Inside Automotive with Jim Fitzpatrick, powered by CBT News

Breaking Down the California EV Mandate Block with NADA CEO Mike Stanton

• Jim Fitzpatrick • Season 1 • Episode 9

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The auto industry secures a significant win with the signing of resolutions to block California's EV mandate, representing a victory for dealers, manufacturers, and consumers by restoring choice in the marketplace.

• NADA CEO Mike Stanton describes the policy shift as "a win for industry, consumers, our country, and common sense"
• The blocking of California's mandate allows for a more diverse approach to reducing emissions beyond just EVs
• Trade associations including NADA and state ATAEs played crucial roles in advocating for this policy change
• Dealers with substantial EV investments will still benefit long-term as electric vehicles remain an important market segment
• The $7,500 EV tax credit is likely to be phased out gradually rather than ending abruptly
• Ford is working to repair relationships with dealers after aggressive EV program requirements
• Despite some business cooling in recent months, dealers report sales still outperforming pre-pandemic levels
• The upcoming NADA Show in Las Vegas is expected to have strong attendance with exhibit space already filling up

We encourage dealers to maintain a positive attitude through industry changes, knowing your trade associations are advocating for your interests in Washington on everything from EV mandates to potential tariffs.


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Jim Fitzpatrick:

You're watching Inside Automotive with Jim Fitzpatrick. Hey everyone, Jim Fitzpatrick, Thanks so much for joining me on another edition of Inside Automotive right here at CBT News. A huge win for the auto industry and the ATAEs across the country on today's show. On today's show we're discussing the recently signed resolutions to block California's EV mandate. That will have implications for dealers and manufacturers and consumers positive ones, I should say. So. joining us with his perspective on this huge move is Mike Stanton, CEO and president of NADA. These people at NADA folks have done an amazing job for you on this very topic. So, Mike, thank you so much for joining us on the show today to discuss this.

Mike Stanton:

Jim, you know it's always great to be with you. This is a special occasion. I would expand upon your perspective on the win, though. I think it's a big win for industry, but it's also a big win for consumers, ultimately our country, and a huge win for common sense. You know we live in a great country that at times we just get pulled into different directions. Everything's so extreme, but usually and thankfully in this instance common sense has prevailed. We still have a lot of work to do, though.

Jim Fitzpatrick:

Yeah, yeah, there's no question about it, and I think this is an example of the importance of trade associations like NADA and all of the state associations and metros that are out there when working together. You know the positive impact that they can have on the auto industry as a whole, the positive impact that they can have on the auto industry as a whole, and so for dealers out there, if you've ever been wondering, you know what can I do. You can support your ATAEs and the work that they're doing and, of course, nada, because you guys brought it home. I mean, you really did a phenomenal job. There's a picture of you and the chairman of NADA right there in the White House at the signing, which we're showing on the screen right now.

Mike Stanton:

That's a pretty cool deal right there. Talk to us about that experience. It's an amazing experience. I don't care what side of the political spectrum you're on. To be there in the White House on such a momentous day was just an incredible and a very special experience, a day I will never forget.

Jim Fitzpatrick:

Yeah.

Mike Stanton:

And you mentioned the Trade Association, and sure it's our job, working so closely with the ATAEs and we had ATAEs calling Congress directly. The relationship that our states have with their representative is only second to the relationship that dealers have with their representatives. That's right to the relationship that dealers have with their representatives and everybody. A full team effort. Everybody got on the same page and collectively, you know, we got it done. It was fun to be a part of.

Jim Fitzpatrick:

That's right. That's right. It's something that never really should have taken place or happened in the first place, right?

Mike Stanton:

Talk to me about that. Well, exactly, I mean, and really we're on to the next. You know you celebrate here and then you just got to move right on to the next, which is the Environmental Protection Agency. The EPA standards are not as tough as the for round one, but we've got to continue to work closely with the administration, the EPA, the Department of Transportation, and we're taking the voice of the dealers, the voice of common sense, to these agencies. Very confident we will get the next step done in this process. But again, the EPA standards are unworkable and I just want your listeners to know that it's full court. Press on that as well. Again, I'm optimistic. Trump signed the executive order. Lee Zeldin has been amazing to work with. It's not a matter of if, it's a matter of when, and there's some different avenues that I don't need to bore you with on how that might happen. But we just, again, I want your listeners to know that it's on to the next and we've got the full court. Press on that as well.

Jim Fitzpatrick:

That's right. That's right, Lee Zeldin, and of course, Bernie Marino too, that you happened to mention there in your article at NADA, among other people in Congress that helped your efforts on this as well, right? I mean, this is really, when you've got the private sector, with the help of a trade association as strong as NADA, working together with those representatives in Washington, I mean you guys can move mountains if you're on the same page, right.

