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July 24, 2025 11 mins

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Episode #1103: Today we’re talking about backlash against stop-start tech, Tesla’s rocky second quarter and robotaxi dreams, and Southwest’s historic shift to assigned seating.


Show Notes with links:

  • Stop-start engine systems, once praised for fuel savings, often slandered by consumers, are now catching flak from both the EPA and frustrated drivers—prompting new questions about their future.
    • 62% of 2023 vehicles used stop-start to claim EPA efficiency credits around $30 per vehicle
    • A new Trump-era law which eliminated CAFE standards and key penalties is reducing incentives for automakers.
    • Consumers often disable the feature, citing annoyance and wear concerns even going as far as installing aftermarket disablers from Amazon which trick the system while some drivers rely on pedal finesse.
    • “If there’s no CAFE program that can be enforced, and there’s not a greenhouse gas standard that requires improvement, that would remove the incentive for automakers to put in this technology,” said Chris Harto, senior policy analyst at Consumer Reports
    • Lee Zeldin, head of the EPA recently tweeted: Start/stop technology: where your car dies at every red light so companies get a climate participation trophy. EPA approved it, and everyone hates it, so we’re fixing it.


  • Tesla’s Q2 earnings took a hit, with profits and sales both sliding amid fading incentives, slowing EV demand, and political headwinds. Elon Musk says the future rides on autonomy.
    • Net income fell 16% to $1.17B; auto revenue dropped 16% as deliveries declined.
    • Tesla’s $439M in regulatory credit sales was half of last year’s, and shrinking fast.
    • A lower-priced Model Y and stripped-down Cybertruck aim to revive sales.
    • Tesla’s invite-only robotaxi service in Austin may expand to half the U.S. population by year’s end if approvals move forward quickly according to Musk
    • “We probably could have a few rough quarters. I’m not saying we will, but we could.”


  • Southwest Airlines will say goodbye to open seating for the first time in its history, launching assigned seats and a tiered boarding system starting January 27.
    • Ticket sales for assigned seats begin July 29; full rollout hits early next year.
    • Eight new boarding groups will replace A-B-C lines, prioritizing loyalty and fare class.
    • Premium seat options—like extra-legroom—are coming, but prices are still under wraps.
    • About 25% of the fleet is already reconfigured with the new seat layout.
    • “We’re optimizing for efficiency… while taking care of our most loyal customers,” said Southwest’s Stephanie Shafer Modi.

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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Transcript

Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Paul J Daly (00:00):
Good morning. It's July 24 it's Thursday. This is
the automotive State of theUnion. I'm Paul Jay Daly Scott
mount today we're talking thatold stop start button. Tesla in
the rough again. And a littlefollow up on a Southwest Airline
story. We've been tracking forthe last several months. We've
been tracking it. We're gonnafly

Kyle Mountsier (00:22):
it all the things I don't know.

Paul J Daly (00:25):
Yeah, I don't know.
I

Kyle Mountsier (00:26):
was a list for a while, but I quit that. You
quit? Yeah, you're a

Paul J Daly (00:30):
Delta boy. Now I'm Delta all the way Delta, way
Delta. Die made that Wi Fi.

Kyle Mountsier (00:35):
You know what I mean. I do.

Paul J Daly (00:36):
I do. We have an upcoming ASOTU Edge webinar with
car, RX, driving loyalty, withdata, with Shane Wilson and
Levi, uh, Beatty. Is it? Yes, onWednesday, August 6, so next
week? Oh no, is that two weeks?
Two weeks, two weeks fromyesterday, you got time to

Kyle Mountsier (00:51):
Oh, but register now so you don't forget, you
know, yeah, oh yeah.

Paul J Daly (00:54):
I want to be reminded. It's like, it's like,
a little time capsule. Registernow and then. Two weeks from
now, you'll be like, Oh yeah,that's

Unknown (01:00):
right. That's a good one, great reason to register.

Paul J Daly (01:02):
Now go to asotu.com, it'll be right there
toward the top of the page. Youknow how webinar registration
work, but these are our quickones. 2530 minutes. You're in,
you're out, you get therecording if you can't make it
live, but if you can make itlive, it's always fun to be in
the comments. Yep, yep. I'msaying, All right, let's talk
about some news. Oh, this onejust hits real close to home for
most drivers, the start stopengine system. You know the fact

(01:24):
that your car dies in the middleof like when you're about to
cross an intersection and itjust shuts off and then turns
back on once was like a big abig thing about fuel savings,
often slandered by customers,now catching flack from both the
EPA and frustrated drivers,prompting new questions about
the feature's future, 62% of2023 vehicles used the stop

(01:44):
start tech to claim an EPAefficiency credit, about $30 per
vehicle. That adds up to a newTrump era law, which would
eliminate the CAFE standards andkey penalties, is reducing the
incentive for automakers toinclude the feature, especially
when them get they're gettinghate mail about it. I'm sure
consumers often disable thefeatures, citing annoyance and
where concerns, even though it'skind of been shown that, like,

(02:07):
it doesn't actually wear yourstarter out, even though, like
old starters, it would have notthe new ones, but people are
buying aftermarket disablersfrom like Amazon with, like,
wiring harnesses. They hate itso much they're willing to pay
money to make it's

Kyle Mountsier (02:19):
jarring. Let's just be honest, it's jarring.

