One of my favorite measures in the car world is “buyer loyalty.” The data isn’t based on sentiment or an inference but on a consumer putting their money where their mouth is and purchasing a vehicle. It’s clean and presumably accurate. The results, though, are a bit surprising.
The news is so shocking and unexpected that, for the rest of today’s The Morning Dump, I’m going to take it easy and focus on news that probably won’t cause your bow-tie to comically spin around or your tophat to suddenly pop off your head.
Canada has matched America’s 100% tariff on Chinese-made EVs, and we’re now learning there was a big pushback from at least one American EV-maker. I’m guessing you know who it is. I’m also going to assume that you’ll be able to correctly decide whether or not GM’s new battery tie-up with Samsung is going to be accelerated or delayed.
And, finally, it won’t be a big shock to discover where CDK Global thinks it needs to make future investments.
The… Lincoln Nautilus Has America’s Most Loyal Non-Tesla Buyers?
I drove the Lincoln Nautilus earlier this year and found it to be a comfortable, capable vehicle with a captivating screen design. Other than where it’s built, it’s hard to make any argument against the mid-size crossover-y luxury-ish Lincoln Nautilus.
At the same time, I didn’t get a strong feeling that my life would be bereft if there was somehow never a Nautilus in it again. Apparently, that’s how many Nautilus owners feel because it is the most popular non-Tesla vehicle for buyer loyalty according to S&P Global Mobility.
And this is in a market that’s becoming more loyal:
More than half of all brands in the industry saw a year-over-year increase of 1 percentage point or better. This group included both mainstream and luxury brands, which saw increases of 1.9 and 1.4 percentage points, respectively. Growing inventory levels and a strong pipeline of return-to- market households were the primary factors in loyalty gains for the first half of 2024.
“Last year we saw a big jump in the number of households returning to market for a new vehicle, but the inventory was lacking,” said Vince Palomarez, associate director, loyalty product management at S&P Global Mobility. “This year, return-to-market volume remains consistent; however, inventory levels are up more than 40%, so households have more opportunity to remain loyal to their previous brand.”
People often move up or down from models within a brand, so model loyalty tends to be a relatively small number for everything that isn’t a pickup truck. Right now, brand loyalty overall is about 52.5%. The most loyal brand owners, by far, have been Tesla owners (67.8%). This makes sense as prices for its vehicles have dropped and little else has been particularly competitive with Tesla until very recently.
The fastest-growing brands in terms of loyalty this year have been Lincoln, Jaguar, and Land Rover. Land Rover makes a lot of sense to me, Jaguar a little less so, but Lincoln is kind of amazing. Overall, the Lincoln Nautilus has a model loyalty of 46.7%, which is an improvement over last year, when the Nautilus had a 42% return rate. The Corsair, too, has extremely loyal customers.
I think it would be easy to say that all Lincoln owners are old and thus are getting the same thing they’ve always gotten, and there’s probably some truth to that, but it’s not like Lincoln sales are slumping. Overall, brand sales were up 25% year-over-year. The one weakness in the lineup is the Lincoln Navigator, but that’s about to be replaced with a new and improved 2025 Lincoln Navigator.
Ultimately, I think this goes to prove that people will buy Chinese-built cars so long as it isn’t super obvious they are buying Chinese-built cars. My guess is a lot of owners had the Candian-built Nautilus before and are now replacing them with the Chinese-built model. Either they don’t know the Nautilus is built in China now or they don’t care.
Tesla Reportedly Wanted Canada To Backoff On Chinese EV Threat… Because Tesla Sells A Lot Of Chinese EVs In Canada
One of the quirks of Tesla is that two theoretically identical models from the same model year might have an enormous number of differences. Specifically, ongoing iterative changes, different battery cells and chemistries, and global production means that you could have a 2022 Tesla Model Y with one type of battery built in Texas and your buddy could have a 2022 Tesla Model Y with a different battery built in China.
That’s less likely in the United States, where Inflation Reduction Act-related rules disincentivize certain batteries and certain production. But Canada is a little different. The IRA had the unintended side effect of sending more Chinese-built cars to our northern neighbors. Specifically, a bunch of Chinese-built Teslas landed there.