Mike Stanton:

Yeah Well, and Senator Moreno has been exceptional. Not only did we get his vote, which I wasn't too worried about that, but he is a team builder and he has brought. You know there's all different teams that were working toward the same goal, but the senator's team, very influential group, and we were working in lockstep with Senator Moreno and his team and he's just been. He's done everything he said he would do on the campaign and it's just been. It's been an honor and a pleasure to work with him on this effort and on other things as well, and we'll continue to do that. He's been a great champion for dealers in just a very short amount of time.

Jim Fitzpatrick:

That's right. That's right. So do you think that this sets a new tone for EV policy? Obviously, there's going to be some fallout from this, but I think, overall, such a positive move. Talk to me about the new tone that it does set with regard to EV.

Mike Stanton:

Well, I think the tone has to be, and should have always been, about the customer and unfortunately we did not have an industry that was united several years ago, and it puts the NADA in a tough spot. I mean, when the dealers aren't united on something, or when the car companies aren't united on something, then obviously we can't work together and be effective. So, yeah, the tone has changed. I think we're moving toward again common sense. Realistic EVs are not going away.

Mike Stanton:

Dealers have always wanted to sell EVs. They want to sell what their customers want, but certainly the landscape is going to change. Focus on the customer hey, let's even talk about the environment. Let's focus on the environment. You know EVs one size fits all demanding consumers. You know, choose a particular type of vehicle is not the American way and it wasn't the best thing for the environment either, because customers just would have held onto their vehicles for longer if they couldn't buy what they wanted. The focus should be on fleet turnover EVs, plug-in hybrids, hyids, cleaner burning ice vehicles, new technologies that were coming our way sooner or later, but that all of that now is on the table and that's where it should have been in the first place.

Jim Fitzpatrick:

So, yeah, again, I keep saying it back to common sense which is which is really where we need to be, back to common sense and back to customers and taking care of our customers, because that's why we exist yeah, yeah, there's, there's no question about it, and of course, we might be seeing the you know them doing away with the $7,500 tax credit on EVs, which you know there was a lot of argument on that to be made. Talk to us about that. What kind of impact that will have.

Mike Stanton:

Well, that will have an immediate impact. The good news is I don't think that's going to happen. Well, that will have an immediate impact. The good news is I don't think that's going to happen immediately. Again, Senator Moreno has been a champion on this. We need a phase out.

Mike Stanton:

The dealers have. I don't have the latest numbers, but it's a lot, A lot of EVs over 100,000 EVs sitting on their lots right now. Last I checked, and it was a while ago, it was over $5 billion worth of electric vehicles sitting on their lot. We need time to move those vehicles. The manufacturers also need time to adjust their pricing strategies, so we have been talking about a phase out for a long time.

Mike Stanton:

I think that's what we're going to see, but it's still very much up in the air right now. As soon as we have a definitive deadline and we're looking at probably another three months, maybe through the end of the year, as soon as we know for sure, we will make sure we get that information out to dealers, as I know the manufacturers will, because the dealers, as you know, jim, the dealers will work. The current landscape, the current climate the current program, but we have to know what that is.

Mike Stanton:

That's right, and that's what we've been pushing for is a phase out, because, yes, there has been talk about kind of a ripcord on this thing and that's just not. It's not fair to dealers that have already invested in these business product as your listeners. Now, once the dealers, they're on the lot. They bought them, they're committed. There's no consignment situation. We bought them and we were motivated to sell them. We just need the time to work out of it in the right manner.

Jim Fitzpatrick:

Sure, and many dealers didn't just buy the cars but they bought the charging stations, they bought the whole kit from their OEMs and obviously Ford was kind of leading the charge no pun intended there. But there were a lot of dealers that made some very hefty investments into this whole EV structure and thinking that the market was going to be there and we were going to be forced to be selling this. So this has got to be a huge sense of relief for so many dealers out there that are saying hey, wait a minute, as well as OEMs.

Mike Stanton:

Right, well, yeah, dealers stepped up.

Jim Fitzpatrick:

They did what they needed to do and EVs aren't going away.

Mike Stanton:

So, these investments will will pay off long term for the most part. And the problem is some of the manufacturer programs. You mentioned Ford, it was just going too far. Ford is working with their dealers to make good on that and you know we've been very critical of Ford back back in those days. But they have done a lot and we've seen it in the dealer attitude survey. They have done a lot to kind of repair the relationship with their dealers and things are moving in the right direction from the sentiment with Ford dealers out there. So we thank Ford. We thank Ford for doing the right thing.

