I wish it would have adjusted for inflation. One quote: "The average transaction price for a new vehicle sold in the U.S. last month was $48,623, according to Kelley Blue Book, roughly $10,000 higher than in 2019, before the pandemic." However, about 9200 euros of that is due to inflation according to this calculator: https://www.usinflationcalculator.com/
That's a nitpick though. All in all, an interesting article, which can be summarized as: the EV car market is lacking demand, and car makers definitely don't want to make cheap EVs since it's already so hard.
IIRC the US has some ass-backwards fuel economy laws that mean it's essentially illegal to produce small cars.
Also there's enough demand for high-margin cars to max out available production capacity, and would you want to be making major investments in ICE car production right now?
I drive a 2023 Kida Rio 5 which is small, simple and fuel efficient (combined 40 MPG). Kia is killing it though, because not enough Americans bought them. They (Americans) instead buy the larger Forte. I specifically told them I wanted the Rio 5, and after a few calls they found one (1!) and proceeded to mark it up $2k - still worth it.
Not only do Americans tend to buy larger vehicles, but CAFE regulations encourage automakers to increase the footprint (area between the wheels) of the cars they offer. This is another reason the Rio is (and other small cars are) discontinued.
CAFE regulations (in a nutshell) require automakers' vehicles to meet a particular fuel economy per size of footprint, averaged across the vehicles they sell. So, they can meet the standards either by increasing the footprint of the vehicle, or by increasing the fuel economy of their vehicles, or both.
I don’t think companies are penalized for producing small cars so much as larger vehicles like trucks and SUVs are incentivized to become larger to sit outside the rules as commercial vehicles even though everyone knows that only a small percentage are used for commercial purposes.
Exactly. The large gas guzzling, glorified grocery getters are just an easy out for manufacturers to subvert the requirements made for smaller vehicles (which was completely short-sited, or it was planned by lobbyists). It was simply easier for these companies to continue doing what they were doing with what they had. Give a company and alternative that costs them nothing, then they will do nothing. We need a new fuel standard. A truck or SUV purchased after <some date> then you pay an extra $<some dollar amount> per gallon. Yeah, I know the implementation is a problem, but I am simply throwing out an idea. Perhaps they yearly registration is now an extra $2000/year. They already screw EV owners in many states. I pay an extra $220 a year for my car, and that is ridiculous. I have owned my car for 5 1/2 years, and I have 24k miles on it. This tax is completely unfair and has no basis in reality for "road tax".
I posted in another comment above, but I bought a 2023 Kia RIo 5 - excellent car. Small, simple, efficient and IMHO good looking. The Forte and Soul are larger (I also own a Soul)
The Nissan Versa currently starts around $17k, and I see a lot of those on the road. The Mitsubishi Mirage is similarly priced but I don't think I've ever seen one in the wild. I rented a Kia Soul a few years ago and thought it was perfectly fine.
But with so few options, like the parent, I'm planning to keep my current car (a 2008 Prius) indefinitely, just paying for repairs as needed until parts are unavailable or nobody is willing to do the work.
My worry is that US automakers have all but abandoned the compact and midsize economy car segments, and I don't know what tariffs will mean for the Japanese and Korean automakers that do cover these segments. But see my other comment about the pendulum swinging back and forth.
I rented a Versa about 5-6 years ago and I was surprised how completely "fine" it was.
It was a totally functional vehicle. The radio sounded good enough. The seats were comfy enough. It was a bit of a slug, but it had enough power so that you weren't scared for your life when merging onto a highway.
If those sound like low standards... well, this was not always the case for bargain basement cars...
Vehicles at that price are usually crap, esp. the Versa with the CVT engine. And, at least last year, there was a shortage so that you'd be paying a few grand above that price just to get it. I'd bet it's still the same where you're paying closer to 20k for this car.
Now, if you could get a Versa with the simpler engine (I think it was a manual shift), it's apparently a decent car. But finding that model is like a full-time job for a week, then either flying out to whatever dealership has it or getting it shipped which is another grand.
Japanese and Korean automakers make a lot of their US-bound cars in USA, so I don’t think it will be that bad. A Honda civic is likely to be more American than a Chevy compact, for example.
The destination fee isn't really a "junk" fee. it's variable based on how far away from the plant that manufactured your car or, or the distance from nearest port of entry. Delivering a car isn't cheap. There's certainly some level of arbitrage going on, but the delivery driver is usually independent of the dealership.
The dealership knows ahead of time how far they are from the plant and how much it costs to ship the car. GP was asking that the fee be included in the advertised price. That's fair.
You'd say someone would build an API to retrieve that information by city. But I would not be surprised that the product seller can't be bothered inserting that information into their sales flow.
My understanding is that because cars are generally purchased rarely, they make more money with the status quo instead allowing customers a budget option.
There's no way to sell a good, cheap car without also cannibalizing your high margin sales and the dealers wouldn't want to sell it anyway. The vast majority of vehicle cost goes to:
1) amortizing the assembly line and upfront platform design costs
2) the raw materials of the basic car components, e.g. power train, chassis, and body
3) getting the car into consumer hands (distribution fees, taxes, advertising, dealership margin, etc).
Everything else like labor and upgraded trims works out to a relatively small percentage of the overall price, often under 20%.
Since you can't make enough impact by cutting amenities, you have to cut one of the listed things. You mostly can't build things more efficiently than major manufacturers do (though Tesla is quite good here), so that's out. You can't shave 50% off the basic materials costs because you run into basic FMVSS issues. Kia's strategy is to get as close to this line as they can though. That means you need to cut from the third category. No company wants don't want to cut their own margin, so that's out. Manufacturers can't work around the dealers by law, so they need to keep some dealer margin. Manufacturers can't stop advertising because the advertising department has significant political power and can get anyone proposing that fired. Manufacturers can't avoid taxes for consumers either.
The only real paths to cheaper cars involve opening the market to competitors that aren't limited like this, for instance foreign companies that don't need dealers and are okay accepting lower margins and not advertising.
I would imagine the most price sensitive buyers wouldn't be looking at the new market at all - there might not be enough demand for "cheap, but still nowhere near as cheap as a second hand car" to make the price point worth targeting as a manufacturer.
