🕵️‍♂️ December 31: VW's Data Drama, 2025's Dealer Momentum, and BYD in Brazil.

The Gist

🔓 VW’s Data Blunder: A whistleblower revealed that Volkswagen left location data for 800,000 EVs unencrypted, tying owners to their trips. Privacy breach, anyone?

📈 Sales Momentum: 2024 is ending strong, with U.S. new-vehicle sales projected to hit their highest since 2019. Dealerships are smiling—wallets, not so much.

🇧🇷 BYD Brazil Scandal: Chinese EV giant BYD is in hot water after Brazilian authorities uncovered "slavery-like conditions" for workers at a factory construction site.

🛠️ Tesla’s H-1B Trouble: Layoffs followed by replacing U.S. workers with foreign H-1B visa holders? Musk is stirring the pot again.

🏆 Honda’s Big Wins: The Drive crowned the Civic Hybrid as Best Car Under $40K and the S2000 CR as Drive of the Year.

🔌 DIY Drill Engine: A team built an EV “engine” from 50 cordless drills. Creativity or madness? You decide.

Fuel for Thought

• 🔓 Volkswagen’s Unencrypted Data Breach

• 📈 Year-End Sales Surge to a Five-Year High

  • Drivers

  • Affordability Challenges Persist

  • What to Watch in 2025

• 🇧🇷 BYD’s Brazil Controversy: Ethics on the Line

  • What’s the Story?

  • The Facts You Need

  • Why This Matters to US Auto Dealers

• 🛠️ Tesla H-1B Visa Replacement Controversy

• 🏆 Honda Cleans Up at The Drive Awards

  • Category winners include:

• 🔌 Garage 54’s Drill-Powered EV Engine

🔓 Volkswagen’s Unencrypted Data Breach

A Privacy Nightmare

Cariad, Volkswagen’s software division, left terabytes of sensitive EV data exposed on the internet, thanks to a “misconfiguration.” The leak included location data for 460,000 vehicles, painting vivid pictures of owners’ lives.

Although Cariad patched the vulnerability, the breach spotlights risks in connected car tech. For dealerships, this raises questions about customer trust in digital vehicle features—a vital selling point in the EV age.

📈 Year-End Sales Surge to a Five-Year High

The Numbers
The U.S. new-vehicle market is wrapping up 2024 with momentum that’s projected to carry into 2025. Analysts expect sales to hit 15.9 million vehicles, a 2% increase from 2023, making it the best year since pre-pandemic 2019. The fourth quarter alone saw robust activity, fueled by year-end incentives, replenished inventory, and improved lease deals.

• Fourth Quarter Boost: December’s seasonally adjusted annual rate (SAAR) is forecasted to reach 17.2 million vehicles, the highest since 2021.

• General Motors Leads: GM is holding onto its crown with a projected 2.7 million units sold in 2024, a 4% year-over-year increase. Honda is expected to make significant market share gains, while Stellantis and Tesla see declines.

Drivers

• Improved Inventory: Dealers benefited from replenished supplies, allowing more diverse options for buyers.

• Incentives on the Rise: EV incentives in particular soared, averaging $8,202 in November and accounting for 14.9% of the average transaction price.

• Lease Surge: Retail leasing increased by 19% year-over-year, signaling a shift in consumer purchasing behavior.

Affordability Challenges Persist

Despite the positive numbers, affordability remains a critical issue. Interest rates dipped below 7% in November for the first time in over a year, but the average monthly payment for new vehicles has climbed to $740—$150 higher than in 2019. Subcompact and compact segments gained market share, reflecting consumer attempts to manage costs.

What to Watch in 2025

Steady Growth
Sales are forecasted to grow another 3% in 2025, with projections ranging from 16.1 to 16.3 million vehicles. However, potential shifts in environmental and trade policies under the incoming Trump administration could add uncertainty.

EV Market Evolution
EV sales are expected to climb 12% in the fourth quarter of 2024, totaling 1.3 million units for the year—about 8% of all new-vehicle sales. While hybrids gained traction, plug-in hybrid sales fell, signaling shifting consumer preferences.

Policy Impacts
The incoming administration has floated plans to eliminate the $7,500 federal EV tax credit and impose tariffs on imports from Canada and Mexico. These moves could raise vehicle prices and disrupt supply chains, creating urgency among buyers in early 2025.

For Dealers
The current market conditions offer opportunities to leverage incentives and drive sales while emphasizing affordability. Keeping an eye on policy changes and adapting to evolving consumer preferences will be key to maintaining momentum.

🇧🇷 BYD’s Brazil Controversy: Ethics on the Line

What’s the Story?

BYD, a Chinese EV powerhouse, faces backlash after Brazilian authorities uncovered “slavery-like conditions” for 163 Chinese workers at a factory construction site. The workers were found in appalling conditions, with withheld passports and unpaid wages, leading to halted factory operations and potential legal fallout.

The Facts You Need

• The Allegations: Subcontractor Jinjiang Construction reportedly subjected workers to forced labor and debt bondage.

• The Aftermath: Authorities rescued the workers, placing them in hotels. BYD cut ties with Jinjiang only after intervention.

• BYD’s Response: The company stated it has “zero tolerance for human rights violations” and pledged to support investigations, though doubts about its prior knowledge persist.

Why This Matters to US Auto Dealers

BYD’s global ambitions, including US expansion, may face setbacks. This could ease competitive pressure on American dealers while offering a moment to champion ethical supply chain practices.

🛠️ Tesla H-1B Visa Replacement Controversy

What’s the Deal?

After laying off 15,000 U.S. employees, Tesla reportedly replaced many with foreign H-1B visa holders. Critics argue the move exploits a system where workers are tied to their employers, creating an imbalance of power.

Elon Musk’s push to increase the H-1B visa cap has drawn criticism from all sides, especially as Tesla continues its “hardcore” work culture.

For dealers, this is a chance to emphasize the value of employee well-being and fair practices—a message that resonates in an era of heightened scrutiny.

🏆 Honda Cleans Up at The Drive Awards

Honda’s Civic Hybrid took home “Best Car Under $40K,” while the S2000 CR nabbed “Drive of the Year.” The accolades reinforce Honda’s reputation for blending innovation and value.

Category winners include:

• Best Truck: Ford Ranger Raptor

• Best EV: Hyundai Ioniq 5 N

• Best SUV: Lexus GX

🔌 Garage 54’s Drill-Powered EV Engine

A YouTube team rigged 50 cordless drills into a makeshift EV motor, proving that creativity has no limits. While the contraption works, don’t expect to see it on your dealership floor anytime soon.

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