#664 - 🚗 Shifts, Shocks, and Strategy

TOGETHER WITH

The count-down to ASOTU CON continues, friends. ⏰

We’re working diligently on some truly unique and exceptional experiences to share with you all, and we can hardly wait to see your faces in Baltimore.

The new swag alone is gonna knock your socks off, so bring a few extra pairs!

Keep Pushing Back
-Paul, Kyle, Chris & Kristi

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BUSINESS

Welcome to the News

The EV industry is on some rocky footing these days, and it’s being reflected in a number of of dramatic and dynamic shifts for automakers. Meanwhile, ever-adaptable dealers remains optimistic as they embrace incentives and increased electric options for buyers.

. . .

Tesla’s Lay-Offs

Tesla is grappling with significant internal challenges as well as slowing market conditions, which is leading to some dramatic adjustments:

• Trimming the Team — As announced by CEO Elon Musk, Tesla plans to cut over 10% of its global workforce (around 14,000 employees) as part of a strategic move to streamline operations. Referring to the job cuts, he wrote: “There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle.”

• Executive Exit — Drew Baglino, Tesla's head of powertrain and energy engineering and a long-time executive, is stepping down. His departure is particularly notable as he has been a significant figure at investor events and was expected to expand his role, not exit the company.

• Shares Slide — Yesterday, Tesla's stock fell by 3.5% in early trading starkly contrasting gains in the broader market indexes like the S&P 500 and Nasdaq, which were up by 0.4% and 0.3%, respectively.

• Efficiency Examined — Tesla ended 2023 with just more than 140K employees, and shipped about 1.8M vehicles. That means Tesla shipped about 13 vehicles for each employee. In comparison, General Motors shipped 38 vehicles per employee, and Ford shipped 25.

Kia’s Pay-Outs

Kia is ramping up efforts to clear its inventory of 2023 EV6 models by introducing more aggressive dealer incentives:

• Dealer Incentives — Kia is providing dealers with a $1,000 bonus for each 2023 EV6 sold and a higher $1,500 for every 2023 EV6 GT model they move. For the 2024 models, the incentive is $500 per EV6 or EV9, plus an additional $250 for each plug-in hybrid sold.

• Sales Strategy — These incentives are part of Kia’s April 2024 Dealer Flat Cash Program, aimed at boosting sales and making room for newer models.

Fisker’s May-Day

Despite ongoing efforts to revitalize its sales and dealer network, Fisker is still stressing over major financial challenges as it faces a potential bankruptcy:

Desperate Times — Fisker reported a $463M loss in Q4 of 2023, and is set to be delisted from the New York Stock Exchange by April 22 due to financial instability.

Desperate Measures — In a bid to stimulate sales and clear inventory, Fisker recently slashed prices significantly on its 2023 model year vehicles, with reductions up to $24K.

Keeping the Faith — Despite the challenges, Fisker continues to expand its dealer network. They recently added new partners in Florida, Denmark, and Austria, bringing their total dealer partners to six in the U.S. and twelve in Europe.

TOGETHER WITH ALTURA AUTOMOTIVE

The Importance of Cultural Competence

Discover the transformative power of the Hispanic market in the automotive industry with Luis Delgado, CEO of Altura Automotive, who will be our keynote for the session, “Driving the Market: The Unstoppable Rise of Hispanic Influence in Automotive,” at this year’s ASOTU CON.

Delgado will unveil the AAA System, a pioneering solution for dealerships to connect authentically with Hispanic consumers. Learn how embracing cultural understanding and personal engagement can unlock market relevance and consumer loyalty.

Don't miss this opportunity to rethink and reshape your DEI strategy with Altura Automotive. Join Luis Day One at 3:15 PM, Stage 3, for insights into fostering meaningful relationships and driving innovation through diversity!

DATA & INSIGHT

Car Insurance Rates on the Rise

Just as car prices in the U.S. finally began to decline from pandemic-induced highs, consumers are now wrestling with soaring auto insurance rates.

Notably, insurance expenses now account for over a quarter of the total ownership costs for some models.

The surge in insurance rates is driven by the increased costs of repairing advanced technology in vehicles and more frequent storm and environmental-related damages.

Despite new vehicle prices decreasing slightly by 0.1% and used prices dropping by 2.2% from the previous year, the Consumer Price Index for auto insurance rose by 22.2% last year, marking the largest increase since the 1970s.

AROUND THE ASOTU-VERSE

Coming Soon

ATTN DEALERS: In case you have’t heard us say it enough yet…The Automotive State of the Union Conference is a must-attend for those seeking to navigate the evolving landscape of automotive. It's a community centered event where the spirit of unity fuels progress and learning, and where each handshake has the potential to unlock new pathways to success.

It’s the place to find that one tool or person you never knew you needed 😉

Be there in Baltimore, MD this May 14-17th!

🎟️ Grab your ticket today! 🎟️

CULTURE

Marketing to Gen Z

Studies show that Gen Z is ditching the search engines like the Google of yore in favor of quick, relatable answers from social media apps like TikTok and YouTube.

Central Houston Nissan clearly understands the assignment.

By embracing this change, they've turned their TikTok page into a viral sensation, attracting millions of views with their short, humorous, and unexpected videos.

Central Houston Nissan salesperson Jose Lopez said, “Everything is about a hook and catching people’s attention in a short amount of time.”

One memorable clip begins with a puppy attack and transitions to a dealer assuring viewers they won't feel "attacked by salespeople.” It alone has garnered over 10M views.

Their creative efforts have helped the dealership amass a rather significant following on TikTok (boasting over 92,000 followers and 5.8M likes), and can serve as a playbook for others looking to break through the clutter of social media marketing. 😉

Quick Hits

• Speaking of Gen Z…America’s skilled trades need more workers as Baby Boomers retire, and recent vocational enrollment shows they are stepping up to fill the gap. 👷

• In an effort to reduce America’s dependence on foreign manufacturers, the Biden administration approves up to $6.4B in grants for Samsung to expand their chip production in Texas. 🤠

• Last week, Wyler Automotive became the first U.S. dealer to sell a car through a 100% virtual transaction. 🥇

History

• 1900: The U.S. Post Office issues the first book of postage stamps. 📬

• 1972: Two giant pandas, Ling-Ling and Hsing-Hsing, arrive in the U.S. as gifts from China. 🐼

• 2017: In honor of his birthday, a world record is set for the largest gathering of Charlie Chaplin lookalikes at the Chaplin museum in Switzerland with 662 doppelgangers present. 🥸

• 2018: Kendrick Lamar becomes is the first rapper to win the Pulitzer Prize for music. 🏆

Thanks for reading, pal! Charlie Chaplin once sang “You’ll never find rainbows if you’re looking down,” the lyrics to a song at the beginning of his 1969 film, The Circus. We know it’s not always easy, but don’t forget to keep looking up.