🚗 Q1 reality check: payments up, supply tight, margins on the line

TOGETHER WITH

Howdy Fam!

Bright new morning, big new reminders.

Did y’all see this story from West Herr Automotive Group?

They recently served a mathematically unlikely family: quintuplets. A family of nine, suddenly trying to answer one simple, real-world question: “How do we fit everybody?”

So West Herr stepped in with a 2026 Chevrolet Suburban and took “transportation” off the list of things a mom with five babies in the NICU should have to solve alone.

That’s the thing we’ll keep reminding the world about: dealers don’t just sell cars.

You solve mobility. Even when the odds are 1 in 55,000,000. 😉

Keep Pushing Back,
-Chris with Paul, Kyle & Kristi

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Affordability is still tight. Inventory discipline is becoming the default. And used EVs are quietly turning into a math play, not a “belief system.”

J.D. Power and GlobalData project February 2026 total sales at 15.6M SAAR, with retail down year over year and EV share in the mid-6% range. Average transaction prices remain elevated, and the average monthly payment is projected around $811.

More buyers are reaching for 84-month terms, and negative equity is expected to show up on 31.5% of trade-ins. Translation: more deals are fragile, and trade strategy is doing as much work as your lead volume.

Axios framed it cleanly: the future of mobility is getting held back less by capability and more by cost. That’s true for robotaxis and autonomy, and it’s also true for mainstream EV adoption.

If the payment doesn’t work, the innovation does not matter to the customer standing in front of you.

GM executives say they’re carrying 30% to 40% less inventory than they used to, targeting 50 to 60 days.

Even if you don’t sell GM, the strategy is worth watching because it points to a broader trend: OEMs believe leaner lots protect pricing power if 2026 softens. Dealers feel the downside when affordable trims go scarce, but the “flood the lot” era is not returning in a clean, predictable way.

“If you’ve got 120 days’ supply sitting on the ground, you can’t pivot when the economy changes. Lean inventory lets you respond faster.” -Kyle Mountsier

A peer-reviewed University of Michigan study found three-year-old BEVs can deliver the lowest seven-year total cost to own across powertrains, largely because early depreciation already happened. Pair that with strong wholesale conversion and EV values stabilizing, and the opportunity gets real, fast.

If you can’t explain the battery warranty and ownership math in one minute, the unit is either a pass or it needs to be priced like a risk.

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Rivian says R2 production begins in Q2 2026, aiming for 20,000 to 25,000 deliveries this year. Meanwhile, Amazon now has 30,000+ Rivian delivery vans on the road and 17,000+ chargers installed. Consumer adoption may ebb and flow, but fleet electrification is moving steadily. High-mileage, tightly managed operations are where EV total cost math is proving itself first.

Reports suggested VW’s Scout brand could slip beyond its original production target, though the company says it is still aiming for 2027. Whether delayed or not, the pattern is familiar. New brands and new platforms are getting squeezed by software complexity, capital intensity, and shifting policy winds. Launching is harder than announcing.

Tesla is expanding its Grok AI chatbot into more European vehicles while regulators continue probing safety and compliance questions. The feature race inside the dashboard is accelerating, but so are concerns about distraction and oversight. As vehicles become more connected, compliance and governance are becoming retail realities, not just engineering footnotes.

Thanks for reading, Friend!

What do you hope you have accomplished by Monday? Hit reply and let me know.