Inside Automotive with Jim Fitzpatrick, powered by CBT News

Jeremy Beaver Discusses California EV Trends and 2026 Outlook

• Jim Fitzpatrick • Season 1

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Despite softer EV demand in California and ongoing cost pressures, dealership operations remain resilient. On this episode of Inside Automotive, Del Grande Dealer Group CEO Jeremy Beaver explains how disciplined growth, strong fixed operations, and workforce investment are positioning dealers for success heading into 2026. Beaver discusses how the expiration of EV tax credits has reshaped demand in Northern California, why hybrids and fuel-efficient vehicles are gaining traction, and how supply constraints are limiting how quickly OEMs can respond. He also shares DGDG’s approach to acquisitions, internal promotions, and technology adoption, emphasizing that people and process remain central to performance in a volatile market. The conversation offers a grounded view of how dealerships can focus on controllable factors to maintain profitability and stability in the year ahead.

Key topics:

  • The impact of EV tax credit changes on California demand
  • Record fixed-operations performance and workforce expansion
  • Acquisition strategy and internal promotion as growth drivers
  • Managing tariffs, inventory, and rising operating costs
  • The role of technology and AI in long-term planning
  • Leadership priorities shaping dealership performance in 2026

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SPEAKER_01:

Welcome to Inside Automotive with Jim Fitzpatrick.

Jim Fitzpatrick:

Today we are pleased to welcome back Jeremy Beaver, who's the CEO of Del Grande Dealer Group in Northern California. You've seen him before here on CBT News. In fact, you've seen him everywhere. This guy is the person that the industry turns to to get uh to kind of check the pulse of the of the market out there, so which is what we're doing today. So, Jeremy, thank you so much for joining us on the show once again. Well, you know, I've seen you at other uh uh other other uh events and uh and certainly on other platforms out there, and and you do a great job representing the industry, and you've got great uh you know, a great lineup of of different franchises and such. So you you're just the guy the industry wants to uh to hear from. So let's jump right in here. Um let's talk a little bit about the state of the industry from your perspective. How are things at your stores?

SPEAKER_00:

You know, it's uh it's been quite a crazy year out here. Uh, you know, our stores are in the heart of Silicon Valley. Uh so we've had, you know, just like everyone else, we've been through the tariffs, we've been through the shortages. Yeah. Uh most recently, we've been through the EV um situation of credits and and kind of you know higher or slower demand. So, hey, I guess just like every other year in the car business, uh, it's you know, peaks and valleys and a lot of craziness. Um, I think in in general, uh it feels like you know, a lot of our friends and for our business, uh business is still going well. Um I think there's a lot of volatility in the vehicle sales departments. I think there's been a lot of strong growth and fixed operations, and just like everything else in life, uh everything's still getting a little more expensive for you know cost of land, cost of our team, but we're doing everything we can to uh make sure that we're just taking care of them every day.

Jim Fitzpatrick:

So let's that that's fantastic. And uh let's kind of jump in on the EV. Since you are in California and that is the number one state for selling EVs, how has taking uh the or should say the loss of the tax uh benefit uh hurt your business? Has it hurt your business?

SPEAKER_00:

Yeah, unfortunately, it's been a pretty big impact uh for us. Um, you know, we were uh as an alternative powertrain, so either uh plug-in hybrid or you know, full-blown electric vehicles, we were selling over 40% of our new vehicles were in that range. So pretty crazy, obviously. Um big Tesla market here in the Bay Area. Um and as soon as that that credit went away, uh we've seen a pretty strong pullback in the electric vehicle demand. Now we are at we're the highest penetration in the country, and so you know, we do expect that to soften. Um as we look forward into 2026, we think it's gonna be a lower penetration, but people are still gonna buy electric vehicles. There also was the big change of the carpool here in the Bay Area. Um, you know, when you customers that used to have these stickers that could use the carpool lane, no longer can use that, and so you kind of had this credit go away, can't use the carpool anymore. Uh, people are trying to figure it out for sure. And at the end of the day, these these EV vehicles are a little bit more expensive than the ice cars. And so um, I think the world out here is trying to figure out what's gonna be 2026.

Jim Fitzpatrick:

Sure. Of course, you've got gas prices that the last time I was out there it was like six bucks a gallon. I don't know what it is today, but that really drives a lot of traffic just organically, right? To the EV and the and the and and uh you know BEV vehicles, right?

