AAH #764 - Are You Ready for AI in Your Car?

TOPIC: Car Tech Experience PANEL: Kathy Rizk, JD Power; Perry Stern, Freelance; Gary Vasilash, shinymetalboxes.net; John McElroy, Autoline.tv

Episode Transcript

Speaker 1 (00:00):
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Speaker 2 (00:24):
Welcome everybody to Outline after Hours. Going to have an
interesting discussion today on artificial intelligence in cars. We're going
to get into the news of the week in the
second half of the show. But Gary, always good to have.

Speaker 3 (00:36):
You here, Good to be here. Missed you last week.

Speaker 2 (00:38):
I know I was at a conference that I learned
a whole lot about things going on in the industry.
It was good, but I did miss the show. Well,
we got to let everybody know. We've got Kathy Risk
here from Jene Power and Associates. She's done some very
interesting research into what consumers think about all this AI
stuff coming into cars. And we've got our colleague Perry

(00:59):
sternback on the show and very great to have you here.

Speaker 4 (01:01):
Great to be here.

Speaker 2 (01:03):
So, Kathy AI and cars, what did you set out
to try to figure out? What kind of research did
you do tell us about it.

Speaker 5 (01:14):
Yeah, So I lead our Tech Experience Index studies, so
that looks at advanced technologies in the vehicle and so
we started last year to dabble in it a little bit.
We have forty technologies in the study and we started
to put a few of the AI technologies in there,
and then for this year we added seven in total.
So we are looking at things like generative AI that's

(01:35):
learning that behavior from the customer, you know, as they're driving,
you know, what are those requests they're asking for. To
smart climate control where it can automatically sense if you know,
the sun is coming in the passenger side, it not
only adjusts the temperature the fans be but the events
and so several technologies like this, and we wanted to

(01:56):
measure that impact. Normally, we're looking at like the A
to MY experience for these technologies and what the user,
you know, any problems the user's having or anything that
delights them. But this technology doesn't really have an HMI experience,
so it was a very different area for us.

Speaker 6 (02:13):
So, Kathy, these are technologies that are actually in vehicles.
This isn't something that you guys are saying, well, someday
we'll do this.

Speaker 5 (02:21):
Yeah, No, these are actually in the vehicle, and so
they're not on a lot of models yet there's only
on each technology is only on a handful.

Speaker 2 (02:29):
But you've also found right that I mean this in
car experienced, the UX or whatever you want to call it,
is a high factor in dissatisfaction with cars.

Speaker 5 (02:41):
It's a combination, right, So you know, we found that
some of this technology reduced some of the problems are having.
Like we've been tracking that climate controls, you know, as
we've put them into the infotainment system has become a
lot more problematic for drivers. Is it's a distraction right
to go in there to try and adjust the climate.
And with smart climate can controls, they're not having to
go in and actually interact with that. So they're really

(03:05):
you know, embracing that technology. They feel like it reduces
that driver workload and it's less distracting. But there are
some of these technologies, you know, that they don't want
the vehicle learning too much or the manufacturer actually learning
too much about them.

Speaker 6 (03:21):
So you know, when you're talking about this smart climate control,
so many vehicles have automatic climate control. You set it
at seventy two and it goes to seventy two. Right,
This is more specific to the passenger and to the driver,
and it's.

Speaker 5 (03:37):
To the vehicle in general. But I was just giving
that one example. But it's a step beyond auto. So
it can adjust the vents, right, and you know if
you tie that with smart glass, which can actually tint
the glass if the sun is coming in. So we're
starting to see all of this stuff where the driver
has to do a lot less.

Speaker 4 (03:57):
Do people like the fact that the car is doing
all this for them or does it make them nervous?

Speaker 5 (04:02):
I think for some people they don't even realize right
that that workload's been reduced, But you know, others are
really welcoming the fact that it's you know, we have
like you know, smart driver preferences. It learns if you
want a certain ambient lighting at night, or you put
your seating position in a particular way, or use you know,
one driver mode in the morning in a different drive

(04:25):
mode at night. So they like that it's learning their
behavior and it's you know, it's you know, doing that
work for them. But on the other hand, they don't
really want the auto manufacturer tracking you know, what is
that voice? You know, recognition type question they're asking or
you know, with the direct driver monitoring camera, you know so,

(04:46):
and they have concerns about all this data privacy of
what's happening with all this information that's being collected.

Speaker 2 (04:51):
Yeah, I want to get into that, but but let's go.
You send us some slides and one that I thought
was very interesting was using generative a I to improve
the native infotainment system i e. The one that the
automaker has put in the car. And you just touched
on voice recognition. Go into that because we've all, you know,

(05:14):
we all test drive cars here and we've experienced how
bad most of the car company's voice recognition systems are
compared to our phones, which handled it easy, breezy. And
what I've been told is that's because your phone puts
the inquiry up into the cloud where there's a massive
computing power versus your car. That unless these car companies

(05:39):
put in very expensive microprocessors, they can't do it. But
it sounds like maybe AI is cleaning that all up.

Speaker 7 (05:47):
AI is helping.

Speaker 5 (05:48):
So we've seen this advancement in the voice assistant right
for years, it wasn't connected to the Internet. Then most
of them became connected to the internet, and it got better,
but it didn't change drastically, right, And now we have
generative AI, and it's really starting to help because it's
learning what the customer is going to be asking. So,

(06:09):
you know, once it starts to understand that better, right,
the customer is starting to have a better experience. And
what we've found on I thought was very interesting is
people are using the enfotainment system more on vehicles that
have generative AI. And I would tell you that most
customers don't know they have generative AI, right, but they're
finding that it's working better for them. And so we're

(06:30):
seeing them use the native navigation system more, they're using
the voice assistant more, and in total, when we ask them,
you know, their infotainment system, those that are using generative AI,
we've seen an increase in the percent actually using that
versus Android Auto or Apple Car Play.

Speaker 2 (06:46):
Is there any way to tell if your car has
got generative gen AI in it.

Speaker 7 (06:50):
I think it's very hard for them to know if
they have.

Speaker 6 (06:53):
That very interesting, So I mean, is this something that
automakers are keeping under the radar, as it were, or
is it something that you think.

Speaker 3 (07:04):
Could be promoted as a feature.

Speaker 7 (07:07):
I don't think right now.

Speaker 5 (07:08):
A lot of them are promoting it as a future,
but I think they could right because of the benefits
we're already starting to see very quickly in terms of
customers using that system more. But you know, in you know,
all fairness, some of those systems are aaos with gas right,
so some of them are Google you know system that's
integrated into the car, but not all of them. You know,
companies like Mercedes is offering this technology and several other manufacturers.

Speaker 4 (07:34):
Do people still prefer to use and write out or
Apple Car Play though? Since those as you were saying,
you know, the voice recognition in those systems work so well,
and I think people get used to that and they
want to have the familiar interface. Is that something that
people aren't going to give up for easily.

Speaker 5 (07:51):
I don't think they're going to give it up easily,
but we are seeing an increase and I think that
was like a step in the right direction in what
in using the native system, So you know, we think
that's a step in the right direction. But will it
just ultimately replace you know, Apple Car Player, Android Auto,
I don't think so, not right now.