Jim Fitzpatrick:

That's right. That's right.

Mike Stanton:

What's the most important thing that dealers should be paying attention to now, now that we're Well, I think you know we pay attention to your attitude, right as leaders of your organization. So goes the. You know your employees. You keep, as Alan Mulally has said before you, don't own your face. Keep smiling. Things are going to work out. We know about the resiliency of dealers. You name it EVs, epa tariffs, ev tax credits going away. We will figure this out. Maintain a positive attitude. Know that your trade association has got your back. We've got your voice. Regarding tariffs you haven't brought up tariffs yet. I do want your listeners to know we are talking with the administration, talking to members of Congress, talking to the agencies, about the potential impact that these tariffs will have, not only on the consumer, from an affordability perspective, but also from small and medium-sized businesses, and the potential for job losses.

Mike Stanton:

So, again, it's our day job. We have got the dealer voice, we're carrying that to the appropriate places here in Washington and you know we're very much in an advocate, wait and see approach and we've got some escalation strategies. Again I report into a board of directors and we will determine what the best next step is and of course we'll communicate that accordingly.

Jim Fitzpatrick:

Sure, sure. As we sit here today in the middle of, or, I guess, toward the end of June, how's business among your members? What are they telling you?

Mike Stanton:

Well, let's compare notes. What I'm hearing is that we've had a great year and maybe there was some pull ahead in that there probably was some pull ahead.

Jim Fitzpatrick:

Sure.

Mike Stanton:

Dealers are optimistic they're always optimistic, but there has been a pullback in business, is what I'm hearing. May know May was good, not as good as April June. Well, things are okay but, certainly not as good as they've been, and they're never as good as we want them to be. Is that similar to what?

Jim Fitzpatrick:

you're hearing. In fact, I just did an interview before this interview here today with you and the dealer said you know, I'm still doing way better than 2019. So, if that's any indication, he goes all things are very good with our group. So and I'm hearing a lot of that that things are to your point. Maybe they weren't what they were in March, latter part of March or April or what have you, but they're still pretty good out there.

Mike Stanton:

Yeah, I wouldn't say that's universal, but we were just with our board last week, 65 representatives from all across the country. I mean some people, things are still going gangbusters. Some are not quite as optimistic, but the general sentiment is what I shared before. We're hearing the same things.

Jim Fitzpatrick:

Yeah, it's good to be in the car business, for sure.

Mike Stanton:

It's always great to be in the car business. That's right, you know that's exactly right I agree, I agree.

Jim Fitzpatrick:

So this, then. This is why my next topic here, and this is why the NADA show this year is going to be phenomenal. We got a little storm, snowstorms, but that puts that many more people in Vegas this year for what should be an incredible show. And I say that because here we are, six months out, but, as you know, I'm going to be having another conversation with you over time. It'll be. It's 30 days away, you know. I mean, that's how quick time goes, especially in the car business. But so for those of you that haven't already looked into your reservations in Vegas, this is going to be a huge show out there and, of course, if you're wanting to exhibit, you want to get your booth in there quickly, because that's filling up as well. So it should be a great show, right, mike?

Mike Stanton:

It will be a great show and first off, thank everybody with all the efforts, those who made it and those that didn't make it to New Orleans. I mean it was an incredible experience. Seventy three percent of the people that wanted to be there actually made it. That just shows you how great maybe you could use the word crazy our industry is, and some of the stories coming out of New Orleans.

Mike Stanton:

But, all in all it was. It was a successful show and you know the show is always great and we've seen positive momentum. There was talk during the pandemic about this virtual world. Virtual doesn't work in our industry.

Mike Stanton:

Relationships work in our industry and the only way that at least I haven't figured out how to do it virtually is to get together and talk about things and to share our experiences. So yeah, vegas, we're super excited about it. We've already got a waiting list for the exhibit floor. I know registration. If it hasn't opened up yet, it's opening up very soon. So please, you know, get in, get early. We have early bird discounts. The best way to do this is to plan ahead. Make sure you get the hotel rooms that you want. I have no doubt and I shouldn't say this, but I don't think it's going to snow in Las Vegas.

Mike Stanton:

I have no doubt it's going to be a great show. Thank you for giving me the opportunity to talk about it a little bit.

Jim Fitzpatrick:

Absolutely. Congratulations again on the big win and I know that a lot of dealers are very happy, OEM executives are very happy, ATAE people are very happy. So thanks so much. Mike Stanton, CEO and President of NADA, appreciate all the time you've given us here at CBT News. Love to do a follow-up with you to see how things are moving along.

Mike Stanton:

Yeah, thank you, Jim Thanks.

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