Tariffs In Effect, Tesla Tops Depreciation List, Google Pushes AI Workforce

Today is our fearless leader Paul J Daly’s birthday! So we gave him the morning off and tapped in producer Nathan Southwick. We’re talking all about the new Canada and Mexico tariffs that put pressure on the automotive supply chains, plus the top depreciating cars and how Google is pushing to achieve artificial general intelligence.

Show Notes with links:

• The U.S. has enacted 25% tariffs on imports from Canada and Mexico, throwing the highly integrated North American production network into turmoil.
  • The tariffs, effective today, March 4, apply to all imports except Canadian energy products, which face a lower 10% duty. Canada and Mexico both responded with their own tariffs.
  • Industry experts predict vehicle prices could rise between $4,000 and $10,000, with Ford CEO Jim Farley cautioning that prolonged tariffs could "blow a hole in the U.S. industry that we have never seen."
  • Flavio Volpe, president of the Automotive Parts Manufacturers’ Association said that there is potential for U.S. and Canadian auto production to revert to "2020 pandemic-level idling and temporary layoffs within the week.”
  • Key auto models at risk include the Toyota RAV4, Ford Mustang Mach-E, Chevrolet Equinox and Blazer, and the Honda Civic and CR-V, while European automakers with manufacturing in Mexico, including Volkswagen, Stellantis, and BMW, saw their stocks drop sharply
  • The STOXX Europe 600 Automobiles and Parts index fell 3.8% and Continental AG, a major supplier, saw an 8.4% drop in shares.

• Used Tesla Model 3 and Model Y vehicles saw the steepest depreciation of any cars in 2024, according to Fast Company’s analysis of CarGurus data.
  • Model Y prices dropped 25.5%, while Model 3 prices fell 25% from January 2024 to January 2025.
  • Comparatively, the Nissan Maxima only dropped 5.2%, and the Ford Mustang declined 5%.
  • Full Top 10: Tesla Model Y, Tesla Model 3, Land Rover Range Rover, Jeep Wrangler 4xe, Chevrolet Express Cargo, Ford Transit Connect, RAM ProMaster, Land Rover Range Rover Sport, Chevrolet Bolt EV, and Ford Expedition, all with over 19% depreciation

• Google co-founder Sergey Brin is back and pushing Google DeepMind (GDM) teams to accelerate their progress toward Artificial General Intelligence (AGI). In a newly released memo, Brin outlines the urgency and expectations for Google’s AI teams.
  • Brin emphasizes the need for 60-hour work weeks, daily office attendance, and faster execution by prioritizing simple solutions, code efficiency, and small-scale experiments for faster iteration.
  • He calls for a shift away from “nanny products” and urges teams to “trust our users” more.
  • Brin, who has no formal role at Google beyond a board seat, stepped in over the head of Google DeepMind, Demis Hassabis, signaling the urgency of the AGI race.
  • "I think we have all the ingredients to w

Hosts: Paul J Daly and Kyle Mountsier

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Transcript

Kyle Mountsier: 0:01

Music. Well, good morning. Good morning. It's a first on the automotive troublemaker live. I got Nathan sitting next to me because Paul ran out of charges, Paris, Tesla and Google's AI is what we're chatting about this morning. Oh man,

Nathan Southwick: 0:15

it's like everything is crazy this morning. What is going on with this world I

Kyle Mountsier: 0:21

wanna, I wanna create, like, you know, the the makeup story, the story that, like that it didn't actually happen. But, like, do it with some video edits about Paul going up the East Coast and and having issues like charging getting in at three in the morning. But make it way more exorbitant than what made that what probably actually happened. That's what I wanted to do,

Nathan Southwick: 0:45

oh for sure. Oh for sure, right? Like, there's badgers and there's, oh, there's, there's,

Kyle Mountsier: 0:50

of course, badgers, right? There's a fox that comes out of the woods, right? They're out there feeding deer out of their hands, right? Like, that's exactly what it is, Nathan, you've been on the morning show on Saturdays, but I think this is actually your first time ever officially co hosting the Daily Show.

Nathan Southwick: 1:09

This is, this is true. This is

Kyle Mountsier: 1:11

a first. It's a big we had to do it before we got to episode, 1000 right? 1000s coming up. You got, you had to get in the first 1000, right?

Nathan Southwick: 1:20

Trying, you know, trying to try to edge my way in here somehow. That's

Kyle Mountsier: 1:24

awesome. Well, hey, we, we've only got a couple quick things this morning. Obviously, ASOTU CON is alive and well, it's breathing. It's going people are buying tickets to get in hotel rooms. We're about to be releasing a ton of schedule stuff. We've got speakers lined up. We've got some incredible topics across AI, across the industry, updates like if you want to, if you want to talk about it, and it's in the industry. It's happening out of soda con. We don't spare any topic. It's not just a marketing conference. It's not just an operations. We get into fixed ops, we get into technology, we get into expansion and growth, all of those things in a two day jam packed schedule, make sure that if you haven't got your tickets, you get them now, because you don't want to suffer the price increase, and you want to make sure and get your hotel, because we will sell out of the primary block at the main hotel, and it is a gorgeous Hotel. My wife actually this weekend. She was like, we were, we were at a hotel and doing something for our 15th anniversary. She was like, you know, I think those hotels in in Baltimore, like, some of the nicest hotels that we've stayed, stayed in. So that's what we get. That's what we do.

