The Expert Podcast

If you're at all interested in automobiles, and who of us isn't? Everybody has a car, everybody knows about cars, and some of us are car enthusiasts. This week has some of the biggest news for the future of automotive, put together in a way that hasn’t been done in history, and that's not an understatement.

First, we see an article where Hyundai is going to start selling vehicles on Amazon next year, 2024. This article is from November 16th, the date of recording. You might think, "Well, I don’t want a Hyundai; not a big deal." Do you think they're going to be the last ones? If this works, this will be a more common thing. When a manufacturer sells a vehicle through a car dealership, it can add $5,000 or $6,000 to the cost, sometimes up to $10,000 because of commissions, facility costs, labor, and staffing that go into the dealerships. If you sell cars through Amazon, the factory can eliminate all those costs and either sell them cheaper or make more money.

Whether or not you like the idea of getting rid of the dealers and bypassing them to buy through Amazon doesn’t matter. This is what the factories want to do. This is just the first step in doing it. Mark my words: in 2027 or 2028, look back in time, and you’ll see this is when the evolution of auto retailing officially started. Sure, Tesla has been kind of doing it for a while, but Tesla is a very narrow niche of electric vehicles and certain types of buyers. Everybody uses Amazon, right? We’re all familiar with Amazon. This opens up that retailing strategy to a larger volume of people. So, whether you like this idea or not, or you hate it, this is the wave of the future, and plan accordingly for that.

What about electric vehicles? Well, some other news came out today. There was a Tesla that was driving and fell into a lake, catching on fire underwater. The fire didn’t start because of a crash; it started because the vehicle was immersed in water. The water shorted out the battery, starting a chain reaction of energy within that battery that burned underwater. This is something to be aware of because more and more fire rescue and police departments are realizing that when a car in an accident is an EV with a big battery, it can spontaneously start catching on fire. Even if you put water on it from a fire truck, it doesn’t always put out the fire. Sometimes, it makes the fire worse. That's going to be something that will be an issue with these electric vehicles.

Also, with EV repair claims, costs are higher than with gasoline vehicles. That's going to affect your repair bill, but also insurance rates because many times, insurance is based on the repair cost of a vehicle. Not many times—every time—that goes into insurance rates. So, as more and more EVs hit the road, insurance costs are going to go up, which means insurance rates and premiums will go up. Even if you don’t buy an electric vehicle, they have to take into account if you crash into one. They have to fix an electric vehicle, so the costs are going to be higher.

Last but not least, here's even more disturbing news. The federal government wants to install anti-speeding tech in new cars. What does anti-speeding tech mean? It means they can control the speed of your car. If you're speeding, they can slam on the brakes, or at minimum—this is what they say—warn a driver that they're speeding. What does "at minimum" mean? That means they want to do more. They could attach it to the kill switch already talked about for cars that could be required by 2026. If you're speeding, they could activate the kill switch in your car.

These three or four subjects—the EV catching on fire and repairs, the speeding kill switch, and the Amazon selling of cars—are all very important developments in the automotive industry. Whether you're a car buyer, a car enthusiast, just a car owner, or in the car business, putting these four things together is going to dramatically change the world of automotive. I can’t understate that. In the next 3 to 5 years, we’ll see a huge shift.

I know you have an opinion about all of this. Let us know in the comments what exactly you think.