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Episode #1127: We’re diving into major tariff relief for EU carmakers, Sonic Automotive’s EchoPark outpacing expectations, and how generative AI is rewriting the rules for online retail traffic.

Show Notes with links:

• The automotive industry is watching closely as the U.S. and EU hammer out a framework deal that could bring massive tariff relief for European automaker. The fine print could mean big savings and new market access.
  • The EU and U.S. announced a new trade framework aiming to reduce U.S. auto tariffs from 27.5% to 15%.
  • Relief would be retroactive to August 1 if the EU introduces enabling legislation this month.
  • In exchange, the EU pledged to cut tariffs on U.S. industrial goods and increase access for American agricultural products.
  • The deal may expand to include mutual recognition of auto safety standards and influence future U.S. agreements with Japan and South Korea.
  • EU Trade Commissioner Maros Sefcovic emphasized urgency: “It is the European Commission’s firm intention to make proposals by the end of this month.”
    
    
    
• Sonic Automotive just dropped its Q2 2025 earnings, and while a hefty impairment charge dented the bottom line, EchoPark's performance made sure the story stayed bullish.
  • Total revenue reached a record $3.7B, up 6% YoY.
  • Despite a $172.4M impairment charge, adjusted EPS surged 49% to $2.19, beating expectations.
  • EchoPark led the charge with $62.1M in gross profit (+22%) and a 679% increase in adjusted segment income.
  • Segment income rose from $3.9M to $11.7M — a 200% leap.
  • “EchoPark is just on fire,” said Sonic President Jeff Dyke.
    
    
    
• Adobe reports a massive 4,700% YoY increase in U.S. retail site traffic driven by generative AI platforms like ChatGPT and Gemini — a clear signal that AI is transforming the online shopping journey.
  • Traffic from gen-AI sources has grown monthly since the 2024 holiday season.
  • 90% of users trust gen-AI recommendations; bounce rates are down 27%.
  • Visits from AI referrals are 10% more engaged, with 32% longer durations.
  • The conversion gap between AI and non-AI traffic has shrunk from 49% in January to 23% in July.
  • “It’s allowing a very optimized, urgent, efficient journey,” said Adobe’s Vivek Pandya.

0:00 Intro with Paul J Daly and Kyle Mountsier
1:35 Next week, Paul and Erroll Bomar III will be at NAMAD next week
2:38 EU-US Finalizing New Trade Deal
4:35 EchoPark Boosts Sonic's Q2 Earnings
6:52 4700% Increase In Retail Traffic From GenAI Sites

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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Episode #1126: Today we’re joined by Steve Greenfield and talking about Hertz vehicles showing up on Amazon, VinFast’s new San Diego dealership kicking off a coast-to-coast franchise push, and how AI is helping Atlas become a surprisingly capable humanoid robot.

• Hertz has partnered with Amazon to list its used vehicles on the retail giant’s platform, giving customers a new way to shop for former rentals online. The move builds on the roughly one-third of Hertz’s vehicle sales that already go directly to consumers.
  • Shoppers can now browse and buy Hertz vehicles on Amazon, then pick them up in Dallas, Houston, L.A., or Seattle—with plans to expand to 45 U.S. locations.
  • Retail sales, add $1,000–$1,500 in value per vehicle for Hertz compared to wholesale channels.
  • Hertz is also expanding its “try before you buy” program to 100 cities and enhancing digital sales through platforms like Carvana and Autotrader.
  • “It is really important as well that we get more net out of what we’re selling,” said Hertz CEO Gil West.

• VinFast’s U.S. dealership network is taking shape with the grand opening of its first California franchise location in San Diego.
  • The new store, operated by Sunroad Automotive Group, offers sales, service, and test drives of the VF 8 and VF 9 electric SUVs.
  • The automaker plans to replace all 15 of its former company-owned California stores and now operates nearly 30 authorized dealerships across 14 states, with the company “recognizing the distinct advantages of this distribution channel” to maximize business efficiency.
  • California remains a key focus for the brand, which calls the state a “top priority” for EV growth.
  • The new location includes full support for warranty, repair, and maintenance using genuine VinFast parts.
  • “This event marks a pivotal moment in our strategy,” said Mike Nolte, VinFast’s U.S. VP of Sales and Marketing.

