I wake up literally every day with a little bit of paranoia that it's all going to end. Why? Some of it's just my nature, others, it's such a volatile business that it's scary, man. I mean, I'm not selling Ford F-150s. Those are going to be popular forever. I don't know. I mean, I think and I'm putting all my chips in the middle. We are all in betting literally everything. I've never taken a dime out of the business in five years. No salary, no pay, no profits. Every dollar, just keep doubling down and doubling down. It's a scary business for sure. Welcome to the Car Dealers from Guy Podcast. Today I'm speaking with Alex Lawrence. Alex is a serial entrepreneur, professor and founder of EV Auto, a used car dealership based out of Utah exclusively selling EVs in a deep-red state. We dive deep into why he thinks the EV mandate should end and how he decoded Elon Musk's tweet to beat the market. A big thank you to our sponsors for making today's episode possible. Dealer on car dealership Guy News and stream companies. And now let's get into the show.
The car business has a term PhD, right? You're a real PhD. Not Papa has a dealership, not that one. Yeah, I didn't know that that was a thing. And so my secret life as a college professor, PhD is a big deal. And so I have had people over the years say like, who's your dad? Who, what car dealership? Not that big. Yeah. And I said, anyway, the first couple of times that caught me off guard. How do you go from a college professor to a dealer? I feel like that's an arc that doesn't make sense. I thought you were fake when I, when you, I think you followed me on Twitter like a while ago. I was like, yeah, who is this guy? Like, what do you do? You're trying to like open up a dealership, you were, you know, an academia. I don't see it. You've done it. You've been very successful. You're profitable. You're opening up another location. Maybe we could go on and on and on. Like just to give us a little, you know, synopsis of that transition. Why do it?
Yeah. So I actually have been an entrepreneur my entire career. The, the professor thing happened accidentally. And for me, you know, I'm motivated a lot by doubters, you know, a little chip on my shoulder, kind of a thing. And so when I started teaching a little bit, as part of, I started an entrepreneurship program at Weber State where I teach, I realized that academics didn't really respect you unless you had a PhD. And so I said, okay, I'll get on the list. And I did a real one. I flew to Oklahoma State every month for almost five years. It wasn't what did you do? What did you do? What did you do? So a business related and I actually studied startups and tried to figure out if there was a good time to quit, like it made sense to quit and stop and move on to your next thing. And so that was my research.
But so, so the deal was with the university when I got off the entrepreneurial treadmill a few years ago was that I could still start businesses as long as I taught, I don't teach, I only teach two classes. But yeah, I didn't start a business for years. And then, you know, we can talk about how, because the dealership didn't actually start as the dealership. It started as a EV marketplace that morphed into it. Yeah. So tell us more about that. Like, what was your beginnings in the car business? Why even venture into the car business?
Yeah. I still care around my head around someone from academia. Like, I feel like the skill sets are so different in the car business, you have to be so scrappy and I mean, I can give you 50 other adjectives to describe a dealer, right? Like entrepreneurial spirit, blah, blah, blah, blah, right? And I feel like academia, it's a very structured role. Like you do not need to be very scrappy and it's not very entrepreneurial. And maybe I'm wrong, but you can tell me otherwise, like how do you make that transition?
Yeah. I mean, that's definitely the earned stereotype. But like I said, the academic was accidental. I've got mediocre grades. I'm definitely non-traditional. And I teach in a sales program. I teach sales. And so which all great entrepreneurs have to be great at sales. And so I love my students. I love teaching, but I don't participate in academia. I go in, I teach, I love my peers. I work, I love where in the department I'm in, but it's definitely entrepreneur first, academic second. And I think, you know, there's a real opportunity. I take stuff that I did yesterday into the classroom the next day. No, your students probably love that. They do.
I mean, it's like, it's like no bullshit, you know, especially the car business where, you know, retail, you're dealing with the customers. I mean, it's great. Yeah. I mean, they see a TikTok video I did last week that's got a million views or, you know, they see something that, you know, I'm building it. It gives a legitimacy that I think is a cool opportunity. So we'll talk a lot about your numbers and your growth and your vision. We'll talk obviously about EVs because you are one of the top 10 used EV dealers in the US, is that right? Yeah. From the data that I've been provided, that's what it says. Okay. So yeah, pretty reputable source. So let's roll that. I mean, you're selling over 100 EVs per month used. That's pretty meaningful number. Just give us again, big picture, right? Why EVs? Right. You're getting to the car business. It's already super competitive, tough as is. Why say I'm going to make it even tougher myself and focus on this niche specifically and, you know, not focus on any other type of car? Why?
Yeah. So my co-founder and I, he's one of my closest friends. We were talking about five years ago and it was actually his idea. He said, you know, it's really hard to buy the used Tesla. And I said, yeah, it kind of is. It's very fragmented, you know, a Ford dealership. It'd have some random one. Nobody knows anything about it. And so we started talking about that actually he said, you know, we should build a website where people can buy and sell, use DVDs. And that's a great idea. My previous companies were in tech. First step for my career was actually in franchising, which relates to what I'm doing now, potentially, with cars. Second half of my career was tech. And so we started looking at building a marketplace and the domain EV cars.com was available.
It was expensive, but available. How was it? You know, I think we paid, it's been a while. I think we paid 20,000 for it. I love that. But I mean, when you do it when it's kind of early in an idea, when it's just an idea, you're like, it's a lot of money. But I think it's the best domain almost you could get for an even marketplace. We also own EV trucks and EV auto and a bunch of other domains. Yes, I'd be. Yeah, a little bit.
And so we started developing this concept around the marketplace. The marketplace, the paying customer would be the dealer. Free to private sellers, dealers would business with the initial vision you had. It's not what you operate today. Totally unrelated to a car dealership. So at some point in my career, I've either always been the customer or been really close to the customer. In this case, I was neither. And so this same buddy co-founder, business partner, had an old dealer's license as well. And he said, hey, you know what? Use it. And I said, yeah, I'm going to start. Well, when you say that, what is it like in Utah, and you just like retain a dealer's license if you're not operating or?
