In today’s episode of Inside Automotive, we sit down with Ryan Kerrigan, Managing Director of Kerrigan Advisors, to discuss the fallout from OEMs’ aggressive EV push and the broader implications for the automotive industry. Kerrigan, a well-respected voice in retail automotive, shares his candid insights on the missteps in the EV rollout, the impact on OEMs and dealers, and what the future holds for the industry as it navigates these turbulent times.
Key Takeaways
1. Kerrigan critiques the centralized approach taken by OEMs, driven by mandates from Washington, D.C., which he argues is far removed from consumer demand and market realities. This top-down approach has led to significant financial losses and a lack of consumer interest in the aggressively rolled-out EV products.
2. The EV rollout, which saw OEMs invest over $100 billion domestically and $500 billion globally in R&D, has not met expectations. Kerrigan notes that this has resulted in shrinking EV markets and has placed OEMs in a difficult position as they struggle to balance public pronouncements with market realities.
3. Additionally, Kerrigan shares insights from a recent survey of OEM executives, revealing that over 80% are delaying their EV plans, with many discussing contingency plans to continue and extend ICE platforms. This indicates a significant shift in strategy as OEMs reconsider their aggressive EV timelines.
4. The interview touches on the material impact of the CDK issues on Q2 financial performance, with major players like Asbury and AutoNation reporting significant losses per share. This has contributed to a challenging financial quarter for the industry, highlighting the vulnerabilities of relying on key technology providers.
5. Nonetheless, Kerrigan discusses the broader economic trends, including rising interest rates and a slowing economy, and their implications for auto retail. He suggests that while the industry may face challenges in the near term, potential interest rate cuts in 2024 could offer some relief, making the outlook for auto retail cautiously optimistic.
"The EV push was driven by mandates far removed from the consumer and marketplace realities. We’re relearning the lesson that centralized decision-making doesn’t work in this industry." – Ryan Kerrigan.