Speaker 2 (08:08):
Well, the automakers would love to have a fighting chance.

Speaker 5 (08:11):
They would like to have okay, royalties on this stuff.

Speaker 6 (08:15):
Yeah, I was looking just earlier this week at iPhone sales.
I mean, there are so many iPhones out there, and
there's so there are so many people from the interface.
There's no way in hell that the entire auto industry
combined can get anywhere even near that, So I I
just don't see that as being a possibility.

Speaker 4 (08:35):
Although it is surprising that some car companies have started
to remove it general motors while their evs no longer
offers it, which is an odd Yeah, exactly. I mean,
I have no idea how.

Speaker 2 (08:47):
Much that GM is doing a better job than most
in selling evs.

Speaker 5 (08:52):
But in some way well, but in some ways where
they have an advantage is they can use us to
control more than what Car Player Android Auto could right,
So they can do a lot more things like what
you know, like controlling the temperature right or you know.
Ultimately we can see more, you know, more long term

(09:13):
potential from the automaker using this for other applications in
the car and not just within infotainment, Car Play Ultra.
They're getting more. They're also getting more. I'm not saying
they're not you know it's a battle, right, but you
know it is a little bit it's a small win
for the automakers to have this.

Speaker 2 (09:34):
Right now, what is your research turned up in terms
of driver monitoring? People concerned about privacy and data and
that sort of thing.

Speaker 5 (09:42):
Yeah, so data privacy in general, if I can take
a step back from minute, you know, when we look
at any of those connected technologies, that is a big
concern when we ask you know what improvements are needed
for these type of technologies, whether it's your music, your phone,
you know, they're very concerned about the act that there
isn't great data privacy rules, right, and so that comes

(10:05):
up almost in the top three improvements when we ask
you know, what needs to be changed with these various technologies.
And when we look at direct driver monitoring in total, right,
there is very concern about you know, that camera watching
them and it's not truly recording it in the vehicle
right right, The automaker's not using a video of them,
you know. But I don't think customers truly understand that.

(10:27):
And what irritates them the most is really all the notifications, right,
you know, pay attention if you look out the window
for a second, you're getting a notification, right, and it's frustrating.

Speaker 2 (10:38):
Even had they're frustrated. I think Hondi is the one
that does it that if the car in front of you,
if you're stopping a stop lighter stop signing, the car
in front of you pulls away, you'll get a notice, Hey,
the car in front of you is pulling away. And
several like that.

Speaker 5 (10:51):
Yes, several automakers you know and on you know to
speak out for them, right, they're trying to make the
road safer, right, and several automaker offer that. But when
they connect direct driver monitoring to more than active driving assistance,
you're getting more notifications. So like when you have the
lead vehicle going, you get more complaints around the fact.
You know that they don't want all those notifications. They

(11:13):
don't want to be watched all the time.

Speaker 4 (11:15):
So as AI being used, I mean most of the
examples you gave, we're run infertainment climate things like that. Yeah,
is there any application for actual driving? I mean changing
the way the driving systems work, transmissions work, things like that,
just based on how you're driving the car.

Speaker 5 (11:29):
I think there's a lot more going on with AI
behind the scenes that the consumer doesn't know, and I'm
hoping the one area that eventually we'll see more as
the ads technologies, right, because the number one complaint regardless
of our technologies we track in TXI is that it
doesn't drive the way I do. So until you start
to better mimic that drivers behavior, you have a hard

(11:50):
time with acceptance and trust.

Speaker 2 (11:51):
And TXI, for those who don't know.

Speaker 7 (11:53):
I apologize. Is Tech Experience Index study.

Speaker 2 (11:57):
That's the JD Power.

Speaker 7 (11:59):
Yeah, that's where we met or these advanced texts every year.

Speaker 6 (12:01):
So one of the findings that I thought was a
bit surprising was sixty two percent of the people want
in car payments.

Speaker 3 (12:08):
What's that all about.

Speaker 5 (12:10):
Well, I think it's kind of a theme we're seeing,
whether it's the smart technologies or whether it's other technologies
that can make the drive experience more convenient. So, you know,
we saw things like in car payments, but what they
want is tap and go right. They don't want, you know,
twelve steps in order through the infotainment system in order
to pay for fuel or pay for parking. You know,

(12:30):
they want what they have on their phone. They want
it very simple and very fast, and so I think
there's a high desire for that type of technology, but
we haven't executed as an industry very well.

Speaker 3 (12:40):
Oh.

Speaker 2 (12:40):
I want to hear more because when you said car payments,
I'm thinking the monthly payment on the car.

Speaker 3 (12:44):
Who wants to pay.

Speaker 4 (12:45):
In their car to do that?

Speaker 5 (12:46):
No, I mean consumers are looking for things to make
that drive even simpler, whether it's paying for parking, paying
you know, for charging for fuel, you know, reserving parking,
and even car washes came up as a number five
in terms of what they want to use in car
payments for. But they don't want to go in the
infotainment system, you know, or in their phone and make

(13:08):
all these different, you know steps in order to complete
that purchase.

Speaker 7 (13:11):
They just want to tap and go.

Speaker 6 (13:13):
Just being at car washes. Now you car wash mode.
I've never even heard of car wash modes.

Speaker 3 (13:19):
Talk to us about that one.

Speaker 5 (13:20):
Car wash mode is another one, especially in EVS. It's
really another technology that customers want. But the problem is
a lot of people don't go to the car wash
every day, and so they don't remember where this feature
is housed in the infotainment system. But what it would
do is it will roll up the windows for you.
It might shut off the proximity sensor. You know it
might close, put it on neutral, put it in neutral. Right,

(13:42):
it does all this for you, and then when you
exit the car wash, it automatically as you get up
to speed, well, you know, put it back to where
it was. But what happens is they get in line
in the car wash and they panic because they can't
remember where in the infotainment system it is. And you know,
they feel like there's people behind them, and now there's
press Sure, you're right to get it done. And so
this one, too is just a good idea that's still

(14:04):
too complicated.

Speaker 7 (14:05):
Damn it.

Speaker 3 (14:05):
After roll the windows up.

Speaker 5 (14:07):
You have to do all the work yourself. But it's
kind of on that theme of making this simpler.

Speaker 2 (14:12):
No, this is fascinating. So you know, dream a little bit.
Where's this AI going? I mean, how much of your
car's AI will recognize you, your life, your lifestyle, the
fact that you're at a car wash or you're parking
or whatever. How all encompassing can this become.

Speaker 7 (14:29):
I think we're at the tip of the iceberg of
what it can do.

Speaker 2 (14:33):
And how you who's going to drive this? Is it
going to be the tech companies or is it going
to be the auto companies that figure out how to
do this.

Speaker 5 (14:42):
I think the auto companies are actually really embracing this
one a bit more so. As I said, I think
one of the biggest areas will be eight US once
we start to improve those technologies. I think, using AI
to learn that behavior, I think we're going to start
to see greater acceptance as we move to fully automated
self driving vehicles.

Speaker 2 (15:01):
Interesting that you say that, because I like to point
out that traffic fatalities and crashes today are higher than
they were before all this aid ASS technology came on board.
So if AI can make it more effective, maybe you
can finally start to produce the results we were looking for.

