Slasher Honda, Mini-Lambo, AI Power Grid Probs

The Automotive Troublemaker w/ Paul J Daly and Kyle Mountsier

It’s the last week in March as we head toward our 5th Friday and 5th Saturday. On our way, we’re covering Honda’s unilateral cut to Dealer profit margins plus BYD's 10k ‘Mini Lambo”, as well as another impending anchor on the power grid.

• In a move in their shift towards electric vehicles, Honda is cutting dealer profit margins in both the U.S. and Canada, triggering significant industry backlash.
  • Honda announced they will reduce dealership profit margins on new vehicles in the U.S. by 0.5 percent and up to 44 percent in Canada as part of a broader adjustment strategy affecting marketing, advertising, and service payments.
  • The decision has stirred pushback among Honda dealers. U.S. dealers describe the margin cut as "inappropriate but not surprising," reflecting the hefty investments required for the EV transition.
  • Canadian dealers, facing more severe cuts, label the move a "blatant money grab," anticipating a shift of financial burden onto consumers.
  • The reduction is expected to impact dealerships' bottom lines, with U.S. dealers particularly worried about smaller operations. Brian Kanyan, chair of the Honda National Dealer Advisory Board, emphasized the need for dealers to adapt, expressing hope for Honda's support in adjustment efforts.
• BYD is launching the Seagull EV, dubbed the "Lamborghini mini," which features BYD’s Blade batteries and offers a range of up to 252 miles, that is priced under $10,000, raising concerns among American car manufacturers about their ability to compete on price and innovation.
  • Ford and GM are adjusting their strategies towards more affordable EVs. Ford is focusing on compact electric pickups and SUVs, and GM is planning to introduce a next-gen Chevy Bolt EV.
  • BYD’s aggressive pricing and integrated manufacturing approach are underscoring a broader industry trend towards lower-cost EVs, compelling American manufacturers to innovate or risk losing significant market share.
  • Ford CEO, Jim Farley called the vehicle “pretty damn good” and continued, “If we fail to keep up with Chinese automakers, like BYD, then 20% to 30% of your revenue is at risk... As the CEO of a company that had trouble competing with the Japanese and the South Koreans, we have to fix this problem.”
    
• The rapid expansion of AI data centers across the United States is triggering concerns that the national power grid may not withstand the surge in electricity demand.
  • AI data centers are requiring exponentially more power than their predecessors
  • States like Oregon’s Portland General Electric has doubled their demand forecast for the next 5 years and and Georgia is looking at a 17x increase in their industrial power forecast

Hosts: Paul J Daly and Kyle Mountsier
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