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The auto industry's AI honeymoon phase is officially over, and the numbers are finally catching up to the hype. Cox Automotive found 70% of dealers expected AI to boost sales, but only 22% say it actually has. That gap is exactly where the next few years of winners and losers get decided.
Also in today's email:
Used EV prices should have crashed by now. Here's why they haven't.
BYD is targeting 2.5 million vehicle exports in 2027
Hyundai is building a $26 billion U.S. footprint across three states
China's stranglehold on batteries is bigger than $500 million can fix
Keep Pushing Back,
—Chris with Paul, Kyle & Kristi
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The Auto Industry's AI Gamble May Take Years to Pay Off
Yesterday we talked about our time in Istanbul, meeting with international automotive leaders and hearing a lot about AI.
The hype cycle is over. What's left is the harder question: does any of this actually work yet?
📊 The gap between expectation and reality, per Cox Automotive:
80%+ of dealers say they're using AI in some capacity
70% expected AI to increase sales and revenue
Only 22% say it actually has
It's really a game changer that AI is not an assistant anymore, but that the AI is really taking over full responsibility. That has a lot of implications for vehicle manufacturers and dealers to put enough strategic emphasis on how to implement and manage such a system.
The next three to five years are expected to separate the leaders from the laggards, according to Gartner's Pedro Pacheco. On the factory floor, AI vision systems are already catching defects human eyes miss consistently. In dealerships, chatbots have occasionally gone rogue, one reportedly offered to sell a Chevrolet Tahoe for $1.
AI can help with a lot of things, but it can't replace trust, empathy, the relationship building. You have to have this emotional connection to the brand and the people you're buying it from.
Which Staff Behaviors Show Up in Dollars per RO?
Ask two GMs what they do after a bad week of reviews, and you'll get two different answers. One looks outward: who's gaining on me, and what are they doing that I'm not? The other looks inward: which of my people is driving this, and what do I say to them Monday morning?
Neither question gets answered by a star average or a CSI score.
Today, Widewail CEO Cuyler Owens is sharing findings from a study matching six months of customer reviews at 350+ franchise dealerships against the actual repair-order revenue behind them, and the headline worth knowing before you tune in: being friendly isn't the behavior that moves dollars per RO. He'll walk through how to coach with evidence instead of opinion, and how to benchmark your store against the specific same-OEM competitors you're actually losing deals to, not a generic industry average.
Used EV Prices Should Have Crashed by Now. They Haven't.
Used EV supply just hit 46 days, outpacing combustion supply for the first time all year. Prices should be falling. Instead, dealers are paying $1,000 to $3,000 more over book value, and Plug's biggest sale day saw three-plus dealers bidding on every unique vehicle.
Every customer touchpoint on the lot needs to be one that injects confidence in the mind of the EV shopper.
Consider this today
Douglas's advice cuts against half-measures. Don't assign EVs to one "EV person," build expertise across your whole floor. Don't demo overnight, put your team behind the wheel for a month. And don't dabble, go high volume or skip the category entirely, since a handful of EVs on a lot doesn't give a shopper enough to compare.
Want the full conversation?
🎙️ Listen to today's Automotive State of the Union episode for the complete discussion.
BYD Is Targeting 2.5 Million Vehicle Exports in 2027
Brokerages say BYD's overseas shipments could top 2.5 million vehicles in 2027, up from a 2026 guidance of 1.9-2 million, nearly double last year's total.
A Hungary plant starts assembly by year-end, and local production in tariff-exposed markets like the EU and Brazil could save BYD more than 40,000 yuan per vehicle. The company is also targeting a 25% share of China's domestic market, already up from 8% to 18% this year alone.
Hyundai Is Building a $26 Billion U.S. Footprint Across Three States
Hyundai Motor Group's newest project: a $5.8 billion steel mill joint venture in Louisiana, the first Electric Arc Furnace-based integrated steel mill in the U.S.
It's part of a broader $26 billion commitment, Hyundai's largest ever outside its home market, spanning a 500,000-vehicle Georgia Metaplant, a 20-year-old Alabama assembly plant, and a target to raise U.S.-sourced parts to 80% by 2030.
🚘 Car Stuff
The U.S. is trying to reduce battery reliance on China with $500 million in DOE grants, but analysts say it takes "decades and tens, if not hundreds of billions of dollars" to meaningfully dent China's grip on refining, cathode material, and battery cell production, where it holds an 80-95% share depending on the stage.
Canada's retaliatory tariffs on ~CA$28 billion in American goods took effect this week, though none directly target autos this round. The move follows the collapse of trade talks over proposed U.S. tariffs on heavy-duty trucks, leaving negotiations at a standstill.
🔭 Not Car Stuff
Thieves stole four artworks from a Renoir museum in southern France, nearly a year after the Louvre heist, cutting paintings out of their frames with an electric saw before fleeing. It's the latest in a string of high-profile art thefts across Europe this year.
The AI jobs apocalypse hasn't shown up yet. The U.S. added 162,000 jobs in August, well above expectations, with unemployment at 4.1%, near a 50-year low, and young workers holding up better than feared.
A California city canceled Flock's license plate cameras, took them down, and then found the company had quietly reinstalled some anyway. Flock says it was following contract maintenance procedures; the city says it keeps taking them back down.
1776: The Second Continental Congress formally adopted the name "United States" for the new nation, replacing the term "United Colonies."
1850: California became the 31st state of the Union, joining the country without ever having first been a territory.
1956: Elvis Presley made his first appearance on The Ed Sullivan Show, performing to an audience of 60 million people, the most-watched TV broadcast of the entire decade.
Thanks for reading, Friend! Ready for September 15th?
