More Than Cars In Kazakhstan, Delivery Fees Skyrocket, Rivian and GM Trim Workforce

Episode #1180: Fresh off a global adventure, Paul and Kyle return with stories from Kazakhstan, a look at why destination fees are climbing faster than car prices, and how Rivian and GM are tightening up their EV operations as the market cools.

• Destination fees — the unavoidable “shipping” charges tacked onto every new vehicle — are climbing faster than sticker prices. Once a minor line item, these fees have ballooned across brands, marking the steepest industrywide increase in at least a decade as automakers quietly offset rising costs and tariffs.
  • Average destination fees jumped 8.5% for 2025 models, the biggest one-year spike in 10 years, according to Edmunds.
  • Fees have risen 27% since 2021, now averaging $1,549, up from $1,220 just four years ago.
  • Some models saw even sharper hikes — Porsche up 48%, Ford up 39%, Stellantis up 35%.
  • Analysts point to inflation, heavier vehicles, and new tariffs as key cost drivers.
  • “It’s another place where they can increase the price without increasing the price,” said Sam Fiorani of AutoForecast Solutions.

• As the EV market cools and cost pressures rise, both Rivian and GM are trimming teams to stay efficient. Rivian’s cutting hundreds after the loss of key EV tax credits, while GM is reducing salaried positions tied to design and development as part of a broader restructuring.
  • Rivian is laying off 4.5% of its workforce — about 600 employees — as it consolidates operations in sales, service, and marketing.
  • CEO RJ Scaringe said the move reflects a “changing operating backdrop” as demand softens following the expiration of the $7,500 EV credit.
  • Rivian will continue investing in its next-gen R2 platform to reach a broader market beyond its luxury R1 lineup.
  • GM confirmed more than 200 white-collar job cuts in Detroit, mostly in its design engineering and CAD teams.
  • The automaker is also managing $1.6 billion in EV-related write-downs and tariff costs as it shifts strategy to protect margins amid a slower adoption curve.

0:00 Intro with Paul J Daly and Kyle Mountsier
1:25 More Than Cars just got back from Kazakhstan
7:42 Destination Fees Skyrocket On 2025 Models
10:33 Rivian Lays Off 600, GM Cuts 200

