One of the more interesting side effects of the continually cheap price of oil last year was a huge increase in sales of SUVs and pickup trucks.

In this video segment, Sean O'Reilly, Tyler Crowe, and Taylor Muckerman go over the numbers, explain why Tesla Motors (NASDAQ:TSLA) is far from competing on the same scale as incumbent SUV and truck manufacturers, and how this scale disparity will impact competition between these two sides of the auto world.

Listen to the full podcast by clicking here. A full transcript follows the video.


This podcast was recorded on Jan. 7, 2016.

Sean O'Reilly: What were you saying about SUVs before we came in here, Tyler?

Tyler Crowe: Well, I'm not saying it. It was actually, a lot of reports are coming out. As of late, a lot of the major auto manufacturers are starting to report their November and December sales for the end of the year, and I think maybe to the surprise of few, SUV sales are absolutely booming.

O'Reilly: Because gas is $1.90 for the first time in five years or whatever.

Crowe: Yeah.

Taylor Muckerman: Long-term investing!

Crowe: On Bloomberg this morning, there was an estimate that $100 billion has been transferred to the customer through gasoline savings over 2015.

O'Reilly: I think it was like $600 per household or something.

Crowe: Yeah, it's a lot of money, and it's just basically being put into other things, and one of the things it looks like people are going to buy now are SUVs. Going over the big three, doing a comparison of cars versus trucks. In 2015, Fiat (NYSE:FCAU)General Motors (NYSE:GM), and Ford (NYSE:F), their truck and SUV brands grew 22%, 16%, and 8.3% respectively.

O'Reilly: That is white-hot for cars.

Crowe: Now, let's compare this to their cars, sedans and smaller vehicles. Same thing, Fiat, General Motors, and Ford. Fiat Chrysler is cars down 19%, General motors down 14%, and Ford down 0.9%.

O'Reilly: People are buying trucks instead of cars.

Crowe: Exactly.

O'Reilly: My god. What's the average MPH for a truck these days?

Muckerman: Not as good as a car. 

Crowe: But, I mean, we're looking at somewhere in the high teens to low 20s. And just running a number on it -- and I hate doing this, because it makes it seem like I'm kind of belittling the movement to hybrid and electric vehicles and things like that ...

O'Reilly: Which, of course, you would never do.

Crowe: I don't want to do it, because I think it's going to happen. The technology is going to come up one day, it's just not quite there yet. But just to get a little bit of perspective on growth rates, if we were to combine the large pickup trucks, the largest and most popular, Ford's F-150 series, Chevy Silverado, and Dodge Ram -- for every one Tesla that was sold last year, there were 83 of those trucks sold.

O'Reilly: Oh my god.

Crowe: Just giving a little perspective.

Muckerman: Where you at, Elon Musk? Step it up.

O'Reilly: Step it up.

Crowe: Just to give a little perspective about, when we talk about growth rates.

Muckerman: Well, there's also more scale to sell. Elon Musk is pretty much tapped out, doing what they can sell. They have more capacity to build into their factory, but right now, they're running at pretty peak rates.

O'Reilly: Does anybody know off the top of their head how many cars Elon Musk sold in the fourth quarter or third quarter? Wasn't it like 25,000 or something?

Muckerman: In a quarter? No.

Crowe: Annual was 50,000, I believe. I may be a little low on that, don't quote me.

Muckerman: Yeah. I think they're shooting for 500,000 out of that factory.

Crowe: Within a couple years.

O'Reilly: And millions of trucks are being sold right now.