Porsche’s EV Struggles, CA’s Tax Credit Alternative, Is Air Travel Getting Worse?

2 days to turkey! Today we’re talking about how Porsche is realigning its EV goals and planning on more ICE and hybrids. Plus, California preps its own EV tax credit that won’t apply to Teslas, and air travel has its most complaints since the pandemic.

Show Notes with links:

• Porsche is pivoting its strategy to address declining BEV sales, planning new combustion-engine models to align with regional demand, while managing challenges in China and profit pressures.
  • Porsche’s BEV sales dropped to 7.3% of all sales through September, down from 12% in 2022.
  • China led the decline, with overall sales falling 29% amid tepid BEV adoption in the luxury market.
  • Porsche is aiming for a leaner China dealer network, anticipating long-term sales dips below peak levels.
  • Porsche’s Q3 operating profit margin dropped to 10.7%, down from 17% in Q2. The company has a goal of 20%.
  • CFO Lutz Meschke emphasized extending combustion-engine offerings, with new Cayenne and Panamera ICE versions planned, saying ““We are currently looking at the possibility of the originally planned all-electric vehicles having a hybrid drive or a combustion engine… What is clear is that we are sticking with the combustion engine for much longer,””

• California is bracing for a potential repeal of federal EV tax credits under the Trump administration, with Governor Newsom proposing a state-backed alternative to keep the electric vehicle momentum going.
  • Newsom is looking to revive California’s Clean Vehicle Rebate Program, which previously supported over 594,000 EVs with $1.49 billion in subsidies.
  • The plan could be funded by the state’s Greenhouse Gas Reduction Fund, even as California faces a $2 billion budget deficit.
  • Tesla, which builds EVs in California, likely wouldn’t qualify for a proposed state tax credit as it stands.
  • California is aiming to ban gasoline-only vehicle sales by 2035, targeting 80% EV sales by then.
  • Newsom’s office said in a statement, "The governor’s proposal for ZEV rebates… would be intended to foster market competition, innovation and to support new market entrants,"

• As air travel hits record highs this Thanksgiving, passenger complaints about cramped seating, added fees, and poor service are raising questions about whether flying has become worse — and how to fix it.
  • Airlines are squeezing coach seating while expanding premium options; Delta sold 74% of first-class seats in cash this year.
  • Budget-style “unbundling” adds fees for basics like carry-ons, seat selection, or sitting next to family.
  • The U.S. Transportation Department received nearly 97,000 airline complaints in 2023, the highest since 2020.
  • Passenger rights awareness may have contributed to increased complaints, despite fewer cancellations (1.2% in 2023 vs. 2.3% in 2022).
  • Experts suggest political action to regulate rates and improve quality, with CBS’s Peter Greenberg quipping about how he thinks abou

Hosts: Paul J Daly and Kyle Mountsier

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Transcript

Paul J Daly: 0:01

It is Tuesday, November 26 it's the day before the day everyone, all they do is think about, is it time to go yet? Today we're talking about Porsches EV struggles, California's tax credit alternative and his air travel getting worse. I feel like isn't who I've never, ever, ever seen an article that says air travels getting better ever. No,

Kyle Mountsier: 0:22

you've never, no, you've never seen like, This

Paul J Daly: 0:24

is a once a year thing again. We'll talk about it

Kyle Mountsier: 0:26

when we talk about, I don't know, unless, well, I think it depends on the the airline brand, honestly. So we'll get to that in just a minute. Also talk to me. Talk me through like, the day that everybody's wondering whether it's time to go. Is that like, get out of your family's house, or is that like,

Paul J Daly: 0:47

Oh, that's true, because that's part Thursday as well. That's part Thursday as well. Yeah, no, on Wednesday, it's kind of like the distracted driving begins. We talked about it yesterday halfway through Wednesday, if you're having people over, or you're traveling somewhere that the phone starts ringing and texting, and the thing you and

Kyle Mountsier: 1:06

everybody, I'll tell you this, there's like, you know, I don't know, people in charge for cars. This is, like, the same thing in retail. There's two days out of the year that are, like, the most awkward days, and it's the day before Thanksgiving, and then Christmas Eve. Yeah, Christmas and they both kind of like you're working, but you're not really sure whether or not you're