Speaker 7 (15:21):
Yeah, I would hope. So, I don't know.

Speaker 5 (15:23):
I'm not an engineer, right, but I'm hoping that that's
where we see it going.

Speaker 6 (15:27):
So, Kathy, one of the things that you guys sort
of posited is that going forward, that it won't be
so much a problem with things broken as much as
it will be a problem with say biometric identification or
getting into screens way back, you know, back there somewhere.

Speaker 3 (15:49):
Yeah, So, I mean, how will this all be sorted out?

Speaker 5 (15:53):
Do you think, well, I think what we're seeing right
now is, you know, the automakers are trying to replicate
some of your experien and from your smartphone. So we
see things like fingerprint reader or facial recognition, and that's
been really problematic. You know, when you use it on
your phone and how many times a day you go
into your phone, it works pretty well. But even your phone,
we've moved away from fingerprint reader, but in the car

(16:15):
we haven't, right, and we're using it to start the car,
to load your vehicle. You know, your profiles, right, so
all your settings in the vehicle load and it doesn't
work consistently. So customers are very very frustrated using a
technology that's redundant, right. You know, we have a lot
of ways, you know, we have some cars have facial
recognition to get in, some use fingerprint.

Speaker 7 (16:37):
Reader to start.

Speaker 5 (16:38):
We have other ways to do that that have worked
well for years and now we're adding this complicated you know,
it seems cool, right, this technology, but it doesn't work
for most people. You know the majority of the time
they have to try multiple times.

Speaker 4 (16:51):
What are those things that are cool for a couple
of minutes and it's like, well, why can't I just
push the button and start the car.

Speaker 5 (16:55):
I don't need to do this exactly. You don't need
to get your finger just right on the face reader.

Speaker 2 (17:00):
Yeah, that's been a big problem with the industry is
it's coming up with all this cool technology, they put
it into cars, which drives up the price, and then
they find out that consumers don't even use it or
rarely use it. What would be some of the guidelines
that you might give on what is what your research
has turned up that people really like.

Speaker 5 (17:19):
Well, I think one of our number one technologies this
year was actually a smart ignition, right, so you know,
just took out the step of actually having to push
it right to get the vehicle to start. But that
one was, you know, number one. Obviously that's on EVS
right now, but that was our number one technology and
that was filed followed by the blind spot camera. So

(17:40):
they love the blind spot camera and that one we
see with the as technologies. When you know, someone provides
a technology that supports a known issue like blind spot
when backing up or changing lanes, even if they find
it to be a bit problematic or a bit annoying,
they still rate it much higher because they can see
the value that technology is bringing.

Speaker 4 (18:03):
When you say this the auto start, I mean so
basically for the EVS, when you get in the car,
it's going you've put it in drive and you go, yeah,
as opposed to actually hitting a start button, right, And
that's what people really like.

Speaker 7 (18:14):
They do like it. And then when a lot of
it's like the panel.

Speaker 4 (18:20):
Who likes that. Yeah, I always found it a little unnerving.

Speaker 5 (18:28):
There are people who don't know, like, as I walk away,
is it really going to shut off? Right?

Speaker 7 (18:32):
Doubt?

Speaker 4 (18:32):
And then you go back to check the doors and
you realize that touching the door to check the door,
you've unlocked the door.

Speaker 3 (18:38):
So it started this endless loop.

Speaker 2 (18:42):
No, it's something that I think, you know, we've just
got to get used to. But I'm sure we've all
experienced that. You know, you pull in with the EV
test car, you put it in park, you get out
of the vehicle, and then five minutes later you're peeking
outside to see if it really turned off.

Speaker 7 (18:58):
Yep, that's for sure.

Speaker 6 (18:59):
So one of the things that I was fascinated with
with your study is you know, you all the carmakers
are included in it, and you have Tesla and Rivian
that are like unofficial, but they score really high. I mean,
Tesla is eight seven three out of one thousand, and
Rivian seven thirty out of a thousand, and then the

(19:21):
one that you can count because you have access to
all their information is Genesis, which is at five point
thirty eight. So what is it about those two vehicles
that sets them head and shoulders above the rest of
the industry.

Speaker 5 (19:36):
It's really about the advanced technologies they're offering. So they're
offering a lot of technologies and in our study, not
only have to offer it, but your customers have to
be using it. So you know their customers, you know
we're Tesla and Rivion tend to use a lot more
of that advanced technology, is John was mentioning, and there's
a lot of technology that's going on cars, but customers
aren't necessarily using all of it or even knowing they

(19:57):
have some of these technologies. So you know, their their
customers tend to embrace that technology a lot more.

Speaker 2 (20:05):
I wonder if it's too the underlying underlying electronic architecture
that they've got. I mean, Tesla and Rivian both have
central centralizedonal computing, and you know, none of the legacies
have caught up to that yet, and so I think

(20:25):
that their systems i e. Tesla's and Rivian's much more seamless,
much more right on the spot. I mean, you know,
it reacts so much faster than the legacy systems.

Speaker 3 (20:37):
Oh, I've got to say that.

Speaker 6 (20:38):
In first place is Genesis, and I think that they
do a fantastic job.

Speaker 4 (20:42):
Oh they do definitely.

Speaker 6 (20:43):
I mean they're screens and just layout. I find that
to be wonderful.

Speaker 4 (20:50):
It is interesting though that Rivian and Tesla score high
because their type of owner is more is embracing that
type of technology more. It sounds like where I'd be
curious if those type of buyers were in other cars,
but they liked the technology as much.

Speaker 5 (21:07):
Yeah, it's hard to say because they're all designed differently.
But you know, like Genesis, this is a fifth year
in a row they've won, so you know, they have
really set out to be an advanced technology you know, manufacturer,
and they're offering a lot of technology on their vehicle.
And even Hyundai as well on the mass market side.
Remember years ago we didn't see these advanced technologies going

(21:28):
on mass market, but Hyundai even launches some of them
on their mass market vehicles, so they really changed.

Speaker 6 (21:34):
And it's in Hyundai's in first place in the mass
market category.

Speaker 7 (21:38):
They are. This is their six year in arrest, six
year in argo.

Speaker 2 (21:41):
So Gary had enumerated some of the things that are
so good about Genesis and Hondai. What else would you add?
Why what sets them apart?

Speaker 5 (21:51):
Well, I just think it's the number of different technologies
are offering to customers. So it's not just, you know,
not in just one category. It's not just driver as system.
It's convenience features.

Speaker 4 (22:01):
You know.

Speaker 5 (22:02):
They're out front with a lot of these different technologies.
You know, they're working with in vehicle payment systems. They
have the car wash mode system, you know, so they
have some of the smart technologies. So they're really in
the forefront of all of these advanced technologies.

Speaker 6 (22:18):
I may have to start washing test cars, Yeah, I'll
find I mean I did.

Speaker 4 (22:25):
Is the only one I've seen with the car wash mode,
and I think it turns off the automatic wipers and
it sets up the emergency braking so it doesn't slam
on the brakes when the brush is coming up at
you and things like that. But it's an interesting idea.

Speaker 5 (22:40):
Definitely, as we put more of these technologies on like that, right,
you don't want the brakes.

