Michael Ward's questions to LITHIA MOTORS (LAD) leadership • Q3 2025
Question
Michael Ward inquired about the margin on US EV sales, its impact on overall new vehicle gross, and whether EV profitability bottomed in Q3. He also asked about the potential for $1 billion in acquisitions by year-end, current multiples, and capital allocation.
Answer
Bryan DeBoer, President and CEO, confirmed that EV margins were lighter, impacting new vehicle gross, and agreed that profitability likely bottomed in Q3. He noted Lithia is conquesting second and third-generation Tesla customers. Regarding M&A, Mr. DeBoer stated that Lithia expects to close significant deals in Q4, well within their 15% hurdle rates and 3-6x EBITDA multiples, leveraging long-term relationships and a disciplined approach.