No, we had a little building. All the boxes were checked to maintain the rules. And why did you have that? Was he wholesaling cars in the slot? Very, very minimal. At-arms, lights, and carbuses. No, definitely not a car. But it meant the requirements. But he was collecting cars, buying cars, so but on a smaller scale. And so just kept it alive. And so I'm going to start signing up for dealer tools and sign up for the auction and buy a car because I wanted to be able to speak their language and understand how they operated.
So then when I tried to sell into them, I could say, oh, yeah, I got dealers license. I bought and sold a few Teslas and just try and get a little bit of credibility. And for about a year and a half, that's all I did is I would buy one car and then sell it on a local marketplace and then buy another one. And literally just kind of repeated that while we were building out the marketplace at the same time. So you were doing this in order to create a better marketplace for dealers. You were essentially, as they say, eating your own dog food, you were trying to really figure out the system, make it scalable for a dealer community. That's right.
And so and I have a question here. Like, what was different or what is different today about selling EVs in your perspective? Like, why, why are you needed in the marketplace? I think it's so I was given advice to if I was going to open a physical location to get something that was easy to find and safe, but doesn't need to have any visibility because everybody does the research online and this then they just kind of show up to find a location perspective. Yeah, they just kind of finalize it. So my hypothesis, our hypothesis was, you know, the vast majority of people buying EVs, it's their first time.
And they actually have a lot of questions and they want to drive one. And so we went counter to a lot of very wise people in the car business and went after locations that were highly visible and tried to make them highly desirable to come into because people they want to come in and experience that their first time buyers 90 plus percent of my customers have never had an EV before. And so and why are they coming to buy an EV? Well, I mean, a lot of it's because they have a neighbor that has one, a friend that has one, a coworker that has one and people that have them are big time advocates. They're unpaid advertisers. They love them and they're not shy about telling people about them.
Okay, so first thing you're telling me is that there's this peer pressure, in fact, or whatever you want to call I mean, it's just, you know, humans saying other humans, you know, with this new type of vehicle relatively speaking, they're like, okay, I'm interested. Yeah. What now take us one step further into the mind of the consumer, you deal with these consumers, you know, at a much greater rate than the average dealer, right? What's done like build on that thought process, right? So they they come to you. Why do they end up actually buying the like, is it like gas savings? Is it they don't want to, you know, it's cleaner for the earth or so they think and we can debate that. I mean, why like what? Look, I can I can mention any study under the sun, but I want to know from you to anecdotal experience. Yeah. So it depends on which car they're interested in. I mean, you get a six figure EV or a low four figure EV. It kind of depends on where you're at. So the goals are different depending on those, but I would say the majority of my customers right now are comparing it against gas alternatives and recognizing that dollar for dollar, there's not a better car. And that's it. I've asked a lot of my friends at own large gas car dealerships. I say, look, you can get a Toyota Corolla, you can get a Honda Civic, you can get a Tesla Model 3 and all things being equal. One has self driving, one's all will drive, one's really fast. They're all good cars. They're all safe cars. They're all nice cars, but they're not fun. And that's the big difference. The Tesla checks all the boxes, but it's also fun. And so I think people are like, why would I spend extra for a boring car?
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So before we move forward to the actual dealership, your economics, I mean, how much money you're making, we're going to dig in all that. Let's just wrap up how you went from a marketplace to a dealership. Like what was that transition like and what was sort of the end state? Yeah. So again, like I said, it wasn't on the radar at all. Although I think it's funny, I read something recently that the things that you're most interested in between when you're 13 and 18 are likely the things that you'll be best at professionally as an adult. And so my very first business that I started. So think back to what you're interested in, right? I was building websites. Okay. So I mean, kind of like it's a form of marketing. And it's online. Yeah. And it's, yeah. So my first business was a car detailing business when I turned 16. I've always loved cars. I've never done anything related to the car business until I was 45, five years ago. And so anyway, so I come back to that and I started realizing, and we're making good money selling these cars. So then I bought two and sold two. And then I bought three and sold three. And it's after selling several million dollars of Teslas by myself, essentially, I thought, and we thought, you know, let's rent a little spot because very frugal, you know, profitable from day one, you know, just one car into two car into three.
So we rented this little dumpy spot near my house and took at the time, what felt like a huge risk to buy like eight or nine. And it was scary. And it's still I mean, it's still a scary. Where did you buy them? I bought, I think all of them from Anaheim, although I buy from all different places now. And how did you value them at the time? It was it wasn't as scary. It's the most volatile car you could ever buy and sell. How did you do it? Just lots of homework. I mean, I'm completely immersed in this from day one. Yeah. I am every day all day. It's the only thing that I study and think about and I'm an expert in is is EV prices and values and sales. And so it doesn't mean I don't get it wrong, but I just stay really, really close to what's going on the market. And if Elon dropped prices, I dropped my prices within 30 minutes and tried to clear out everything I could before anybody else was aware and reacting.
And that saved me from losing what I didn't lose any money when all those things happened and people were losing 10, 15, $20,000 a unit. How did you not lose money? Well, one of the ways is I felt like price drops were going to happen. If you listen to Elon over time and really study what he's going to say, he wants to make him more and more and more affordable. And as their margins increase and their volume increased, it seemed logical that price drop was coming. Now, I didn't realize it would be as aggressive or as frequent. So what I did is I never was buying cars that were newer than two years from the current date. And so the value between my used cars and new cars with the price drop was still wide enough that people would consider it. But if you're looking at a car that's a year older and has 10,000 miles versus a brand new car that's zero and there's a $1,700 difference, what are you going to pick? And so I've maintained that strategy today. I don't carry anything that's close to that. So you avoid price risk, essentially, by buying units that I've depreciated more heavily already prior to your acquiring them. And clearly, again, it's less comparable to a brand new car, right? It's not like it's three months old, in which case, if the new one drops its prices, yours has taken a massive haircut, right? So that's where you're sort of avoiding that depreciation risk. That's only with Tesla, though.
It's a much more difficult with other brands. And that's goes back to the other kind of hypothesis is that there's all these different brands and these cars are spread out all these different dealerships. Most of them don't want to sell them. They don't like them. Their salespeople don't want to sell them. They don't know very much about them. And so if you want to go try three or four different cars that are similar, you're going to have potentially three or four mediocre experiences. And so one of our theories is that we can bring all those cars under one roof and create an experience that's really unique and different that we're just going to get around. I mean, if you want an EV, go to EV Auto, it's a no-brainer.