Nathan Southwick: 2:31

Yeah, I mean, so I have the privilege of of getting to sit with you and Paul and Al, our events director and, like, plan some of the schedule, and talk through speakers and I've done this for a couple years now, but it is amazing to me how much we cover right, over the course of a two day event, right? Like, we aren't kidding when it is, like it is top to bottom, anything that you can think about in the store, outside of the store, looking at the global industry, right? Everything we will cover it. And we will cover it. And we just, you know, we just announced a couple speakers. Well, I'm not sure we announced them, but there's a couple more speakers on the website. So if you want to go, like, poke your head over there, people have said yes, and you know, you might get a little more peek at who's going to speak. Go check

Kyle Mountsier: 3:13

it out. Awesome. All right, let's get into the news today. Hey, Nathan's going to be color commentating. He's got opinions on this. Let me tell you. He tells us his opinions off off screen, so we'll see what his opinions are. Today, the US has enacted through the White House, and obviously Donald Trump leading a lot of this charge, 25% tariffs on imports, starting today from Canada and Mexico, and throwing the highly integrated North American production network into what looks like to be some turmoil. The tariffs are effective today, and everything except for Canadian energy gets the 25% Canadian energy gets 10% obviously, Canada and Mexico responding with their own tariffs. Industry experts are predicting that vehicle prices could rise between four and$10,000 Ford CEO Jim Farley said that prolonged tariffs could, quote, blow a hole in the US industry that we have never seen. Fabio Volpe, president of the automotive parts Manufacturers Association, said that there's a potential for US and Canadian auto production to revert to, quote, 2020, pandemic level idling and temporary layoffs within the week this week, key auto models at risk are the Toyota rav4 the Ford Mustang Mach E, Chevy Equinox blazer, the Honda Civic and CRV. European Auto makers also have a lot of manufacturing in Mexico, including Volkswagen, Solanas and BMW and the wild output, here is their European stocks also saw a significant drop. The automobile parts index in Europe fell 3.8% continental AG, a major supplier, saw an 8.4% drop in shares. A. Um, the Bernstein Research Analyst Daniel reska said, unless there's a swift policy reversal, we'll anticipate severe disruptions in North America supply chains and automotive profit margins. Going to be an interesting week or two, as we see how this actually impacts all the way down to retail. Yeah.

Nathan Southwick: 5:19

So there's a couple things on this, right you saw yesterday, and if you read a morning daily pushback email, you saw we talked about this there that Honda has moved their is going to move their civic manufacturing to Indiana, to potentially avoid some of this. I don't know how quick they'll be able to move it, but to address some of that. But I think, I think the interesting thing for me here is, is the effect on Europe. You know, Trump and the administration have talked about bringing auto tariffs in, I think, in April for some of for some of the auto imports from Europe. But these, these global effects of what we're dealing with here, definitely at play. The other thing, yeah, go ahead. Well,

Kyle Mountsier: 6:00

I and the thing that I think is staggering to me is it's not just new vehicle pricing, but we're going to be looking at at parts things too, right? A lot of this is the supplier parts network, and so when we look at, you know, wholesale parts are a massive part of a dealer's business, and that's going to potentially see some pretty quick impact, because the pace and speed at which parts hit part shelves is really high. It's a very fast turnaround from production to part shelf. So it's not just new car pricing or availability, which a lot of like consumers are kind of hearing and seeing the fear around, but it also could be, you know, a little bit of residual into the parts. I would say this is a great time for communication to your people. Let them know why or why not the impact might be on your brand. Look at the brands, the manufacturers, that are going to have the highest impact here. And hey, maybe there's an opportunity to drive some net new sales because of potential scarcity out there in the market.

Nathan Southwick: 7:00

Yeah. And I remember, so back when the UAW strike was happening, was that 20 Gosh, that was like a year and a half two. Yeah, was that end of 22 it must have been 23 so 2323 I'm getting my ears confused. 23 so we had Patrick a bad on an episode of the wheelhouse, hosted by Daniel Gover back then, and we were Daniel asked him, How do you like address this with a customer? And Patrick said, here's what I want my people to say, look, this might affect us, but we are going to make sure that it doesn't affect you as the customer and and that might be tough with this stuff coming, but as much as possible in our stores and our interactions with customers, even just in our demeanor when they ask us about it, not to like freak out and not that we would, but, but just keep a calm and level head when you're dealing with people, and do everything you can to make sure that none of this reaches the consumer at All.

