Hybrids, Trucks, and EVs: The Auto Winners Today

0:00Let's check in on this automotive industry here. Welcome in our next guest, Brian Moody, automotive expert at Capital One Auto Navigator. Brian, thanks so much for your time. Good afternoon. Look going on in the auto industry as we discuss. I think we only talked to you about a month ago. We've got everything from the macro headwinds, obviously, to the policy and regulatory challenges and the competitive shakeups as well. I'm just wondering which company you're seeing right now that's sort of best position to navigate all of the headwinds. Yeah, there's a couple that I think are worth keeping an eye on. And it's not the ones that we would think of as typically strong in the past few years. They're the ones that maybe are headed for a big turnaround. One of those being Nissan, they have new technology. They have a hybrid system that works different than everything else. They took a few of us behind the curtain and showed us what they have coming. It's very impressive. And I would also put Stellantis in that same group. They've shown some modest gains ahead of a huge product onslaught.

1:00But more importantly, they have new executives. One of those being a chief of communications. One of the things that I think people get is it doesn't matter if you do a great thing. If you didn't communicate that great thing effectively, you may as well not have done it at all. So I think Stellantis is one to watch. They have this new executive coming in. I think that's one to watch. She's been a journalist before. I also think GM, they have next year a very profitable full size truck is going to be all new if they can get that right. Huge upside for them. Ford, new electric small pickup. Hyundai and Kia, I think, are worth watching. And here's why they already have a sizable domestic manufacturing footprint here in the US. Kia just came off one of their best months sales wise in the company's history here in the US. They like the vehicles. They already are entrenched in the US in terms of where they build stuff. I think both Kia and Hyundai have a lot of new things coming and are worth watching

2:01into 2027 and maybe even into 2028. And you mentioned GM there, Brian. I mean, we saw them number one in US sales in the second quarter and they pulled back on their EV strategy and you've highlighted they've got this all new full size silver motto, not an EV for sure coming out. But you also add that EVs are down, not out. So as we look at GM as a potential opportunity, how are you also looking at the EV space and who is doing something right in that space right now? Well, sometimes who's doing something right is not always reflected in massive sales. So I think who's doing something right is Rivian. They have great products, but it hasn't really reached that Tesla critical mass in terms of sales. Tesla is going to continue to do well. I'm not worried about them. I think Volvo is one to look for when it comes to EVs because remember, just because there isn't room for all of the EVs that we have seen doesn't mean that there's none. When you look at certain counties in California, for example, the number of new car sales

3:05that are electric is 25 or 30%. So there's still plenty of room at the table for electric cars. They just have to be good. And I mean, like really good. So that's why you mentioned GM. They have the profits from the big trucks. They can bring about some new affordable electric vehicles. And I think consumers will respond to that. I want to go back to Nissan because it's such a fascinating story to me. I mean, I was sitting out in Asia for many years. I mean, that was a struggling company for a while there. I mean, obviously there was the Renault story. It's got a little bit of French blood, but then it was obviously trying to do this merger with Honda. That kind of fell apart. And it was like, what to do with Nissan? Is this more of a turnaround story? Is it just coming from a low base? I am fascinated with this one as far as the strategy. Well, it is a turnaround story because it's one of the fastest growing brands in the US along with Hyundai. So consumers are responding. But I think what we have to look at with Nissan is they've cut.

4:06OK, they've cut things that maybe they didn't need. And I was able to speak to the CEO recently. And he has a great commitment to the company. He wants to keep their enthusiast portion of the company, but he also wants to make great mainstream vehicles. The new Rogue Hybrid is a perfect example. It doesn't work like any other hybrid. It's dramatically different. And I think once consumers get the idea of how that works, they're going to respond with their dollars. So it's easy to say, you know, yeah, low base. That's fair. That's a fair criticism, I think. But I also think that they've realized, hey, it's now or never. We need to get this done, or it's not going to work out too well on the future. And I think that they have that fireland of them. And I see the passion from the leadership at the company of really making great things that consumers want. And Brian, I think last we spoke, we talked about hybrids and how they may become a big driver here as people look to have some of these EV features, but also want the potential to have gas.

5:11If that's a part of the Nissan thesis as well, do Hyundai and Kia, who you already mentioned, fall into that camp too? Because I know their hybrid sales were up significantly this year. Yes, Hyundai's hybrid sales were up about nearly 70%. So that shows where people are thinking. But at the same time, it's funny that you should mention those three companies. All three of those have a very strong electric vehicle program, but also a very strong hybrid program. And one thing to keep in mind, when we talk about low-priced cars, that's like the buzzword lately. It's all the sudden like low-priced cars are the new cool. Well, those low-priced cars from brands like Kia, for example, as low as $25,000, those are usually gasoline powered cars. So you need all of those things. And what I would be doing is looking at a company that has a strong showing for all of those technologies, not just one. And Brian, given you've got such great exposure to the auto industry,

6:13by the way of being able to talk to these CEOs and people across the board here as far as the sector is concerned, I mean, what are you hearing about the challenges of affordability? I mean, what are they telling you right now? I mean, who's getting it right? You know, particularly when you think about pricing and just generally going and filling up your car with gas. Yeah, when you look at a company like we mentioned Nissan and they have five or six models that start under $30,000, they're getting it right. When you look at Kia and they have cars that transact for under $30,000, Chevrolet, same thing. So this is why some of these companies are ones to watch. Of course, they have the top-end things. Of course, you can find a $100,000 luxury SUV. But what they didn't do was they didn't leave out the $25,000 SUV that they know it's what people can afford. Recently, there was a survey done using capital one data. And you know, one of the most purchased vehicles when people were loaning money or buying money with a loan was a Chevrolet Tracks and a Chevrolet Silverado.

7:17And I think that shows where people are with their pocketbook. They want efficient, they want affordable. But at the same time, there's still a whole segment of people who want something electric, no matter what the price is. And when you can hit all of those things effectively, that's going to be a strong showing into the later part of this year and even into the next year. All right, Brian, I'm going to wrap things up here with the thing you're not supposed to do. Make the parent pick the favorite child. If we have to pick one automotive company over the next 12 to 18 months that you see as having the most opportunity, who is it? I would say Nissan, they have the most opportunity. Now, that's not the same thing as saying that they're going to capitalize on the opportunity. They may very well do that. But who has the most upside is Nissan because, remember, they have the Infinity brand and they have several new products coming. And here's why I said the thing about the communication. When you tell people what you're doing, it gives people confidence in the future.

8:18And I think they have huge upside. Brian, such a pleasure to talk to you today. Really appreciate you joining us for that deep dive into the automotive sector. You're the automotive expert at Capital One auto navigator. Again, that was Brian Moody.