You've invested a lot in your showroom. And I can just tell by just looking at it, I've built a showroom. We invested a lot. I mean, it's a lot of money, right? You want to really make it into experience, but you've taken it at another level. What, like, why do that? Do you really believe that the future is bricks and experiential? Like, how much money have you spent if you could share that with us? And why do that? Well, it's a lot less than you think. Yeah. Very frugal. A lot of that stuff is very creative. It's visually cool, but it's not name brand cool. Yeah. And so our building was under a million dollars, the whole building. Did you buy it? Yeah, we own everything. So I think it's important to know. It is very important. Yeah. I mean, especially with interest rates, and stuff, and we don't have any flooring. We own all of our cars. And so with, I mean, like I said, flooring, I think you posted something the other day. Margins are getting killed with dealers because flooring costs are so high that it's just scrunching things. And so I would say it looks like a franchise. It looks great. Really cool one, right? Different, unique. But it's more about how people feel. That's what, and I know it sounds cliche, but I have been a car customer my whole life. And I will say that the reputation of car dealers and use car salespeople as being one of the worst reputation industries right there with lawyers and whatnot is 100% deserved, absolutely earned, deserved.
Really? Absolutely. I mean, I'm tired of hearing that there's a few bad apples. No, I think there's a lot of bad apples. Really? Yeah, they pressure people going to a dealership. They're waiting by the front door. How do you sell car? I'm scarce. We're chill. We're my dogs. What does that mean? I mean, in every one of my locations, it's going to be just like this. We're hanging out on the couch. I've got a wall of nine giant TV screens showing something. We've got music playing. And we're just like, Hey, what's up? Welcome. And there's nobody waiting at the door for you in a blazer to jump on you. We don't even go outside. We let you kind of walk around for a few minutes. So how do you close customers? Like what, what, what gets them to make the purchase? Like what's that? We don't pressure them. Yeah, we do not push people to buy a car. And it's hard sometimes you spend two hours with somebody and watch them walk out the door. It's tough. But again, a lot of car dealers, they haven't bought a car in a very long time. Some of them have never bought a car. They don't know what that experience is like. And so I think, you know, our core values are, are, you know, one of them is that we are the experts. That when it comes to these and plug in hybrids, we do both that we are the experts that we know the answers. The other is that it's a special place to be. And that's for customers and employees. I want the experience to be the best buying experience they've ever had. The best car buying experience, the bar is too low. It's too low. I mean, it's the golden rule. We don't pressure people. We don't push people. We're friendly. We answer questions. Our pricing is transparent. It's fair. We don't push back end. You work with one person. You don't go get sat in the finance office. You can be in and out of their fast. Everything's digital. We'll let you take cars home. We'll deliver cars to you. I mean, there's just a lot of things we do to surprise and delight people that they come in with their guard up. And, and after a little while, they realize, hey, I can just talk to these guys and drive some cars and leave. And that's okay. Or that leads to a sale, which we've had really strong growth.
So talk to me a little bit on numbers because I'm curious. So if, if I was just to, you know, a fly on the wall right now, as if you are, if I'm a dealer, right? I'm listening to this saying, okay, cool. You're talking a big game. You don't pressure people or whatever. You have your own, you know, kind of unique sales process. How much money are you making though? Yeah. That's, that's the brass. So like, let's, let's break that down. Yeah. Kind of part by part. Like, first of all, what's your gross profit per unit? How much are you making per car on app? You know, we track it frequently. I think latest number, we're around 40, about 4,600 per unit. Okay. And how much is that? It's front end versus back end. About 35, 3600 front end around 1000 back end. Wow. So you're, that's a, that's a very meaningful number on to make. So again, for the audience, right front end is what you make on the car, back end is what you make on insular products, you know, vehicle service, contract, insurance, blah, blah, blah. And back end continues to grow for us.
So for, for the first couple of years, when we made that ship to a dealership, and we can talk about that, as far as that, that commitment there, I had no financing options. I had no back end. Yeah. Cause 1000 is pretty low. I would say that's at least 50% lower than average. But tell me, so tell me more about the front end, right? Yeah. You're making about 3500 dollars. I'd say 3000 on front end at the latest report, 3000 front end, 1500 or so back end, because it, it changes as we're, we're driving back end.
Yeah. I understand. Yeah. Where you're acquiring your EVs from today, everywhere, private sellers, small auctions, large auctions, other dealers, trade ins. Okay. So you're, you're, are you publicizing? We will buy your car and stuff like that. Starting to, yeah. And it's, we're getting better at it. So, okay. Reconditioning. How do you do that? In house, outsource, talking about that. Yeah. So that's another thing that we do a little bit differently. We buy cars only that don't need much reconditioning. And so you're buying like, nicer cars, 5.0 conditioner. What? I don't know. I mean, 3.5 and above, but that's dings, dents, scratches, that's stuff that we can recondition in a day or two. And so we get a car in that a curb rash is hugely popular on EVs. The visibility is a little harder. The wheels are a little deeper dish. And so they come curb rash often. And so we fix curb rash repair. That'll drive, that'll drive a condition report for listeners down quite a bit if all four wheels have curb rash. And so, so we start out with cars that, you know, I bought all the cars. Now, Tyler, our general manager and operating partner buys some and, and we're starting to expand the buying, but we're very, very picky and particular about what we've been. And where do you recondition? I'm on site. Yeah, on site. Do you have technicians on site? Everything's on on site? Yeah, I mean, technically, when I say on site, let me rephrase that. So we have a body shop guy that that actually comes and gets the car, takes it to his body shop nearby and fix it. So that's like a bumper that needs to be repainted. But we don't do anything that's more serious than that. I mean, literally, it'll be a bumper that needs to be repainted. And that's, that's, you have any technicians at your dealership? Yeah, but we don't do. That's the hires. Yeah, that's the thing. These EVs don't require much work. I'm not like repairing a transmission or there's a leak or we've got to do, I mean, we're, we're putting new tires on it. They don't need new brakes until you're over 100,000 miles. So we're putting new tires. We're doing curb rash. We're repairing some scratches, some dings, some dents, and sometimes some leather. That's it. That's all that that's all we're doing to these cars almost every time, if anything, sometimes we're not doing anything to them. They show up and they're ready to be put on the front line.