SPEAKER_00:

It was, and I think, you know, that's kind of the peaks and valleys we saw last year when gas prices were at those extremes. We saw a lot of people switch to those lease vehicles. We we saw a lot of one-pay leases through the year where people would buy it, it would be a third car to drive. And now I think they're trying to figure out what that's gonna be in the future. Just like the the rest of the industry, um, a lot of the vehicles that just have that hybrid sticker or anything that has to do with hybrid and good gas mileage um are getting a lot of demand here. But as you know, you know, these manufacturers just can't retool their factories overnight. So you can't just start producing EV cars and next day you're you know producing all the ice and the hybrids. And so I think that we're gonna see this evolution um change really in 2026. We're expecting a little bit more mid-year for it to kind of level out for us um with a little softer demand in the start of Q1.

Jim Fitzpatrick:

Okay, okay, great. Um, will there be any uh acquisitions that we see coming down the pike from your group in 2026?

SPEAKER_00:

We are actively on the hunt. 2026 for us at DGDG is going to be a very offensive year. Uh, we've worked really hard over the last couple years to really solidify our team. Um, our task this year at the organization is to have a record number of internal promotions. Last year we have we have roughly about a thousand team members. We had a hundred promotions last year, but this year our rec are we're going for a record, and a lot of our growth is going to become from buying stores, but also growing the team internally, which is just the core of who we are at DGDG.

Jim Fitzpatrick:

Sure, sure. If you don't mind me asking, do you already have those stores earmarked and just haven't made the announcement yet? Or do you have to start start the the hunt in uh after the new year?

SPEAKER_00:

Jim, I think there's a little of both. So uh I think there's some in the works right now and uh there's some we're hunting for. So maybe maybe I'll get some more phone calls after this.

Jim Fitzpatrick:

You may, you may, you know, with a with an aggressive expansion plan taking place. Talk to us about fixed ops. Obviously, it's been red hot uh for quite some time now, with the average length of a vehicle being on the road 12, 13 years, which is crazy. Um, but talk to us about that. What does your fixed ops look like?

SPEAKER_00:

Yeah, our fixed ops has uh broken record after record, and uh we focused on that for a really long time. It's one of the core foundations in our organization. Our fixed ops team is more than 50% of our entire organization today. So um over 300 technicians and then advisors, our porters, our detail team, our our parts staff. So um it's a really, really big function. We have focused really over the last three to five years on again the quality of the experience that our team has every day, opportunities for growth, growing our team, um, and really made a large impact. Um it's been really neat. While the industry still um, you know has a dearth of talent when it comes to technicians. We have again this year grown technicians over 15% in the organization. So um we're really, really, really looking to grow that. I think dealers will also continue to double down. Normally, when vehicle sales, you know, maybe get a little bit softer, a little bit more rocky, um, they they really focus on those controllables, right? So you think about fixed operations, doing a better job in finance, and then really still managing SGNA and expenses in these business through people, through performance, but really also through technology. I think that 2026, you're gonna see a lot of dealers focus on using platforms for scale to get economies of scale through these new technologies. And whether that's in sales or whether it's in marketing or in fixed operations, um you're I think you're gonna see dealers just try to get the most out of what they have. Um, because again, you know, unfortunately uh for us again here in the Bay Area, this land's not getting cheaper, taxes aren't getting cheaper, insurance not getting cheaper. So we gotta figure out a way to make sure that we have a sustainable business to support our team every day.

Jim Fitzpatrick:

Yeah, that's great. That's great. I know that the uh when I uh talked to uh Mr. Moss at the association there in California, uh they're working, you know, pretty hard on making sure that the franchise system is alive and well, and you don't have companies um, you know, that that are trying to come in like Fila and uh and Volkswagen's Scout and what have you. Any comments on that at all?

SPEAKER_00:

Yeah, you know, I think for first of all, Brian and the team at CNCDA do an amazing job supporting the dealers here in California. So we are very appreciative to have such great leadership out there. You know, I think that there's gonna be a lot of these kind of side entrants or even some of our manufacturers that are trying to figure out how to have these direct-to-consumer models. You know, I think for us, right, um we try to focus on control the controllables, right? And today we can focus on our team, our wonderful relationship with our OEMs, and you know, doing the best job we can. I think that in any sort of a scale, bringing in new brands to the United States takes quite a quite an effort, a lot of money, and a lot of time. And so I think that, you know, we're gonna figure this all out together at the end of the day. But it's always really, really nice to have support from guys like Brian uh leading that charge to make sure that we're protected and at the end of the day, protect our team, our families, and our communities of being able to make an impact.