Paul J Daly: 1:25

it's like you're working, but no one else is. So you wonder if you should be

Kyle Mountsier: 1:30

well, but at the same time, like you know that if someone comes up on the lot, they're

Paul J Daly: 1:35

ready to buy, right? Only buyer. Buyers only, absolutely no tire kickers on the day before, things like, if it snows seven inches, someone pulls up. You're like, we're selling this person on a car. Just bought a car. It's already done. Yeah, just, just walk paperwork right out to him. Bring some keys out. Bring some paperwork out. Same thing Wednesday morning. Hey, we walk we released a new one of our soda edge webinars yesterday, connecting cars and customers with advanced streaming media solutions with Cody Tom chick, Senior Vice President of force marketing, and Dane Toko, Senior Director of Marketing at Lithia listen. Kyle said this yesterday. If you and your marketing team get together and watch like the last three ASOTU Edge webinars, you're going to have a really great heading going into 2025 it's going to help jump start your conversations and get you going. You can go to asotu.com you can see everything there. You can watch all the web you know, sign up for the webinars. Watch the webinar histories and all that. We're trying to help, right? And our partners, our sponsors, your partners, are trying to help you get calibrated for 2025

Kyle Mountsier: 2:37

which I love. Know what else we haven't talked about, Paul, we haven't even talked about this. We are hosting a website called nada parties, in partnership with, oh my gosh. And if you're having a party, or want to know where the parties are, or want to keep track of, like, whether or not more parties got added, you just bookmarked that sucker. Also, we're having a party. Oh my god, this. I think this might be the I think,

Paul J Daly: 2:59

I think you're right. We have not talked about this. We're having a

Kyle Mountsier: 3:02

party on Friday night. You can be there. It's free, but the tickets are ridiculously limited. They will sell out, probably a 4j and one, and we ain't letting in if you don't have a ticket, but it is free. Go there, register for it. We're going to be at the Sazerac house at nada on Friday night of nada, and it's going to be a rip. We're

Paul J Daly: 3:23

calling it a first stop. So the site is nada parties.com. Ours should be at the top. We're definitely going to the tickets are going to be gone, but we're going to do some kind of lottery, and so there's going to be a wait list, and it's like a multi level thing. You got to be there. We're calling it the first stop, because no one stays somewhere, right? No, come here for an hour or so, see your people, and then go on to your next thing. That's how nada works. Let's talk about some news. Shall we get into it? All right, this may be no surprise here. Porsche is pivoting its strategy to address declining battery electric vehicle sales, planning new combustion engine models to align with regional demand, while managing challenges in China and profit pressures, basically, Porsches Bev sales dropped to 7.3% of all sales through September, down from down 12% from 2022 so it's just like, oh, down from, I'm sorry, yeah, oh yeah. Sorry about that. China led the decline with overall sales falling 29% amidst tepid, uh, adoption in the luxury market in China, Porsche is aiming for a leaner China. China dealer network, anticipating long term sales dips below peak levels. Their q3 operating profit margin dropped to 10.7 down from 17% in q2 so that's a pretty big drop. The company's goal is 20% and they're obviously going in the wrong direction. CFO Lutz, or Lutz Minsky, emphasized extending combustion engine offerings with new cayenne and Panamera ice versions. Plan saying quote, we are actually we are currently looking at the possibility of originally planned all electric vehicles having a hybrid drive or a combustion engine. You. We're just gonna stick with a combustion engine, which clear is that we're sticking with the combustion engine for much longer. You're

Kyle Mountsier: 5:06

telling me, Paul is when people get in the sports car, they want it to sound like a sports I mean, understand, yeah, I will say, though, the people that I know that have the all electric Porsche right now say that thing,

Paul J Daly: 5:21

it's dope. Danny Zaleski has one, and when I was at the Vinh unleashed event, he drove me over from, like, their headquarters to the hotel, and that thing was amazing. It does and then we turn the sounds on. He's like, check the sounds out. And they were really cool, yeah? And they're

Kyle Mountsier: 5:38

really cool, you know? And this is what's weird. Like, I feel like the ultra luxury would be more into this as an option, right? Have a garage, need a charge. You know, electric vehicles are, historically a a second or third vehicle in the garage. So, like, I, you know, it's kind of confusing to me, but maybe you wore out, kind of the initial adopters. I think