Speaker 2 (22:43):
Being Yeah, exactly, Kathy. I was interested to see that
your research turned up that drivers don't want to share
their location. They don't want to share their destination or
they're driving habits or their voice commands. But when it
comes to location and destination, I mean.

Speaker 7 (23:01):
They do it all day long.

Speaker 2 (23:05):
Your phone knows where you are, your phone knows where
you've been, your phone knows where.

Speaker 3 (23:08):
Your ways work.

Speaker 4 (23:09):
So this is how Google mapps.

Speaker 2 (23:11):
So I mean, and I've run into this before on
other things. Yeah, people don't seem to know what their
phone is doing, right, and they don't want their car
to do it. Why is that?

Speaker 5 (23:23):
It's definitely a different mindset. I don't think they know
how many of their apps are actually tracking them all
of the time, right, if they didn't go in and
shut off that location services, or maybe the app won't
work without it, you know.

Speaker 7 (23:35):
But when you.

Speaker 5 (23:36):
Specifically ask them about that in their vehicle, they don't
want that, right. They're willing to you know, share you know,
their speed or you know some of the other you know,
not really important data, right, But when it comes to
any of their personal stuff, it drops like a rock
in terms of wanting to share it.

Speaker 2 (23:53):
And I'll tell you why this came up recently. So
states are looking at gasoline tax is going down. Part
of that is driven by electric cars. The other fact
is that all vehicles are just getting more efficient and
using less fuel, hybrid's, p hubs, whatever, and so states
have been talking about instead of a gasoline tax, they'll

(24:16):
have a mile tax, so they'll track how many miles
your car goes in the world, and it can be
anonymized and all that. But some people are going ballistic
over this. How dare they try to track us? And
I'm thinking, you got a phone in your pocket.

Speaker 7 (24:32):
They can track doing all of that for sure.

Speaker 4 (24:35):
And you just got in your car and logged in
Android Auto or Apple car Play. It's doing it right
there in your car.

Speaker 3 (24:41):
It is.

Speaker 5 (24:42):
People have no idea how many I mean, if you
search on how many things they can actually pull out
of the car from your phone and other information, they
would be shocked how much information look.

Speaker 2 (24:53):
Or the car itself. Every car today has a digital radio.
The car companies know when you're listening to the RADI
they know which stations you're listening to. I assume they're
monetizing all that data.

Speaker 3 (25:05):
You know.

Speaker 2 (25:06):
One of the things that they're studying now is do
people really use paddle shifters? They can tell when you're
using their paddle shifters or not. So yeah, I mean
just about anything that you use in your car today
can be tracked.

Speaker 7 (25:18):
Right, I just don't think people realize it.

Speaker 4 (25:20):
That's right.

Speaker 5 (25:22):
They focused on the direct driver monitoring camera, but it's
really a small piece of everything that's being tracked in
the car, right.

Speaker 2 (25:30):
You know, well, was it this year last year? I
think it was last year. GM got nailed because on
Star was providing all kinds of data to third parties
who were monetizing that, and then some drivers found out
their insurance rates were going up because that data was
showing how they were driving, and GM got sued for it.

Speaker 3 (25:50):
What advice would you give.

Speaker 2 (25:51):
Car companies in how they get customers to opt in
or opt out or however they handle this stuff.

Speaker 5 (25:59):
I mean, ask an exact question in our study, like
would you prefer if you've given a choice, would you
rather be asked to opt in instead of trying to
find out how to opt out?

Speaker 7 (26:09):
And of course that.

Speaker 5 (26:10):
Score is really high, you know, that's what their profit
would be is let me decide if I wanted to
do that, not try to figure out how to opt
out of whatever you're trying to.

Speaker 3 (26:19):
Collect after you read three hundred pages on your screen.

Speaker 2 (26:22):
Exactly, Yes, And you know most of it is you know,
when you're buying a new car and you're going through
all these forms, whether on paper or electronically, and you're
just signing you want to get the hell out of
that dealership and drive your brand new car. You'll sign
anything at that point, right, And so you've signed away
your life for them to capture all this data. And
that's why I like what you're saying and what you're finding.

(26:44):
If people are saying no, no, no, no, let me
opt in on my own.

Speaker 4 (26:49):
Accord, of course, how much of all that captured data
is making the systems better and scoring higher because they
had all that data to read from.

Speaker 7 (27:00):
The system to improve that user experience.

Speaker 4 (27:02):
Exactly. So you're improving the user experience based on the
data that you don't want them to have.

Speaker 2 (27:07):
Yeah, no, I didn't have yours, Perry.

Speaker 4 (27:09):
Yeah, exactly, I'll take care of it all for everybody
you got.

Speaker 5 (27:14):
I think one of the interesting things we found is
that forty percent of consumers said that, you know, if
they didn't think that automaker's data protection policy was you know,
strong enough to truly you know, in their best interest, right,
they consider shopping another brand.

Speaker 7 (27:29):
The problem with that is, I don't think.

Speaker 5 (27:31):
Most people know what the data protection policy is, so
you know, they can state that, but you know, I
couldn't ask one person to describe to me what is
that data.

Speaker 6 (27:40):
Protection in how one car company differs from the others, right, right, So.

Speaker 2 (27:45):
It's all in legal eese anyway, I'm sure, right, So
who's going to hire a lawyer to say, go through
all these systems and tell me which one I should
go with?

Speaker 5 (27:53):
And what are you going to do in the end
if you don't like it? Right, because someone else is
going to be doing the same thing.

Speaker 4 (27:58):
That's right.

Speaker 3 (28:00):
So I've got another thing that struck me.

Speaker 6 (28:03):
We're talking about all those advanced technology and I see
that the land Rover Defender is the premium model receiving
the Comfort and Convenience Awards for its advanced air purification system.

Speaker 5 (28:18):
This is not your HEPA filter, right, So it has
to be some for air advanced air purification system. It
has to be in the infotainment system where there's some
type of display.

Speaker 7 (28:28):
So, you know, as things have changed.

Speaker 5 (28:31):
Since COVID, right, you know, that's become more of a
hot button for customers, and so having that type of
air purification and you know, having the system there, you
know a lot of customers will say they don't notice
the difference. You know, some manufacturers allow you to clean
the air before you get in the car through your app. Now,
I would think when you open the door, the air exchanges, right,

(28:52):
But they seem to like that. But the one thing
they really want is like this boost factor. Like if
I'm sitting next to a truck that has a bad exhaust,
I want to be able to hit a button and.

Speaker 7 (29:04):
Instantly clean my air and make it faster and noticeable.

Speaker 5 (29:08):
And that's one thing that's lacking from this technology, except.

Speaker 2 (29:11):
That with AI, it should do it automatic. It should
should know it that's right.

Speaker 6 (29:17):
But then it might start hallucinating and it might just start,
you know, doing all kinds of things to your hair.

Speaker 3 (29:22):
That's right, open the pod door.

Speaker 2 (29:25):
Look, we're gonna have to wrap the segment up. But
Kathy Risk, thank you so much for coming on talking
about all this AI stuff. I agree with you. I
think we're just at the very beginning. This stuff is
going to get crazy for sure.

Speaker 7 (29:37):
Well, thank you for having me. I've enjoyed it.

Speaker 2 (29:39):
We're good. We're gonna give a shout out to our sponsors.
We'll be back in just a jiffy.