• Boston Dynamics and Toyota Research Institute are working to make humanoid robots useful in real life by teaching them complex, adaptable behaviors through massive AI models.
  • Many of us are familiar with Boston Dynamics, but Toyota Research Institute (TRI), a Toyota subsidiary, focuses on human-centered AI innovations in automated driving, energy, and materials to improve the human condition.
  • The Atlas robot is being trained with Large Behavior Models (LBMs) to handle complex, long tasks using proprioception (a robot’s internal sense of position and movement), vision, and language prompts.
  • These AI-driven policies allow Atlas to walk, crouch, grasp, and manipulate objects with surprising dexterity—even reacting intelligently when things go wrong.

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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Episode #1125: Today, we’re talking affordability trends, lead follow-up gaps, and a CEO who worked his way from intern to the top at Target.

• At the halfway mark of 2025, the Dave Cantin Group Market Outlook Report shows the U.S. retail auto market is a mix of high prices, resilient demand, and major structural shifts. Despite headwinds, smart dealers are still in the driver’s seat.
  • Affordability is the top issue, with 52.1% of buyers carrying negative equity and 84-month loans now nearly 20% of all new financing.
  • Consumers are sticking with their preferred segment but trading down in size and trim; value-focused models from brands like Buick and Mazda are gaining traction.
  • 40% of U.S. consumers say they’d buy a Chinese-made vehicle if it was 10% cheaper than other cars sold in the US, and 75% of dealers expect Chinese OEMs on U.S. lots within 12 months.
  • As OEMs take multi-billion-dollar tariff hits, dealers are thriving on a flexible playbook—parts, service, F&I, and used cars—with 61% of dealers expecting record revenue growth this year.
  • “U.S. dealers are proving once again how resilient they are and how sophisticated their customer-focused business models have become,” Dave Cantin Group CEO Dave Cantin said.

• Think the lead is dead after Day 3? Think again. A new Foureyes report analyzing over 8 million leads shows a 30-day close rate of just 16.2%, revealing how fast opportunities fall off — and where smart dealers can still win.
  • 73% of sales happen in the first 3 days, but 1 in 4 still close after that. Close rates drop from 12.4% to 2.3% on days 4–7.
  • Follow-up efforts also plunge after Day 3 — a “coincidence” that’s costing dealers real money.
  • Used vehicles close faster than new, but new car deals stretch further into the 30-day window.
  • Internet leads close slower but still produce late-month wins; leads created in the last week of the month have a 17.3% close rate.

• Target is making headlines as it promotes a true company insider to the top job. Michael Fiddelke, who started in 2003, will become CEO on February 1 — a move that reflects deep institutional knowledge but is sparking debate about the need for outside perspective.
  • Fiddelke joined Target as an intern and worked his way up through roles in merchandising, finance, operations, and HR.
  • He most recently served as COO and previously as CFO, giving him a broad view of the company’s levers.
  • He’ll succeed Brian Cornell, CEO since 2014, who will step into the executive chair role.
• “To be clear, we have work to do to reach our full potential,” Fiddelke said.

0:00 Intro with Paul J Daly and Kyle Mountsier
0:52 2025 Halftime Report on Dealer Reputation Webinar Later Today
1:31 New Auto Collabs episode with Technician Curtis Gardner
1:54 DCG Report Shows Affordability and Ch

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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Episode #1124: Today we break down the latest Fixed Ops Golden Metrics, showing where service departments are winning and where there’s room to grow. We also look at how dealer inventory has returned to pre-tariff “normal” levels, and why Atlantans are playing cancellation games just to ride in a Waymo robotaxi.