They used to, that’s the thing. It used to be possible to get barebones A-to-B transportation with zero frills. Power windows/locks, air conditioning, ABS, power steering, automatic transmission—all manner of things that aren’t strictly required to get a person to/from where they need to go—could be optioned away if the buyer was very price sensitive.
In 1998 a Chevrolet Metro could be optioned without a radio or rear defogger, even. New purchase price was about $9k (equivalent to $14.5k today). Somebody was buying those, enough for it to be worth the manufacturer’s effort to produce it.
I suspect a whole segment of people would be willing to consider a no-frills EV at a comparable price point. Hell, if somebody made something new like a base model 90s Civic into a $15k EV without extra luxury nonsense I don’t actually need, I’d be in the dealership tomorrow.
You can get a low miles used Chevy Bolt for that much, and it's significantly nicer than most 90's Civics (has AC, Android Auto and CarPlay, cruise control, satellite radio, power doors and locks, keyless remote, etc.).
> I suspect a whole segment of people would be willing to consider a no-frills EV at a comparable price point.
GM made that play with the Bolt. It was routinely available for just over $20K. Still sat on lots, not getting a lot of love. People shopping for new cars want nicer toys, people who cannot afford new shop used and enjoy getting those nice toys at a discount. I bet the subset of buyers looking for a bare bones no frills brand-new car is quite small.
It is worth recognizing the role that ZIRP played in all of this. Artificially low interest rates allowed payments on more expensive premium vehicles to be much more manageable for a much larger portion of the population.
I think this is something people just don't want to admit. It's easy to overlook prices being ridiculous when your monthly payment is all principal. That period of time of ZIRP constantly had me wondering how financing was making money.
> I bet the subset of buyers looking for a bare bones no frills brand-new car is quite small.
I think you're correct; we're probably talking about a portion of the weirdly minimalist and frugal crowd pursuing FIRE. Also, most folks in that small subset wouldn't even consider buying a GM product; it's going to be either a Toyota or Honda for them.
Source: I'm one of them, still driving my base-level trim 2008 Prius.
As an aside, I'm reading that the new Bolt sold nearly as well as the Tesla Model S in 2017. Before that, I think the similarly basic Nissan Leaf was the best selling EV. Since then, however, my sense is that EV purchases became more about "fun" (which Tesla has emphasized and provided) than anything else.
Man this thing is awesome. One of my dream cars was always a 90s hilux - I got so disappointed when they started taking design cues from giant American trucks and making them bigger. Single cab with maximized tray space is the most practical option if you actually need to use it as a ute.
with the American consumer buying 15M cars a year at those average $50K there isn't an opportunity for the low end. And if such market really appears - i.e. if the American consumer would hit hard economic patch and would really need cheap car - it will be at any moment filled by cheap Chinese EVs.
Because there's no incentive to. The invisible hand of the free market only encourages a race to the bottom when the incentives are aligned. With the ridiculously high capex required to become an automaker these days, why would someone come in, just to make $3,000 per car, in a saturated market, chock full of regulations, to make money on the bottom end of a market where existing manufacturers can easily just undercut you the second you get any traction in the market.
Manufacturers make more money off selling luxury cars. The poors can just buy used luxury cars for all they care. We see the same problem with housing and luxury vs spartan options. The spartan option exists, but only begrudgingly so.
Yep. Midrange-to-expensive EVs have been around for long enough that pretty much everybody in those market segments who are currently interested have already bought one. Additionally, the segment has been flooded with midsize SUVs, with the odd midsize sedan — variety is sorely lacking.
Between these two, quite a considerable market is being left unaddressed. The first to fill these niches with affordable models that don’t have weird quirks or make strange tradeoffs will likely do well.
I'm hoping for manufacturers to pull back on the "all controls are via touchscreen" and "you can't have carplay because we want to charge you our own monthly fees" trends.
Taking Chevy for example, they have physical HVAC controls, but they're counting on the average consumer being too clueless to realize they only have Google Maps in their car because it came with a free OnStar trial. Eventually people are going to notice that they spent $1000+ to buy the larger screen upgrade, and now Chevy wants them to shell out $300/year forever to be able to use it for maps.
The other big unknown is lifespan of car software platforms, if these end up being like phones where they get laggier and laggier with continued software updates, until eventually it's unusable, people aren't going to be happy about it. But we won't know for 15 years exactly how bad that problem is.
The trend to exclude CarPlay and/or Android Auto really is awful.
Not only is there a high risk of notoriously underpowered head units becoming increasingly laggy over time with updates, there’s also the risk of the automaker deciding that shipping new updates for your only slightly old EV is too much of a cost to bear and dropping support, making the head unit slowly become more and more useless over time as apps stop running.
CarPlay/Android Auto is an excellent hedge against both of those scenarios, even if one prefers the onboard experience. It never hurts to have an escape hatch.
Because demand isn't the issue. The issue is a new car that isn't a budget brand is increasingly a luxury option in the United States, because, and say it with me...
Wages have been stagnant in the United States for nearly 50 years.
Every economic stat right now points to this as the core issue. Consumers are squeezed more on every last good and service, tons of services are now only available via subscriptions which inherently cost more, and despite the economy supposedly (and, actually) booming in a lot of ways, that doesn't hardly at all make it's way down to the workers either via higher wages, or via cheaper products.
This is a complicated situation that doesn't lend itself well to comments but a number of the bigger datapoints include an employment market that favored employers for the majority of the time since the 70's, the ongoing slandering not to mention outright interference on the part of employers against labor organizing, "inflation" that when you scratch the surface is just companies charging more because they can, the ongoing consolidation of enterprise resulting in monolithic companies that own dozens of brands of the same product, none of which truly compete on price, on and on and on.
There are a ton of good reasons for Americans to be broke, and a number of prominent economists have been ringing alarm bells for decades now that all of these things coming together is going to stall the economy cold and send us into the... by my count, fourth once-in-a-lifetime economic crisis I've experienced.
