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Welcome to Wednesday as we talk about the big finalization of new FTC rules that has NADA CEO Mike Stanton not mincing words. We also talk about a big stock purchase of Ford by one of their employees, as well as a Christmas rescue of a Cybertruck.
The FTC has finalized a new rule yesterday, targeting deceptive car-buying practices, including junk fees and misleading promises, set to transform the automotive retail landscape by July 2024…for better or worse
- The rule, set to go into effect on July 30, 2024, requires transparent pricing and prohibits non-beneficial add-ons, such as oil changes packages included in an EV contract, or nitrogen that isn’t much different than normal air
- It aims to protect consumers, particularly servicemembers, from deceptive practices costing $3.4 billion annually.
- The National Automobile Dealers Association criticizes the rule for adding complexity and increasing compliance costs, noting that The Center For Automotive Research suggests it will add 2 hours to the transaction time. This counters the FTCs claim that it will reduce time by 3 hours
- The same study suggests that Dealers face $18 to $22 billion in extra compliance costs over a decade due to the FTC rule, far exceeding the agency's estimate of $1.36 to $1.57 billion.
- Mike Stanton, CEO of NADA said Tuesday: “This regulation is heavy-handed bureaucratic overreach and redundancy at its worst... The FTC made up data to support its claims, then rejected calls to slow down the process and test the effectiveness of its proposal with real consumers. We are exploring all options on how to keep this ill-conceived rule from taking effect.”
Ford's chief electric vehicle, digital, and design officer, recently made the largest non-family investment in the company since 2004 purchasing $2 million in Ford stock, reflecting confidence in the automaker's future.
- Doug Field acquired 182,000 shares at $11.05 each which doubles the $1 million stock purchase by former COO Jim Farley in 2020, signaling optimism in Ford's direction.
- A Ford spokesperson commented, "Doug has a substantial ownership interest in Ford stock, which shows he believes in the company's future."
A twitter user captured a Tesla Cybertruck's failed attempt to climb a snowy hill, requiring rescue by his friend’s Ford Super Duty, raising questions about its off-road capabilities, and of course, embarrassing the new vehicle
- The incident occurred in California's Stanislaus National Forest, where the Cybertruck struggled on a snowy incline and needed recovery by a Ford F-series.
- Factors influencing the failure include inadequate all-terrain tires for snow and a software issue preventing the use of "lockers" for better traction.
- Also absent from the Cybertruck were any pickup or recovery points, meaning the truck had to be pulled out by its control arms
Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.
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