• The Fixed Ops Golden Metrics 2025 report from Reynolds and Reynolds highlights how service departments are stacking up in hours, labor rates, and RO profits—plus the big gains from technician efficiency tools.
  • Dealers are grouped two ways—by urban classification (Major Urban, Metro, Community, Rural) and by 5 volume classes based on monthly customer-pay ROs: Class 1: <300 and Class 5: >1,200.
  • High-volume Class 5 stores topped 3,000 hrs/month. Major Urban averaged 1,613 hrs/month vs. Rural at 490.
• Major Urban led profit per RO at $414, Rural just $225. Class 1 averaged $400, dropping to $243 in Class 5.
• Using recommendation software added +0.5 hrs/RO, +$18 ELR, and +$62 profit/RO—worth $9K more profit/month for a 150-RO store.

• After months of tariff shocks and supply swings, dealer lots look familiar again. The average automaker now has a 73-day supply of new cars — right on the industry’s long-term target.
  • Lots once ran as high as 89 days of supply during early tariff panic.
  • Inventories plunged to 66 days when 25% tariffs first hit but have since recovered.
  • Despite costs, prices rose just 1.5% YoY as automakers and dealers absorbed tariffs.
  • Some brands buck the trend: Toyota/Lexus are tight with just over a month of supply, while Ram and Land Rover sit on four months’ worth.

• Waymo has expanded beyond its California and Arizona roots, bringing robotaxis to Atlanta. But there’s a catch: you can only hail one through Uber, and it’s not guaranteed.
  • Riders can select “Prefer Waymo” in the Uber app, but often get matched with human drivers.
  • Some Atlantans cancel ride after ride—one reporting 20 cancellations on average—just to snag a Waymo.
  • Waymo has only dozens of vehicles in the city now, with plans to grow to hundreds in coming years.
  • Riders can improve their odds by staying inside the 65-square-mile service zone, avoiding highways, and riding outside peak times.
  • As one rider put it, “The fact that it’s so challenging to get has turned it into a game.”

0:00 Intro with Paul J Daly and Kyle Mountsier
1:08 We'll be at the NAMAD Annual Meeting next week
1:45 Webinar on Dealer Reputation Tomorrow
2:26 Fixed Ops Golden Metrics from Reynolds and Reynolds

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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Episode #1123: Today we cover Rivian’s fight over frozen EV credit revenue, ex-Tesla talent launching Hubber to fill urban charging gaps, and a sharp rebound in CEO confidence as recession fears cool but cost pressures remain.

Show Notes with links:

• Rivian says the Trump administration’s rollback of fuel economy penalties is choking off $100 million in revenue from regulatory credits—a revenue stream EV makers have depended on for years. The fight shows how quickly policy changes can shake up automaker economics.
  • EV makers like Rivian, Lucid, and Tesla sell CAFE credits to legacy brands that struggle with gas-mileage targets.
  • NHTSA froze compliance letters after the rollback, leaving credit deals in limbo.
  • Rivian already negotiated deals it now can’t close; Tesla projects a $1.1B hit to expected revenue.
  • GM and Ford, frequent buyers of these credits, could save billions thanks to looser rules.
  • Rivian said credits made up 6.5% of its revenue this year, while Lucid noted they represent a “significant share” of theirs.

• From the chaos of Elon Musk firing Tesla’s entire Supercharger team, a new EV charging startup has emerged. Hubber, founded by ex-Tesla talent, is focused on solving one of the industry’s biggest bottlenecks: fast charging for urban taxis and delivery fleets.
  • Former Tesla leads Harry Fox, Connor Selwood, and Hugh Leckie rolled out 100 Supercharger sites before launching Hubber.
  • The company targets urban “charging deserts,” converting warehouses and gas stations into high-throughput hubs.
  • Taxis and ride-hailing vehicles charge up to 5x more often than consumer cars, making access critical.
  • Hubber secured £60M (~$81M) in funding, with its first site opening this week in South London.
  • “We’re addressing one of the most urgent constraints in the energy transition: the shortage of fast, reliable charging in major cities,” Hubber states.

