Auto Industry Gets Tariff Exemption, Best Resale Value Cars, Google AI Search Mode

The auto industry breathed a sigh of relief yesterday as it was announced that they will be exempt from the 25% tariffs on Mexican and Canadian goods. Plus, we’re looking at the cars that hold their value the best, and Google’s push towards AI search.

Show Notes with links:

• The auto industry is temporarily relieved by a one-month exemption from the 25% tariffs on vehicles covered by the United States-Mexico-Canada Agreement (USMCA). President Trump granted the reprieve following requests from Ford, GM, and Stellantis, with the ultimate goal of shifting production to the U.S.
  • The automotive provisions of the USMCA require that 75% of a vehicle's components be made in North America (up from 62.5% under NAFTA) to qualify for zero tariffs, and mandate that 40-45% of auto parts be made by workers earning at least $16 per hour, aiming to boost North American production and labor standards.
  • Most automotive manufacturers comply with USMCA standards and The American Automotive Policy Council and automakers expressed gratitude for the temporary exemption.
  • Suppliers remain concerned about long-term impacts, despite positive signs for USMCA-compliant parts.
  • Dealers and industry experts view the exemption as part of a broader strategy to encourage domestic manufacturing, but uncertainty persists.
  • “The damage has already been done. For an industry that operates in three- to five-year product cycles, this level of day-to-day uncertainty is debilitating.” — Glenn Stevens, Executive Director of MichAuto.

• Last week we covered the cars with the most depreciation, and now, Kelley Blue Book has announced its annual Best Resale Value Awards, highlighting the top performers of 2025.
  • The top 10 vehicles are projected to retain an average of 58% of their original MSRP, compared to the market average of 44.6%.
  • Toyota dominates the list, securing four of the top ten spots, including the #1 2025 Toyota Tacoma with a projected 64.1% resale value.
  • The full top 10 list includes the 2025 Toyota GR Supra (53.7%), 2025 Porsche 911 (53.8%), 2025 Toyota RAV4 (53.9%), 2025 Honda CR-V (54.4%), 2025 Mercedes-Benz G-Class (56.6%), 2025 Ford Bronco (57.0%), 2025 Toyota 4Runner (60.0%), 2025 Toyota Tundra (60.9%), 2025 Chevrolet Corvette (61.0%), and 2025 Toyota Tacoma (64.1%).

• Google is accelerating its AI integration into search with a new feature called AI Mode, adding a chatbot-like experience directly to the core of Google Search.
  • AI Mode, currently in testing, is only available to Google One AI Premium subscribers and must be enabled in the Labs section of Search.
  • The feature offers a search-centric chatbot experience, delivering AI-generated answers directly from Google’s search index with supporting links throughout.
  • AI Mode uses the Gemini 2.0 model, aiming to improve Google's ability to handle more advanced queries while providing real-time data and web interaction.
  • While concerns remain about Google's shift away from traditional website linking, Stein asserts that AI Overviews an

Hosts: Paul J Daly and Kyle Mountsier

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Transcript

Paul J Daly: 0:00

Music. Good morning. It is Thursday, March 6, and I feel like a little bit like a Yo yo, up and down, back and forth. Could they have, of course, we're talking about the auto industry tariff exemption, best resale value for cars in Google AI search mode. Hey, what they're trying to do to keep up with the fact that lots of people just search on chat, GPT, now

Kyle Mountsier: 0:21

that's all it is. That's there. Everybody has, everybody has figured like, Hey, we're just headed that way. So what do we do? So we'll talk about it. I got, we got some insights on

Paul J Daly: 0:34

my 13 notes, searching that way. We got issues. I mean, just as the weather issues, I don't know. Listen, look, put the slide up. We have this slack channel. We have several Slack channels about ASOTU CON, but that's right, we have these early indicators that things are really heating up. And that's our back end Slack channels integrated with people signing up and buying tickets and requesting sponsorship information, all that. And that's how like we're so in it right now. ASOTU CON 2025, coming in super hot. Thank you so much. Our presenting sponsors, rentals of rentals and goo bag goo stepped up early to make sure a soda con was as good as it possibly could be. And so we want to say you need to be there because it's going to be on, be livable. I mean, we, we're kind of hype guys, just in general. I think people would say we're hype men. I get it, but anyone that's been to a soda con knows that we're not exaggerating.