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Speaker 1 (30:28):
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Speaker 7 (30:38):
Let's do something big together.

Speaker 2 (30:43):
All right, we're back. This is where we get into
the news of the week. What's been going on this week,
and you may know the headlines. Now we want to
get behind that and get our insights and opinions of
what's been going on.

Speaker 3 (30:55):
You know, we haven't talked about Tessa for a long time.

Speaker 4 (31:00):
Almost five minutes.

Speaker 3 (31:00):
Yeah, I was surprised that.

Speaker 6 (31:05):
In the third quarter it's sold five thousand, three hundred
and eighty five cyber trucks, really a sixty three percent
decrease from the same period last year, And I thought,
oh my god, this is this is this is the
most horrible number I've seen a long time. And then
I looked at the number of electric motorcycles that Harley

(31:26):
through its live Wire operations sold in the first half.

Speaker 3 (31:31):
So guess how many motorcycles.

Speaker 6 (31:33):
Think that this is a this is a going business
that has models and I mean they're very cool.

Speaker 4 (31:39):
Look, I'm guessing less than the number of Tesla trucks,
less than over two thousand. What do you think?

Speaker 2 (31:45):
I have no idea, but yeah, I mean think of
the customer. Do Harley customers pine for a quiet motorcycle?
Hell no, They'll put on loud mufflers.

Speaker 3 (31:58):
This is why it's called live wire.

Speaker 6 (31:59):
So it's like you got hardly knowledge mixed with advanced.

Speaker 2 (32:04):
Technop you're not going to buy one. First half eighty
eight eighty eight, Wow.

Speaker 3 (32:10):
For a whole business.

Speaker 4 (32:12):
How many did that business? But I'm curious as to
even how many did they even expect to sell. I mean,
I can't imagine the.

Speaker 2 (32:18):
Problem much more than eighty eight. Whatever they're for is
what they expected more?

Speaker 6 (32:23):
Yes, but okay, So so then my question to you guys, though,
is is that, Okay, if we have a ginormous truck
on the one hand, and then we have a two
wheel vehicle on the other hand, neither of which is
doing very well, what does this say about the genuine
market for.

Speaker 2 (32:45):
These types of I don't even think that's the question.
I think what does that say about the product development
process that thought that buyer was going to buy an
electric whatever? And so I would argue if you look
at the forward lightning, if you look at the Chevry Clorado,
the Ram electric, which is never going to happen, now,
the cyber truck, those buyers pick up hardcore full size

(33:08):
pickup buyers have zero interest in electric pickups. All the
people who are buying them, they've never owned a pickup
in their lives. And when you look at the Harley
buyer in the Harley brand, even though it's live wire,
I get all that those buyers don't want an electric one.
Now that's that buyer. If you find the right segments

(33:30):
in whether it's two wheel or four wheel, you're going
to find people who very much want on electric. And
that's why I say, especially the full size electric pickups,
the biggest product planning fiasco in the history of the industry.

Speaker 4 (33:45):
I mean, I think that they certainly have, you know,
some use and obviously, but they don't work if you're
going to do lots of towing. They don't work if
you're going to be hauling lots. If you're going to
use it as a full size pickup truck. You know,
it's I know.

Speaker 2 (34:00):
Okay, so full sliced pickup truck.

Speaker 4 (34:02):
So but it but it works. It's a family I mean.
So I'll just use my own example. I have a
full sized pickup truck because I toe occasionally. Most of
the time, it's a daily driver and it just drives around.
So we have a vehicle that's you know, we use
its abilities for five percent, but we bought the hybrid
so that we could get better fuel economy if you

(34:24):
had an electric truck. And so that brings you to
the new RAM, the rev U, the uh EV right
the EREV.

Speaker 2 (34:33):
Which has now been pushed back yet another year, right,
and it's going to go into the Grand Wagoneer.

Speaker 4 (34:37):
I just gonna say the Grand Wagoneer will be the
first one out with it. And so basically this is
the extended range electric vehicle, so dual motor, full electric vehicle,
but an engine underneath the hood to generate power so
you never run out of juice. They say about with
the Grand Wagoneer anyway, about one hundred and fifty miles
of electric only. So for most cases you're driving electric

(34:59):
car all the time, you need to go somewhere, you
can put gas in it. You drive around and you
have the gas engine. So that's you know, for a
pickup truck to have that if they can pull it off,
because you know they've pushed it off so many times now,
that seems like the ultimate solution, you know, for a
vehicle that you can drive around every day when as
an electric but you can still have you know, the

(35:20):
capability to toe to do all the big chuck things
that people need to do with trucks.

Speaker 3 (35:24):
All right, John, are we ever going to see it?

Speaker 2 (35:27):
Yeah, we'll see it. But will it sell? Is the question?
And I think a lot of that's going to depend
on how they price it. I'm just going to say,
and you know, so if I'm a typical suv owner,
full sized suv like Grandwagon Air, what's the advantage for
me if especially I got to pay a lot more
U or the one I've got just does everything I want? Fine?

(35:51):
Why why should I pay more for this technology? So
there's got to be more to it than that. So
if there's bi directional charging and you know, I can
plug it into my house if the power goes out,
now you're starting to talk to me about other things, that, yeah,
I'll start to consider it. But if it's a whopping
big premium over the ICE version, it's d o A.

Speaker 6 (36:14):
So so do you think that the Stilantis announcement that
is going to go into.

Speaker 3 (36:19):
The Grand wagonear.

Speaker 6 (36:22):
Very premium vehicle is indicative of what the pricing will be.

Speaker 2 (36:27):
I think it's indicative that they woke up to the
fact that full size pickup buyers don't want this technology
and not the AEV plug in. They're not interested maybe someday,
but not today. And so when you look at who's
buying Grand wagoneers, very high income people you know, probably
fit the profile of somebody who's more interested in a

(36:49):
plug in. My guess is that's why they've they've pushed
the ram e Rev way back and are going to
launch this technology with the Grand Wagon Air.

Speaker 4 (37:00):
I think you're right though, I mean that, And they
have said that it will be available at every trim
level that the new engine, you know, the extended range engine,
so theoretically there could be you know, relatively affordable, but
they haven't announced the pricing of what the.

Speaker 2 (37:16):
What the what the gremium is going to be? Yeah,
because right, but they're putting it.

Speaker 6 (37:20):
They're putting it in the putting it in the top
Wagoneer rather than in the Grand Cherokee lay so, which.

Speaker 4 (37:25):
And it makes sense I think at least when you're
first launching it, if you know, if you someday have
hopes to putting it in other vehicles.

Speaker 2 (37:32):
Also, when you get into an ebrev, there's a packaging issue, right,
You're going to have a battery in the floor, You're
going to have an engine you're going to have develop
into right Yeah, yeah, John saying it's got to go
into Uh. They the truck and the Grand Wagoner share
the same platform. So that right, Speaking of Stilantes, what

(37:55):
did you guys make of this thirteen billion dollar investment
and the United States bringing gs thousand jobs five thousand jobs.

Speaker 6 (38:07):
What do you think, Gary, I think it's great for
Michigan and Ohio and Illinois and Indiana. I think it's
big money being spent in manufacturing care.