I guess I don’t understand the advantage of EVs really. Isn’t a plug in hybrid the best option? You can do everyday short trips on battery but also have the gas engine for longer trips. Sure it is more complicated but Toyota has shown that you can make this super reliable.
Not only does this (and the things you pointed out) reduce the cost of maintenance, it saves on trips to get them done, and the headaches of the pressure most put on you to get things done you don’t need, just so they can make even more money off of you.
Also, EVs on the highway (when hybrids are using the ICE) are much quieter, and have more torque.
The only downsides I have noticed are:
- Higher up front cost (though I don’t think hybrids are much cheaper)
- Heavier = more frequent tire changes (again, not sure hybrids are much better)
- Range for long road trips, resulting in having to pause for long charges, and having to plan your route in advance (definitely not a problem for hybrids)
> And brakes. My brake pads rarely touch my rotors.
I still have the original brake pads on my 2008 Prius with 150k miles. (And yes, I have them measured periodically to see if they're still good.) This is typical.
With torque blending, regen braking is blended with friction braking at low speeds (when regen braking is ineffective). Friction braking is always needed to make a full stop.
25 year old sedan with a Northstar engine, a couple belt and chain replacements, no significant transmission issues, no significant engine work. Regular dealer maintenance No major battery pack replacements. May not be the greenest, but I know I’m in the green. Plug-in hybrids do sound cool…
The biggest downside of a plugin hybrid is the complexity and therefore higher service costs, likely shorter lifetime etc. You have all the maintenance requirements of a regular ICE vehicle and an electric motor + battery on top of that. Also the full electric range is likely much lower than an electric only vehicle so running costs would be higher.
Some EVs have full charge range that's not much less than a full tank of gas on an ICE at this point - the range is really a non issue for a lot of people.
I drive an EV with a comparably low range (~130 miles) and I can still count on one hand the number of times I've needed to drive further than that in one trip - on those occasions other than my lunch/dinner stop being limited to places with a charging station nothing really changed compared to when I drove an ICE. The rest of the time I get to plug it in in my garage overnight instead of having to stop at petrol stations, which is a nice albeit minor convenience increase.
A real EV has much better performance than a plugin hybrid, which is more like the worst of both worlds when it comes to driving experience. If you think only about economy, a PHEV can make sense, but it is an overly complicated solution which is bound to have extra maintenance problems.
You're never going to a hybrid under $25,000. Pretty much everywhere but the US has the option of getting an electric car for under $25,000 from BYD or Renault.
I've done over 20,000 km in road trips in an EV. You charge while you're eating or toileting or sleeping, it doesn't affect my trips.
I agree, the range has rarely been a problem for me. The battery runs out of juice about the time my butt needs a break, my bladder needs emptying, and my stomach needs filling. By the time I'm done with lunch, I'm good for another 250-300 miles, and I'm going to stop for the night at that point anyway. People doing >500 miles per day on a roadtrip are the outliers. Way, way outliers.
I see PHEVs as the worst of both worlds. Electric but short range, hybrid but lower efficiency. All of the complexities and costs of both drivetrains added together.
People who are spending new car money are not going to settle for a product that requires planning and effort to be used outside of one's daily routine.
This is also why 3-row SUVs and half ton crew cab trucks have proliferated as much as they have.
Most people don’t own multiple cars and wouldn’t rent a car for those rare use-cases when they already own a perfectly fine car. It may be overall cheaper to do that, but people don’t think that way.
One or two annual holiday roadtrips to go see the family and oops that EV starts looking like an annoying option. Every friend I have who doesn’t own a house and bought an EV ended up returning it because of how annoying the charging was to deal with.
It’s not that charging was _hard_, it’s that they had to think about it.
edit: this may be an urbanite take. Even folks with cars don’t really use them to commute regularly. Semi-rare trips only.
I enjoy road trips far more since getting an EV. It's nice paying half as much or less in fuel costs.
Tesla's charging network is excellent, and I'm glad it's opening to all EVs on the market. I used a third party charger once and the horrible user experience made sure I never will again.
Dodge has the 2025 ramcharger which has amazing specs! 690 mile range, 14,000lb towing capacity, 663 hp, etc. etc.
I've got reservations about dodge, and reservations about the first year of the model from any manufactuerer. Otherwise, I'd gladly shell out 70k+ and my left nut to get one.
I really wish more manufacturers would go this direction. I've got no interest in 100% EV, because I do things with my truck that simply are not feasible with any EV model, mostly due to range. The problem is, I do just enough truck stuff with really tough requirements that I don't want a non-truck without serious range. Yet, I still go to work in an office a few days a week and would love to use plug-in charge to do so.
Is it actually $10K more expensive? The F150 Lightning I just bought was cheaper than the hybrid version I was looking at buying. The Tesla Model 3 & Y seem to be priced pretty competitively, as well.
Privacy is in my top two concerns for EVs (and any vehicle purchase I make). I am increasingly avoiding every privacy destroying option out there, be it cars or services in general. It is, unfortunately, becoming nearly impossible to be privacy aware but the more resistance people put up the better chance we have of maintaining some privacy.
Not good privacy by default, but as a hack you can also just buy a Bolt EV for like ~14k or so, then disconnect the location tracking antennae which takes like 30 mins of fiddling and $12 of parts.
I don't think EVs are any worse than any other car. My F150 Lightning has precisely as much telemetry as the ICE version. Which is to say, more than I'd like. But I realize most buyers don't care.
I always buy used so I have some time left, but not much. When I bought my last vehicle the person had one of those insurance GPS devices in it. I can't even begin to understand why anyone would do that. It is so obviously going to be used against the driver and it is also obvious that it will eventually become 'required' and that just depresses me.
1) a SV/Texas "tech" company, which, by its very identity, must yield insane returns to shareholders
2) Legacy auto companies who must yield insane returns to both shareholders and, to a lesser extent, retired employees. In their defense, the second group actually did work
Compare this to Chinese EV makers who are dumpi - I mean, willing to take less return on their sale in order to establish market dominance globally.
“As automakers were profit maximizing during the supply chain crisis era, you are going to prioritize the bigger vehicles, the more expensive vehicles with their higher margins,” Tyson Jominy, vice president of data and analytics at J.D. Power, told me. “Now we just don’t have” these cheaper models.
