Back To ICE, Used Car Market Dip, Costco's Tech Timing

The Automotive Troublemaker w/ Paul J Daly and Kyle Mountsier

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It’s Thursday and we’re talking about a McKinsey study showing many EV owners considering a return to combustion engines, a decline in used-vehicle wholesale prices, and Costco’s plans for a technological transformation under new leadership.
A McKinsey & Co. survey reveals that over 40% of U.S. EV owners are likely to switch back to combustion engine vehicles due to charging concerns.

• The study asked 200 questions to more than 30,000 consumers in 15 countries that comprise 80% of EV sales volume
• 46% of U.S. EV owners and 29% globally are likely to revert to combustion engines.
• Inadequate public charging infrastructure, high ownership costs, and impacts on long-distance travel are top concerns.
• Philipp Kampshoff, the leader of McKinsey’s Future Mobility division said, “I didnt expect that. I thought once an EV buyer, always an EV buyer.”
• Twenty-one percent of global respondents do not want to switch to an EV, with 33 percent citing charging concerns, exacerbated by rising range expectations from 270 miles in 2022 to 291.4 miles today.

Cox Automotive reports a slight decline in used-vehicle wholesale prices in May, with significant yearly drops and varying impacts across vehicle segments.

• The Manheim Used Vehicle Value Index fell to 197.3 in May, down 0.6% from April and 12% from May 2023.
• On a non adjusted basis, prices declined 1.2% in May from April and were down 11% year over year with retail supply of used vehicles remains lower than last year
• Average non adjusted wholesale prices for 3-year-old vehicles decreased 2% over four weeks, including a 0.7% decline in the last week of May.
• Seasonally adjusted wholesale prices for luxury vehicles, SUVs/crossovers, compact vehicles, midsize vehicles, and pickups were down 11-17% year over year.
• Used EV values were down 16% year over year and declined 2.4% month over month in May.

Costco is set to undergo significant changes as new leadership aims to enhance its technological infrastructure and e-commerce capabilities.

• New CEO Ron Vachris and CFO Gary Millerchip are focused on expanding Costco’s digital presence and fulfillment offerings.
• Historically conservative with technology, Costco plans to improve its buy online, pick up in-store model, starting with electronics, and enhance member engagement through technology, with over 90% membership renewal rates globally.
• Vachris emphasizes evolutionary changes that maintain Costco's core values while adapting to the evolving retail landscape and leveraging data analytics to enhance member experiences and drive sales.
• Despite advancements, Costco reassures that the $1.50 hot dog and soda combo price will remain unchanged, and monthly sales reports will continue.

Hosts: Paul J Daly and Kyle Mountsier
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