Mitsubishi had a strong 2024, offering affordable cars that the market wanted to buy, including hybrid crossovers. A closer look at how dealers performed, however, shows that the boost in sales wasn’t necessarily a huge boost to dealers. Even worse, a new electric platform might not be the Mirage replacement everyone wants.
A big thanks to Thomas for helming The Morning Dump earlier this week while I was traveling/attending an ad tech conference. I’ll have a little update on that at the bottom of TMD.
I want to talk about electric cars today because there’s been some interesting news on that front. From Mitsubishi, we’ve learned that a new vehicle is coming that’ll be similar to the new Leaf. Is that a good thing? It’ll depend a lot on how much it costs. Tesla continues to struggle in China, where it’s losing market share to companies like BYD. Lucid missed its earnings expectations, but narrowed the amount of money it’s losing per vehicle as it expands production.
Does all this talk of electric cars bore you? Congrats, I’m ending the week with the good news that one of the coolest car events anywhere is coming to the United States.
Mitsubishi Dealers: A $40,000+ EV ‘Won’t Work’
Mitsubishi is still associated with Nissan, in spite of all the merger/sales talks, and the company’s product roadmap includes a small electric car based on the upcoming and entirely redesigned Nissan Leaf. It’s possible this is going to be a great car, but for budget-oriented Mitsubishi dealers, the most important thing is that it be an affordable one.
Even though the company reported a sales increase of 25% year-over-year to about 110,000 vehicles last year, not all of those deliveries were normal retail transactions for dealers. In fact, according to a new report, only about 66,000 of those vehicles were retailed through Mitsubishi’s U.S. stores. With about 320 retail stores, that comes out to about 17 vehicles per dealer per month. With high costs of vehicles last year, I’m sure a lot of Outlanders ended up at rental counters.
Here’s what dealers are telling Automotive News:
Mitsubishi financial data provided to Automotive News showed that average net profit per store plunged by nearly half from the pandemic’s start in 2020 to $434,199 last year. Average dealership net profit as a percentage of sales slipped to 0.92 percent last year from 2.2 percent in 2023.
A Mitsubishi dealer welcomed the lineup expansion, but tempered expectations in a product information vacuum.
“If we get an EV that’s $40,000-plus, that won’t work,” the retailer said, requesting not to be identified. “We need affordable vehicles. That’s where the market is.”
Absolutely. All of these expensive two-row electric crossovers are fighting over a relatively small market, whereas there’s a huge opportunity for cost-effective electric vehicles, hybrids, and gas-powered cars. It’s why the Chevy Equinox EV and Honda Prologue are selling so well. If this re-imagined Nissan Leaf can come in at an affordable price, then maybe Mitsubishi will have something, although I can’t imagine it’ll be a replacement for the bargain basement Mirage.
The brand already has affordable PHEVs, so I’ll reserve judgment until I see pricing.
Tesla Is Running Out Of Excuses
Another day, another story about Tesla sales dropping in a key market it used to dominate. This time it’s China, where the automaker continues to face intense competition from new car companies.
Tesla Inc.’s vehicle shipments from its China plant declined for a seventh consecutive month, exacerbating the carmaker’s early-year slump.
Elon Musk’s automaker shipped 58,459 Model 3 sedans and Model Y sport utility vehicles from its Shanghai factory last month, 6% fewer than a year earlier, according to preliminary data released Wednesday. China’s Passenger Car Association didn’t yet offer a breakdown of domestic sales and exports.
China-wide wholesales of new-energy vehicles — which include electric cars and hybrids — are estimated to have risen 42% to 1.14 million units for April, the PCA data show.
Tesla, as a company, has started to note that CEO Elon Musk’s political activities have harmed sales in places like California and Europe. Those political concerns seem like they should be less of an issue in China, where strong competition has led the American company to increasing declines in a country where it was once thriving.
The company’s global switch to a refreshed Model Y, as well as the Lunar New Year, have been used as an excuse for why deliveries might be down in China in the past. That’s no longer in play here, which means that any decrease in sales going forward is probably just demand.
Could politics eventually play a hand, though? China and the United States aren’t exactly playing nice with one another right now. I’ve yet to see Musk or anyone else at Tesla try to explain concretely what’s happening.
Lucid Misses Earnings, Which Isn’t That Terrible
Sales and financials at electric car startup Lucid weren’t great, but they were better, and better seems good enough for a company sitting on a Scrooge McDuck-level pile of Saudi cash. Sensing that Tesla was weak and having, generally, the best-performing electric cars on the market, Lucid’s strategy has been to drop prices and increase incentives to gain market share.
This seems to be working, with Q1 deliveries of 3,109 vehicles and $235 million of revenue, a little short of the $250 million the market predicted. The company only lost $0.24 per share, which is better than Q1 of 2024, when it lost $0.27 per share.