Unfortunately, while BYD would be the most readily-available option for cheap cars, it would need: homologation, distributors, parts suppliers, repeal of the protectionist tariffs protecting Tesla, and the removal of Musk from an unfair position of power, influence, and regulatory capture, and whatever the heck DOGE will be.
The larger issue is that, in order to afford housing, a car, and a life, regular American workers need to be paid livable wages to keep up with the inflation "pay cut" and reverse decades of sliding standards of living through lower and suppressed real wages.
The only EV I'm even interested in is an Aptera. They're building a new class of vehicle that takes advantage of the affordances of full electric. I want a small efficient car that can go long distances and nobody else is building anything like that. Even US capital markets don't understand the appeal of this class of vehicle, but luckily they were able to fill their funding in global capital markets. I'm pretty pessimistic about US EVs, but Aptera gives me a little hope.
I love Aptera! I just don't think it's ever going to take off. There's just not enough investment and demand. It looks ridiculous but it's an awesome concept of aerodynamics.
Sorry to burst your bubble, but unless there is another solar option, the 100 kWh pack will take around 40 days to charge by solar at 700W from 20% to 80%. Otherwise, it seems like the solar part is greenwashing with a bit of '70's-style geodesic dome and Balans chair styling. I'm all for cheap(er) EVs that don't involve Tesla like Scout or BYD.
Something has to disconnect here. Everyone complains that everything costs so much, but the average Americans' paycheck is not rising the same way, so they can try all they want to sell $95k electric vehicles because of thin margins for cheaper products, but if purchasing power doesn't rise with inflation, then that market that "sucks" is going to be the only real market one day...
The problem IMHO is a variety of US policies have artificially taken out that cheap market in all kinds of domains through protectionist policies like rent seeking, monopolies, and tariffs. So, for example, tariffs hurt the emergence of a cheap EV market.
The solutions for this in general don't line up nicely with any of the major party platforms, at least in the US — major deregulation of certain areas in certain ways, aggressive antitrust enforcement, and dismantling of tariffs, possibly combined with government incentivizing of competition in certain areas, at least for awhile. It feels like candidates and parties demonize one or more of these things and overemphasize other things, or implement some of these things in the wrong ways, like they're all mutually exclusive.
I think the disconnect is maybe just in the title: Lucid is obviously just trying to be the next Mercedes. Duh, of course they don't make a cheap car (how much did Lucid pay for this ad in the WSJ?); but their competitors kind of do. Tesla literally told their shareholders during the most recent earnings call that "more affordable models are coming in the first half of 2025". Jim Farley has spoken on how one of the reasons Ford's EVs are still rather expensive is because they clean-roomed much of the assembly for them to better compete with Tesla, so while ICE cars have a century of process optimization behind them, their EVs aren't at that same level... yet.
Its just clickbait paid by Lucid to make their $90,000 cars seem reasonable because, well geeze, no one is making cheap EVs anyone. Wrong: Everyone is trying to, and its very obvious that this is direction the market needs to go in (just look at the depreciation on modern Teslas, new cars cannot compete with what is happening in the used market).
I'm pretty sure they do, though. Lucid owns Atieva, the company supplying the batteries for Formula E. What they've learned through the many seasons directly goes back into the vehicle's battery.
Yeah, I think the pendulum swings back and forth. My recollection of the 2007-2009 recession, with $4 gas and the failure of GM, was that it spurred a lot of interest and innovation in smaller, more efficient, economy cars after many years of the automakers pushing (and people buying) larger and less efficient trucks and SUVs. I think we're at an extreme point in the cycle again now with American automakers all but abandoning the compact and midsize economy car segments. At some point, things will dry up and they'll need to compete with the Toyota Corolla and Honda Civic again.
I think you're right about pendulums here, but we might be about to see a US auto maker vs China auto maker inflection point like I read about in the 1980s with US vs Japan.
I watching this video which lays out some fundamental diffs between US companies, like GM and Chinese companies, like BYD: https://www.youtube.com/watch?v=PXvcwM977D0
* Short term vs long term focus
* .gov subsidies stronger in key markets in CN
* CN companies extremely rapid in development (as low as 1.5 yr vs 6 yr in the US)
* Lower wages and input costs
Things will probably have to get worse before they get worse. Corporate people know the machine (public traded US auto makers) keeps lumbering forward without change until it can't, and all handouts, bailouts, and other tricks have been played.
There's only one reason why US cars are more expensive than CN cars: People will pay it. All that other stuff is window dressing. The US is way, way better at financial engineering than China; we can sell an $80,000 Tahoe to a single mom between jobs on zero down and 10% APR, somehow she'll take that deal, and somehow the system doesn't explode into a fiery deathball; so you get $80,000 Tahoes. That's it.
Short-term vs long-term focus means nothing. Government subsidies run out. Rapid development is easy when its a first generation product with no customers. Lower wages means fewer of your own people can afford it (though it does help with export pricing to richer first world countries... what's that word I'm looking for... it starts with a T, I heard an orange man say it recently. eh probably nothing)
The 2008-2023 US economy was basically the strongest national economy in the history of humanity; but, obviously, that's changing. And no, I'm not doomering about a mother-of-all-crashes. The world is just getting more realistic, as it should.
Manufacturing, generally? Solar? Batteries? Semiconductors? Cyber espionage/warfare? I think those are more than nothing that China has had a demonstrable long term strategy in which benefits them at our expense.
Also, great point about financialization in the US. Do you think if that dam breaks, US auto makers come back to planet Earth instead of chasing what seems to be exclusively high-margin cars only affordable by credit?
The British made the same mistake back in the day with motorcycles. "Who cares about the market for 125 cc machines?" they said.
The Japanese did, and now they have the market, the British used to have, for luxury and high powered motor cycles. As well as most of the 125cc market
Not if our governments start putting tariffs on everything.
I am Canadian, but it also applies to other governments (including the US). The politicians know that it's not going to be easy to do the actual right thing and build up a competitive industry. Instead, it's much easier to just slap some tariffs and make lagging productivity the next generation's problem.