Got it. Okay, so tell me more about how are you attracting customers? Like what's your advertising like? How much are you spending per car? Give us a little overview about that. So for years, I was really proud of the fact that I'd spent zero dollars on advertising. And so we grew the business for the first three and a half years with zero dollars spent on advertising. 100% word of mouth organic free social. I think I waited too long on that to start spending. And so, but I've been very cautious about it.
Like I said, we're frugal. I mean, you see, I want to say this, I don't want to mistake excitement for arrogance or overconfidence. I'm really excited about our business. I wake up literally every day with a little bit of paranoia that it's all going to end. Why? Some of it's just my nature. Others, it's such a volatile business that it's scary, man. I mean, I'm not selling four F one 50s. Those are going to be popular forever. I don't know. I mean, I think, and I'm putting all my chips in the middle, we are all in betting literally everything have never taken a dime out of the business in five years. No salary, no pay, no profits, every dollar just keep doubling down and doubling down.
It's a scary business for sure. But having said that, we've we've built our business around referrals, reputation, online reviews, visibility, all those things are free. But I've just barely started spending money on things that are that are paid. And I'll tell you, I'm not sure I'm going to because I feel like the car gurus and the cars of cop, com and the auto trader, I'm funding competition for against my website. Okay. I'm paying them to get leads to the cars that I am listing on my own website that I'm driving with my own social traffic and my own direct traffic. And I'm paying them to compete with the same keywords. And I'm not saying I'm not going to do it. I just since I started with none, I'm cautious because most dealers just they do them all. They just cast a white net. They're on every platform. And and I just want to be very cautious.
And how much are you selling on average right now per month? With no, I mean, how many were any advertising right now whatsoever? Very, very minimal. So I did I did a car gurus test. I've done, I've done some stupid little paid social for, you know, 80 bucks here, 100 bucks there. I'm trying to think I spend a lot on how much are you selling for month on average right now? So like I said, we did 93 cars last month. Wow. And let me put that in perspective. I mean, to do that organically, that's a very impressive number. I mean, might end tomorrow. Seriously, it's you got to repeat it every day. But I think what's crazy to me, and it really is, I couldn't believe it. Our team told me, and I didn't believe them.
I said, that's not right. You've got to go out right now that we sold that many cars in July. I said, that's not right. There's there's no way because things have been so busy. Just every day, just constant that I haven't been keeping track. We're actually changing the TV in my office that shows number of cars sold because it's so exciting. But that's we turned over our entire lot because this is on an acre. Okay, my law is an acre. I can only hold about 40 cars. So I turned over my entire inventory twice in 30 days, which is unbelievable for the car industry, right? I mean, so I just I can't continue it feels like, but maybe it will.
What's your what's not working? Like what's your biggest challenge? I right now, I'm nervous to have anything other than Tesla. My law is almost exclusively Tesla because demand is wonky. Pricing is a little I'm a little more nervous about pricing demand. I mean, there's the saying people don't want an EV. They want a Tesla. And I mean, their market share continues to shrink. And so and to deliver on our vision, we've got to have all of the brands. But again, since we don't use flooring stuff, I can't just buy anything. Why would you use floor? You know, my co-founder and I were just frugal. And we at some point, maybe we will.
But so far, it's if nothing else helps me sleep better at night, knowing that we own everything for a better enough. And so but I also think it's a competitive advantage. If you can do it, you know, these, you know, these are margins. Yeah, this episode is also brought to you by stream companies. Stream companies is the type of agency partner that easily becomes an extension of your team fully engaged in the growth of your business. Their impressive team of auto industry and marketing experts dive in to understand your business needs, study the data and provide full media strategies that leverage every channel that is right for your specific business and its goals.
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What's the most popular EV with consumers that is not a Tesla? I'd probably say Rivian. And not a Rivian. I mean, technically, Ford's selling a lot of mockeys and Ford lightnings and stuff. And I really like the lighting. I'm not a big fan of the mockey. Why do you like the lightning? I mean, it's an F-150. It's a great truck. It's faster. It's quieter. If you're a farmer or if you're in rural America or whatever, I get it. It's not. EVs are not for everyone.
That's one of the things I think people expect me to say. And we've had customers that come in and we ask them questions about their lifestyle. And we say, yeah, I don't think it's going to be a fit. And they're kind of shocked, but they don't know what they don't know. Where EV is not for? Right now, I think that's going to change. I think EVs will be eventually for almost everyone. Charging networks and prices. Charging networks increase and charging options increase. Prices go down. It's really a compelling argument.
But rural America, it's obvious to me why they're not selling. They are driving longer distances. There's not as many chargers. It's also a political thing, I think, in some ways. What do you think about that? What do you think about the politics? It's crazy to me that a car is a political hot button, but it is. I mean, Trump and Vance are talking pretty frequently. It's one of their talking points that they're going to end the EV mandate on day one. I mean, Trump and Vance has got even further to say he's going to end the EV tax credit and replace it with a gas car tax credit, which is kind of, I think, hyperb. I was just trying to get news for that. And let me be clear, I'm not choosing a side on that. It's just interesting to me. I'm definitely a conservative person and have conservative values. But I think that the reality is the gas car industry has been the beneficiary of subsidies for a very long time and still is. And I'm actually not a fan of the government getting involved in that stuff in general. I'm a capitalist. And so the EV mandate, I actually don't like it. I actually think it should go away, which shocks many people. I don't think the government should mandate car manufacturers what you can and can't make and by when.
What do you think happens to your business if the EV man goes away? I don't think anything. I mean, that's in 2035 or something in 2013. If there was a new administration and a 108 January first. Well, there's a difference between the mandate and the tax credit. So let's. True. I was. I was actually referring to the tax credit, not the mandate. So it's really interesting. The tax credit. And again, for listeners, mandate is what percentage of cars need to be EVs or meet certain qualifications by 2035. Tax credit, of course, is you buy an EV, you get X amount back in your taxes. It's a new EV, 7500. So a UCDV can be up to $4,000. That's right. Yeah. But there's a number of Republican senators, including the one from Utah, they're trying to get rid of that right now. I don't think it'll happen. And they're calling it the Elite Act. Elite. Elite Act. And I believe it's what's called. And they're saying, hey, rich people don't need more tax breaks. And I get it, an $80,000 Rivian that gets $7,500 off. Yeah.