Paul J Daly: 6:01

we're gonna see, I think we already have seen. They're gonna see a lot of manufacturers already rolling back the EV plans. That's there's a ton of hype, and everyone made all these claims. We'll see what Jaguar does, right? Because they're going all electric. I think they, I think they're kind of locked in. I

Kyle Mountsier: 6:16

don't know. Everybody's just gonna be like, assume the Toyota position. Yeah,

Paul J Daly: 6:20

right. Exactly, exactly. And we'll see what happens. I mean, because 2030 is getting awful close now it's about to be 2025 and wow, we've seen a lot of stepping back, not stepping forward, speaking of stepping forward, stop. I guess. I don't know if the stepping forward California is a little bit stepping forward, but more more than not, they're bracing for the repeal of the federal EV tax credits under the Trump administration, with Governor Gavin Newsom proposing a state backed alternative to keep the electric vehicle momentum going, he's looking to revive California's Clean Vehicle Rebate Program, which previously supported over 594,000 EVs with a 1.4 billion in subsidies. It could basically be funded by the state's greenhouse gas reduction fund, even as California faces a$2 billion budget deficit. I've no idea where they get this money. Tesla. Tesla, which builds their EVs in Canada, which are, by the way, the only company to build EVs in California, aren't going to qualify for the tax credit,

Kyle Mountsier: 7:22

definitely not well, even if, even if they were, they figure out a way to not do it because they're mad at him for moving the man

Paul J Daly: 7:29

isn't personal at all. They're aiming to ban, California is aiming to ban gasoline only vehicle sales by 2035 targeting 80% EV sales by then. So Portia, there's your market. Newsom's office said in a statement, the governor's proposal for zero EV rebates would be intended to foster zero emission vehicles, I'm sorry, would be intended to foster market competition, innovation and support new market entrants. Yeah, not the OGS

Kyle Mountsier: 7:57

look. I mean, if you didn't think that California was going to do something to kind of like Bob when they weaved. When it comes to EVs, they've they've poured so far in that it's like, how could you turn back at this point? It's still surprising to me that they would say maybe we're going to throw another couple billion dollars into this thing and potentially incentivize new entrance. Um, but you know, California gonna do? What California are they? I

Paul J Daly: 8:29

saw a story yesterday about being illegal to buy motor homes in like six states yesterday. Did you see that floating around? No,

Kyle Mountsier: 8:36

I missed that. Yeah, yeah. I

Paul J Daly: 8:38

saw two Ty Caputo reposted. I saw it first, and then he reposted it, and I was like, oh, maybe it is legitimate. I wonder if California is one of them. Wouldn't be surprised, but, yeah, I don't know what it is. It's like an emission, maybe a certain class of motor, decent fuel, typically,

Unknown: 8:53

I think it's a weight thing.

Kyle Mountsier: 8:55

I remember it being a weight thing, weight on Highway, yeah, I

Paul J Daly: 9:00

mean yeah, because EVs aren't any heavier, yeah. And trucks,

Kyle Mountsier: 9:03

truck, EVS aren't heavy, yeah, sure, yeah. It's

Paul J Daly: 9:06

like a 12,000 pound Hummer.

Kyle Mountsier: 9:08

Got it

Paul J Daly: 9:08

okay. Speaking of to travel heavy things, not on the road.

Kyle Mountsier: 9:16

Hopefully, talked about this, but we know that air travel is hitting record highs again this Thanksgiving, and passengers are complaining about cramped seats out of fees, poor service, and raising a bunch of questions on whether or not flying has become worse and how to fix it. I bet a lot of auto industry people have have some opinions on this, because we travel in the air all the time. Airlines are squeezing coach seating while expanding premium options. Delta sold 74% of first class seats in cash this year. So not upgrade 74% people buying those jokers. Budget style unbundling adds fees for basics like carry on seat selection or sitting next to family, so that, you know, picking your seats so that's you know, your your budget airlines, your spirits, your allegiance, thing like that. Are unbundling. The US transportation department received nearly 97,000 airline complaints in 2023 the highest since 2020 What's that compare to the auto complaints? Thinking about that, can you boy, know passenger rights awareness may have contributed to increased complaints despite fewer cancelations. So, yeah, cancelations right, are half down, yeah. So everybody still is. They're getting on the plane 1.2%