Yes, the lack of discussion of tariffs in the article and even in these threads is a bit odd to me. The US has tariffs on Chinese electric vehicles in part specifically to keep cheap Chinese EVs off the market.
The complexities of this are outside my wheelhouse, but it's easy to see how keeping cheaper EVs out of the market would carve out a major source of cheaper vehicles period, leaving other manufacturers able to push higher priced cars. My guess is the tariffs are directly contributing to the process described in the article. Even if manufacturers were to "leave that market to China", eventually it would come to bite them as a certain proportion of people would start buying those cars instead.
Monopolies, monopsonies, and tariffs are playing a huge role throughout the US economy and it gets such little attention. Or at least it seems that way to me.
That would only apply to markets with tariffs, and not the rest of the world. China can sell their EVs to Central Asia, Russia, Africa, south east Asia, Australia, and still dominate the world wide market. America, Canada, Japan, Western Europe, and Korea can protect their markets, but they can’t really protect their market share.
Honestly that analogy feels like a stretch. I like my Nortons, BSAs and Triumphs, but the Japanese honestly just built better bikes at the end of the day (que joke about Lucas electrics and all of the other shit that seems to go wrong on British vehicles of that era). The British built really beautiful bikes and sports cars, but their reliability and general aggravation of ownership was kind of abhorrent. A good Yamaha, Suzuki, Honda, etc. even from that era, I've come to expect will be cheaper to maintain, not come with half a dozen headaches out of the box, and will "Just Run" when you turn the key.
I've yet to see good evidence that the Chinese cars are actually built in a way that they're more reliable or a better value than counterparts from other countries, they're just cheaper.
Obviously it might be pointless for a company like Tesla, as it might not favour their financial numbers.
It is actually a phenomenon going on specially with European brands. They have abandoned low margin cars, it is, cheapest segments, to improve their financial performance numbers (ROIC...)
* That was mentioned during Tesla's earnings call in October this year, in the context of the shift of strategy towards FSD and the Robotaxi.
While he did say that, its worth pointing out that Tesla also said that more affordable options will be available in 2025H1 [1]. Given Musk's statement, what I think Tesla means by this is more affordable trims of existing models.
I don't think its reasonable to read Musk's statement as "the Model 2 isn't happening". Its more accurate to read it as "it might cost more than $25,000".
https://archive.ph/9oIT4
I wish it would have adjusted for inflation. One quote: "The average transaction price for a new vehicle sold in the U.S. last month was $48,623, according to Kelley Blue Book, roughly $10,000 higher than in 2019, before the pandemic." However, about 9200 euros of that is due to inflation according to this calculator: https://www.usinflationcalculator.com/
That's a nitpick though. All in all, an interesting article, which can be summarized as: the EV car market is lacking demand, and car makers definitely don't want to make cheap EVs since it's already so hard.
If even ICE cars are now super expensive, why isn’t this a screaming opportunity for some auto manufacturer to target the low end of the market?
I’ve never spent more than 20k for a car. With prices like this, I’m just going to keep my old one as long as I can.
There are small, ~20k cars in the US, but this isn't where most of the sales volume is. Trax starts at ~20k and isn't even that small.
IIRC the US has some ass-backwards fuel economy laws that mean it's essentially illegal to produce small cars.
Also there's enough demand for high-margin cars to max out available production capacity, and would you want to be making major investments in ICE car production right now?
I drive a 2023 Kida Rio 5 which is small, simple and fuel efficient (combined 40 MPG). Kia is killing it though, because not enough Americans bought them. They (Americans) instead buy the larger Forte. I specifically told them I wanted the Rio 5, and after a few calls they found one (1!) and proceeded to mark it up $2k - still worth it.
Not only do Americans tend to buy larger vehicles, but CAFE regulations encourage automakers to increase the footprint (area between the wheels) of the cars they offer. This is another reason the Rio is (and other small cars are) discontinued.
CAFE regulations (in a nutshell) require automakers' vehicles to meet a particular fuel economy per size of footprint, averaged across the vehicles they sell. So, they can meet the standards either by increasing the footprint of the vehicle, or by increasing the fuel economy of their vehicles, or both.
I don’t think companies are penalized for producing small cars so much as larger vehicles like trucks and SUVs are incentivized to become larger to sit outside the rules as commercial vehicles even though everyone knows that only a small percentage are used for commercial purposes.
Exactly. The large gas guzzling, glorified grocery getters are just an easy out for manufacturers to subvert the requirements made for smaller vehicles (which was completely short-sited, or it was planned by lobbyists). It was simply easier for these companies to continue doing what they were doing with what they had. Give a company and alternative that costs them nothing, then they will do nothing. We need a new fuel standard. A truck or SUV purchased after <some date> then you pay an extra $<some dollar amount> per gallon. Yeah, I know the implementation is a problem, but I am simply throwing out an idea. Perhaps they yearly registration is now an extra $2000/year. They already screw EV owners in many states. I pay an extra $220 a year for my car, and that is ridiculous. I have owned my car for 5 1/2 years, and I have 24k miles on it. This tax is completely unfair and has no basis in reality for "road tax".
Kia sells quite a few cars that start at $20k, like the Soul and Forte
I posted in another comment above, but I bought a 2023 Kia RIo 5 - excellent car. Small, simple, efficient and IMHO good looking. The Forte and Soul are larger (I also own a Soul)
The Nissan Versa currently starts around $17k, and I see a lot of those on the road. The Mitsubishi Mirage is similarly priced but I don't think I've ever seen one in the wild. I rented a Kia Soul a few years ago and thought it was perfectly fine.
But with so few options, like the parent, I'm planning to keep my current car (a 2008 Prius) indefinitely, just paying for repairs as needed until parts are unavailable or nobody is willing to do the work.
My worry is that US automakers have all but abandoned the compact and midsize economy car segments, and I don't know what tariffs will mean for the Japanese and Korean automakers that do cover these segments. But see my other comment about the pendulum swinging back and forth.
I rented a Versa about 5-6 years ago and I was surprised how completely "fine" it was.
