First, car sales remain pretty slow:
Find more statistics at Statista
That chart only goes through 2022. Since then small vehicle sales have increased 12%. That’s still below pre-pandemic levels.
My contacts in the auto world aren’t what they used to be but something which I’m sure that auto manufacturers have considered but which may not have been considered by others is that rapid technological change can actually inhibit sales. The “I’ll wait until the new model comes out” mentality sets in. When something costs $1,000 (like smartphones although most people don’t pay that) it’s possible to get the latest model. It’s a lot less possible when an EV costs $30,000. Only the truly rich will get the latest and greatest and some of the truly rich will, like Warren Buffett, stick with their 2014 Cadillac XTSs.
Suspect this is multifactorial. Economic concerns for sure, car availability (chip shortage), cars lasting longer and many fewer teens getting a drivers license. Maybe even WFH?
Steve
Just about Everything is multifactorial Steve.
Rationalize all you want. And after all, you don’t have to bear the costs. But EVs are a market flop.
Isn’t it mostly an affordability issue?
The average monthly car loan payment has gone up by 32% for new cars since 2019. A side effect of the higher interest rates is it implies borrowers will take a longer time to build “equity” on their car. That will affect when consumers can do a subsequent trade-in for their next car. Higher interest rates also make leases less affordable, and leases have an outsized effect on the new car market.
Affordability is certainly the issue for me, but that’s not new.
The topic has me wondering what percentage of NEW vehicles are purchased by these categories:
Government:
Business, company cars:
Rental agencies:
Individuals:
?
Nationwide about 92% of light vehicles are registered to individuals. In Washington, DC about 65% are.
Grey and Curious
EVs are uneconomical relative to ICEs. Period.
Yes, some factors curious cites apply to ICEs. But others do not. And I believe what Grey is really asking is whether or not EVs can make it without subsidy.
No.
For those interested, her sis how you define a market flop.
https://www.coxautoinc.com/market-insights/q4-2023-ev-sales/
“A record 1.2 million U.S. vehicle buyers chose to go electric last year, according to estimates from Kelley Blue Book, a Cox Automotive company. More specifically, 1,189,051 new electric vehicles (EVs) were put into service as the slow shift to an electrified future continued unabated. In 2023, the EV share of the total U.S. vehicle market was 7.6%, according to Kelley Blue Book estimates. That is up from 5.9% in 2022.”
Steve
It’s a market flop, Steve.
Dependent on subsidy, sales far below expectations, and with some of the true costs (like battery replacement and inability to recharge on trips) just becoming apparent prospects are dim.
And where does the rubber hit the road? (Heh) About 50% of GM dealers are opting out of EV mandates.
It’s a flop. Maybe not in 25-50 years. But it’s a flop for now.
Right on cue: The glorious EV market.
https://www.msn.com/en-us/money/companies/hertz-will-sell-a-third-of-its-ev-fleet-to-buy-gasoline-cars-instead/ar-AA1mODed
Yes, I read that. Several observations. First, that’s a LOT of EVs to come into the used market. I have no idea what the impact of that will be.
But then add my observation. If the EV market is operating like a technology market Hertz is going to need to get rid of those EVs quickly or their value will decline to nothing.