Carvana’s “Grift For The Ages”, Tesla’s Drop In Deliveries, Cursive Coming Back

The Automotive Troublemaker w/ Paul J Daly and Kyle Mountsier

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Today, we break down the Hindenburg Research report that allegedly exposes Carvana’s shady business practices. Plus, we cover Tesla’s first annual drop in deliveries and talk about the return of cursive logos.

Show Notes with links:

• Hindenburg Research, known for exposing automotive startups like Nikola and Lordstown Motors, has published a scathing report on used-car retailer Carvana, alleging questionable accounting practices and underwriting concerns.
  • Carvana allegedly sold $800M in loans to a "suspected related party" and used "accounting manipulation" to inflate profits.
  • Carvana allegedly sold vehicles to DriveTime, a company owned by Ernie Garcia II (father of Carvana’s CEO), at inflated prices to avoid recording markdowns, thereby boosting its reported revenue.
  • A former director reportedly claimed Carvana approved 100% of loan applicants, suggesting riskier lending practices to generate higher loan volumes, and by extending loan terms through a DriveTime affiliate, Carvana may have avoided reporting higher delinquency rates, potentially hiding the true state of its loan portfolio.
  • Carvana shares dropped 1.9% following the report, closing at $199.56.
  • The company called the report "intentionally misleading and inaccurate," asserting a focus on long-term growth.
• Tesla’s Q4 production and delivery numbers are in, marking a challenging end to 2024 for the EV giant, with its first annual drop in deliveries amidst intensifying competition and political distractions for CEO Elon Musk.
  • Tesla delivered 1.78M vehicles in 2024, falling short of the 1.81M it delivered in 2023.
  • Q4 2024 deliveries hit 495,570, falling short of analysts’ expectations of over 500,000.
  • Tesla shares dropped 7% following the report, despite a 63% rally in 2024, showing mixed investor sentiment.
  • Tesla faced declining sales in Europe and slower growth in China while rivals like BYD and Hyundai gained market share.
  • High-priced Cybertrucks are "piling up on used car lots," reflecting a lack of affordable EV options in 2024.
  • “Tesla still does many things better than any other EV maker, but the challenge remains the nuts-and-bolts job of being a car company,” said Patrick George, editor in chief of InsideEVs.

• Lord & Taylor is turning back the clock, reviving its cursive logo as it prepares to relaunch as an online discount luxury retailer under new ownership, Regal Brands Global.
  • The classic script logo, first introduced in 1945, replaces the modern sans-serif wordmark, which the new leadership called "the biggest betrayal of the brand."
  • Founded in 1826, Lord & Taylor is embracing its legacy, branding itself as “the signature of American style” for its digital comeback.
  • Many brands have moved away from cursive logos due to younger consumers' unfamiliarity with the style, but Lord & Taylor sees its heritage as a unique strength.
  • “I understand going after young customers, but this is not a startup,” said Regal Brands Global chief strategy officer Sina

Hosts: Paul J Daly and Kyle Mountsier
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