Starting in first gear
Good morning. Eleven days from now, a fortune in collector cars changes hands on a golf course in Monterey. Last Thursday, Jim Farley stood in front of Ford employees and told them to prepare for BYD showing up in American dealerships. And sometime last month, without a press conference, BMW started building M3s that light the fuel twice.
Three different rooms, one question. This industry has stopped arguing about whether things change. It's now arguing about when — and everybody's answer is sooner than the last one.
In today's newsletter, we'll get into
The Auction Desk: Carroll Shelby's own Daytona Coupe, and a Ferrari that beat it to the punch
One Big Story: Ford's CEO put a date on the Chinese arrival
Engineer's Corner: Why the new M3 has two spark plugs per cylinder
Garage Economics: Best sales month of the year. Hybrids ate all of it.
Let's roll.
THE AUCTION DESK
The warm-up act is already outbidding the main event
Source: Bring a Trailer
Two weeks ahead of Monterey, a 2015 Ferrari 458 Speciale Aperta closed on Bring a Trailer at $2.125 million. Not a Le Mans winner. Not a one-off. One of 499 built, with a folding roof and a V8 that revs to 9,000 rpm.
Hagerty explains the appetite. Standard Speciale coupes sat between $500K and $600K all through 2025. This year, condition #2 cars jumped 57% to $845,000, with concours examples at seven figures. The Aperta is roughly three times rarer than the coupe, and the market has done that math loudly.
Then the real week starts. Monterey runs August 12–16, anchored by the 75th Pebble Beach Concours on Sunday the 16th.
Gooding Christie's (Aug 14–15) leads with a 1964 Shelby Daytona Coupe, chassis CSX2300 — third of six built and the only one Carroll Shelby owned personally. It debuted at the 1964 Tour de France with Bob Bondurant driving, ran third in class at Daytona and Sebring during Shelby American's title-winning 1965 FIA campaign, then won at Suzuka and Fuji. Shelby bought it back in 1975. Estimate: north of $25 million.
RM Sotheby's (Aug 13–15) counters with a 1962 Aston Martin DB4 GT Zagato at $12M–$15M and Corvette Grand Sport chassis 003 at $11M–$13M. Broad Arrow takes Bonhams' old Quail slot with a 2025 Bugatti W16 Mistral, $8M–$10M.
📈 Market signal: Money is chasing scarcity harder than it's chasing history. A 12-year-old production Ferrari gained more in eight months than most six-car race legends will move in a decade. Monterey is where those two curves finally get priced against each other — and hypercars have run unbroken since Kissimmee in January, with crypto liquidity notably absent this time. Watch whether the Shelby clears its low estimate. That's the honest reading of the room.
ONE BIG STORY
Ford’s CEO put a date on the Chinese arrival
At a Thursday town hall in Dearborn, Jim Farley told Ford employees the company is planning for Chinese automakers entering the U.S. market within five to ten years — and that senior leadership thinks the back half of that range is likelier.
Read that against what's standing in the way. Tariffs on Chinese-built cars run near 100%. The connected-vehicle rule bans Chinese software in U.S. vehicles by 2027 and hardware by 2030. The Senate is working to widen the ban further. On paper the door isn't closed — it's welded.
Farley is telling his people to plan for it anyway.
Why that's the right read. Ford is already losing this fight elsewhere. In Europe, Chinese brands are taking share fast enough that Ford signed a joint venture with Geely to stay competitive — a deal some U.S. lawmakers disliked, and which Ford defended by saying Chinese competition is forcing everyone to get leaner and smarter. In Mexico, Chinese automakers have built serious share with no tariff wall to climb. Ford has seen this movie in two theaters.
The response: a family of affordable EVs engineered from a blank sheet to match Chinese cost and efficiency. Not a decontented Lightning. A ground-up answer to a cost structure Detroit spent a decade calling subsidized rather than real.
There's an awkward footnote. Ford, like other automakers, has been quietly seeking authorizations to keep selling some China-built vehicles here under the very rule designed to keep them out. The wall has doors, and everyone knows where they are.
The other side: Ford Executive Chairman Bill Ford — who backs the legislation — told an Axios event in Washington that Detroit shouldn't plan around permanent walls. Per the Wall Street Journal, he said America "can't expect to keep them out forever."