Kyle Mountsier: 1:25

Well, this like we put out a video of just people talking about ASOTU CON last year, and I you

Paul J Daly: 1:32

it is, you know what? I know. I

Kyle Mountsier: 1:36

didn't exactly, I didn't see any of that. I didn't prompt anyone to say that, I think that you know when, when you look at the operational, functional things that you get out of the content, the conversations, the connections at this event in particular. And we go to all the events like, you know, we absolutely love the cane, NCM event, the Pash events, nada, we're at them all, and they are great for connecting. There's just something different about what goes on at ASOTU CON. So you got to be there. Man, I was on, like, panel prep calls people talking about what they're going to be speaking about bunch of different places last yesterday already. So it is heating up. Yeah, cute.

Paul J Daly: 2:20

Let's give some props to Nathan. Our producer, Nathan has the video. He's like, do you want the video in the show? Nerds like, you're like, he's like, queue it. I got it right here at my back because you're

Kyle Mountsier: 2:29

that quick at it. Cue the video. Go.

Unknown: 2:33

People here are the tip of the spear when it comes to excellence in automotive. The speakers, the sessions I took, the pages and pages of notes. I have so many ideas that I can't wait to go back to the dealership, with the environment, the network, the people here. I tell everybody, it's different, the conversations around the happy hours and lunch, it's just a great experience all the way around. I love this conference because it just combines like minded people that loves people more than cars and just coming together and just re energizing. My favorite part of the soda pond is the people, the environment and the vibe. I am so here for and I can't wait for next year I got to the auto industry so that I could change the auto industry. I never thought in a million years that I would find people that thought exactly like me. It's more than just sales, it's more than just products. It's more than opportunity. It's about a community coming together and talking about things that really matter. Asotugo continues to step up their game this year, there's so many progressive dealers, and they bring to us what they're doing. It allows us opportunity to continue to enhance our game and raise the level when we get back, the details are done exquisitely, the recharge lounge, the racing, all of the things add up to a really great vibe. And it was very, very fun, very interactive.

Paul J Daly: 3:51

They make me happy, those dealers, and they're like, I want to spend more time with you next year. I know, right, so many, yeah, look, if you, if you're wondering, that was just a small fraction of the hundreds of dealers that were there, and you need to be there to go to ASOTU CON com, get your tickets and please, we said this every day, and we'll keep saying it until it's full. Book your hotel room at the event hotel as soon as possible, because that's going to be the first thing to get the sold out sign on it. We have every room they'll give us, which is like 98% of the rooms in the hotel, and it's gonna sell out this. I mean, it'll sell out probably in a matter of weeks at this point, before April, for sure. And so I don't want that to be the reason you're like, Well, I can wait another two weeks, because it could go faster, because the second all of like, the people who already have their tickets and the industry partners who are bringing their people are like, Oh, we better book. It's gonna fill up super quick, all right, time to get into it. Oh so yesterday, you all know, we talked about, oh my gosh, Trump before Congress tariffs. What are we gonna do? Well, like 30 seconds later, the US industry is temporarily relieved by a one month exemption from the 25% tariffs on vehicles covered by the United States Mexico can. Nada agreement, otherwise known as usmca, President Trump granted reprieve following requests from Ford GM and stellantis, with the ultimate goal of shifting production to the US the automotive provisions of the usmca require 75% of a vehicle's components to be made in North America, up from 62% under NAFTA to qualify for zero tariffs, and they it also mandates that 40 to 45% of auto parts be made by workers earning at least $16 per hour, looking to boost North American production labor standards, most manufacturers comply with usmca standards and the American automotive Policy Council and automakers both express gratitude for the temporary exemption. Suppliers, obviously concerned about long term impacts. Dealers and industry experts see the exemption as part of the broader strategy to encourage domestic manufacturing. But there's still uncertainty. Here's a quote from Glenn Stevens, Executive Director of Meech Mitch auto. Mitch auto like Michigan, I'm guessing, yeah, Michigan. Michigan auto, the damage has already been done for an industry that operates in three to five year product cycles. This level of day to day uncertainty is debilitating. That's