Paul J Daly: 10:24

cancelation, yep, versus 2.3

Kyle Mountsier: 10:27

This, this. This is a great quote, right. Here it is. Experts suggest political action to regulate and improve quality with CBS, is Peter Greenberg quipping about how he thinks about his flights. He said two words, we landed, yeah,

Paul J Daly: 10:40

yeah. That's it. You know, when you get there and you land, I have a couple things to say about this. Number one, the coach seats, I'm telling you, I just have long legs, so if they make them any smaller, I've been on some flights where my knees are literally touching the seat in front of me. It's kind of bad. But when you think about delta selling 74% of its first class seats, like at purchase, not upgrades. I think that does two things. Number one, it shows that people are willing to spend on more comfort while they're traveling, but I think it makes the experience worse for the people who fly more often, right? So the people who fly more often, you have, you know, higher status rates. You tend to get the upgrades, but you get a lot fewer upgrades when people are buying the seats. So I think that could contribute to a worse experience for the people who fly more than the people who just pay more for the first class seats, those are getting scooped up. Look, I don't know when it comes to passenger rights over like a customer service it's flying is one of the most complicated ones to fix, because no matter what, very few people are choosing a less convenient flight over an airline. You know what I mean? Like, when you look and you go on Google Flights and you're like, Well, this one gets me there when I want to get there, and it might be not my preferred airline, and the other one gets me three hours later, or I have to take a layover. Like, you're gonna take the other flight and then, right, maybe you'll complain about it, but you're still going to take it. So, like, it's hard. I think it's hard from a standpoint, it's

Kyle Mountsier: 12:04

very similar to auto right where there's, there's only so much you can do. It's, it's like the rising tide lifts all ships, kind of like everybody has to come up, and the industry would have to decide that there's something different that they do. Yeah, now I will say all the stuff around, like, cancelations and refunds that came out a little bit about a month ago, that's a little bit of like, like, that's an oversight thing that says, like, hey, we need to make sure that

Paul J Daly: 12:29

type of thing holds an industry accountable to a stand Exactly. Yep.

Kyle Mountsier: 12:33

But yeah. I mean, look, I don't know. We fly a lot, and I don't really have, I think the more you fly, the like you get. There's that convenience, yeah, the nuance of it, understand, of like, you know, oh, like, hey, 10 minutes late pilot timed out. You know, these things happen. Um, but I will say, you know, I see a lot people that clearly don't fly a lot. It is an anxiety inducing, oh

Paul J Daly: 13:01

my gosh, right, yeah, that's true. And we, man, I'm just thinking, like, I've had the worst experiences. Like, I remember you, you raving about Southwest. And finally we got Southwest in Syracuse. I was, like, so excited. And then there's kind of, like, the worst part of Southwest the last, like, two, three years.

Kyle Mountsier: 13:16

Yep, right. Can't think about that. Like, like, draw that straight line to auto. You know, you know, the people that come in have bought 4567, cars from you. Yep, the path to purchase is super easy. They're hanging out, talking to the service advisor, talking to the GM, right? They're getting their own coffee. It feels very fluid, but there's an anxiety inducing thing when you only buy a car every five years. You're not used to the rhythm of that, right? Like buying on Amazon, we do that every two to three days. That's that's not anxiety inducing for a person, but something they do every five years is anxiety reducing. So recognizing the difference between the type of person that's sitting in front of you is really important for that consumer experience. I think

Paul J Daly: 13:58

there's one, one big takeaway, and it's that no matter which airline you like, if you have a preference, it literally only takes one bad flight to ruin it. Or, on the flip side, it only for an airline that maybe you had a bad perception of, or some bad experiences, it only takes, like, one great flight attendant to totally change the temperature. And I think that is true in the auto industry, no matter what experience people have, the one that they have next at your store is actually going to be the only one that matters. You have full control over that. So take control over that before we get to tomorrow, when a talk word go out there, sell some cars and take care of some people.

Kyle Mountsier: 14:35

Got that so strong you