Kyle Mountsier: 7:56

Yep, speaking of reaching the consumer, stop segway you five Tesla's reaching the consumer, but not in the way that we all expected him used Tesla Model three and model Y vehicles saw the steepest depreciation of any cars in 2024 according to Fast Company's analysis of some car gurus data, model Y prices dropped 25.5% while model three prices fell 25% from January 24 to January 25 comparatively, the Nissan Maxima only dropped 5.2% and the Ford Mustang declined 5% here's the top 10 biggest losers in depreciation last year, the model Y, the model three, Land Rover, Range Rover, jeepranger Four, xe, the Chevrolet Express cargo. Everybody saw that one coming. The Ford Transit Connect the RAM pro master Land Rover, Land Rover, Range Rover Sport The Chevrolet Bolt. EV, clear reasons on why that might be the case and the Ford Expedition, all with over 19% depreciation. The analysis covered user models from 2015 to 2023 focusing on the 200 most common car models. So the Tesla used car market a little bit drying up last year. Well, I

Nathan Southwick: 9:09

think we've talked about this too with EVs and especially Tesla. It is. It is as much a piece of tech as it is a car. Yep, and and you think about tech, and whether it's computers or phones or any sort of thing like that, the depreciation on those is is pretty significant right off the bat, too. So that tracks for me. I think the interesting one that I'm not sure about is, you've got a lot of you got a lot of commercial vehicles on here. Yeah, right. And, and so that that's interesting

Kyle Mountsier: 9:40

well, and you look at what rivian is doing now with commercial vehicles and entering that space, and you wonder if people are looking at these opportunities to have a different experience for the commercial fleet, and all of a sudden, the legacy commercial vehicles aren't as kind of sexy or in market type thing for sure. Yeah, yeah. I also think, like Tesla was significantly overvalued for quite some time, right? Slim, you know, not a lot of availability, little bit higher price point, so you might have just seen a little bit more of a leveling off to what would I would, I would consider, like normalized, right? So we'll

Nathan Southwick: 10:21

see. Yeah, you have seen you have seen them also like, slash prices, renew car side, right? And so yeah, and that that always contributes as well. Speaking of

Kyle Mountsier: 10:30

slashing, stop segway. Here it is. Google co founder Sergey Brin is back and pushing Google DeepMind teams, their AI teams, to accelerate their progress toward AGI, artificial general intelligence. In a newly released memo, Brin outlines the urgency and expectations for Google's AI teams. Listen to these. He emphasized the need for 60 hour work weeks, daily office attendance, so no more that remote stuff, faster execution by prioritizing simple solutions, code efficiency and small scale experiments for faster iteration, he calls for a shift away from, quote, Nany projects, and urges the team to trust their users more. Brin, who has no former role at Google beyond a board seat, stepped in over the head of Google, Deep Mind Demi has to be signaling the urgency of the AGI race. The quote is, I think we have all the ingredients to win this race, but we are going to have to turbo charge our efforts that putting it in overdrive occurred, according to Sergey Brin,

Nathan Southwick: 11:36

yeah. So I have a question for you first. I'm going to put you on the spot. All right, go first, because I know you're obviously involved in the soda. You've got auto genius, you're doing other stuff. How many hours do you think you work?

Kyle Mountsier: 11:49

A week? I don't think I want to answer that question.

Nathan Southwick: 11:53

You're probably right about where.

Kyle Mountsier: 11:56

Yeah, I definitely I hit that probably 60 plus or minus a little bit. But, you know, I'm a founder. I'm a it's like, you start doing startup, you know, right? Like,

Nathan Southwick: 12:04

like, I mean, and I've got the ASOTU thing, I've got, like, a couple side, side gig things going on, so I'm probably in around that 60 hour work week as well. And, and I think the interesting thing from his, from his memo, for me, is that he says, like, that's the sweet spot, but he doesn't urge going too far beyond that, right? Interesting and and so I there's, there's something there to this that I think is that we can take away that, like, it's okay to work hard, it's good to be in office together.

Kyle Mountsier: 12:40

I can tell you that's true. I was up in I was up in the Syracuse office last week, and we had like five people together. I was like, whoa. This is crazy, right? I envy our dealership partners and friends that get the opportunity to sit face to face and like, work out problems, you know, demanding that 60 hour work week. We've seen where their successes and failures, especially in the retail auto business. But I think anytime you are driving toward a challenge, right? I think it's something that the team can get behind. You see, you see, like, I know dealerships that they'll last week of the month, or like, that last day where everybody's all on all day. And I you know, like the team gets energized by that stuff. It's, it's a question on how long a company like Google can sustain that level of pressure. You know, this, this race for the like, the AGI thing out there, where General Intelligence happens in the in the AI world, we'll see if it ever actually happens. But I agree, hard work isn't bad demanded. Hard work can only last for a time, and we'll see whether or not that produces the results that they're looking for.

Nathan Southwick: 13:54

Do you think that they'll nah. What are they what are they gonna do? Yeah. Do you think they'll hit Do you think they'll get there? AGI, do you think that

Kyle Mountsier: 14:01

happened? I don't think they'll get there. They'll get there. I think humans are too much. Humans are the reason why we're here. Love humans, baby. You.