Dealers Say Biden's EV Strategy Is Too Aggressive for U.S. Market

First Up 02/02/24

Dealers Say Biden's EV Strategy Is Too Aggressive for U.S. Market

Despite federal efforts to fill in charging infrastructure gaps and make electric vehicles cheaper for consumers, U.S. car dealers surveyed by Automotive News say they are worried the Biden administration is forcing the industry to move too far ahead of market demand. Thousands of dealerships have urged President Joe Biden to reconsider the proposal — which could be finalized as soon as March — arguing it would mandate an unrealistic shift to solely battery-powered vehicles before the market and infrastructure are ready. Click here to watch a video from EV Voice of the Customer and learn more. "Electric vehicles are exciting. They're definitely overall a good impact for our customers and for the environment, but it's moving too fast," said Michael Lucki, general manager of Riverhead Mazda in New York. "It should be driven by consumer demand, and consumer demand isn't there yet." Click here for the full story.

Volvo Will Stop Funding Polestar EV Brand but Keep Collaborating

Volvo and Polestar are breaking up—financially speaking, that is. The news comes after Volvo announced it will no longer fund Polestar, which features a slowly expanding all-electric lineup. Instead, Geely, the Chinese automotive giant that owns both brands, will now provide full financial and operational support to Polestar going forward, reports Car and Driver. Geely could also become a "significant new shareholder," according to a Volvo press release. While Volvo won't be giving Polestar money anymore, the two will continue to collaborate on activities including manufacturing and R&D. Of course, Volvo also has the benefit of selling cars and SUVs with internal-combustion engines along with its upcoming EVs such as the EX30 and EX90. Meanwhile, Polestar exclusively sells EVs, which are currently seeing a decline in sales around the globe. Being an all-electric brand with a tiny lineup (right now, the Polestar 2 is the only model sold in the U.S.) as well as a slow rollout of new models has caused the company to struggle. Click here for the full story.

Buy-Sell Activity Booms

Dealers convening in Las Vegas this week for the 2024 NADA Show have a good problem to have: they’re sitting on a mountain of cash after three years of the best profits they’ve ever had, according to Erin Kerrigan, founder and managing director of Kerrigan Advisors, Irvine, Calif. “The industry has an overabundance of cash,” Kerrigan says during a webinar by AIADA. A lot of that money is going to be plowed into buying more dealerships, reports Wards. High interest rates would normally deter a high level of buy-sells, but the average dealership has so much cash, they don’t have to borrow as much to make acquisitions, Kerrigan says. In the meantime, acquisitions by the public groups tend to increase when their share prices are high, since they often use stock to purchase dealerships, she says. The publicly traded groups collectively outperformed the S&P 500 in 2023, Kerrigan says. With so much purchasing power in hand, the latest trend in dealership buy-sells is for big dealership groups to seek out and acquire other big dealership groups, a practice Kerrigan calls “elephant hunting.” Click here for the full story.

Toyota's EV Strategy Guided by Dealers and Customers, Not Regulations, Says Jack Hollis

Toyota Motor North America's head of sales says the company's varied powertrain strategy is being guided by its dealers and their customers, which gives it a competitive advantage. "Our strategy is based on what dealers are telling us the customer wants," Jack Hollis, executive vice president of sales, said at the Automotive News Retail Forum. "Our dealers are not telling us that the customer wants EVs more than other things. They're telling us they want EVs as a choice. They want plug-in hybrids as a choice. They want hydrogen as a choice. In fact, they would like to have gas engines [as a choice] but also have cleaner-burning fuels." Hollis said he is concerned for the industry because emissions regulations that will require widespread adoption of EVs in the early 2030s are unobtainable unless customers are more willing to embrace the technology than they are now. "Regulations are way out in front of where the customer is at. That never works well for any industry," Hollis said. "The customers have to lead; the regulations have to be able to protect them. Not the other way.” Click here for the full story.

Mazda Doubling Down on Rotary Engine, Pours Money Into R&D

Mazda is not only reassembling a dedicated team of engineers for rotary engine development, it also announced its intention to expedite research and development (R&D) efforts in the field of Wankels. Most recently, the company explored the use of a rotary engine in the plug-in hybrid MX-30 e-Skyactive R-EV. Its 0.8-liter Wankel engine charges the vehicle’s small battery pack, extending its range from 53 miles to 373 miles. This development has been successful enough to convince the brand to further invest in the technology. Starting on Feb.1, 2024, a team of 36 engineers will collaborate with the goal of achieving a breakthrough in rotary engine technology, according to Ichiro Hirose, Mazda’s chief technology officer. According to Carscoops, he promises a technology that can help create “attractive cars that excite customers.” “In Mazda’s history, the rotary engine is a special symbol of our ‘challenger spirit’,” says Hirose. “We are deeply grateful to all those who have supported RE to date, and are pleased to announce the rebirth of the organization that develops RE, the engine that has been loved by customers around the world.” Click here for the full story.

AIADA Affinity Partner Happenings at 2024 NADA Convention

AIADA's Member Benefits Program is one of the most valuable services AIADA provides to its members. AIADA partners with best-in-class companies to provide members with exclusive values on the goods and services they need to succeed in a competitive business environment. While you're in Las Vegas, make sure to check out AIADA's Affinity Partners. Click here for a quick reference guide on where to find them at NADA 2024!

 

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