But the people that are buying Tesla Model 3s for $24,000 that are getting a $4,000 credit, so they can buy for $20,000. They are the middle class. They are a totally different customer than I had two years ago. And they're getting a car that's cheaper to own, cheaper to operate. I mean, consumer reports rated just recently, the number one most affordable vehicle is a Tesla to own and operate. And that's consumer reports. Number two is Buick, by the way. But then it's the usual Swiss specs, Toyota, Honda, Lexus, all that stuff. And so not only are they cheaper to get in, they're cheaper to own. And with everything going up, gas prices, inflation, like, how is that elite? How is that bad? People are getting access. And the $4,000 is used as a down payment. So these folks that can't even qualify for financing now can qualify because they've got a 20% down payment. So what percentage of your customers take advantage of the $4,000 used EV tax credit? A lot. Well, that's because of the inventory I'm carrying on purpose. So I decided late last year to go all in on that. And it was scary. So if I'm sniffing around here, based on my experience, is what I would call you, your business is, or you're you're attracting a lot of those price slash value shoppers can define how everyone.
But I always found in every day, what kind of test is this, right? When you carry those types of units, you can find them. It's, I mean, it's instant sellers, those price points nowadays, how for to get. But here's where my, here's my challenge. How are you finding these cars at a pretty decent condition report at that price point? Like this is like, you know what I mean? I'm trying to like, like put the square together. Like you have, you're trying to get these like units that don't need much for conditioning. You're trying to hit under 25 grand price point, and you're trying to make money. Yeah. How are you solving that puzzle? It's really hard. I mean, again, it's all we do. So think about it, you're running your dealership and you only buy and sell essentially one make and model of car. You'd get pretty good at sourcing when you if that's all you did all day, every day.
I mean, I joke that's my, what do you do? I mean, you're the mercy of the market. Like as you can only, you can only buy as many as you can actually find. You're right. There's no used EV factory. You know what I mean? Yep. And also to qualify for the credit has to be older than 2022. So there's a finite number of those in the marketplace. Now, if they if it continues, you'll be able to it's two years older or older. And so once we flip to January, depending on if the law is still there, then 2023s become available. But you're right. And I don't think this is going to it won't last forever. And we sell other cars, we sell model wise all day long that don't qualify. And so it's it's the model three is the only ones that that that qualify. And it's very difficult to source them. And I want to also say a condition report. It's really interesting how they vary. There's super subjective. Oh my gosh, depends on the spectrum.
So I bought below 3.5s only because we study them and look at every picture and go, yeah, that's not it. That's not a two. Well, that's where you can find some arbitrage because not everyone does that. And you can actually arbitrage it. You find something that is improperly inspected. And you, you know, you get that benefit if you can find that in efficiency. And again, if you're all you're doing is looking at Tesla model threes all day long. I can spot a 2.5. That's really a 3.5 because I don't want to that, you know, some dealers watching this sees me at the auction and bids on 2.5. That guy's full of crap. He, he buys stuff. But it's only because I know the certain things that are wrong are minor and minor to fix. It's not just about a cost thing. I want to feel like the car hasn't been beat the crap before I got it. You know, I just person again, put myself in the car buyer shoes. I don't really, I know what the car looks like now because you've reconditioned it. But what did it look like when it showed up? Yeah.
So then going back to my question, right? Yeah, use EV tax credit goes away tomorrow. 50% of your business down. 20%. I hope not. What do you think? So we've grown every month for the last five years, every month, and both in top line and bottom line. And so the tax credits only existed since January.
And so I'm going to be carrying other plug-in hybrids, other makes, other models that are continuing to get more affordable. And so because it's still a 20, if it's a without the tax credit, it's still a $25,000 car, which is extremely competitive. It's not a $21,000 car. Yeah. More. But yeah, no, I think, I think a lot of dealers that don't have an all in viewpoint and are just kind of quick cash turning them, they're going to be kind of left holding the bag in January if things change. And so, but I, I, it's been very good for us, for sure. No doubt.
Tell me, tell me about the politics of your customers. Like, it used to be, again, based on the data, right, that EVs attracted more of kind of the left. And then Elon Musk became a big proponent of EVs and sort of polarized the left. And you know, you could argue that maybe now it's attracting a little bit more of the right. You can argue that both sides.
But the point is like, there's no doubt about it that EVs have really grown tremendously in states like California, where you have more, you know, left-wing population. I'm curious though, in your dealership, right? Do you notice like trends with political views, with your customers? Have you seen any distinction recently, changing maybe in behavior? Just give us a little of that anecdotal insight from the ground floor.
Yeah, it's another one of the crazy variables in my business that I don't think any other car businesses. By the way, you mentioned that you have sort of conservative views. And I would like to think that most of your customers probably have different views, right? So all these things go through my mind. I'm asking you questions right now, as if I'm like an investor or something, I'm just curious. But what's that dynamic like in store? Are people buying from you all left-wing liberals, right, when conservatives? Like, what's going on?
Yeah, you must not know much about Utah, man. I mean, it's the reddest of red. It's very conservative, very Republican, dominant. So who's buying the EVs? So both, I'm seeing customers that because, again, I think for most people, the other variables that EVs present, especially now that affordability is becoming, and they're seeing them pop up on their streets, they're not thinking about that other as much. So, but I have a customer that they were only going to buy a Ford. They refuse to support Elon Musk. They wanted an EV, but they refuse. They were getting a Ford, they were getting, and they don't want to look at anything related to Tesla. That's pretty unusual. That's unusual. Yeah.
But Utah's its own unique state for a lot of reasons. I can tell you that when I post on different social media channels, the comments that I get, depending on the platform, which is demographic associated, are very different. So I get a lot of EV hate, for example, in Facebook comments. Really? That hate EVs that hate, you know, have all kinds of crazy things they're saying and anti-anti-anti, but if I'm on, maybe, say, Instagram or Twitter and mostly TikTok, they're generally more positive. TikToks actually kind of goes back and forth.