Kyle Mountsier: 6:09

the thing that to me is like, how do you make decisions as a company starting a business? Right? You start having these like Rush meetings, you know, even just the stuff that we saw happening last month and in pre producing cars, in increasing the amount of inventory and parts, part stocking, and then all of a sudden, now you've got this part stock, and increase inventory that maybe you didn't have to worry about, but you may still have to worry about in one month, right? The jury's still out on what the long term impact or what the long term opportunity for this is. You know, we've got a month of reprieve. It's really only for three manufacturers. So this doesn't impact all the other manufacturers that are going to be hit by these tariffs, the ones that are manufacturing vehicles or parts in Canada, Mexico. So there's still a lot to kind of like uncover from this, but for the big three here in the US, definitely a little bit of reprieve. I can't imagine doing business, making decisions as a large corporation under this kind of a type of strenuous thing.

Paul J Daly: 7:06

It's a 30 day reprieve, right, right? That's it. That basically is giving time for people to figure out how they can get a longer exemption, yep, right? Like, they're not, they're not going to be able to, like, make any meaningful changes. They're just going to have to make a case for the fact. Lobby for it. They should have another nine months, right till the end of 2025 in order to, you know, like meet certain requirements or show enough commitment that the reprieve gets extended. So it's all hands on deck. You know, there's an army of lobbyists and lawyers and business strategists trying to figure out how they can actually the Big Three anyway. Can can figure this out. I mean, and if you're one of the not one of the big three, right, still in it, yeah. And so we'll see, I guess we'll see, used cars. Speaking of used cars, oh, segue, it's been way too long since we used the Segway button, just realizing that last week, we covered cars with the most appreciation. And now Kelley Blue Book has announced its annual best resale value awards, highlighting the top performers of 2025 the top 10 vehicles are projected to retain an average of 58% of their Original MSRP, compared to the market average of 44.6% no surprise here. Toyota dominates the list, securing four of the top 10 spots, including the number one spot, which is the 2025 Toyota Tacoma, with a projected 64.1% resale value. That's like 50% higher than the average. It's kind of ridiculous. The full top 10 list is the 2025 Toyota gr Supra, 25 Porsche 911, 25 rev 425, CR V, Mercedes Benz Class Ford Bronco, Toyota four runner, Tundra, Chevy Corvette, and the Toyota Tacoma.

Kyle Mountsier: 8:57

There it is. So obviously we all know like Toyota has been a long standing mainstay in best resale value awards. Just, you know, if you don't know a little bit about the awards, these percentages are based on a 60 year term as far as resale value and 60 months, yeah, didn't I say 60 did I say 60 years?

Paul J Daly: 9:19

Wow. I knew it, wow.

Unknown: 9:21

I mean, if they rotated that much, probably

Paul J Daly: 9:25

over

Kyle Mountsier: 9:26

cruiser, you know, they're

Paul J Daly: 9:28

way higher. It's like 200%

Kyle Mountsier: 9:31

original. So, so yeah, for 60 months. And you know, when you look at this, obviously, this is resale value. This isn't wholesale value. But when you look at this, you start to look at, hey, look where am I looking for leasing? And where might consumers be looking for leasing? Because you're going to have great three year terms based on the residual value of that car. So if you're a part of any of these manufacturers, maybe take a look at the leases today, see how they're performing, because that's probably a place where your consumers are looking as well. Through. But kudos to Toyota for just putting in the good work with the good cars and all that stuff. You

Paul J Daly: 10:05

know what I like? I like when Nathan chimes in on the show, like, just like, comes out of nowhere. But I'm gonna call you out. If you're gonna do that, you need to get your mic set up. I know, right? I'm gonna call him out because I love, I love what he does. It. It's so fun, and I think it's an awesome dynamic to the show. But, I mean, like, the mics probably sitting like three inches from from that mouse pad right now. It's just not plugged in. He can't even come on the show. Am I allowed to say something? No, he can't even say anything else. It's not allowed. She was on screen. Oh no, it's so good. Let's

