Lowest repair costs by brand, GM Q1 earnings, dealers combat direct-to-consumer sales

Hey everyone. 

Thanks for joining me for this edition of the daily roundup. Before we get started, I came across a wacky story from TikTok user @captain.ad, who says his Tesla Cybertruck allegedly bricked for 5 hours after being taken through the car wash at the end of a beach trip.

Turns out, Tesla has some very specific requirements for cleaning the Cybertruck, like not washing it in direct sunlight. Weird…I know.

—CDG

1. American-made cars have some of the lowest long-term repair costs across the industry

Big picture: Outside of basic maintenance like oil changes, it’s not often that new cars need many repairs in the first couple of years of ownership. The actual costs start to incur as the vehicle ages past five years (i.e., more wear and tear plus expired warranties). 

To find out which brands have the most and least expensive repair costs over time, Consumer Reports surveyed its members about their out-of-pocket maintenance costs. 

At a glance: 4 of the 5 least expensive brands to maintain over 10 years were American-made, with Tesla coming out on top. On the other end of the spectrum, several German automakers found themselves at the bottom of the rankings with the most expensive costs.

By the numbers (total 10-year cost):

Least expensive

• Tesla: $4,035

• (tied) Buick: $4,900

• (tied) Toyota: $4,900

• Lincoln: $5,040

• Ford: $5,400

Most expensive

• BMW: $9,500

• Audi: $9,890

• Mercedes-Benz: $10,525

• Porsche: $14,090

• Land Rover: $19,250

Of note: Several brands, including BMW and Toyota, offer free maintenance periods on new cars.

Why it matters: Long-term maintenance costs are a big determining factor when car buyers decide on a brand, as unexpected repair bills can strain finances, especially if they happen a lot. These costs also influence resale values. Vehicles known for their reliability and lower upkeep tend to retain more value over time.

Market Watch

2. General Motors ups 2024 guidance on strong Q1 performance

At a glance: Early this morning, General Motors (GM) reported its financial results for the first quarter, surpassing Wall Street expectations. 

Quick facts: 

• GM’s global revenue: $43.01 billion, exceeding the expected $41.92 billion.
  

• Net income: Up by 24% to $2.98 billion.

• Adjusted earnings per share (EPS): $2.62, beating the estimated $2.15.

Inventory Insights: GM ended the first quarter with 534,479 vehicles in inventory, a 63-day supply, above its previous guidance of 50 to 60 days. This means that if no new vehicles were added to the inventory, it would take approximately 63 days to sell all existing vehicles. 

In comparison, during the same period last year, GM dealers had 412,285 new vehicles in stock.

What’s ahead: GM is feeling bullish and has also revised its 2024 guidance. 

• The automaker now expects adjusted earnings between $12.5 billion and $14.5 billion, up from the previous range of $12 billion to $14 billion.
  

• Net income is projected to be between $10.1 billion and $11.5 billion.
  

• GM also plans to produce 200,000 to 300,000 EVs this year.

Investors responded positively, with GM shares jumping more than 4% immediately following the earnings report.

3. U.S. dealers on alert over potential direct sales by VW’s Scout EV brand

Topline: U.S. auto dealers are concerned they might be sidestepped when Volkswagen’s Scout EV brand (a joint venture with Sony Honda Mobility) eventually hits the market. 

For context: In the U.S., there are franchise laws in almost every state that prohibit direct-to-consumer auto sales from the manufacturer. Meaning, that new cars have to be sold exclusively through dealerships. 

So far, EV-only makers like Tesla, Rivian, and Lucid have avoided these laws and been able to sell directly to consumers via their own networks. 

What’s happening: Automotive News reports that a group of state dealer associations are raising the alarm over the possibility of the Scout brand selling outside of the dealer network. 

In fact, the Automotive Trade Association Executives (ATAE), which represents executives from over 100 state dealer associations, took out a full-page ad in print as a preemptive strike.

The ad reads in part:

Thus far: Sony Honda Mobility and Volkswagen have been weighing their retailing options but they haven’t clued dealers in on the plan. And with an SUV and full-size pickup set to debut in the third quarter, dealers are anxious to find out their role in all of this. 

Key quote: "After two years of asking and getting nothing, frustration is very high," John Devlin, the Automotive Trade Association Executives' 2024 chairman and CEO of the Pennsylvania Automotive Association, told Automotive News.

"If they want to sell the vehicles direct, it's going to be an incredibly difficult battle."

More on Scout: Last December, the EV brand announced that its debut car would be a $40,000 SUV specifically for the American market. It will be manufactured at a $2 billion assembly plant in South Carolina that broke ground in February. Scout expects to start producing the SUV and pickup truck in 2026.

• A study by the U.S. Department of Energy expects that by 2030, 60% of all EVs in the U.S. will be owned by people living in the suburbs. Why? To get the maximum benefit of owning an EV, you really need to be able to charge cheaply at home.
  

• The plot thickens in China’s EV price war. Last month BYD slashed the price of its cheapest EV, the Seagull, by 5%. Tesla followed suit by lowering the price of four models by 14,000 yuan ($1,932). Now, Li Auto reduced prices by about 5% on four of its five models and will refund recent buyers for the difference.
  

• A majority of Volkswagen workers in Chattanooga, Tennessee, have voted to join the UAW, a first for Southern workers outside of “The Big 3.”
  

• Rivian has introduced a new “Electric Upgrade” offer, where qualifying purchasers/lessees can get up to $5,000 off an R1 EV if they take delivery before June 30, 2024. Details here.
  

• The Kia EV9 is now $7,500 off with new discount offers to match the EV tax credit it currently doesn’t qualify for.

We’ve got tons of great jobs hitting the CDG Job Board right now. Here are some standouts for anyone looking for their next move.

• Time for something different? OpenLane is hiring a ton of market sales managers all over the country.

• Remote work more your speed? CarNow is hiring for several roles like BDC operations manager and account manager.

• Enjoy face time with car buyers? CarEdge is looking for a car buying concierge.

Looking to hire? Add your roles today—it’s 100% free.

Thanks for reading. See you again tomorrow.

—CDG