It was a totally functional vehicle. The radio sounded good enough. The seats were comfy enough. It was a bit of a slug, but it had enough power so that you weren't scared for your life when merging onto a highway.
If those sound like low standards... well, this was not always the case for bargain basement cars...
> The Nissan Versa currently starts around $17k
Vehicles at that price are usually crap, esp. the Versa with the CVT engine. And, at least last year, there was a shortage so that you'd be paying a few grand above that price just to get it. I'd bet it's still the same where you're paying closer to 20k for this car.
Now, if you could get a Versa with the simpler engine (I think it was a manual shift), it's apparently a decent car. But finding that model is like a full-time job for a week, then either flying out to whatever dealership has it or getting it shipped which is another grand.
Japanese and Korean automakers make a lot of their US-bound cars in USA, so I don’t think it will be that bad. A Honda civic is likely to be more American than a Chevy compact, for example.
Quite a few $20k ish, though only the Forte actually making it under that. Forte LX starting at $19,900.
Of course that's without without the $1,155 "destination" fee, so even the Forte really starts at $21,145.
But considering inflation, $21k isn't a bad price.
We need laws that ban these junk fees. Any advertised price should be one I can get when I walk in.
I cannot get the car without registration. I cannot get the car without 'destination' fee.
Bake it into the price.
The destination fee isn't really a "junk" fee. it's variable based on how far away from the plant that manufactured your car or, or the distance from nearest port of entry. Delivering a car isn't cheap. There's certainly some level of arbitrage going on, but the delivery driver is usually independent of the dealership.
The dealership knows ahead of time how far they are from the plant and how much it costs to ship the car. GP was asking that the fee be included in the advertised price. That's fair.
Registration cost is too variable. Varies by state, and even by city.
You'd say someone would build an API to retrieve that information by city. But I would not be surprised that the product seller can't be bothered inserting that information into their sales flow.
A 2025 Toyota Corolla hybrid is ~ $25k
My understanding is that because cars are generally purchased rarely, they make more money with the status quo instead allowing customers a budget option.
There's no way to sell a good, cheap car without also cannibalizing your high margin sales and the dealers wouldn't want to sell it anyway. The vast majority of vehicle cost goes to:
1) amortizing the assembly line and upfront platform design costs
2) the raw materials of the basic car components, e.g. power train, chassis, and body
3) getting the car into consumer hands (distribution fees, taxes, advertising, dealership margin, etc).
Everything else like labor and upgraded trims works out to a relatively small percentage of the overall price, often under 20%.
Since you can't make enough impact by cutting amenities, you have to cut one of the listed things. You mostly can't build things more efficiently than major manufacturers do (though Tesla is quite good here), so that's out. You can't shave 50% off the basic materials costs because you run into basic FMVSS issues. Kia's strategy is to get as close to this line as they can though. That means you need to cut from the third category. No company wants don't want to cut their own margin, so that's out. Manufacturers can't work around the dealers by law, so they need to keep some dealer margin. Manufacturers can't stop advertising because the advertising department has significant political power and can get anyone proposing that fired. Manufacturers can't avoid taxes for consumers either.
The only real paths to cheaper cars involve opening the market to competitors that aren't limited like this, for instance foreign companies that don't need dealers and are okay accepting lower margins and not advertising.
I would imagine the most price sensitive buyers wouldn't be looking at the new market at all - there might not be enough demand for "cheap, but still nowhere near as cheap as a second hand car" to make the price point worth targeting as a manufacturer.
They used to, that’s the thing. It used to be possible to get barebones A-to-B transportation with zero frills. Power windows/locks, air conditioning, ABS, power steering, automatic transmission—all manner of things that aren’t strictly required to get a person to/from where they need to go—could be optioned away if the buyer was very price sensitive.
In 1998 a Chevrolet Metro could be optioned without a radio or rear defogger, even. New purchase price was about $9k (equivalent to $14.5k today). Somebody was buying those, enough for it to be worth the manufacturer’s effort to produce it.
I suspect a whole segment of people would be willing to consider a no-frills EV at a comparable price point. Hell, if somebody made something new like a base model 90s Civic into a $15k EV without extra luxury nonsense I don’t actually need, I’d be in the dealership tomorrow.
You can get a low miles used Chevy Bolt for that much, and it's significantly nicer than most 90's Civics (has AC, Android Auto and CarPlay, cruise control, satellite radio, power doors and locks, keyless remote, etc.).
Not new, but does that matter so much?
> I suspect a whole segment of people would be willing to consider a no-frills EV at a comparable price point.
GM made that play with the Bolt. It was routinely available for just over $20K. Still sat on lots, not getting a lot of love. People shopping for new cars want nicer toys, people who cannot afford new shop used and enjoy getting those nice toys at a discount. I bet the subset of buyers looking for a bare bones no frills brand-new car is quite small.
> People shopping for new cars want nicer toys
It is worth recognizing the role that ZIRP played in all of this. Artificially low interest rates allowed payments on more expensive premium vehicles to be much more manageable for a much larger portion of the population.
I think this is something people just don't want to admit. It's easy to overlook prices being ridiculous when your monthly payment is all principal. That period of time of ZIRP constantly had me wondering how financing was making money.
> I bet the subset of buyers looking for a bare bones no frills brand-new car is quite small.
I think you're correct; we're probably talking about a portion of the weirdly minimalist and frugal crowd pursuing FIRE. Also, most folks in that small subset wouldn't even consider buying a GM product; it's going to be either a Toyota or Honda for them.
Source: I'm one of them, still driving my base-level trim 2008 Prius.
As an aside, I'm reading that the new Bolt sold nearly as well as the Tesla Model S in 2017. Before that, I think the similarly basic Nissan Leaf was the best selling EV. Since then, however, my sense is that EV purchases became more about "fun" (which Tesla has emphasized and provided) than anything else.
I bring you https://www.carexpert.com.au/car-news/toyota-hilux-champ-lau...
You can't have it because of existing tarrifs.
Man this thing is awesome. One of my dream cars was always a 90s hilux - I got so disappointed when they started taking design cues from giant American trucks and making them bigger. Single cab with maximized tray space is the most practical option if you actually need to use it as a ute.
