VW ditches some touchscreen controls, Feb. wholesale used car prices, Tesla’s Canadian EV rebate claims

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Subprime auto loan recovery rates plunged to 32% as of March:

Basically—a recovery rate represents how much of the original loan amount lenders recover after repo.

And it hit one of the lowest levels in nearly 20 years.

Why?

Falling used car values, rising defaults, and tougher economic conditions.

For context—

Recovery rates hit a 75% peak during the pandemic, fueled by soaring used car prices.

But now?

They're on par with Great Financial Crisis levels.

Big picture—lenders face a tougher road ahead, with higher losses on defaults and a market that’s no longer bailing them out.

(Data sources: Fitch Ratings Auto ABS Indices / Capital markets analyst Joe Cecala)

1. Volkswagen reintroduces physical buttons as touchscreen fatigue grows

After years of driver complaints over unreliable touchscreen controls, VW is bringing back physical buttons for crucial in-car functions, starting with the upcoming ID. 2all.

Between the lines: The decision signals a broader industry shift as automakers recognize consumer frustration with touchscreen overload.

• A 2023 J.D. Power survey revealed that touch-based infotainment systems were a major drag on customer satisfaction.

And VW’s Design Chief Andreas Mindt says they’ve learned their lesson: “We will never, ever make this mistake anymore." … (Go deeper: 3 min. read)

2. Wholesale used car prices dipped in February despite a late-month rebound

February’s wholesale used car market had a bit of everything—early-month sluggishness, a late rally, and a slower start to tax refund season.

• The Manheim Used Vehicle Index declined month-over-month, but non-adjusted prices rose 1.4% from Jan., with seasonally adjusted prices ticking up 0.1% year-over-year.

• But by the end of February, dealers were chasing more inventory, pushing prices up 0.2% in the last week as retail supply remained tight.

Bottom line: With tax refund season ramping up, demand will likely keep wholesale prices elevated into March … (Go deeper: 3 min. read)

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3. Tesla secured half of Canada’s remaining EV rebates in just three days

Driving the news: Transport Canada is reviewing Tesla’s recent rebate filings after an unexpected surge in requests during the final days of Canada’s EV incentive program.

• Over just three days, four Tesla locations submitted 8,653 rebate claims—accounting for more than half of the remaining $71.8 million in funds.

• A Quebec City dealership alone reported 4,000 sales, raising concerns among industry experts.

• Meanwhile, other dealers say they were left covering 2,295 rebates worth $10 million with no certainty of reimbursement.

The government is now facing mounting pressure to investigate how rebate funds were allocated and whether all dealers had a fair chance in the program’s final stretch … (Go deeper: 4 min. read)

• Automakers want to start banks, hoping to benefit from lighter-touch rules.

• U.S. jobs report shows evidence labor market is softening.

• Ford to inject up to $4.76 billion into cash-strapped German business.

• SoftBank-backed self-driving firm Wayve nears commercial debut.

• Kia’s EV9 will soon be able to power your home.

Thanks for reading everyone.

— CDG