Paul J Daly (02:23):
Okay, so here's a quote from Chris Harto, senior
policy analyst at ConsumerReports. He said, If there is no
Cafe program that can beenforced, and there's not a
greenhouse gas standard thatrequires improvement, that would
remove the incentive forautomakers to put this in the
tech. Lee Zeldin, the head ofthe EPA, recently tweeted, start
stop technology where your cardies at every red light. So
companies get a climateparticipation trophy. EPA

(02:45):
approved it, and everyone hatesit, so we're fixing it.

Kyle Mountsier (02:49):
And he dropped the mic right after that, too,
all at the same time, just like,walked off the stage, just full
on arm extended Mic drop. I haveyou driven a car like this? Have
you driven like Yeah,

Paul J Daly (03:00):
I think, I think the No, I think most cars have
it. I think the last, the last,like, four cars I've owned,
like, my Kia had it. I had aDurango was the first car I ever
had that had it. You know, GMvehicle has it. Like, yes, all
the cars have it. I'll tell youwhat so annoying. The navigator,
we had had it. I'll tell youwhat. It really does depend.
They're not all the same, right?
I will say the Durango was theroughest one we had, because I'm

(03:24):
like, is this thing shiftingright? The navigator wasn't bad,
like, it didn't annoy but, youknow, the thing is, some of the
cars you're able to turn it offright, like, turn it off off,
but most of the cars now Itdefaults to on when you turn the
car back on.

Kyle Mountsier (03:40):
What's so funny, there is, like, you can turn
this off, but the automaker isstill getting the efficiency
credit,

Paul J Daly (03:46):
yeah, but it goes back on. They do say, like, the
the data shows that, like, itcan save up to 10% of fuel in
stop, start, city traffic. Okay,so, I mean, it's probably like a

Kyle Mountsier (04:01):
percent. Maybe that's nifty. You can tell I got
opinions about it. There's

Paul J Daly (04:05):
nothing like feeling like you like, hit the
gas and it delays when you needto hit the gas. And, yeah, I
hate the feature. I mean, Iguess if it's an option to turn
it on and but, like, abouthybrids and EVs? My EV never
does that. It's like, it'salways all the power and always
on. I told I towed a boat withit yesterday again. And let me
just say, you got there's it isamazing. It is so amazing to tow

(04:29):
it, that thing well, because allthe torque, because torque is
what you need, and breaking iseasy. It's easy to solve
nothing. Oh yeah, the fact that,like, you take your foot off the
gas and like, and the feelingthat that big, heavy thing back
there is actually charging myvehicle. Yeah, it's good.

Kyle Mountsier (04:43):
Yeah, that thing back there is recharging well,
but it doesn't, you know, it'skind of low on the flip

Paul J Daly (04:49):
side. And like I did all the I put all like that,
the stats and you load a trailerup, give me the way, give me the
dimensions, range calculation,yeah, pretty much cuts it in
half.

Kyle Mountsier (04:58):
You're like, all that charging. Does nothing,
quite

Paul J Daly (05:02):
hilly area. So like the trek to put the boat in the
lake, even though it's onlylike, you know, 10 miles,
there's a lot of hills. Andbasically it's like a mile per
percent is what it Oh, mygoodness, that's unbelievable.
So take that with a grain ofsalt. No, no. Long trips, no
longer. Fine. Speaking of longtrips, Tesla's had a long trip.
Tesla feels like they're on theroad trip that'll never stumble.

(05:26):
Their q2 earnings took a hit,with profits and sales both
sliding amid fading incentivesslowing. Ed EV demand and
political headwinds. Elon Musksaying the future rides on
autonomy, their net income fell16% to 1.1 7 billion auto
revenue dropped 16% asdeliveries declined there.
There, they had $439 million inregulatory credit sales, meaning

(05:50):
they're selling theirenvironmental credits to other
automakers. That was half ofwhat it was last year, shrinking
fast. They say, take this with athe Elon sized grain of salt, a
lower price model Y and astripped down cyber truck are
aiming to revive sales. We'llsee. We'll see Tesla's invite
only Robo taxi service in Austinmay expand to half of the US

(06:12):
population by the year's end, ifapprovals move forward,
according to musk, that soundslike a long way to go from where
they are now.

Kyle Mountsier (06:20):
Yeah, have you ever seen government move that
fast?

Paul J Daly (06:24):
No, he said, he said, quote, he goes, we
probably could have a few roughquarters. I'm not saying we
will, but we could.