The takeaway: Trade barriers are a schedule, not a shield. Farley is treating the early 2030s as a deadline and spending the interim building a car instead of a lobbying budget — which is a more honest position than anyone in Washington has taken on this.
ENGINEER’S CORNER
Why the new M3 has two spark plugs per cylinder
Source: BMW M
Production of the M3 and M4 with BMW M Ignite started last month; the M2 follows this month. It's the first series-production use of a pre-chamber ignition system BMW patented in 2024, and it borrows directly from Formula 1.
The problem it solves. In a normal gasoline engine, one plug lights the mixture at one point and a flame front travels outward across the piston. That takes time. Unburned mixture in the far corners gets squeezed and heated while it waits — and if it gets hot enough, it detonates on its own. That's knock, the hard ceiling on compression and boost. The usual fixes are extra fuel for cooling and retarded timing. Both cost efficiency, which is why a track car drinks fuel far faster than its window sticker suggests.
What BMW did. They put a second, smaller chamber in the cylinder head, linked to the main chamber by small overflow openings. It gets its own plug and its own coil — two complete ignition systems per engine.
At low and medium revs the main-chamber plug fires first and the engine behaves conventionally. Push it hard and the pre-chamber takes over: a slug of mixture is forced through the openings, ignited in the small chamber, and the flames blast back out through those holes at roughly the speed of sound.
Instead of one flame front crawling across the piston, you get jets lighting the charge at many points at once. Combustion finishes dramatically faster — so fast the end gas never gets the dwell time it needs to knock. Exhaust temperature drops as a bonus.
Knock margin is currency, and BMW spent it on a higher compression ratio and variable-geometry turbos. The payoff lands where M owners live: fuel consumption drops substantially under sustained load. More laps between splash-and-dashes.
The takeaway: This isn't a power grab — displacement and output are unchanged from the outgoing engines. Euro 7 takes effect this November, and M Ignite is a significant part of how BMW keeps a big turbocharged straight-six road-legal in Europe. It's a survival plan wearing a race-tech jacket.
GARAGE ECONOMICS
July was the strongest month of 2026. The hybrids ate it.
Cox pegs July's seasonally adjusted annual rate near 16.7 million — the best pace of the year. J.D. Power and GlobalData go higher at 16.9 million on roughly 1.42 million units, up 1.4% year over year.
California — the market that was supposed to lead — says the same. Through the first half of 2026, standard hybrids took 22% of the state's 864,848 registrations. EVs took 16%.
Follow the incentive money. Automakers now spend $10,092 per EV, down 7% year over year. On everything else: $3,181, up 22.2%. Dollars are moving off the powertrain nobody's buying and onto the one flying out the door.
Then there's the number nobody's putting in a press release: subprime is now 10.3% of new-vehicle sales, up 1.8 points from last July. High-credit buyers pulled purchases forward last year ahead of tariffs. What's left is a market carried increasingly by people with less room to absorb a $46,000 average transaction price.
The takeaway: The best sales month of the year was built on hybrids and thinner credit. Both work beautifully right up until they don't — and only one of them is a product strategy.
🏁 THE COOL-DOWN LAP
Quick hits:
Stellantis calls back 1.27 million. FCA US announced a voluntary recall Friday covering an estimated 1,271,294 U.S. vehicles over the second-row center and driver-side seat belt buckle anchors.
Kyushu is still dark. Toyota extended suspensions at three southern Japan plants — including Miyata, which builds Lexus models — through August 5, and will idle an Aichi assembly plant too. Nissan has partially suspended two Kyushu plants, Mitsubishi halted some Okayama output, Honda's Kumamoto motorcycle plant is down for repairs, and Renesas stopped two chip lines. Aisin says its post-2016 seismic retrofits held.
GM goes in-house on AI, launching its own proprietary in-vehicle system later this year.
Waymo unhooks from Uber. Waymo plans to end its robotaxi partnership with Uber and compete directly.
Ferrari raises guidance after a Q2 beat; the CEO says he wouldn't change a thing about the polarizing Luce EV debut. Rivian goes the other way, trimming 2026 spending and narrowing earnings guidance.
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