What are some, like, give me three tips for the average dealership that, or how could the average dealership sell EVs in a better way? Yeah. So the first tip, and this is a scary and hard one, is either be all in or all out. You've got to dedicate one or two people that only sell EVs. You've got to have a couple of charts. I don't think it's that scary. I mean, all AIN could mean many different things. But if you're just saying have, like, someone who's an EV specialist on the team, I think that makes perfect business sense. Just the ones I've talked to, that person will feel alienated. They want to have access to all the inventory because they've only got 10 cars to sell and there's 300 cars on the lot. Okay. So it's not, again, just talking to my guests. Yeah. You've got to build a right and set up plan for sure. Yeah. And I also think that you have to give the consumer confidence that you're a good resource. You're going to have answers to questions. You're going to have some selection too. That's the other thing, especially new car dealers. They're not going to source a whole bunch of different kinds of used EVs. They're going to mostly just have new EVs that are associated from their manufacturer and then the trades that they get. Yeah. By the way, that's different. I think having a single person for new EVs, you know, or consistent supply. Yeah. Yeah. I don't know. I could understand having a specialist on the, maybe on all the use side. Well, that's, I mean, so that's decide how you're going to be all on. So you're basically saying you need to invest a resource staff. Someone who's really knowledgeable about these vehicles. Or wait, wait, wait for the market to kind of start to become more obvious.
The second tip is, and this is really cliché in lane, but you're asking what we do, I think, what I've learned. Yeah. You know, you're going to have to abandon, I think, a lot of the traditional sales tactics. Why? Do you think that's just like you, your personality? By the way, I'm not, I'm not defending any sales tactics. I could like, there can be traditional high pressure, low pressure, whatever. I'm just trying to understand like, what's the traditional sales tactics? Let's put a high pressure on the side. Okay. Right. Let's not focus on high pressure. That's clearly a sales tactic. Let's talk about, you know, go on dealerator, find the top rated sales person at the Toyota dealership in Philadelphia, whatever. Okay. Right. I'm sure there's no what they're doing. And I doubt their high pressure if they're the top rated sales person out of the company, I would have to assume they have a great way with customers. Right. Dude, are you saying this? That, what I'm saying is, you're asking me how we're successful. And I'm just saying it's hard for some of these places to unwind some things that I think we don't do that make us successful. So I'm trying to give you actionable advice from my experience. If I'm running and owning a big dealership that's been around for a long time, and I'm trying to join the EV market, I think maybe that's more of what you're saying. Yeah, I think whatever's actionable for actual dealerships. Okay. So if you, if you have some commitment to it, so you've got somebody that really understands the cars, they drive them, right? Their daily driver is one of these. So they really understand the features. They know the different self-driving types. They know information about batteries and things like that. I think that's going to help a lot. Okay. I think understanding charging is really important. To one of your questions earlier, they did we didn't quite get to, you know, if you live in an apartment or a town home or somewhere where you don't have a garage, it becomes charging becomes more of an issue. So having a solution for people like that, understanding what the charging network is like around you, understanding what their driving habits are, and having an in-house option for a charger.
I mean, one of the things that we do that people are shocked and love is we'll have a certified electrician at your house within 36 business hours to install a level two charger for 1500 bucks. That includes the charger and the electrician. Wow. And you've got a gas station in your garage, and you never have to worry about charging. You only have to think about charging on trips. But that's for people that own a home or have a garage. But what I'm seeing, again, if you know that and you can speak to that and you've got the, you make it easy for them to take charging out of their concerns, that makes them a lot more likely to buy. Yeah. So having the proper response to the questions that I would expect, charging, you know, range anxiety, just having, you know, some good rebuttals to actually educate the customer and answer those questions. And then battery is the, is the people have lots of questions about, you know.
But what should you know about the battery and how can the average dealer know about like, what would you do? Just, I mean, there's some really good data out there that's unbiased from parties that are unrelated to EVs that talk about, you know, how long EV batteries are lasting. That's the biggest one because they're right. You know, when a battery goes out, it's very expensive, very expensive. And by the time it goes out out of warranty, because all the battery warranties are over 100,000 miles before a battery is out of over 100,000 miles. And what's the average warranty? It's like eight years, 120,000 is pretty average, I think, for a, for a battery warranty, which is a long time. But still, you know, your nine years, 130,000 miles into it, and you've got a $16,000 repair bill, devastating, right? Devastating.
So, so there's two ways around that. One is there's a recent study that came out and I'm going to paraphrase. So, because I don't know the exact number, but they, they took a meaningful number of EVs since 2011 and analyzed their battery health. Okay. And, and they found that the vast majority of batteries that failed were older than 2016. And when I say vast majority, I'm talking somewhere in the 90th percentile or more. So, like a certain cohort of batteries. Just old technology, right? Yeah. And up the total amount. With this only Tesla or all, all EVs. And the total amount that batteries that have failed since 2011, I want to say it was in the like, I'm going to butcher this. It was single digits. How about that? Total, all batteries in the last 13 years. Okay. Have, have had significant issues. But ones that were out of warranty, like I said, were, were low, low single digits. So, the likelihood of it happening, I've sold over a thousand Teslas. I've only had two batteries, three, three, but I just had a recent one that went viral on, on social media. I've only had three that I know of. Two of them were in my possession. One of them happened to a customer after we sold it to them. And the reason it went viral is because I immediately took car back. I immediately refunded it as money. Yeah. Even though I didn't have to do any of that. I mean, it was, as is, he was gone. He'd been gone for days. So anyway, if you can understand those three things outside of changing the experience, you're going to, you're going to be better at, at selling EVs for sure.
All right. So tell me, are there any opportunities in EV service that many aren't thinking of? What are the results? Yeah, there's huge opportunity, which is interesting, because one of the selling points is that EVs don't require service like gas cars do. And that's true. But they still require tires. And at some point, they require brakes. And there are things that go wrong. Door handles and touch screens and things like that that aren't catastrophic, but are a pain. Yeah. Yeah. That's a, yep. That's a big one. It's a big deal. And some of the model threes that are older, it is. So you can't talk out of both sides of your mouth. They don't, they do. The opportunity is right now specifically with Tesla, which is, you know, what most of my thinking is around. It's like two months out in Utah to get a service appointment. I know I have a customer just today.