• CEO confidence is staging a rebound. After a brutal second quarter, execs are signaling less panic about recession and a more stable outlook for their industries, though concerns about labor, wages, and costs remain front and center.
  • The confidence index rose to 49 in Q3, up from 34 in Q2.
  • Recession fears fell sharply: 36% expect one in the next 12–18 months, compared to 83% last quarter.
  • Job outlook flipped, with 34% of CEOs planning cuts vs. 27% planning to hire — the first net negative since 2020.
  • Most CEOs still plan to raise wages 3%+ in the next year, even as they freeze capital spending.
  • Cost pressure is highest from suppliers (71%), materials (64%), and tech (63%), pushing many to boost productivity through automation and upskilling.
  • “CEO confidence recovered… but fell short of signaling a return to optimism,” said Stephanie Guichard, senior e

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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Episode #1122: Ford’s Doug Field maps a Silicon Valley–style path to a $30K EV truck, Mitsubishi debuts a luxury-inspired “Gallery” store concept, and OpenAI brings GPT-4o back after users missed its supportive “yes man” tone.

• Meet the man behind Ford’s push for affordable EVs: Doug Field, Ford’s EV chief, is channeling his inner Elon Musk by leaning on hardcore engineering, radical manufacturing changes, and first-principles thinking.
  • Field’s career spans some of the most ambitious mobility projects of the last 20 years—Segway, Tesla’s Model 3, and Apple’s secretive car program.
  • Applying “first principles thinking,” he’s cutting battery size, body weight, and part count by 20% while keeping Mustang-like acceleration.
  • “Physics isn’t proprietary,” Field noted when asked about similarities to Tesla’s approach. “The best part is no part.”
  • He admits shifting a century-old company isn’t easy: “Doing something new at an established company requires overcoming inertia… I came in with slightly unrealistic expectations of how quickly [things could be changed], but that’s an industry thing, not just a Ford thing.”

• Mitsubishi Motors will open its first U.S. “Gallery” dealership in Antioch, Tenn., by Q1 2026, blending luxury-style retail with mass-market appeal as part of its Momentum 2030 growth plan.
  • Located in the Century Farms mixed-use development, the store will be designed for browsing, with a no-pressure, open-format showroom more common in luxury brands.
  • Instead of a traditional lot packed with vehicles, the Gallery will store inventory off-site at its partner dealer—City Auto Mitsubishi—and bring in vehicles as customers progress toward a purchase.
  • Trained brand specialists from the partner dealer will walk shoppers from discovery through final paperwork, focusing on experience rather than volume.
  • CEO Mark Chaffin says Mitsubishi is “underrepresented” in the U.S., aiming to grow from one-third to over half of new-car markets by 2030.
  • “The Gallery dealership program is key to introducing customers to our vehicles in a welcoming, surprise-and-delight way,” Chaffin said.

• Responding to user backlash over GPT-5’s cooler tone, OpenAI has reinstated the beloved GPT-4o model for Plus subscribers, promising to make GPT-5 warmer over time. CEO Sam Altman says many missed GPT-4o’s overly-agreeable “yes man” style — for some, it was the only real encouragement they’d ever received.
• GPT-4o’s style, removed earlier this year, was criticized as “too sycophant-y,” gushing over mundane prompts with “absolutely brilliant” and similar praise.
• Altman says some users found it life-changing: “Please can I have it back? I’ve never had anyone in my life be supportive of me.”
• He warns even small tone tweaks can impact billions of chat

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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Episode #1121: We cover the rapid growth in EV charging infrastructure even as EV sales plateau, Tesla’s China-only 500+ mile Model 3, and a solar-powered drone that just stayed airborne for 74 hours without a drop of fuel.