>why isn’t this a screaming opportunity
with the American consumer buying 15M cars a year at those average $50K there isn't an opportunity for the low end. And if such market really appears - i.e. if the American consumer would hit hard economic patch and would really need cheap car - it will be at any moment filled by cheap Chinese EVs.
Because there's no incentive to. The invisible hand of the free market only encourages a race to the bottom when the incentives are aligned. With the ridiculously high capex required to become an automaker these days, why would someone come in, just to make $3,000 per car, in a saturated market, chock full of regulations, to make money on the bottom end of a market where existing manufacturers can easily just undercut you the second you get any traction in the market.
Manufacturers make more money off selling luxury cars. The poors can just buy used luxury cars for all they care. We see the same problem with housing and luxury vs spartan options. The spartan option exists, but only begrudgingly so.
> the EV car market is lacking demand
There is scant evidence for this. Every time prices improve, sales surge. Sounds like the demand is there, but price matters. As it always has.
Yep. Midrange-to-expensive EVs have been around for long enough that pretty much everybody in those market segments who are currently interested have already bought one. Additionally, the segment has been flooded with midsize SUVs, with the odd midsize sedan — variety is sorely lacking.
Between these two, quite a considerable market is being left unaddressed. The first to fill these niches with affordable models that don’t have weird quirks or make strange tradeoffs will likely do well.
>with the odd midsize sedan — variety is sorely lacking
Sedans are nothing. Just barely, finally, after all those years, we have electric kombis - VW ID.7 Tourer and Audi A6 Avant e-tron.
I'm hoping for manufacturers to pull back on the "all controls are via touchscreen" and "you can't have carplay because we want to charge you our own monthly fees" trends.
Taking Chevy for example, they have physical HVAC controls, but they're counting on the average consumer being too clueless to realize they only have Google Maps in their car because it came with a free OnStar trial. Eventually people are going to notice that they spent $1000+ to buy the larger screen upgrade, and now Chevy wants them to shell out $300/year forever to be able to use it for maps.
The other big unknown is lifespan of car software platforms, if these end up being like phones where they get laggier and laggier with continued software updates, until eventually it's unusable, people aren't going to be happy about it. But we won't know for 15 years exactly how bad that problem is.
The trend to exclude CarPlay and/or Android Auto really is awful.
Not only is there a high risk of notoriously underpowered head units becoming increasingly laggy over time with updates, there’s also the risk of the automaker deciding that shipping new updates for your only slightly old EV is too much of a cost to bear and dropping support, making the head unit slowly become more and more useless over time as apps stop running.
CarPlay/Android Auto is an excellent hedge against both of those scenarios, even if one prefers the onboard experience. It never hurts to have an escape hatch.
Indeed. I won't buy a car that doesn't support CarPlay.
Because demand isn't the issue. The issue is a new car that isn't a budget brand is increasingly a luxury option in the United States, because, and say it with me...
Wages have been stagnant in the United States for nearly 50 years.
Every economic stat right now points to this as the core issue. Consumers are squeezed more on every last good and service, tons of services are now only available via subscriptions which inherently cost more, and despite the economy supposedly (and, actually) booming in a lot of ways, that doesn't hardly at all make it's way down to the workers either via higher wages, or via cheaper products.
This is a complicated situation that doesn't lend itself well to comments but a number of the bigger datapoints include an employment market that favored employers for the majority of the time since the 70's, the ongoing slandering not to mention outright interference on the part of employers against labor organizing, "inflation" that when you scratch the surface is just companies charging more because they can, the ongoing consolidation of enterprise resulting in monolithic companies that own dozens of brands of the same product, none of which truly compete on price, on and on and on.
There are a ton of good reasons for Americans to be broke, and a number of prominent economists have been ringing alarm bells for decades now that all of these things coming together is going to stall the economy cold and send us into the... by my count, fourth once-in-a-lifetime economic crisis I've experienced.
So if people would have money, there would be a demand. His point still stands.
I guess I don’t understand the advantage of EVs really. Isn’t a plug in hybrid the best option? You can do everyday short trips on battery but also have the gas engine for longer trips. Sure it is more complicated but Toyota has shown that you can make this super reliable.
An advantage of a pure EV over a hybrid is that you don’t have the maintenance liability of the combustion engine, cooling system, and transmission.
And brakes. My brake pads rarely touch my rotors.
Not only does this (and the things you pointed out) reduce the cost of maintenance, it saves on trips to get them done, and the headaches of the pressure most put on you to get things done you don’t need, just so they can make even more money off of you.
Also, EVs on the highway (when hybrids are using the ICE) are much quieter, and have more torque.
The only downsides I have noticed are:
- Higher up front cost (though I don’t think hybrids are much cheaper)
- Heavier = more frequent tire changes (again, not sure hybrids are much better)
- Range for long road trips, resulting in having to pause for long charges, and having to plan your route in advance (definitely not a problem for hybrids)
> And brakes. My brake pads rarely touch my rotors.
I still have the original brake pads on my 2008 Prius with 150k miles. (And yes, I have them measured periodically to see if they're still good.) This is typical.
Is that right?
With torque blending, regen braking is blended with friction braking at low speeds (when regen braking is ineffective). Friction braking is always needed to make a full stop.
25 year old sedan with a Northstar engine, a couple belt and chain replacements, no significant transmission issues, no significant engine work. Regular dealer maintenance No major battery pack replacements. May not be the greenest, but I know I’m in the green. Plug-in hybrids do sound cool…
The biggest downside of a plugin hybrid is the complexity and therefore higher service costs, likely shorter lifetime etc. You have all the maintenance requirements of a regular ICE vehicle and an electric motor + battery on top of that. Also the full electric range is likely much lower than an electric only vehicle so running costs would be higher.
Some EVs have full charge range that's not much less than a full tank of gas on an ICE at this point - the range is really a non issue for a lot of people.