Speaker 3 (38:18):
I think that it's the right move. I want.

Speaker 6 (38:23):
You know, they're saying is over four years, correct that
the money is going to be spent, And five billion
of that thirteen billion over four years was already announced early.

Speaker 2 (38:32):
Right, they've repackaged it into the lake and it includes
the money that the suppliers are going to have to
put into boosting up all this manufacturing.

Speaker 3 (38:40):
Right.

Speaker 6 (38:40):
So so a fantastic news, but b As you say,
you've got to you've got to look at the fine
print and see where this is going to be going.
You know, Stilantis North America really needs some help in
terms of its product portfolio. I mean we you know,
we see Chrysler with what one vehicle right the PACIFICA.

Speaker 3 (39:04):
We see that jeep has been you know for the
last year.

Speaker 6 (39:07):
So, I mean things are getting better now and the
Cherokee will come out and it'll do even better than that.

Speaker 3 (39:11):
But still, I mean it needs help. You know, what's
what's going on with the Dodge brand.

Speaker 6 (39:18):
Now. Part of this money will be spent for a
new Durango, which I'm sure people would like to see,
but that should be money well spent, and it's money
that they need to spend.

Speaker 2 (39:29):
Yeah, it is. You know, before everything collapsed under Taveres,
Chrysler North America i'll call it Chrysler Stilantis. North America
accounted for sixty percent of the company's profits. So here's
Antonio Falosa, the new CEO, going, oh my god, I've
got a basket case on my hands. Where do I prioritize?

(39:51):
And he looks at Fiat and he goes, man, Fiat,
I don't know. It doesn't make any money, and Pougeau
is profitable, but it makes some money. If I gets
you know, North America turned around, I could make real money.
And so he's prioritizing that to the detriment of some
of his other plants. So Teluca used to make the compass.

(40:15):
I think if I've got that right, and I want
to say Melfi in Italy made it as well, and
or the Cherokee was made at Melfi and they were
tooling the Canadian Brampton plant to make the compass. He's
pulling that all out of Mexico, Canada and Italy and
putting it in Illinois. I mean, to me, that's an

(40:36):
extraordinary move. It's great for the Illinois plant, but it's
going to hurt those other operations, taking you know, product
away from the volume away from them. But to me,
it shows just how much importance he's putting on the
US market. And of course it's all driven by Trump's tariffs, right,
so he's packaging it up there. They're they're taking we

(40:58):
announced that five billion before it doesn't matter, put it
into the new announcement and and put it out there.
Because that's how you deal with the Trump administration. You go,
look how much I'm doing for America.

Speaker 6 (41:08):
Well, I mean, to be fair, I mean, other companies
have done the very same thing. I mean, oh yeah, yeah, yeah,
Alt and you know, absolutely under Biden.

Speaker 3 (41:16):
And then they said, oh but you're.

Speaker 4 (41:18):
Look again money again. I mean, it seems like in
the long run, that's it's the logical thing to do,
like you said, for the you know, the tariffs are
gonna you know, are so unknown. This is going to
at least alleviate some of that issue. And you said,
it's more jobs. And even if it is money that's
being you know, it's re rebeing recent again whatever, it's

(41:40):
still money being spent billion exactly. And to your point,
I think it's you know, if they can turn around
the North American market and get some new product, I
think it's a good thing for scientis.

Speaker 1 (41:50):
Yeah.

Speaker 3 (41:50):
Okay, So so here's my question you guys. Okay, so
you know, talk about thirteen billion dollars.

Speaker 6 (41:54):
Okay, Now we heard earlier this week General Motors one
point six billion dollars, right offs, right, Okay, so this
is money that they're not going to have essentially in
one way or another. Okay, But the question becomes this,
as we're seeing the probable decline of electric vehicles in

(42:20):
the United States, stranded capital is a result of that
because there's gonna be lots of battery plants and assembly plants.
I mean what they announced Factory zero is going to
be be down till the beginning of the year, I believe.
I mean, it's just like, okay, where does this money
come from?

Speaker 2 (42:40):
Well, it's it's the money's been spent. Okay, the money
has already been spent, and now they've realized, you know,
make up a number. You've got factory zero, I'll say
it's probably capable of making two hundred and fifty thousand
vehicles a year. They're coming nowhere close to that. They
had they were going to have orient build electric. Now

(43:02):
they're converting it to ice trucks. So they've got stranded
capital which is sitting on the books as an asset.
It's no longer an asset. It is unproductive, so they
have to write it off. So that reduces their assets,
which in turn reduces shareholder equity, which CEOs and other

(43:24):
top execs hate to see happen because part of their
bonus is tied to growing shareholder equity. So when it's shrinks,
these execs are going to lose part of their bonus.

Speaker 3 (43:36):
But I mean, my question is is that okay?

Speaker 6 (43:39):
For a company like Stilentis, which has not been making
a whole lot of money these past several years, where does.

Speaker 3 (43:45):
This come from?

Speaker 6 (43:47):
I mean, you sell products and you get money, right, right,
So we don't sell products, you don't get money, right.

Speaker 4 (43:52):
So did they have this money just sitting around and
it's like, oh, let's spend it now.

Speaker 2 (43:56):
No, no, no, So when you write down an asset, the
money has already been spent. What you're now saying is
this one point six billion dollars that we declared that
we have in assets. It's no longer there. They don't
have to shell out cash. This is a none cash.

Speaker 4 (44:13):
No no no.

Speaker 6 (44:13):
For they're going to be spending money in Warren truck,
They're going to be spending money at the partraing plants
in Cocomoa. They're going to be spending money at the
Toledo assembly cars.

Speaker 2 (44:21):
We're going to borrow it, jeep, So they're going to
borrow It's I mean, you know, yeah. Normally, you know,
you generate positive cash flow and you fund your operations
out of the cash that is extra we'll call it.
And in Stalantis's case, it's been running negative cash flow.
So the only way to do it is either you

(44:42):
sell more stock and who wants to go out and
buy Stialanta stock right now? Or you go to the banks,
or you issue bonds, or you go to the credit
markets and raise capital that way, and that's what they're
going to have to do.

Speaker 4 (44:54):
It's been ready to make money.

Speaker 6 (44:56):
So at the end of the day, when all these
products come out, what will this do to the price which,
as we just saw this week, we now broke fifty
grand in terms of the average transaction price for your vehicle.

Speaker 3 (45:06):
Because it was on the local news this morning, it's.

Speaker 4 (45:08):
A shot, it's a big deal.

Speaker 2 (45:09):
It's a big number. You know, people look at that
and they go, man, I can't afford a new car.

Speaker 4 (45:13):
It doesn't seem that long ago that it was in
the thirties. I mean, it seems that it climbed quickly.

Speaker 2 (45:20):
It did, you know, COVID and the chip shortage, you know,
pass it the price dramatically. Okay, here's another topic period.
I'm going to throw it to you. Toyota announcing that
it's going to come out with a new luxury brand,
the Century, and position it above Lexus.

Speaker 4 (45:38):
Had you heard this, I heard little bits and pieces
of it. I didn't realize that they were putting Century
above Lexus.

Speaker 2 (45:43):
Above Lexus. What do you think about that?