They told him September 25th is the soonest they can get him in for something simple. And so that right there screams entrepreneurial opportunity. And so our next location is got a four bay dedicated EV service center that that's all they'll do. And so I think if you want to dedicate the challenges is you've got to have different equipment, you got to have different certifications. And one of the things I've learned in working with some of our service partners, a lot of their people that have been in that industry, they don't want to, they don't want to mess with them. They don't want to learn new stuff. They don't want to deal with new equipment.
And they're super busy doing gas car repairs. And so you've got to kind of find the right person and the right structure and invest in the right equipment. But I mean, the model why is the number one selling car in the world. It's number four selling car in America. So if you're just an entrepreneur, you see that there's going to be more and more of those on the road over time, they're going to need to be repaired. And so I think it's crazy. And what do you think dealers could do like specifically to attract that customer? Hmm. Well, I mean, got a lot of people know you can do that work because people call us all the time from other brands.
他们非常忙于修理汽油车。因此,你必须找到合适的人选和结构,并投资合适的设备。不过,我的意思是,Model Y 是全球最畅销的汽车,也是美国第四大畅销车。所以,如果你是个企业家,你会看到这种车在路上会越来越多,它们将需要维修。因此,我认为这是一个很好的机会。你觉得经销商可以做些什么来吸引这些客户呢?嗯,我的意思是,要让更多人知道你能做这些工作,因为人们经常从其他品牌打电话给我们。
We service model wise. Yeah. Yeah. Or Chevy bolts or whatever. Because even the dealers, the other dealers, this is anecdotal. They don't love working on them. Again, it's just not it's not in the normal flow of everything that you want. Also, it's a lower ticket. It's a lower RO. Can be what's the most profitable part of service, parts of your labor? Labor. That's right. And so electric vehicles don't use a lot of parts, but they use more labor. So the margin on the service work is actually really good. Yeah.
And so anyway, we're investing heavily in that. And I think you should have at least one day and give it a shot if you can get your people to buy in on it. Somebody and not to stereotype, it's some younger mechanic or whatever that thinks they're cool. Like get them the training, get them the right equipment, start to get the word out that you you've got expertise and you service those in lane four. And that's I think you'll have demand. I really do. But we're obviously doing only that. And then I'm also getting ready to launch the second cyber truck that I'm tricking out with a why do you do that? Yeah.
Is that like just you do it for fun or is there like a no business reason for that? Like what's one, two, three, four, five, I've got five crazy rap TVs that drive all around Salt Lake. Okay. And why do you do that? You see them, you notice them. They stand out. Okay. And that's your marketing. It is. I mean, you are spending on marketing. That's right. That's right. Unconventional. Wait, that's right. When you asked me the question, I had to think about that. I'm like, give away all this swag and I do my cars and stuff. But it's not, most people don't, they're talking our traditional advertising in the car business, right? And here's non-traditional. I just offer to my customers, if you'll let me, I will pay to wrap your car and give you a monthly stipend.
And I've had three in the last 24 hours that are like, I'm in. So my vision is to have these actually a dealer that's like 10 minutes away from where we're sitting right now. That is notorious for that, by the way. Are they cool? No. Okay. They're not cool. Yes. I mean, you've seen our wraps. And the wraps are really on. Yeah. No, ours are like, but they're like 10 minutes. I noticed for five, because we've got you. I'm going to drive by. I'm going to drive by. So we're doing like, cover changing chrome and just really cool covers. So, so having those all out on the road, but I'm buying a cyber truck that we're going to wrap crazy with this custom trailer.
And that's going to do mobile service. We're committed to growing. I mean, we've said from day one, like we're all in. And our goal is to be the largest seller of UCDs in the world. How many co-founders is it? Just Logan and I. Yeah. We started the business five years ago in December, which feels like dog years. And so, you know, I mean, really, it's five years is a long time for this.
So before we wrap up, I'm going to talk about your vision. Tell me just a little bit about the market right now, like, just pulse of the market. What are you seeing? Where price is heading? Just give us a little intel. It's a mark. Yeah, it's constantly, it depends answer because from brand to brand and model the model, it's a different answer. And also part of the country. And again, that's why it's such a scary, exciting, it's very difficult to predict. But the news constantly says, you know, EV sales down, they've got to understand that the trend line is still up and to the right. And I absolutely believe that's going to continue.
I've never thought it's going to be like this. I've always thought it's going to be like this, which again surprises a lot of people. And if you look at that market, it's going to continue to get bigger. It's going to be a large market down the road. And I said earlier, an EV isn't for everyone, but as prices go down, as choice goes up and as charging becomes more available, more and more people are going to want them and get them.
What EVD drive? I drive the Cybertruck as my daily drive. Your Cybertruck daily. Yeah. But I mean, I, that's what I drive because mostly I want it seen everywhere. Is it worth the hype to Cybertruck? It's so fun, dude. It's so fun. I mean, it's, it's, it's actually a pretty good truck. I mean, you know, the closed tonneau cover, I throw crap in there, I close it down, I can take stuff. It's quiet. It's comfortable. It's fast. It's fun. It's just fun. I brought me out the right person to ask.
Yeah, you know, yeah. But they're definitely from a marketing car. They couldn't ask for anything better. So the market, I think is going to continue to grow with depreciation and stuff. I think the heavy depreciation has is built into most of the cars that are out there. The challenge is, as manufacturers are still coming out with EVs that are way too expensive. I mean, even an example, we just started selling Volvo EVs.
I can buy a 2023 Volvo that's the highest trim level package that has 7,000, 9,000 miles on it, 5.0 condition to your clean title, clean car facts and sell it for $30,000 less than a new one because of that in crazy depreciation. Because that car's way overpriced at $68,000 or whatever it is. No way. It's a great car though. It's a Volvo. It's really nice. It's really well made. But people will pay 35 for it. They won't pay 65 for it. And so the challenge is, is they all are losing money on these cars. So you're trying to get them to lower the price.
