Welcome to another edition of the Car Dealership Guy Podcast Recap—a rundown of key lessons from top operators, founders, and execs shaping the future of auto retail.
Today’s guest is Sen. Bernie Moreno.
We discuss his legislative plan to "hermetically seal" the U.S. market from Chinese vehicles to protect national security and dealer valuations.
Legislation outlasts executive orders, and this bill goes further than existing rules.
The connected vehicle rule from the Commerce Department was a starting point, but rules made by agencies can be reversed by the next administration. Hardcoding the restriction into law is what makes it permanent.
"Executive order is unpredictable because you never know when a new executive will come in and reverse that. So by putting in the legislation, you cement it."
The bill goes beyond the connected vehicle rule to address both the economic threat and the national security threat posed by Chinese vehicles, treating them as separate but equally serious arguments for the same outcome.
American automakers can beat any company on earth, just not a country.
Any individual US automaker can go head-to-head with any single foreign company. What no private company can do is compete against a government-funded operation designed to wipe out Western auto manufacturing.
"These are massively subsidized industries that are intended to destroy the western auto world so that they can basically own the industry and the entire planet."
The distinction is about recognizing that the rules of normal market competition don't apply when one party is a state actor.
The national security case is about what the cars send back, not just who makes them.
Connected vehicles collect high-definition video, photos, location data, and ownership information. Chinese companies are legally required under Chinese law to hand that data to the CCP if asked.
"Knowing when that person arrives, where they leave, where they go afterwards, can you imagine the national security implications of that? Like, why would we ever allow that?"
BYD, Moreno noted, is also a defense contractor for the Chinese government, which makes the national security argument substantially more concrete than just general data privacy concerns.
The bill hermetically seals the US market, including the Mexico loophole.
Moreno says it’s not enough to ban direct imports if Chinese vehicles can be manufactured in Mexico and then cross the border. And this bill addresses that explicitly.
"This not only prohibits the direct importation of Chinese vehicles, but also the manufacturer of Chinese vehicles here and the supply chain. We go all the way into the supply chain and we don't even allow a Chinese vehicle to enter the US in any way. Even if it's somebody in Mexico with a Chinese vehicle, they're not allowed to cross our border."
The Wall Street Journal had recently reported on Chinese vehicle production in Mexico, and Moreno’s answer was direct: the bill closes that path entirely.
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Washington, D.C., has always been reactive, but this bill is an attempt to change that.
Canada recently allowed 44,000 Chinese vehicles into their market and considers it manageable. Moreno’s read is that they're repeating the same mistake the U.S. made with subprime mortgages before 2008, dismissing the risk until it's too big to unwind.
"Fast forward 2 years, they're going to look back and go, 'Who allowed that to happen?' And now there's this major crisis. We saw it in the housing sector. You know, we all saw it in 2005, six, and seven."
Moreno’s POV: Getting ahead of the problem is the whole point, and this bipartisan support the bill has received suggests that framing is landing on both sides of the aisle.
The $400 billion EV push produced a 4-point gain in market penetration.
Affordability is partly a policy problem, and the forced acceleration toward electric vehicles is a concrete example of how government can make it worse.
"The move to electric vehicles also cost the taxpayer $300 billion. That's what we spent between subsidies, charging stations that we never actually built. So, a $400 billion price tag to move people, by the way, from 2% electric vehicle penetration…to where we are now, 6%."
Moreno’s argument is that redirecting that capital toward making affordable gas-powered vehicles would have had a more meaningful impact on the everyday consumer.
The FTC letters are actually good for the car business.
No dealer wanted to receive an FTC enforcement letter, but Moreno’s position is that the crackdown, under Commissioner Andrew Ferguson, is the most dealer-friendly version of this correction that the industry is likely to get.
"This is actually a very very positive development for the car business…This is as good as it gets."
The alternative, he warns, is waiting for a less sympathetic administration to impose something far more burdensome, with lawyers sitting next to salespeople for seven-hour disclosures in finance offices.
Moreno’s suggestion: Syndicate the real price, and put the doc fee right next to it.
The FTC is fighting the gap between what consumers see online and what they actually pay at the dealership.
"If the car is $29,000, you syndicate $29,000. If the doc fee is $400, put with mandatory documentation fee $29,400 right next to the price, not all the way down in one point font that nobody will ever read."
Third-party listing sites will also need to update their UIs to carry that disclosure consistently, compliance on a dealer's own website doesn't fully solve the consumer experience problem.
The 5% of dealers practicing bad pricing makes all dealers look bad.
Price transparency enforcement benefits the 95% of dealers who are already operating honestly, because the dealers who are stacking incentives that no one qualifies for to advertise a price that disappears by the time the customer arrives are the ones damaging the industry's reputation.
"You see the ad for 26, you're furious with me because you think I robbed you $5,000, which is just not true because you don't qualify for any of those incentives. And you shouldn't make it contingent on financing. You shouldn't make it contingent on buying some warranties because that's already illegal."
Cleaning that up, Moreno says, levels the playing field.
The fundamentals of dealership success haven't changed, and won't.
Ten-year outlook questions can get complicated fast, but Moreno’s answer kept pulling back to the same core: great people, great franchise, great location, great customer experience.
"At the end of the day, it's one human wanting to interact with another human. And so, building a great team mattered then, it matters now. Having great people working in your dealership, top priority."
On technology specifically, the advice was to stay current without chasing every new thing. Don't be at the bleeding edge of everything, but don't get left behind either.
