Most negotiable cars, China's EV market, Ford poised to reverse decision

Hey everyone. The EV market is evolving at a fast clip – but how is it impacting car buyers and dealers? On today’s episode of the Car Dealership Guy Podcast, I get the scoop from Dave Thomas, Director of Content Marketing at CDK Global. Give it a listen here.

— CDG

1. EVs, sedans remain most negotiable models amidst supply boom

Top line: New data from CarEdge reveals opportunities to increase inventory turnover on less popular cars.

By the numbers: As you might have guessed, the most negotiable models are the ones with the longest days’ supply (i.e. sell the slowest), meaning EVs and sedans are the best bet for discounts.  

• Keep in mind that the average days’ supply earlier this month was 76 days, according to Cox Automotive. 

Let’s start with EVs: 

1. Ford F-150 Lightning (128 days)

2. Ford Mustang Mach-E (166 days)

3. Hyundai IONIQ 5 (140 days)

4. Cadillac Lyriq (184 days)

5. Chevrolet Blazer EV (507 days)

Next are sedans:

1. Kia K5 (150 days)

2. Hyundai Sonata (154 days)

3. Nissan Altima (144 days)

4. Nissan Sentra (120 days)

5. Mazda Mazda3 (147 days)

The bottom line: Whether you’re a dealer looking to move inventory or a consumer in search of a good deal, watching the days’ supply is your best bet. Typically – the longer it takes to sell a vehicle, the more flexible the price.

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2. China automakers laser-focused on EVs

Top line: Chinese automakers remain committed to pursuing EV dominance, promising to upset the power dynamics that have kept the global car industry locked in a status quo for decades.

How did we get here: Foreign automakers used to be at the top of China’s automotive food chain, with brands like General Motors and Volkswagen taking the biggest slices of the pie. 

• Meanwhile, domestic manufacturers like SAIC and BYD struggled to compete, lacking the expertise of international brands.

Key background: In 2014, China’s President, Xi Jinping, described a way to challenge the international industry during a speech before automotive executives. Rather than trying to out-compete legacy manufacturers in the realm of gas-powered vehicles, Xi urged domestic brands to focus on new energy models, specifically electric ones.

• That speech was a catalyst for significant change in how China’s automakers approached the car market.

• It also drove domestic companies to leverage advantages unique to China, including its control over the world’s supply of lithium.

• Since 2014, Chinese companies like SAIC and BYD have leveraged these advantages to displace foreign automakers as the leading brands in their home country. 

But the global industry hasn’t been idle. Having taken notice of this shift, foreign car manufacturers and lawmakers have taken steps to prevent a flood of budget-friendly Chinese EVs into their own countries. 

• In the U.S. President Biden has implemented massive 100% tariffs on China-made vehicles. 

• Overseas, the E.U. has launched an investigation into collaboration between China’s government and its domestic automakers, arguing that it has created an unfair advantage.

Bottom line: It’s unclear whether these actions will deter China’s domestic brands. During an event marking Xi’s 14-year-old speech, Li Zheng, co-founder of SAIC’s QingTao New Energy Technology Co., didn’t seem to think so.

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3. Ford to suspend dealer EV requirements

Top line: Ford may be reversing its decision to block certain dealers from EV shipments over failing to meet investment commitments and other requirements.

What investments? In 2022, Ford told dealers that they would need to make EV-related investments as high as $1.2 million if they wished to receive electrified inventory down the road, requiring retailers to install charging stations and upgrade their service centers.

• The pushback from dealers was intense, eventually leading Ford to ease its requirements a few months later while still keeping the core commitments in place.

Earlier this month, Ford told dealers to halt EV-related investments as it re-evaluated its strategy, saying it would have answers some time in June.

• Now it appears Ford is ready to cancel the requirements altogether. 

• A series of meetings this last week between dealers and high-level executives, including CEO Jim Farely, indicate that the company will allow any franchisee to sell EVs, regardless of the status of their investments.

Comments from company leadership back this up.

Bottom line: Ford has yet to make any official announcement, but it wouldn’t be a surprise if it follows through. Those who have been paying attention to the company know that it has been slowly scaling back its own EV investments, postponing vehicle and factory launches by a number of years. 

• Tesla is pulling back on advancing manufacturing processes to focus on artificial intelligence and software.

• Proxy firm Glass Lewis advised Tesla shareholders against approving CEO Elon Musk’s $56 billion pay package.

• Toyota is showing off new adaptable engine technology that can run using a variety of fuel sources, including biofuels.

• A Texas BMW dealership uncovered a false identity and apparent fraud attempt using face ID technology.

• The U.S. Joint Office of Energy and Transportation has published its quarterly report on public charging infrastructure, revealing a massive spike in the number of available chargers since the start of the year.

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.

• Are you a salesperson at heart? OPENLANE has 10 roles for Market Sales Managers all over the country,

• Are you an expert in dealership financials? HGreg is seeking a Senior Controller near Palmetto Bay, FL.

• Interested in how EVs work at the wholesale level? Plug is looking to fill two business development roles.

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

Thanks for reading everyone.

— CDG