Kyle Mountsier: 10:44

keep it rolling. Google is accelerating its AI integration into search with new with a new feature called AI mode, adding a chat like experience to the core of Google search. AI mode, currently in testing, is only available to Google one AI premium subscribers, and must be enabled in the labs section of search. So it's a it's a very small few, but you can see where they're headed. Feature offers a search centric chat bot experience delivering AI generated answers directly from Google Search injects with supporting links throughout so very similar to like what Bing did early and now, how you you know you might be chatting with a GPT or perplexity. It uses the Gemini 2.0 model, aiming to improve Google's ability to handle more advanced queries while providing real time data and web interaction. Obviously still kind of up in the air out there in the world of search, whether or not AI search is going to become the absolute mainstay or we're going to continue to get like, regular search results. Quote from Robbie Stein, VP of product at Google, says we're finding, what we're finding from people who are using AI overviews is that they're really bringing different kinds of questions to Google. They're more complex questions that may have been a little bit harder before. So people are just asking more long form things. They're getting used to this, like, more in depth way of searching, as opposed to, like, just your three word near me type stuff, and that's how those Google AI answers are happening.

Paul J Daly: 12:05

I will say at this point my search behavior is probably, if is probably 5050 That's right, it's about 5050 the times when I will use a traditional Google search. Now so funny that we're talking about traditional Google search. I just, you know, the traditional back the way our great behavior, yeah, I use traditional Google search. It's usually because I'm trying to buy something, right, right? Because I want, I want to see the pictures. I want to see the products, you know. And I've actually been increasingly frustrated with Siri that it doesn't respond like GPT would like chat GPT would it's pretty. It's pretty. There was an article we didn't get the cover last week. But Apple, like, the news is like that they're actually a lot further behind than they want it to be at this point. Yeah,

Kyle Mountsier: 12:50

they're saying next year. Yeah. And so

Paul J Daly: 12:53

like with Google doing this, I think it's, I love the idea of having a chat window where you can have this conversation. Feel like you'd be able to get to what you want faster. The real question is, how are they gonna maintain their ad model with this going on? And it also is a good reminder that it still gets all of its source information from good web content, good social media content, and that is what is informing? What's the term that they use for the optimization? It's like generative. It's got a G in it. It's not SEO. It's like, G, I can't remember what that generative engine optimization, yeah, exactly, yeah. Which is the bottom line is, like, you still need to put great content on the internet. Because, like, yes, that's, that's the

Kyle Mountsier: 13:35

great content, speedy website experience, so the crawlers can understand it well, formatted SEO header formatting so that it can understand the semantic hierarchy of the web page. Like all of those content, things are extremely important, and like bulleted lists, semantic hierarchy are even more important. Now, when you think about these AI overviews, they're literally extracting that content from the way the HTML is structured. So when looking at your web provider, and when looking at the content structure, the design structure, it's ever more important to kind of create in that so that you can get in that generative search. I can tell you, the other thing that I would look out for is an increased amount of zero click search so that, but you need to be branding yourself at every turn and and in all of your content, because that branded search model where zero click Results are happening is going to be ever more important to make sure that people find you later down in the process. Hey,

Paul J Daly: 14:33

I think I don't know if it was you or Ben that made a post about this. Maybe it was Ben Hadley, is it true that because, you know, obviously, to have these crawlers getting information from the web, takes a certain amount of compute to find out resource. Is it true that, like the the headers and the bulleted lists are valuable just because it takes less compute to like pull information from that? Do we know that? Well,

Kyle Mountsier: 14:56

it so whenever you're like actual content. Structure from like, the raw HTML that's sitting there is easier for the bot to understand. And there's there's less like, there's less divs to go down, that the structure of the body isn't so intense where you've got like, content structure inside of content structure. It definitely is easier for these crawlers to crawl. And, I mean, just the speed of the website is important too, because the crawl budget is all based on, you know, how much compute does it get? Does it take to crawl one web page and understand what's going on? It's it's going to be just more and more important that your content is structured appropriately for these, for these engines to be able to understand,

Paul J Daly: 15:42

I feel like we gave everybody the full thing today. They got to see a video. We got a nerdy at the end. Good next. We got the Riz. We got the hassle. Nathan, our producer. But again, Nathan, we expect you on the show. More. Plug in your mic. Got him goodbye.