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Transcript

0:00

All right, let's see if we remember how to do this. It's Monday, October 27 This is the automotive State of the Union. I'm Paul J Daly. This is Kyle Mountsier. We're going to talk about our trip to Kazakhstan, yes, Kazakhstan. And also we're going to talk about some other things, destination fees and people, laying off people, and all the other fun stuff, fees and EVs, fees and EVs. If only I was quicker on the draw on that. It feels like forever since we've been looking at each other through a studio, because we just spent, like the last week plus together traveling the globe, literally to the other side of the world, literally to the other side of the world. It was so I mean, first of all, just the chance to be together. You me, Michael Cirillo on planes and in another country, and think and Id idea this is that, at its minimum, would have been enough that well, that that's so sweet. You had me yet together, that that's literally the most time we've ever spent together in a row period, yeah. And it probably will be for a long time, sadly, but true. Unfortunately, I know. So if you don't know what the heck we're talking about, we, we we have. We've all posted about it on LinkedIn. So if you go to our LinkedIn accounts and look at the last post or whatever, you'll see it. But we've been keeping it very hush hush for the last probably close to nine months. Now, we have been working with the country of Kazakhstan, and I know when I say that everyone has a different thought. And I'm going to bet that 99% of your thoughts are wrong about who it is, where it is, what the people are like, what the industry is like, what the car industry is like. And we've been working with the industry at large, like their version of the Nada, called Ka you or kao for them to unify the industry around some core messaging and core thesis. And how do we talk about this industry as one that is lifting up the people of the country, providing jobs, providing safety and reliable transportation? So we spent, we spent. We weren't there for a full week, but we were there for quite a while and training people, touring factories, checking out a bunch of Chinese brands that are sold in show floors, eating some things we're not used to eating. What else did we do? Used to at all? We got to see a museum of some deep Art History built by a dealer. Go up the mountains. It was beautiful and amazing. And if you have a chance to check out the city, you definitely should. We were in Almaty, in Almaty, and I think that the the most interesting part for me is this is a very, very young industry, mainly because it's a very, very young country, if you think about it, Soviet Union disbanded in 1991 and so only since then has this country really been developing as its own entity. And the auto industry has kind of been built following that pretty quickly, but it's only about a 30 year old industry. And so when you look at that, they've just got so and in the pace of like, all these Chinese brands, all these new manufacturers, all this technological innovation, kind of having to build alongside, alongside of industry at the same time, because they've never really had industry, and yet they've still got so many of the same, same and similar people, problems when it comes to Look at this big industry in our country. What does it mean for us, a local person that just lives and works on a day to day basis, and it's so interesting, and it was so amazing to learn from, but also, you know, impart wisdom that we've seen from our work with more than cars with them. Oh, hold on, I have to get one of the shirts, one second. Yes, he's got one of the shirts. So we got the opportunity to train, train and engage a little over 100 of the marketers and PR personnel across the entire industry. And so we knew if we were going to drop into a room of marketers, people that were all about brand. We had to bring them a little we did. We did. If you look at that picture, keep that picture up the top two rows, you see all the dark suits. Those were actually like OEMs and distributors who manufacture cars and some CEOs of dealer groups. There a lot of marketers. You can identify the marketers, right? They're the ones that know what to do when you pick up the camera for the selfie. They're the marketers, but check this out. Oh, okay, so that we can't say this because we aren't great at Kazakh but that's 100 love people more than you love cars shirts in the Kazakh language in Kazakhstan, walking around this week. All right, we're going to talk more about it. We were able to test drive and see so many Chinese vehicles and so many brands that we talk about all the time on the show. It was so interesting to see them in person, to see the quality, to see the pricing to drive them, to talk about why people choose those. And, you know, kind of think about some of the complexities though, on why they are so inexpensive, and how it's not a level playing field like. When you go there versus coming here. So we're going to dig into it all. Wanted to make sure that we kind of let the cat out of the bag, and talked a little bit more about what that's going to do. You know, we will be talking about nerlin smoogulov, and he is kind of the areas. It's the one picture I was able to get at our meeting. Yellow suspenders, yellow watches. He's not a dealer. He's a nation builder that is building an entire nation and their pride in themselves and their ability to manufacture and create jobs through the automotive industry. He is the one that actually built and built the art museum that we're going to show pictures of at some point and tour of, and gave it to the people. And we were there a month after it's opened, and we were just looking at the pride on people's faces as they were looking at the art as they were on first dates. A lot, I saw a lot of first date looking couples. So we're going to talk about him, a complete visionary. You may recognize the name because he recently announced he invested in Steve greenfields automotive ventures fund. And you know, you've probably seen maybe some pictures or videos on the internet of Brian Ben stock and chip, Perry and Steve going out there to visit as well. So there's this little crew going on there that that don't sleep on, don't sleep on the and it's gonna be more as entrepreneur that I mean, big vision all the way through and hard to keep up with on a factory floor. That's for sure. Bro was moving. He was cooking. He was cooking lots, lots more, lots more to come through that. We hope you enjoyed the programming last week, the strategy sessions we did have, and do have archived. We talked to Patrick a bad Russ flips, whips, Andy gelcher, Joe Castellino, Ryan