Congress, Courts Possible Ways for Dealers to Fight FTC CARS Rule
Dealerships seeking a means to block the Federal Trade Commission's new auto retail regulations would need to rely on Congress or the court system, according to Jean Noonan, a former FTC regulator who's now a partner at Hudson Cook law firm. There's no appeals avenue within the FTC to overturn the final version of the Combating Auto Retail Scams Rule, known as the CARS Rule, she said. Announced Dec. 12, 2023, and approved by commissioners in a 3-0 vote, the rule is slated to take effect July 30. It sets specific requirements for auto dealership advertising, record-keeping, customer interactions, and lineups of finance and insurance products and other add-ons. The FTC has said the rule will help customers avoid some dealership practices it says cost consumers billions of dollars a year and lengthen the car-shopping experience. NADA CEO Mike Stanton has objected to the rule, calling it bureaucratic overreach that would force new layers of disclosure and complexity into vehicle transactions. He told Automotive News that the group would seek to stop the regulations. "This should not go into effect," he said. Click here for the full story.
EVs Contribute to Delayed Vehicle Launches
Delayed model launches are on the rise in the auto industry, and EVs are a big contributor, according to consulting firm PwC. According to Automotive News, the delays have come in part from challenges surrounding the electric vehicle transition — namely, that EVs have less established designs and suppliers are having a hard time keeping up. EV "designs are not as mature as the old traditional components; that leads to significant late changes and that contributes to the launch issues," said Akshay Singh, an automotive partner at PwC Strategy&. "EV designs are evolving, and that is going to cause even more issues going forward." In 2023, 34 percent of all vehicles launches experienced production delays, compared with 5 percent in 2018, PwC said. In November, Tesla finally released the Cybertruck, which was supposed to launch in 2021. In October, General Motors announced it would delay the launch of the Chevy Equinox EV, the Chevy Silverado EV RST, and the GMC Sierra EV Denali. In July, Volvo Cars delayed production of a new electric crossover, the EX90. Click here for the full story.
More EVs Lose U.S. Tax Credits Including Tesla, Nissan, GM Vehicles
Many electric vehicles lost eligibility for tax credits of up to $7,500 after new battery sourcing rules took effect on Monday, including the Nissan Leaf, Tesla Cybertruck All-Wheel Drive, some Tesla Model 3s and Chevrolet Blazer EV, the U.S. Treasury said. The Treasury issued guidelines in December detailing new battery sourcing requirements aimed at weaning the U.S. electric vehicle supply chain away from China. They took effect on Monday, reports Reuters. The number of EV models qualifying for U.S. EV tax credits fell from 43 to 19. Those figures include different versions of the same vehicle type. Treasury said some manufacturers have yet to submit information on eligible vehicles, which could lead to changes in the list. The new rules allow buyers to claim the tax credit of up to $7,500 at a participating dealership at the point of sale. The tax credit sets limits on vehicle price and buyer income to qualify. The Volkswagen ID.4, Tesla Model 3 Rear Wheel Drive, BMW X5 xDrive50e, Audi Q5 PHEV 55, Cadillac Lyriq and Ford E-Transit are among the vehicles that fell off the list of vehicles eligible for tax credits. Click here for the full story.
Volkswagen’s Elusive Quest to Make an EV for the Masses
Almost a decade ago, Volkswagen set out on an expensive quest to dominate the new world of software-defined cars and build the electric “people’s car.” It is still trying. According to The Wall Street Journal, the German automaker has invested billions of euros, retooled entire plants and created new software and battery companies to assist in making the transition. However, VW has yet to produce an EV that has matched the success of its historic gas-powered models such as the Beetle and the Golf in its core markets. Sales of its electric flagship, the ID. series, have disappointed. So, VW decided against scrapping the 50-year-old Golf, and it is developing an all-electric version that the company said could be launched by the end of the decade. Building and selling the electric car for “everyman” remains a core mission of Volkswagen, which translates as “people’s car.” In an attempt to reinvigorate VW’s mass appeal, the company is in the midst of a major restructuring so that it can produce profitable, desirable electric vehicles. Click here for the full story.
Adoption of In-Car Payments Set to Accelerate
It wasn’t too long ago that the automobile was simply a means of getting from one place to the next. Times have changed. Today’s cars are technology-laden devices that interact and engage with nearly every aspect of our expansive digital lives. With a wide range of internet-powered integrated applications, vehicle ownership is now as much a digital experience as it is a transportation one. Drivers can access entertainment, navigate, communicate, stay connected via voice or order a meal to be delivered to their destination, all while cruising down the highway. According to Wards, today’s cars have so much technology that the number of lines of code embedded within their systems exceeds that of a F-35 fighter jet or commercial airliner. The presence of all that technology has given rise to another digital transformation quickly gaining speed across the automotive sector: in-car payments. The connected car is becoming the latest form of payment. Embedded payments are popular across multiple industries, so much so that revenue generated from embedded payments in platforms is expected to surge from $1.9 billion in 2021 to $6.7 billion by 2026. Click here for the full story.
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