Show Notes with links:

• EV sales brace for slump, but charging networks surge ahead with automaker support
• Despite challenges in EV sales, the U.S. fast-charging network is rapidly expanding and may actually meet infrastructure goals—whether or not EV adoption keeps pace.
  • The U.S. hit nearly 60,000 fast-charging ports in Q2 and is on track for 19% growth in 2025.
  • Private investment, not government aid, is fueling most of this growth as NEVI funds stall, with new players like Ionna and Mercedes-Benz expanding fast
  • Tesla dominates with 54% market share; Electrify America and ChargePoint trail at under 8%.
  • “There will be more choice, more infrastructure and, hopefully, better experiences for EV drivers,” said Loren McDonald, chief analyst at Paren.
    • This comes as U.S. EV registrations rose 4.6% in June, but EV market share slipped to 8.6%—down from 8.8% last year—signaling a stagnant market.
    • Tesla’s registrations dropped 6%, while GM surged with Chevrolet up 152% and Cadillac up 87%, showing shifting momentum among major players.

• Tesla has quietly introduced its longest-range Model 3 to date, the "Model 3 Plus," capable of up to 515 miles—but only for the Chinese market, for now.
  • The 830 km (CLTC-rated) Model 3 Plus uses a more powerful 225 kW motor and LG-supplied lithium-ion batteries.
  • It achieves long range with just a 78.4 kWh battery thanks to efficiency gains, not just capacity.
  • Tesla aims to compete directly with high-range local EVs like the Xiaomi SU7 and is expected to launch the model in China by September with a price just under $38K.
  • “This effectively shatters the 700 km psychological ceiling,” said Shanghai-based analyst Li Wei.

• Aviation startup Skydweller Aero just pulled off a wild feat: flying a solar-powered drone for 74 hours straight—twice—without touching down or using a drop of fuel.
  • The drone has a wingspan larger than a Boeing 747 and runs solely on solar power and batteries.
  • Its 17,000 solar cells power flight by day and charge 1,400 pounds of onboard batteries to keep flying at night.
  • Recent Navy tests suggest big military potential in anti-piracy, smuggling patrols, and backup GPS missions.
  • Skydweller also has commercial ambitions, including remote internet delivery and environmental monitoring.
  • “There’s a lot of money to be made in something that never touches the ground,” the company noted.

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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Episode #1120: Today we cover Presidio’s latest report showing dealership profitability gaining stable ground. We look at how automakers are shifting from solo efforts to shared platforms in the race for software-defined vehicles. We close with a growing workforce trend as quiet cracking challenges employee wellbeing and productivity.

Show Notes with links:

• Presidio Says the Sugar High’s Over, But the Game’s Still Strong as the latest Presidio Group report shows that after a volatile couple of years, dealers are finally catching their breath. With stable margins, strong profitability, and M&A picking back up, it’s no longer about surviving—it’s about playing to win.
  • New-vehicle margins ticked up in Q2 for the first time since 2022, signaling rare pricing stability.
  • Used cars, F&I, and fixed ops are carrying the profit torch, with public group net income up 17.7%.
  • M&A activity matched last year’s pace, with 208 transactions in the first half of 2025.
  • 72% of dealers expect profits to hold or grow—fueling strategic investments instead of survival tactics
• 
  
  
• As the software-defined vehicle era pushes forward, automakers are realizing that trying to own the whole tech stack isn't just hard, it’s inefficient. Instead, they’re cutting internal software efforts, embracing open-source collaboration, and betting on smarter, shared development models.
  • Ford ended its FNV4 architecture program, VW cut 1,600 Cariad staff, and others have scaled back internal software teams.
  • Despite sounding like a retreat, these moves signal maturity, OEMs are focusing on what matters and outsourcing the rest.
  • Partnerships are growing fast: Foxconn and Elektrobit, BMW and Bosch via Eclipse Foundation, Rivian and VW, all working on shared SDV platforms.
  • Analysts say open-source platforms are now essential to SDV progress. Toyota, Hyundai, GM, and others are already building around Linux-based ecosystems

• Move over, quiet quitting. The latest workplace challenge is “quiet cracking,” where employees keep showing up, but they’re checked out, stressed, and silently struggling. And in today’s uncertain job market, many feel stuck without better options.
  • Quiet cracking is marked by disengagement and burnout, even if employees aren’t actively underperforming.
  • Workers are staying in roles due to fear of layoffs or poor hiring prospects, not because they’re thriving.
  • Signs include subtle performance dips, increased absenteeism, and

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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