The news that Canada was thinking about joining the USA with a 100% tariff on Chinese-built cars reportedly led Tesla to protest.
The source, who requested anonymity given the sensitivity of the situation, said Tesla approached Canada before the official announcement. The automaker asked for a rate similar to what it received in the European Union, the source said.
Tesla does not disclose its Chinese exports to Canada. However, vehicle-identification codes showed that the Model 3 compact sedan and Model Y crossover models were being exported from Shanghai to Canada.
It was worth a shot!
GM And Samsung Ink Battery Deal, Immediately Delay It
Last year the industry was still deep into the EV hype train, and GM and South Korean battery maker Samsung SDI announced a plan to build a battery-making plant via a joint venture in New Carlisle, Indiana.
The deal has been finalized and the plan is coming, with the expectation that it’ll create about 1,600 jobs. Oh, and it’s immediately delayed a year according to The Detroit News. That means the plant will now open in 2027 instead of 2026.
Here’s what Kurt Kelty, GM’s VP in charge of all things battery, had to say in a LinkedIn post:
This new $3.5 billion plant will have an initial capacity of 27 GWh, with capability to expand up to 36 GWh, building prismatic cells, which will be added to our battery technology portfolio, helping us to continue to increase performance and lower costs in the future.
The Samsung SDI joint venture paves the way for our next-generation EVs to provide customers with the latest battery technology, improving EV performance, and the ownership experience. Our new venture with SDI supplements our successful Ultium Cells JV with LG Energy Solution.
Unlike Chinese-built Teslas, these batteries are likely to qualify for IRA tax incentives. In the grand scheme of things, a delay of a year probably isn’t a huge deal.
CDK CEO: Uhh… Let’s Make Our Tech Better
CDK Global is the main provider of Dealership Management Software (DMS) in the United States. It’s worked hard over the years to make sure all of its products were deeply integrated into the running of its partner dealerships.
This backfired to some degree when CDK Global found itself the victim of a major ransomware attack that caused operations to slow down or stop at about 15,000 dealers.
CDK Global is boosting its spending on innovation and IT infrastructure in the wake of two cyberattacks in June, CEO Brian MacDonald said.
“To demonstrate CDK’s commitment and CDK’s abilities, we’re actually increasing investment,” MacDonald told Automotive News on the Aug. 28 episode of the “Daily Drive” podcast.
CDK has invested $500 million in those efforts since July 2022, when Brookfield Business Partners took the company private in an $8.7 billion deal that same year.
Ah yes, Private Equity: the solution to and cause of most of life’s problems.
It’s here that I should probably note that The Autopian is updating its tech stack tonight so there might be some weirdness in the migration. I’m aware that a few things haven’t been working perfectly around here lately. We’ve been slow to fix them as we’ve been testing out a new backend (the front end will look roughly the same) to try and make the site faster. I’m hoping that if it’s successful we’ll be able to iterate and make some overdue improvements and maybe a few design tweaks.
If it doesn’t work, I guess it’s a four-day weekend.
What I’m Listening To While Writing TMD
In honor of the Lincoln Nautilus, here’s Joe Jackson’s “Is She Really Going Out With Him?” This is also a light Mark Tucker tribute since I know Mark is a fan. This song was also used as the intro sequence music for an extremely early-aughts ABC primetime comedy. Does anyone remember the show?
The Big Question
Are you brand and/or model loyal?
Not particularly specific brand or model loyal at this point in my life. You could name any brand that sells vehicles in the US and I could name at least 1 thing I’d either consider owning or would at least like to drive at least once to see if I’d like it. Have owned mostly “domestics” and a Hyundai. Had to ditch the Hyundai due to it becoming more expensive to insure than it was to own. This happened even though my own vehicle history is clean of accidents/traffic citations for an eon and my 22 Tucson was a high enough trim level not to be effected by the “Kia Boyz” easy steal it method. Guilty by association however. Thanks Kia Boyz and American auto insurance industry!! Love the idea of a Hyundai Ioniq6 or Kia EV6 but won’t consider another one of their products period at least till we are FAR past any association with that debacle. Also won’t consider any Nissan with their garbage CVT. Otherwise will consider anything else I end up liking no matter what drivetrain it has.