Warman on a bunch of different topics, on strategies going into the end of this year, spanning fixed stops, marketing, EVs, technology, I miss leadership, so you're going to want to go back and see those. They're on our YouTube channel, and we'll be posting through them. Follow us on LinkedIn. We're still posting content from those, and I'll tell you what Drop, drop, some really, really quality, actionable advice on the show all week. Last week, it went so well, I think we're gonna do that again. We'll do it. I don't know why we were we were halfway through the week recording these and we're like, why don't we do this all the time? Because all these people are like, a text message away, and then they're like, Yeah, sure, I'll do it. And then before you know it, like we got some of what's in their greatness out so everyone can see it. All right with the time we have left, let's talk about some news. Let's talk about the things on everyone's mind, not really, not really, but, but they're about to be destination fees, the unavoidable shipping charges tucked into every new vehicle. They're climbing faster than sticker prices once a minor light item, line item, they've now ballooned across all brands make, marking the steepest industry wide increase in at least a decade. As automakers quietly offset costs and rising tariffs, the average destination fee jumped eight and a half percent for 2025 models, the biggest one year spike in over a decade, according to Edmunds, fees have risen 27% since 2021 now averaging$1,549 up from $1,220 just four years ago, some models saw even sharper hikes. Porsche up 48% Ford up 39% the land is up 35 analysts point to inflation, heavier vehicles and new tariffs as the key drivers. Here's a quote from San Fiorini of auto forecast solutions. He said, this is another place where automakers can increase the price without increasing the price. There it is because you can still, as an manufacturer, advertise the same exact MSRP, and when it gets to the dealers, the final MSRP includes destination charges. That is a wild, wild strategic advantage when it comes to OEMs positioning themselves as not raising prices due to tariffs or or or increased vehicle weights. But we see this on the dealer side, because we know what that final MSRP is, and that's what we're required to advertise against. This is, this is kind of a shocking realization that like hey, manufacturers are dealing with price strategy issues, and they're trying to continue to figure out how to, like raise margins, but keep their marketing strategies in place and present themselves as good to the consumer public, just another point of education that You can leverage in the showroom with your sales people understanding, like, Hey, why are these vehicles moving in prices? We do have heavier vehicles. We got, you know, different charges from, from these shipping providers, when, when you're looking at like, I think the biggest take cyber trucks across the road now, right? I mean, the biggest takeaway, well, first of all, none of that money goes to the dealer, right? Not, not zero. Also, OEMs do not have to disclose what the destination fee is. They don't have to say, well, this much goes to transportation. This much goes that right? So literally, it's an area where they can just raise the destination fee as like a pack into the vehicle. All that money goes back to the. OEM, so straight up profit pack it is. And so it's, I wonder if that's gonna come up. I wonder if that's gonna come up because just came up. We just done time, just came up. Just came up. Well, speaking of things coming up, twice in the news today, over the last weekend, the EV market is, of course, cooling and cross pressures are rising. Both rivian and GM are trimming teams to stay efficient. Rivian is cutting hundreds after the loss of key EV tax credits, while GM is reducing salary positions tied to design and development as part of a broader restructuring. Restructuring, rivian is laying off 4.5% of its workforce, about 600 employees. We saw a lot of that on LinkedIn last week. CEO RJ scaring said the move reflects a changing operating backdrop as demand softens following the expiration of the$7,500 EV credit, rivian will continue investing in its next gen r2 platform to reach a broader market beyond its luxury are one lineup. GM also confirmed that more than 200 white collar job cuts are happening in Detroit, mostly in its design engineering and CAD teams. So you know a lot in the rd effort, the automaker is also managing a$1.6 billion in related EV related write downs and tariff costs as it shifts strategy to protect margins in this slower adoption curve. The other anecdote is I saw Alex Lawrence talking about a massive change in just the overall attention on his website and in the showrooms as these EV tax credits have rolled out a massive Wait, a massive change in people coming in, like a drop off, major drop off. So I think there are a few things at play in this particular story. Number one, I think it's just more fallout of the EV market regulating to an actual normal, not not a manufactured normal, as far as who, what demand is, what supply is, what costs are. So rivian obviously has to respond to that, especially being what I would consider high end EV brand, right, their vehicles are more expensive. And also they did report, as part of this is that they're showing like a 70% increase in revenue, and their loss is narrowing, so they're continuing that long march to profitability. They're still not there yet. And stocks went up on the news, right? Stock news always goes up when companies cut costs. But another thing at work, the question begs to be answered, because there are several other articles out there just today about companies either downsizing or not backfilling when people leave like they're downsizing via just not replacing. And you have to, you have to know that AI integration into these companies is something that is allowing them, especially with the white collar jobs, right? We've talked about this before, especially when you think about CAD design engineering, that a single talented engineer will be able to get more done with some AI automated workflows, or maybe not automated workflows, just in general AI workflow. So this is a conversation we're going to continue to hear, continue to talk about, and I think this is just those two stories colliding. Yep, I agree. I don't know. I All I know is that last week, our bodies were flipped because we were on the other side of the world, and today, we're back in the saddle. We're going to be working hard to get caught up bringing you everything you deserve. So follow along on LinkedIn. By the way, there's gonna be a lot more content hitting there real soon. You you.