Speaker 4 (45:45):
That's I don't know that there's enough market for a
higher level of luxury car. I mean, as it is,
you know, you look at the numbers, the sales numbers,
for Lexus versus Toyota, and it's you know, it's a
tiny fraction of what Toyota sells, and now they're going
to get a tiny refraction. I don't I don't really
understand the value and what's what's going to make those
cars more luxurious than is it going to be all

(46:06):
based on experience? Because that's the new The new luxury
is that you know, you get to go and have
you know, first class experience when you go to the
special Century dealership as opposed to I don't know. I
don't really see where there's a win there.

Speaker 6 (46:22):
So just to put a finer point on your difference between.

Speaker 3 (46:27):
Toyota and Lexus. So through the third quarter, there were.

Speaker 6 (46:33):
One point six million Toyota sold in the US in
the US and there are two hundred and seventy thousand
lex I sold.

Speaker 4 (46:40):
Right, So I was Century going to be a smaller
number than that? And why are you going to develop
the whole?

Speaker 3 (46:45):
I think they're competing with Rolls Royce Bentley. My question
to you, Jai is what will that be vis A v.
The Celastic?

Speaker 2 (46:56):
Yeah, well, I think they're looking at the Cadillacs, Elastick
and go wait a minute, we can do that. And
you know GM has set up the Celastic they only
make one or two a day. I mean, this is
extraordinary low volume. I think Toyota is looking at the Celestic,
They're looking at Rolls Royce and Bentley, and they're looking

(47:16):
at the ever growing amount of very high wealth people
in the world and realizing, you know, we ought to
play in that and no, we're not going to sell
a lot of cars. I mean, what does Rolls Royce
sell every year? Five six thousand cars if something like that,
and they have a tidy little business built around five
or six thousand cars. And so I think what Toyota

(47:40):
is doing is saying, look, we're the biggest car company
in the world, we're the best car company in the world.
We can play in that segment too, and we're not
going to go in and lose our ass on it.
We're not going to make a lot of money, but
we are going to put our flag on the top
of the mountain saying we can be as good as
anybody else out there in the world.

Speaker 4 (48:00):
I think the problem is that when you get to
that level, it's so much about the name and the
mark and everything else. I mean, Rolls, Royce Bentley. You know,
Cadillac doesn't play in that field. I mean, even though
they have the Celestiq, it's celestic, it's way.

Speaker 3 (48:17):
Well, we would hold it together here.

Speaker 4 (48:20):
They're the I hate to say it, but they call
them the cars. Yeah right, but the but but I
mean sure Crown is known in Japan and some other
places and some of the places. But yeah, Entry Centry. Yeah, sorry,
I saw the crowd, the crowd, but yeah, I mean

(48:40):
it's it's just not going to have I don't see
that they're gonna garner that many. And I guess maybe
they don't need that many, But I don't see Rolls
Royce is going to look, oh my god, the big company.

Speaker 3 (48:52):
I would, I would. I would disagree with you on
that one.

Speaker 6 (48:55):
I mean it just seems to me. Okay, So going
back to Lexus and you didn't live here then, but
you did live here then when when Lexus was announced
at the Detroit Auto Show, and you remember they were
like in a basement room in Kobol Hall.

Speaker 3 (49:12):
There were no windows.

Speaker 6 (49:13):
I mean, it was a it was just you can't
imagine that being associated with Lexus. And I remember, like
Detroit's like nothing they're not gonna they're not gonna be
able to compete with us.

Speaker 3 (49:22):
You know, they don't know how to do this. And
and what happened, you know, within a matter of years
right at the top of the heap.

Speaker 6 (49:30):
I got to believe the guys in Goodwood are like,
oh my god, what's what's going to happen with Toyota's
manufacturing prowess coming in.

Speaker 2 (49:39):
The only question I have is why you would call
it a sun tree, you know, because the Celestic, That's
how I say. It is all about burnishing the Cadillac brand.
It's all about trying to get Cadillac back to where
it was in a taday the standard of the world,
back where uh, you can drive up to your country

(50:01):
club in a Cadillac and all the Mercedes and BMW
and Audi people look at you and understand why you
bought it. They don't ask you, oh, nice car, why
did you buy a Cadillac. They're trying to get that
question out of the discussion altogether. So you put out
this halo car, the Celestic, handbuilt four hundred thousand dollars,
blah blah blah. I think Toyota wants to do the

(50:24):
same thing with the century. But why would you create
a separate brand. Why to me, there should be some
connection with Lexus. So you even bring up the prestige
of the Lexus brand better you too.

Speaker 6 (50:39):
Maybe that I think Lexus is doing fine, and I
think that they're at the point where Akio is just going,
you know.

Speaker 2 (50:43):
What, there's more or no, we can show the world.

Speaker 6 (50:48):
We can do this too, and you know, and if
that's the goal then and if it doesn't work out,
we'll sell more cameras.

Speaker 4 (50:58):
And that's and that's probably. I mean, you're right, Toyota
has the ability to do something like that where a
smaller company might not.

Speaker 6 (51:06):
And so yeah, I mean, I mean their knowledge of
carbon fiber makes what Catli can do. I mean, they're here,
catleax here. I mean, let's let's remember that Toyota started
as a loom company and making fabric and carbon fiber
is basically fabric in resin. Those guys know this stuff
just cold, and so I think they can do amazing

(51:29):
manufacturing stuff. And they're like, nah, we'll make we'll make
some Yeah and uh sure, Okay.

Speaker 2 (51:36):
Another topic this week, which is hitting the industry gary
China really clamping down on the export of rare earth
minerals and magnets and motors.

Speaker 6 (51:49):
Well, okay, I think this is this is largely a
political game, and so it becomes, you know, where you
come down on the tariff thing. I think that there
are some people, perhaps in the administration that are surprised
that China can say like, oh, we got stuff too

(52:11):
that you want, and if you're going to put these
big tariffs on us, then we can't.

Speaker 3 (52:15):
Play that game too.

Speaker 6 (52:16):
And farmers are finding this out right now. Who aren't
selling their soybeans to China?

Speaker 3 (52:22):
Right?

Speaker 6 (52:23):
I mean it's like costing billions of dollars, okay, because
China said, well, we'll just come from South America instead.

Speaker 3 (52:30):
Yeah, okay. And so.

Speaker 6 (52:33):
If we're going to have good relationships with countries that are,
you know, economic powers, and let's face it, China is
an economic power and they happen to have like, what
is it, ninety percent of the processing capability.

Speaker 3 (52:47):
If not for rare earth materials.

Speaker 6 (52:49):
I mean, and we need this stuff. Well don't we
have to play nice?

Speaker 4 (52:54):
Theoretically? Yeah? And I think you're right. I mean, this
is this is what it is today, and it can
I know, But what do you do if.

Speaker 2 (53:02):
You're an automaker or a supplier that needs this stuff now.
And you know, earlier the summer when China first started this,
Ford had to shut down in Chicago assembly plant for
a couple of weeks because they they couldn't put electric
motors in there. They didn't have the band.

Speaker 6 (53:16):
And they use these magnus for all kinds of stuff
in the cars. I mean, it's just like you know,
every day cars, not just electric vehicles.

