging habits.

• A 2024 J.D. Power study found that EVs beat gasoline cars on total cost over five years in most states, especially in places like Colorado, Illinois, and New Jersey.

• In regions like Texas, where gas prices are low, it's harder for EVs to reach cost parity.

• Access to home charging can dramatically reduce the lifetime cost of an EV by as much as $26,000 for a 300-mile midsize SUV.

International Spotlight: China's Growing Influence in Mexico

China has rapidly become Mexico's leading car supplier, exporting $4.6B worth of vehicles last year. Chinese EV makers like BYD are making a big push into the Mexican market with affordable options that rival Tesla. However, there's growing concern in the U.S. that Chinese automakers might use Mexico as a "backdoor" to bypass U.S. trade tariffs, thanks to the United States-Mexico-Canada Agreement (USMCA).

• BYD's Dolphin Mini, priced around $21,300, is significantly cheaper than Tesla's offerings in Mexico.

• Chinese automakers are exploring factory sites in Mexico, which could increase their influence in the region and potentially disrupt the U.S. auto market.

Do you like your news curated? Your context clarified? And, your time is respected by an accurate use of the English language?

Sign up for ASOTU’s Daily Push Back email now and get a 3-minute daily email that keeps you caught up so you never have to catch up.

What Does It Mean for U.S. Auto Dealers?

Drop a comment and let us know what today's headlines mean to you, your team, and the community you serve.