Never Stop Driving #107: Midyear Check-In

Cameron Neveu

Nearly a decade ago, I joined Hagerty, abandoning a career reviewing cars at Car and Driver and Road & Track magazines. I left that world because the new machines were converging in size, power, and design, creating fewer opportunities to tell interesting stories. At Hagerty, I could focus on the fun stuff, the cars we own because we love them, not because they’re needed for commuting to work or getting the kids to school. That said, Hagerty Media provides selective new-car coverage because the auto industry still pops out compelling new enthusiast cars, just not at the frequency it once did.  

I’m still a keen observer of the industry, which I find fascinating. Most car companies are public and are focused on quarterly results, but cars take years to develop, so they must plan years ahead. Throw in huge labor forces, government regulations, and an independent dealer network and it’s no wonder the big players pivot with all the grace and speed of the Titanic. July is typically an important month, not only because it’s the height of the summer selling season but also because it’s when car company bean counters and industry analysts alike parse the sales figures from the first half of the year and make predictions for the second.  

parking lot full of cars
Carles Rabada/Unsplash

Cox Automotive expects full-year U.S. sales to be slightly higher than 2023, at nearly 16 million new cars, despite various headwinds: high interest rates; pandemic pent-up demand has now largely been met; and a major disruption to thousands of dealers from a ransomware attack on software supplier CDK Global in June. My local VW dealer could not even schedule a service appointment let alone sell a car. No one seems to know the extent of the attack or if personal information was compromised. Lawsuits are flying. According to Automotive News, CDK paid the attackers some $25 million to leave them alone. Digital ransom, it seems, works. Incredible.  

I also love seeing what car-world observers, from business journalists to Wall Street analysts, have to say about the auto industry. Often, their advice seems obvious. For instance, in this year’s Bank of America “Car Wars” report, U.S. carmakers are advised to focus on profitable trucks to fund EV development and reduce costs. More telling, the report claims Tesla has a $17,000-per-car cost advantage over competitors. Wow.  

Tesla Store experience
Unsplash/Screen Post

The Bank of America report also urged a retreat from China, a market that was once a gold rush, with every car company eager to form the required joint ventures with Chinese companies to sell cars. I remember asking executives if they were worried that they were simply handing over proprietary knowledge. We’d see clumsy copies of cars like the BMW X5 that looked sort of close but off, too. The Chinese Land Rover copy was hilariously called “Land Wind.” The executives all understood the risks, but the market was just too huge, too untapped to ignore. The Chinese industry caught up quickly and now, no surprise, there are dozens of Chinese car companies competing with established players. B of A believes the domestic players have improved and the competition is so fierce that there’s not enough upside.  

2023 Outlander PHEV rear three quarter
Mitsubishi/Brad Fick

One of my favorite unexpected realities of today’s market is that Mitsubishi, which has seemed on life support here for at least the last decade, still exists. The company that was once shrinking to oblivion recently announced an ambitious five-year plan.  

General Motors reported stronger than average Q2 earnings and, in her shareholder letter, CEO Mary Barra reiterated the company’s commitment to autonomous technology via Cruise. The industry remains focused on EVs with frequent reports either confirming the popularity of these cars or debunking it. Cox said that EV sales grew 11 percent year over year in Q2, despite a slowdown in Tesla sales. They credited more models and more incentives that lowered prices. The Tesla Model 3 is a solid deal these days, although be sure you read the fine print. The company is certainly creative with its “price after probable savings” figure, which includes the $5000 Tesla says you’ll save by not buying gas. I kind of admire that sort of creativity even if it is a little underhanded. Selling cars is a bare-knuckles game.  

The rosy EV sales increase in Q2 masks a general slowdown of EV adoption, which was discreetly acknowledged in Barra’s letter. When it comes to EVs, she wrote, GM is committed to “disciplined volume growth.” This week, Barra told analysts that the company is scaling back planned EV rollouts. They’re not alone. Porsche is doing the same. Most believe that EVs will remain about 10 percent of new cars sales for a while.  

2025 Chevrolet Corvette ZR1 ZTK carbon fiber
Cameron Neveu

Among this backdrop came news I never dreamed of: Chevy will soon sell a 1064-hp Corvette. I remember when 500 horsepower was a big deal. We just published the Corvette ZR1 details, which were gleaned during interviews with GM engineers. Visits with automotive engineers are one of the best parts of my gig, an opportunity to indulge my curiosity. I’ve been to hundreds and this one felt markedly different. I could feel the excitement and pride among the group, a sense that they couldn’t believe they were let loose to show what they could do. We need a ticker tape parade in Detroit to celebrate this milestone, the first 1000-horsepower mass-produced car. The Dodge Demon advertised the figure, but it required E85 fuel whereas the Vette does it on commonly available pump gas. We remain in the golden age of internal-combustion horsepower.  

These are the most interesting times. Have a great weekend! 

Larry 

2025 Chevrolet Corvette ZR1 ZTK carbon fiber
Cameron Neveu
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