Speaker 2 (53:23):
I mean, it's sure in the motors that move your mirrors,
that move your seats, that blow the fan and the HVAC,
and they're in everything. I think this is going to
be potentially the next crisis for the industry this year.

Speaker 6 (53:37):
Well, so I happen to notice, and maybe you guys
saw this at Automotive News had today and it looked
into it a little more that there is a Dutch
based semiconductor company called Experia, and apparently the American government
it said to the Netherlands government that company is owned

(53:59):
by Kinda and you basically need to take control of
this company because we're worried about you know, privacy issues
in technology exchange and things like that. Okay, so now
you have a government seizing a chip company, right, How
do the guys in China feel about that?

Speaker 3 (54:21):
Probably not?

Speaker 6 (54:22):
Probably not very good, right, And and so I looked
into it, and so, you know, it was it was
a Dutch founded company and a few years ago went
up for sale and the Chinese company bought it. And
so you know, the technology is you know, arguably Dutch.

Speaker 3 (54:40):
But you know, owns the key who owns the keys
to the building.

Speaker 6 (54:45):
And I think that is going to become a big
problem because these are these are chips that are used
for cars in all kinds of applications, you know, not
you know, we're not talking in video level things.

Speaker 3 (54:56):
We're just talking again regular.

Speaker 2 (54:59):
Well we're probably talking in video level two. Look, the
Americans dominate advanced chip design, the Dutch dominate the equipment
to make it, and the Taiwanese make it, and that
that's the whole you know, trilogy of chip production. And
of course, I mean, I'm sure the Chinese leapt at

(55:21):
the opportunity to buy one of these Dutch manufacturing companies.
And so yeah, I think you're going to see a
lot of this happening. But you know, bringing it back
to the auto industry, the crisis is here right now,
over getting these rare earth minerals to make the magnets,
or get the magnets, or get motors with the magnets

(55:43):
in them.

Speaker 4 (55:45):
I mean, if there's no other no other solutions, I mean,
no other locations to find them.

Speaker 2 (55:52):
Well, one thing that's that's interesting is General General Motors
very astutely four years ago started investing in US minds
and US processing centers for rare earth minerals to make magnets. So,
based on what I'm reading here, GM, by the end

(56:12):
of next year will have fully integrated either US or
ally sourced magnets. And it's the only automaker in the
world that's done this. So GM could be in the
catbird seat here if China is really clamping down on
this stuff.

Speaker 4 (56:33):
Be interesting to see how long it lasts.

Speaker 2 (56:35):
Well, there's another interesting thing too. There's a Canadian company
called Cyclic Materials that recycles all kinds of things to
get the rare earth minerals out of them.

Speaker 3 (56:47):
We're not doing so well with Canada right now, I
should point that.

Speaker 6 (56:51):
Yeah, that's right then, since Stilantis doesn't it product.

Speaker 4 (56:56):
Yeah, they're not very happy about that.

Speaker 2 (56:59):
I know they're not, So maybe one area where the
Trump administration will play nice with Canada because it may
have a source with all these recycled materials to be
able to get it anyway.

Speaker 3 (57:10):
Right, Yeah, we got nine for one more time. All right?
So S and P Global Ratings. I read this today.

Speaker 6 (57:16):
They came out with a number for what they're predicting
next year to be.

Speaker 4 (57:20):
Okay, they've upped.

Speaker 3 (57:21):
With this year.

Speaker 2 (57:21):
You mean for car sales, car sales?

Speaker 6 (57:23):
Okay, so this is you know, US light vehicle sales.
So they upped it for twenty twenty five. They uped
it to sixteen one.

Speaker 3 (57:29):
Okay.

Speaker 4 (57:30):
Where were you last year?

Speaker 3 (57:32):
Last year was fifteen eight? Fifteen eight okay, okay, so
what do you think twenty six will be?

Speaker 6 (57:42):
Okay, So they're they're predicting we'll have sixteen one this year.
It was fifteen eight last year.

Speaker 3 (57:52):
What does it go to next year?

Speaker 2 (57:54):
I would say fifteen eight. That's that's where I'm I was.

Speaker 4 (57:58):
Gonna say it's going to go down fifteen nine or
sixteen fifteen to three?

Speaker 3 (58:03):
Really? Oh? WHOA?

Speaker 4 (58:05):
What are they based them? WHOA say?

Speaker 3 (58:07):
They're smart people?

Speaker 4 (58:08):
Number one? In fact, they're smart people.

Speaker 2 (58:10):
We've had a lot of pull forward this year. You know,
everybody raced out to buy the parraffs, and then they
raced out to buy an Evy before that went away.
And the automakers so far have largely not passed along
the cost of the tariffs.

Speaker 6 (58:25):
All right, So so here are here are factors that
actually they're smart people, and then they have factors too.

Speaker 4 (58:31):
So okay, I figured, you know, the smart people came
up with something yeah, scood.

Speaker 6 (58:36):
Okay, narrowing cushions that households to absorb back to back
my macroeconomic shocks of high vehicle prices, ongoing inflation, rising unemployment,
and high monthly payments for auto loans and leases.

Speaker 3 (58:49):
Right, So basically the consumers.

Speaker 4 (58:51):
Basically consumer doesn't have the money to go out and
buy another cut, right.

Speaker 2 (58:53):
And I would add, on top of that, which ties
in perfectly with what you're saying here, we're seeing record
near wreck maybe record levels of subprime people defaulting on
their car loans. It's at the same level it was
in two thousand and eight, just before the market crashed.
So the people with bad credit scores are not going

(59:15):
to be in the market next year, okay.

Speaker 6 (59:16):
So quickly then I got to ask you, okay, going
back to this whole issue of car companies spending all
of these billions of dollars. What happens when the industry
goes down to fifteen three if it.

Speaker 2 (59:28):
Does, Boy, if we think things are tight right now,
it's nobody's going to make money at fifteen three.

Speaker 4 (59:38):
Nobody, especially, like you said, if you're spending that much
money right off front to pay back to those loan
to make it to make more cars that no one's
going to buy because people aren't buying cars. That's a
tough situation.

Speaker 9 (59:51):
And on that happy noteah, the future, Actually, we got
to do a show on positives.

Speaker 2 (01:00:02):
Now I'm not saying the happiness. There's actually a lot
of really cool stuff going on in the industry right
now under the surface, a lot of really clever ideas
on how to take out massive amounts of costs, ways
of really advancing technology. And it's and we do it
a lot on this show. We talk about all the
problems because they're right here there, right now. It is reality.

(01:00:24):
But we got to think about doing a show that says, hey,
wait a minute, there's actually some good stuff that's coming.

Speaker 4 (01:00:31):
The good news show.

Speaker 2 (01:00:32):
Yeah, the good News Show.

Speaker 6 (01:00:35):
But anyway, but For those of you who are listening
to the podcasts, there are a lot of eye rolling
going on.

Speaker 2 (01:00:40):
Yeah right anyway, Perry, great having you back on the show.

Speaker 4 (01:00:44):
Thanks for having me. It's always a great time. Yeah good,
good good.

Speaker 3 (01:00:46):
Gary.

Speaker 2 (01:00:47):
Always good to be with you too, and I want
to thank all of you for heaven tuned in.

Speaker 1 (01:00:52):
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