Scott Painter, the CEO and founder of Autonomy, joined Cheddar News to discuss the state of U.S. auto sales.

Scott Painter, the CEO and founder of Autonomy joined Cheddar News, to discuss the state of U.S. auto sales as Ford and General Motors released their latest figures. "The overall industry is down about 20 percent from its pre-pandemic norms," he said. "And so the fact that General Motors and Ford are showing increases also highlights the fact that U.S. Automakers were most acutely affected by the pandemic."

State of the U.S. Auto Industry as Pandemic Winds Down Globally

joining us now to discuss is scott painter Ceo and founder over at autonomy scott. Good to have you here this morning. Thanks for joining us. I mean, Ford reported a 16% jump in total sales. Gm reported a 24% jump. Are you surprised at all by these numbers for these companies and really, what does that sort of tell us about the state of the auto sector right now? Well, I think you have to put all of these increases in context. The overall industry is down about 20% from its pre pandemic norms. And so the fact that general motors and ford are showing increases also highlights the fact that U. S. Automakers were most acutely affected by the pandemic. In terms of chip shortages and supply chain issues. You'll notice it also Honda and Toyota for example are down, they had less effect from the pandemic and therefore it looks like that ford and GM are really zooming ahead and really, you know, they announced that they were seeing strong demand. I think again, it is important to note that demand is usually a by product of population. Um, and it's really about mixed shift. People are coming back into the new car space, although interest rates are a little bit higher. The average monthly payment for a car no matter what you buy new or used is up to now over $700. The average new car is closing in on $50,000. The average used car is a little over $30,000. So all of these numbers have have definitely moved up in terms of E. V. Sales while everybody is showing you know in some cases triple digit gains these are all really on very Small numbers you had, you know, Tesla report over 350,000 cars produced a total of 367,000 for the quarter. Whereas General Motors, although a bigger car maker in general with over 500,000 cars being produced for the quarter only produced in total about you know 10,000 or fewer total electric vehicles. So a long way to go for the US automakers in terms of electric cars, we're gonna see a lot of a lot of growth in that area. Yeah that's that's so interesting you say that because you're absolutely right because you're a demand, you know, like for these electric vehicles with so much smaller because these companies weren't producing these things as at the scale that they are at least at right now Ford is saying inventory is increasing. But is it safe to say it's approaching normal levels right now, it's not approaching normal levels. They still have about 10% of their total production sitting waiting for chips. So they still have supply chain issues and chip shortages. They're not back to normal. We're again, we're about 20% off total pre pre pre pandemic norms. And so even though these these companies They're showing gains over last year, it just really highlights they were in a really bad situation in 2021. Do you think electric vehicles are going to revive Ford's legacy? Because as you mentioned, look, the numbers are big on these triple digits Ford's EV sales growing 197.3%. Does this sort of save for down the road? Well, you know, let's let's really look at that number because the F 1 50 which launched in june only sold 8760 vehicles since its launch in june and again, during that same period of time, you've got Tesla selling over 120,000 vehicles a month on the E. V side. So there is a long way to go in a lot of wood to chop for these automakers on the E. V side, E V s are not being produced in mass numbers and uh, you know, a 100% or greater increase in production or in sales on TVs is going to be the norm until these numbers get to the law of large numbers where they're producing at least in, you know, comparable numbers to what they produce on the non electric side of the defense. But certainly the Mach E, the F 1 50 the Equinox, the Blazer, the, you know, the bolt for general motors, the cadillac lit the Chevy, Corvette, the Hummer ev, all of these great product. It's a good time to be a consumer, they're coming but they're not here yet and that F 1 50 lightning has so many people interested in that car. Let's talk about the number one leader in all of this is Tesla. They've gone for years scott with no competition now. They have competition. How worried are you for Tesla to sort of stay number one in here. Tesla still dominates. Just put this in context. Tesla is making more cars per week than the rest of the industry per quarter combined for electric cars. So there is a long way to go before Tesla really is threatened for its dominance and electric cars. And we're talking about, you know, you've got nearly 15 make model trims of other electric cars coming to market. Whereas Tesla is really producing predominantly two cars at scale in the mass production side of things. The model e the model three and the model y uh, these vehicles are, you know, at scale the most mass produced electric vehicles on planet Earth and they're priced below the average new car, irrespective of whether it's, you know, an electric vehicle or an internal combustion engine car. The average new vehicle today is a $47,000 vehicle. The M. S. R. P. On the model three is just over $48,000. So it's right in there scott. I only have about a minute or so left with you. Let's talk auto interest here because according to new data from Edmonds in the third quarter auto loan interest rates climbed to their highest levels we've seen since 2019. The average monthly payment on a car is now at 703 bucks. Why are we seeing this right now? Is this because of supply chain issues? No, it's really just about interest rates and the cost of money is becoming more expensive. The cost of cars is rising, inflation is having an effect here. And so all of those things are really conspiring. But the average interest rate on a used car is above 9% now. So almost half of what everybody's paying for their used car is going to the money, not to the car. And that is really going to have an impact on mixed shift. As the auto industry begins to roll more new cars. Those cars are going to benefit from the fact that um, auto leases are going to become more attractive. Monthly payments are going to become more attractive once again on the new car side. But what you saw seen over the last couple of years is that the demand has shifted away from new cars as supply has been impacted towards used cars. And so that is really what has driven the, the average price increase and the loan interest rates are, are certainly a factor. The average interest rate on a new car is approaching 6%. So this is, you know, pretty impactful. Yeah, indeed scott Great to have you here. Thank you so much scott Painter ceo and founder of Autonomy, joining us here on a wake up with cheddar.