Welcome back to the latest episode of The Future of Automotive on CBT News, where we put recent automotive and mobility news into the context of the broader themes impacting the industry.
I’m Steve Greenfield from Automotive Ventures, and I’m glad that you could join us.
Used car retailer Carvana had a great Q1 earnings call this week, reiterating their long-term goal of achieving 3 million used car sales and an adjusted EBITDA margin of 13.5% by 2030 to 2035.
To put that into perspective, 3 million used sales would still only put them at about 7.5% of all used vehicles sold in the U.S. market.
For now, Carmax is still the largest used vehicle retailer in America, but at this pace, Carvana may beat Carmax’s unit sales in 2026.
Carvana’s stock price is currently sitting at about $400, representing a total market cap of about $83 billion.
You’ll remember that it wasn’t too far back at the end of 2022, right in the heart of COVID, that the stock traded at less than $5 per share. That equates to just over $1 billion in market cap.
That’s some appreciation over a three-year period!
But I’m not really here this week to talk about Carvana’s acceleration, long term used vehicle targets, stock price or market cap.
Instead, let’s focus more on Carvana’s new vehicle aspirations.
On April 21st, Carvana acquired its seventh Chrysler-Dodge-Jeep-Ram dealership, near Cleveland, strengthening its foothold in the new-vehicle market as a Stellantis dealer.
Probably without a lot of coincidence, Stellantis on Jan. 6th updated a policy that “no person or entity may acquire more than one CDJR dealership within a rolling 12-month period,” according to a copy of a memo sent to dealers.
The recent Avon Lake, Ohio store is Carvana’s second CDJR purchase since that memo was issued, though buy-sell deals can be in the works and under contract for months before closing.
Stellantis in March said Carvana’s acquisitions weren’t behind its policy change.
In any event, what we have witnessed, is that the performance of these acquired Stellantis stores is being supercharged once Carvana steps in as owner.
Leveraging operational efficiencies and focus, their ADESA logistics footprint, the Carvana online marketplace, growing consumer awareness and a differentiated value proposition of driveway delivery and a healthy return policy, why wouldn’t a consumer opt to buy their next Jeep or Ram vehicle from Carvana?
I suspect that by year end, we’ll see these seven Carvana-owned Stellantis dealerships are all in the top-10 volume stores in America.
The key questions you should be asking? How many Stellantis dealerships does Carvana need to be able to cover the bulk of the U.S. market? How will competing Stellantis store owners feel about Carvana selling new vehicles to customers in their local markets? And, if Carvana does sell a new Chrysler, Dodge, Jeep or Ram vehicle into a competing dealership’s market area, who’s going to get the parts and service work for that customer?
Beyond acquiring Stellantis stores, the big news to watch will be if Carvana ends up buying new car stores from any other automakers.
Stay tuned to see how this plays out over the remainder of the year.
So, with that, let’s transition to Our Companies to Watch.
Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my weekly Intel Report, we showcase a company to watch, and take the opportunity here on this segment each week to share that company with you.
Today, our new company to watch is Sell My Ride.
The Sell My Ride team has helped automotive dealers acquire over $1bn+ worth of used car inventory, direct from consumers.
Stop sharing leads.
Every single lead on sellmyride is 100% exclusive to you. No competing dealerships. No bidding wars. No shared contacts. Just direct access to motivated sellers ready to sell to you.
Sell My Ride: Discover what dealers nationwide trust in the car industry.
If you’d like to learn more about Sell My Ride, you can check them out at: www.SellMyRide.com
So that’s it for this week’s Future of Automotive segment.
If you’re an AutoTech entrepreneur working on a solution that helps car dealerships, we want to hear from you. We are actively investing out of our new Mobility Fund.
Don’t forget to check out my two books, The Future of Automotive Retail and The Future of Mobility, both available on Amazon.com.
Thanks (as always) for your ongoing support and for tuning into CBT News for this week’s Future of Automotive segment. We’ll see you next week!
