Sonic’s Boom, Wireless EV Charging, Initial Quality Winners & Losers

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On this first Friday of Summer 2023, we’re talking about big used car moves from a public, wireless EV charging, as well as J.D. Power’s Initial Quality winners and losers. 

Show Notes with links:

• In a regulatory filing and a subsequent news release, Sonic Automotive Inc. announced the indefinite suspension of operations at eight EchoPark locations, citing challenges with lower used-vehicle availability and higher wholesale pricing.
  • Sonic did not disclose which EchoPark locations are affected, but expects this move will allow it to redirect additional used vehicles to key markets to meet current demand.
  • Despite the suspensions, Sonic maintains its targets for EchoPark to reach breakeven earnings by Q1 2024, and plans to cover 90% of the U.S. population by 2025.
  • The company expanded its used inventory parameters from 1-4 years old to up to 8 years old, and expects new vehicle production increases over the next year to benefit pre-owned availability and improve EchoPark profitability.

• In a step that could move EVs closer to a wireless charging future, Tesla is reportedly eyeing Wiferion, a German startup specializing in wireless charging solutions. This potential acquisition, coming on the heels of Tesla's teasing a wireless home charging station in a recent ad, marks an exciting possibility in the evolution of EV convenience.
  • Wiferion, founded in 2016, has developed inductive charging solutions for industrial robots and electric vehicles, with over 8,000 chargers deployed, primarily for industrial robots.
  • While Tesla doesn’t typically acquire other companies, the deal is expected to be in the mid to high double-digit millions of dollars, although it is not yet confirmed.
    
    
• New vehicle quality is hitting a speed bump, with carmakers Dodge, Ram and Alfa Romeo now outperforming former leaders like Toyota, according to the annual J.D. Power Initial Quality Study. A surge in issues tied to new features and technology is behind the dip in the industry's performance
  • The average number of problems reported in 2023 is 192 per 100 vehicles, up from 180 in 2022 and 162 in 2021.
  • The more features a car model has, the more opportunities exist for defects or failure to meet owner expectations. Issues include seemingly basic elements like door handles, as well as wireless charging pads not working as expected.
  • While not officially included in the study, Tesla and Polestar had well above the average number of problems per 100 vehicles, with 257 and 313 respectively.

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