Kyle Mountsier (06:32):
So, yeah, this is actually, you know, if you
look at like the growth of Appleover time, and then Android kind
of catching up and leapfroggingthem in some of the technology
that they have. And, likeputting everyone at a little bit
of a question mark, there's somesimilarities here, especially
globally, maybe not so much inthe US, from an EV manufacturer

(06:53):
perspective, and and obviouslywe know the political tension,
some of that's getting resolvednow, you know, I think the, you
know, the over promise, underdeliver, is starting to weigh on
some investors, but I think thatElon is just so much of a he's
just so much in pursuit of thesecrazy ideas with that when they

(07:14):
do happen, they'll be kind ofearth shattering. And you know,
the thing about the differencebetween, like, a Waymo mapping a
city and Tesla mapping a city isthey've been they've been
collecting data on these citiesfor 12 plus years now. Great
point. So like, the the abilityfor them to map and understand a
city and the travel patterns ofthat city is like, it's an

(07:37):
instant. So the minute they getaccess to these cities, it's not
going to be like, oh, we need togo in and map this thing with
our technology teams. They'regoing to be like, pull up data
set for Nashville.

Paul J Daly (07:46):
That is insane.
When you think about the levelof data, the amount of data
they're collecting on a dailybasis. They are just ingesting
hour after hour after hour ofvideo, real life, real world,
squirrely pedestrian data, yeah,it's,

Kyle Mountsier (08:02):
it's not just the roads, it's the patterns.
It's like, how does this moveduring this time of day, and
where, you know, where do peoplecross in front of things like
they, they can analyze all

Paul J Daly (08:10):
of that. That's gotta be wild. What a wild data
set. Yeah. Speaking of wild

Unknown (08:15):
segway,

Paul J Daly (08:18):
big changes about to be

Kyle Mountsier (08:19):
here next week, Southwest air, by airlines, is
finally putting the stamp onsaying goodbye to open seating
for the first time in itshistory, they launched assigned
seats in a tiered boardingsystem starting in January for a
couple flights. Right? I thinkit was like California to
Baltimore or something likethat. Assigned seat ticket sales
begin July, 29 with full outroll outs early next year, eight

(08:43):
new boarding groups, replace a,b and c lines, priority,
prioritizing loyalty and fairclass. So they basically doing
the eight, eight boardinggroups, eight boarding groups. I
mean, that's, that's what likeUnited has eight boarding
groups, premium seat options.
They really do extra leg roomare coming, but prices are still
under wraps. About 25% of thefleet is already reconfigured

(09:04):
with the new seat layout. That'spretty impressive southwest.
Stephanie Schaefer Modi saidwe're optimizing for efficiency
while taking care of our mostloyal customers. All

Paul J Daly (09:16):
right, we'll see what happens. Because you know,
our head of our production team,the owner of the company that we
work with to produce our Docuseries called southwest the
public transportation of theskies, because that's what it
feels like, until that right?
Like you go on and you sit, yousit next to like the least weird
person, right? Which is, whichis like city bus rules, it is
the least word. How can I You'rescoping it all out myself from a

(09:39):
potentially weird experiencethat's going away. I think this
is just a story of a company whohas to reinvent itself and knows
it so they're taking a drasticmeasure. I guess it just shows
the evolution of a company overtime. But it's not like a I
mean, how old southwest, it'spretty old. It's older company,
50 years old, right?
Unfortunately, I'm always alittle bitter. Year, because

(10:00):
when you know you and I firststarted rolling together, you
know, five years ago, whateveryou just talked about Southwest,
like, so highly, and by the timewe came to Syracuse, it was
ruined and terrible. So I neverreally got the Southwest
experience.

Kyle Mountsier (10:11):
Well, it used to be like, I mean, literally, it
was 10 minutes less boardingtime, right? Because it's just
like the process is so muchdifferent from a boarding
perspective. And like, how thegroups have to get up, like, you
just line up, you're in, you getyour seat, you know, there's no,
like, jockeying for, you know,for, for where you stop. It's

(10:32):
just so much smoother and and,you know, I think they've just
the problem. The biggestproblem, in my perspective, is
their pricing is at or higherthan the other airlines, where
you get to pick your seat, andthat's the biggest problem that
they've run into. And so, yeah,it's not a discount airline
themselves, exactly.

Paul J Daly (10:50):
All right. Well, we'll see what happens a lot of
travelers out there, a lot oftravelers in our audience,
that's for sure. So lots oftravel if you book a seat, if
you book a seat, like anassigned scene on a Southwest
flight. Send us a screenshot,and we're going to throw them on
social media. Do that? Send it?
Yes. Oh, it's full stop. Fullstop. I think we need some outro
music. You have an amazing dayout there, serving people,

(11:13):
selling some stuff, becausethat, all that, that combo right
there, goes together really,really well. We believe in it.
We believe in you, we'll see youtomorrow. You.
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