Jim Fitzpatrick:

Sure, no question. Um, we hear so much about AI and how it's going to really change the industry that we know today. You know, if we're having this conversation ten years from now, every dealer says, man, AI is just playing much more of a role in the daily operation of a dealership, especially when it comes to uh online appointments and and F and I. I mean, you you name it, every department is gonna be touched and is touched currently by AI. What's your take on AI? Uh is it are are we talking about something that's you know much to do about very little, or do you really feel that that that's gonna be playing a much bigger role in the industry as we move forward?

SPEAKER_00:

Yeah, well, I think that's probably like an hour-long topic or maybe a couple days, but uh, I'll try to summarize it quickly for us. Um really, over the last uh call it nine years, we have really focused on data structures, data repositories, being able to normalize automotive data uh through Azure, our platform with our CTO. And so um I guess we're we're not that smart, but this is really working out well for us right now, which is we now have this repository where we are going to really start to use um more large language models, uh more different types of AI to operate our business. We believe that um AI is not here to replace the humans. This is still a very retail business, but it can really enhance their jobs. And I think that there's two different ways to think about that. One is um kind of the quote unquote AI, which people use it, like writing emails or summarizing stuff, which is not really as you know AI as it could be, but I think you're gonna hear a lot about that in 2026, and dealers are gonna have a lot of efficiency tools. Uh, there'll actually be a really cool announcement at NADA on a partnership we've done um regarding tools like that. So stay tuned for that. Yeah, that's true. And then um really as we move forward, I think you're gonna start to see this agentic AI. And you're gonna see these large models that are learning, that are, you know, predictive, that maybe, you know, include some OEM data, some third-party data, some first party data, and it's really gonna help the industry just be more efficient. Um, I think we have a lot of ways to go and a long ways to go because uh the data is still very fragmented. Not everyone plays nice in the sandbox, but um that it I think there is going to be an evolution here of data in the automotive industry over the next three to five years. And so we are very, very excited. Um, you know, I think we're on the forefront of a lot of it, but we also, you know, try not to break too many things along the way. So uh stay tuned and uh we're excited to partner with a lot of people on that.

Jim Fitzpatrick:

That that's that's fantastic. Um before I let you go, and I appreciate all the time that you've given us already. Um, what what's your take on 2026? I spoke to uh I interviewed uh Senator Bernie Moreno, as you know, he's a former car dealer himself and uh doing a great job for car dealers and OEMs and representing us in DC, and I asked him about 2026. What's his what's his prediction? And he said you're gonna hear right here on CBT News, which is just, I think we added this morning, that I forecast that we're gonna do a 17 million SAR in new cars in the industry in 2026. I see nothing but clear skies ahead. I'm paraphrasing here. What is your take on the year ahead? Do you think we're gonna have headwinds or do you think it's gonna be a just a great year?

SPEAKER_00:

Well, I think so, you know, I'm definitely not gonna argue with Senator because, you know, he's much smarter than me, but uh, I think um we're gonna probably from the EV side, we're gonna see a little bit of softening here, at least in the Bay Area. I think people are still trying to figure out how that's gonna go. I think the OEMs are retooling a lot of things where they're trying to hit the mark with the consumer. I think, you know, the economy seems really strong still. So I think all in all, the car dealers are still gonna have another good year. I think those that are really invested in their people, in technology, and are hyper-engaged are running really good businesses. I think you're seeing that in a lot of the earnings from the publics and a lot of those things. I think those that um, you know, are trying to figure out if you know they want to stay in the business for the next five years or figuring out succession plans or, you know, or don't want to deal with EAI or don't want to deal with um, you know, buildings and all the other fun stuff that goes on, it's gonna be a little bit more tricky. And so I think, you know, in general, there's some amazing car dealers here in the country uh that are really gonna help drive us forward. And so I think those that, you know, I guess in any business that are, you know, at the at the top of their game or hyper-engaged, it's gonna be another good year for the dealers in 2026.

Jim Fitzpatrick:

Fantastic. Love to hear it, man. Jeremy Beaver, CEO of Del Grande Dealer Group, also known as DGDG. Thank you so much for uh for joining us on the show. Very much appreciate it. Love to do a follow-up with you uh in in 2026.

SPEAKER_00:

Awesome. Thank you for having me. Have a wonderful uh holiday season and a happy new year to all.

SPEAKER_01:

You as well. Thanks so much. Thanks for watching Inside Automotive with Jim Fitzpatrick.