Yeah. But Tesla lost billions for years. So these CEOs, I think they can just come in and slap a battery on something and then have Tesla margins are finding out the hard way. Yeah. That's not. I mean, it's more that it's technology. It's, you know, manufacturing, manufacturing, production, sourcing. Man, it's been really fascinating. Tell me about what's your grand vision? Like, what's the goal here? Okay, great. You have Evie Carlisle about to have two, five years, 10 years. What's the big vision? Yeah. So when we decided to switch from the marketplace to the dealership and go all in, we decided at that exact time that if we were going to do it, it was the go big go home. It was reinvest, reinvest, risk, risk, all chips in the middle and continue to do that in order to achieve the goal of being the largest seller of used EVs in the world, which is in the world.
对啊,但特斯拉亏损了很多年。这些 CEO 们以为他们可以随便装个电池,就能享有像特斯拉那样的利润,但他们现在会发现事情没那么简单。这不仅仅是技术问题,它涉及制造、生产、采购等。真是让人着迷。跟我说说你的宏大愿景是什么?目标是什么?好的,你要做电动汽车大卖场,未来两年、五年、十年会是什么样子的?大的愿景是什么?
是这样的,当我们决定从市场转向全力经营经销商时,我们就下定决心,如果要做,就要么不做,要做就做到最大。我们采取了再投资、冒风险、全力以赴的策略,一直这样做,以达到成为世界上最大的二手电动汽车销售商的目标。
So I plan to go to Europe at some point because EVs are one of the cars of that. Yeah. And so we've got location two, we're in negotiations on location three, we're adding service, we're adding mobile service. I'm also adding collision repair. We're going to do a collision repair center. Total vertical integration where we can handle everything from sales to service to repair and make it the best experience they've ever had. Our reviews, it's somebody's going to write a bad review that didn't buy a car for me. Yeah, I'm gonna look up your resource. Go look at them. Go look at them. I want you to go look at them and read them.
Yeah. I mean, you go to Google and type in EV Auto Utah. They're probably all fake. They're all look at the multiple paragraphs that people write. It's crazy. No coaching. Yeah, you look at it. So as long as we can grow and have, I'm going to lose it the first time we get a non perfect review. We've got 100% perfect reviews. It's going to happen.
Oh, wow. 5.0. Perfect. Every route. And our whole culture is around making sure that that, I mean, we've got 10,000 reviews. It's very impressive, man. That's not easy. It's not. And we've had to, we've been tested a number of times like, okay, here's a chance for us to test. Do we really, are we really different? Are we really willing to do what we say? And it's hard, but we've always done it. We always will do it as we grow.
And so, we have plans to go into every major EV-centric area in America and open a totally different vibe, a totally different look, a totally different feel. They work with one person. They can be in and out of there in 20 minutes if they want. It's all digital. There's no pressure front end. There's no pressure back end. It's fun to buy a car. And buying a car used to be fun. It should be fun. And it's still fun in a lot of places.
But most of the time, I think if you ask people, do you, is it fun to go buy a car? Most people hate it. They hate buying a car. And so if we can change that and provide good value, I think we can grow. And honestly, I'm talking to a bunch of big dealer groups. I want to partner with dealers that are deeply ingrained in their market because the business model is really smart.
You've got all these gas car dealerships, right? And they're getting trades, they're selling cars, and they know they kind of want to play, but they don't really know how you could drop an EV auto right in the middle. Now we can take all their trades. And by the way, I get lots of really good gas car trades. I can send those out to you. And you've got a place to point people that doesn't compete and feel like it's overlapping with your other brands and fighting your other brands.
But they have to believe in doing things different. This is not going to be Joe's EV auto or Jane's EV auto, whatever the brand is. It's going to operate differently than all the other locations. So whether they're a big dealer or a small dealer, I'm talking to them and trying to find them because, you know, for my franchising background, if you can find somebody that's really deeply ingrained in a market that really knows it, that really understands it and be very picky about them.
Yeah, you'll be able to go into a market and do really well. So that's the plan. Well, I love to hear it. As we wrap up any closing thoughts, anything you want to leave with the audience with anything? Oh, man. You know, again, I'm just want to make sure I'm obviously really excited and have a lot of energy, positive energy. But it's been an entrepreneur, man. It's tough, scary. I mean, it's, it's, you know, I turned 52 weeks ago. It's not the optimal time to start a new business, kind of starting to wind down. You turned 52 weeks here. Oh, wow. Yeah. That's an age that feels real. Yeah. Like, whoa.
But we're having fun. It's so fun. Car business is really fun, man. I mean, I've never been involved before, but it is a blast. It is fun seeing people, you know, get out, drive away and wave and have fun and and so on. I love sales. If you're not your car, you're always into it. But I'm grateful. I'm grateful. I mean, this is a big deal for me to come on. Super passionate. It's great. I mean, yeah, that's for sure. But we've got, you know, this amazing team that we just, we just need to get your daughter to get an evening.
I know. We should tell that story. That do it. We still that story. Okay. So my daughter came up from college to spend some time with me. And she does not have an EV. She has a, well, I don't, she was a 2017 Nissan, right? And actually the EVs kind of make her a little bit motion hybrid or gas. We said, 2017 Nissan Rogue, well, SUV. Not a hybrid. No, no. And the Tesla's the stuff kind of make her a little bit motion sick, which is actually a, it's pretty rare, but, but it happens.
The kind of the way they move is a little different. I've never heard. Yeah, my wife actually, like when I, she won't, no launching the plaid with my, totally gives her motion sickness, like no dice. So, so it hasn't been for her, but as we're driving around today, her transmission's going out, man. I literally am going to have to trade in a car or get it shipped back or whatever. And so we were just laughing like, okay, you know, there's no transmission in any, you know, I got lots of 20, 70s. You made that story out.
Yeah, dude, seriously, it couldn't be any better for this though. So, but to close, what I want to say is, you know, it's really fun to work with people that you love. And, and I love this industry. I love this business. I'm, I'm grateful to be in it. I've got some great mentors, people that have been on your podcast. I mean, think about how we met, you know, whether Scott Painter or Brent Morgan, who, who talked to me fairly often, give me advice. I mean, George Sleever, who's just on here's become a buddy and a mentor. And so I'm grateful to you. I, it's seriously, you've helped me meet these people that have mentored me and really helped my business. So that's how I want to end is just saying thank you. Appreciate you. Yep. Well, thanks for coming on. It's been awesome. Had a ton of fun and watch you do it again at some point. Say when? Thanks, brother.
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