Here’s what CEO Mark Winterhoff, pictured above, had to say:
“We continued to build momentum in the first quarter as we achieved yet another delivery record, further strengthened our market position, and executed against operational priorities,” said Marc Winterhoff, Interim CEO at Lucid. “Lucid Gravity is beginning to arrive in more customers’ driveways and at our studios, and combined with our progress toward future initiatives, our company is well positioned for future success.”
With the Gravity coming out this year, Lucid expects it’ll produce 20,000, which is a lot of cars for them. While the automaker seems far from profitability, it’s at least closer than it was last year.
Retromobile Is Coming To The United States
For the last two years, we’ve told you that Retromobile is the place to find some of the strangest, most historically interesting classics. For Europeans, it’s a short jaunt to Paris to attend the show; for the rest of us, it’s a bit of a hike.
Sensing we were missing out, Retromobile is coming to New York, and Gooding & Co. will be doing the auctioning. Hell yeah!
Bloomberg‘s Hannah Elliott (who else?) has the skinny:
New York presents a unique opportunity for Rétromobile to infiltrate America, since the city lacks a premier global automotive event like the Pebble Beach Concours d’Elegance in Carmel, California; the Amelia Concours d’Elegance on Amelia Island, Florida; and Formula One races like those in Austin, Las Vegas and Miami. It’s logistically easier to access from Europe than car centers such as Los Angeles, and many of the country’s most fervent enthusiasts house their collections in relative proximity in Connecticut, New Jersey, Massachusetts and even Michigan.
But the Big Apple has its own challenges too. The venue for the event, the Jacob K. Javits Convention Center in Manhattan, is notoriously difficult to access by subway and on foot, and the dates of the American Rétromobile show conflict with the F1 race happening the same week in Las Vegas.
I find Javits relatively easy to get to by the subway, and if you’re coming via Hudson Yards, it’s not that bad on foot. The F1 race issue is real, though.
Between the two, I think I’ll go to Retromobile… assuming they’ll let me in (and I don’t risk walking away with a car).
What I’m Listening To While Writing TMD
It feels like “Monday, Monday” after being out the last two days, so let’s enjoy some music from The Mama’s and the Papa’s.
The Big Question
I went to an ad tech conference yesterday, which is a sentence I never hoped to write. The reality is that, as the publisher, it’s my job to make sure we’re sustainable (I never want to lay anyone off), so it’s important I understand how all of this works. My big takeaway is that the current environment sucks for publishers because everyone says they want more “quality” and yet the market is designed for “quantity.” Our bet is that quality will win out in the long term, which is why we aim to have an advertising load that’s 51% of what our competitors offer.
After doing some soul-searching, we’re now considering turning off display ads for members. If you pay, maybe you shouldn’t have to see an ad (how we deal with the video player, which also has editorial videos, is another question). At the same time, if we do that, we’ll probably have to turn up the ads for non-members a little bit (let’s say to 75% of what the market offers).
How would everyone feel about that? Would that motivate you to become a member?
Top photo: Mitsubishi
I’m a member and don’t mind the ads too much. Hell I even turn off my ad blocker for you guys. Do what you need to do to keep the lights on, people employed, and the quality content tap open!
I’m so glad this awesome site is such high QUALITY and that y’all are committed to it. I don’t know much about ads but I would actually throw out there the opposite:
-Keep current ads for members (they’re already at a minimum): I would guess members are already committed to supporting site; and are used to just reading around them unless it’s an ad of interest
-Don’t increase the ads for non-members as much since that may decrease the chance of getting them to be members
Anyway, just random ideas
I had a Vinyl membership for a year but didn’t renew because I was laid off about three weeks after springing for it and every little thing adds up, etc. I am still poor and also old, so very undesirable demographically, and I think most other non-members are in one or both of those categories.
So, rather than reducing the number of ads displayed to more valuable readers, increase it instead! Get the ones that pop up all over the place so unintended clicks jack up the engagement rate. Slow everything down to raise dwell times or whatever they’re called. Otto goes to college soon, your daughter’s not that far behind him, and David’s got one of his own already and mentioned “having lots of babies” when he showed off his wedding photos, so the needs are there. And, damn it, The Autopian has not yet started to accelerate on the on-ramp to the Enshittification Turnpike, so time’s a’wastin’.
The big display ads really mess up my reading experience on my tablet, I get the very same ad three or four times in one article, that’s stupidly repetitive, and they are near impossible to navigate past without lag, jumping ahead and general annoyance. Kill the big display ads for all levels of membership and my Cloth renewal is guaranteed. The embedded player ads ars not so troubling, more par for the course.