I drive an EV with a comparably low range (~130 miles) and I can still count on one hand the number of times I've needed to drive further than that in one trip - on those occasions other than my lunch/dinner stop being limited to places with a charging station nothing really changed compared to when I drove an ICE. The rest of the time I get to plug it in in my garage overnight instead of having to stop at petrol stations, which is a nice albeit minor convenience increase.
In theory, yes - however, after all this time, 00s Priuses are typically lowest maintanence (or, overall TCO) cars.
A real EV has much better performance than a plugin hybrid, which is more like the worst of both worlds when it comes to driving experience. If you think only about economy, a PHEV can make sense, but it is an overly complicated solution which is bound to have extra maintenance problems.
You're never going to a hybrid under $25,000. Pretty much everywhere but the US has the option of getting an electric car for under $25,000 from BYD or Renault.
I've done over 20,000 km in road trips in an EV. You charge while you're eating or toileting or sleeping, it doesn't affect my trips.
I agree, the range has rarely been a problem for me. The battery runs out of juice about the time my butt needs a break, my bladder needs emptying, and my stomach needs filling. By the time I'm done with lunch, I'm good for another 250-300 miles, and I'm going to stop for the night at that point anyway. People doing >500 miles per day on a roadtrip are the outliers. Way, way outliers.
I see PHEVs as the worst of both worlds. Electric but short range, hybrid but lower efficiency. All of the complexities and costs of both drivetrains added together.
For most people, their daily trips are well within the range of what an EV can do.
And most people don't do long trips every week. Personally, I try to optimize my life to avoid spending a considerable part of it in a car.
With charging at home EVs are just easy. For long trips charging every 2-3 hours isn't too bad (most humans benefit from a break anyways).
People who are spending new car money are not going to settle for a product that requires planning and effort to be used outside of one's daily routine.
This is also why 3-row SUVs and half ton crew cab trucks have proliferated as much as they have.
> And most people don't do long trips every week
Most people don’t own multiple cars and wouldn’t rent a car for those rare use-cases when they already own a perfectly fine car. It may be overall cheaper to do that, but people don’t think that way.
One or two annual holiday roadtrips to go see the family and oops that EV starts looking like an annoying option. Every friend I have who doesn’t own a house and bought an EV ended up returning it because of how annoying the charging was to deal with.
It’s not that charging was _hard_, it’s that they had to think about it.
edit: this may be an urbanite take. Even folks with cars don’t really use them to commute regularly. Semi-rare trips only.
I enjoy road trips far more since getting an EV. It's nice paying half as much or less in fuel costs.
Tesla's charging network is excellent, and I'm glad it's opening to all EVs on the market. I used a third party charger once and the horrible user experience made sure I never will again.
I'm 100% with you.
Dodge has the 2025 ramcharger which has amazing specs! 690 mile range, 14,000lb towing capacity, 663 hp, etc. etc.
I've got reservations about dodge, and reservations about the first year of the model from any manufactuerer. Otherwise, I'd gladly shell out 70k+ and my left nut to get one.
I really wish more manufacturers would go this direction. I've got no interest in 100% EV, because I do things with my truck that simply are not feasible with any EV model, mostly due to range. The problem is, I do just enough truck stuff with really tough requirements that I don't want a non-truck without serious range. Yet, I still go to work in an office a few days a week and would love to use plug-in charge to do so.
Is the car 10k more expensive because of inflation or is the inflation so high because the car costs 10k more?
Is it actually $10K more expensive? The F150 Lightning I just bought was cheaper than the hybrid version I was looking at buying. The Tesla Model 3 & Y seem to be priced pretty competitively, as well.
yes
Privacy is in my top two concerns for EVs (and any vehicle purchase I make). I am increasingly avoiding every privacy destroying option out there, be it cars or services in general. It is, unfortunately, becoming nearly impossible to be privacy aware but the more resistance people put up the better chance we have of maintaining some privacy.
Not good privacy by default, but as a hack you can also just buy a Bolt EV for like ~14k or so, then disconnect the location tracking antennae which takes like 30 mins of fiddling and $12 of parts.
I don't think EVs are any worse than any other car. My F150 Lightning has precisely as much telemetry as the ICE version. Which is to say, more than I'd like. But I realize most buyers don't care.
> Privacy is in my top two concerns for EVs
Yes.
But it does rue out every single modern car on the market.
Very frustrating
I always buy used so I have some time left, but not much. When I bought my last vehicle the person had one of those insurance GPS devices in it. I can't even begin to understand why anyone would do that. It is so obviously going to be used against the driver and it is also obvious that it will eventually become 'required' and that just depresses me.
Consider who builds American EVs:
1) a SV/Texas "tech" company, which, by its very identity, must yield insane returns to shareholders 2) Legacy auto companies who must yield insane returns to both shareholders and, to a lesser extent, retired employees. In their defense, the second group actually did work
Compare this to Chinese EV makers who are dumpi - I mean, willing to take less return on their sale in order to establish market dominance globally.
Yeah, no wonder American EVs are expensive.
Money quote:
“As automakers were profit maximizing during the supply chain crisis era, you are going to prioritize the bigger vehicles, the more expensive vehicles with their higher margins,” Tyson Jominy, vice president of data and analytics at J.D. Power, told me. “Now we just don’t have” these cheaper models.
Ding ding ding.
We have a winner.
There's a bunch of free riders in the form of shareholders artificially driving up the price of goods.
I doubt a cheap american electric car is the real withering dream with people not being able to put a roof over their head
The American dream would have both.
Unfortunately, while BYD would be the most readily-available option for cheap cars, it would need: homologation, distributors, parts suppliers, repeal of the protectionist tariffs protecting Tesla, and the removal of Musk from an unfair position of power, influence, and regulatory capture, and whatever the heck DOGE will be.
The larger issue is that, in order to afford housing, a car, and a life, regular American workers need to be paid livable wages to keep up with the inflation "pay cut" and reverse decades of sliding standards of living through lower and suppressed real wages.
the only manufacturer that does this right is Aptera, the rest is a bunch of gimmicks / subsidy fraud that doesn't solve any actual problem with cars
Never even heard of them, so I doubt they're the only ones "doing it right" vs other car companies that actually sell EVs.
The only EV I'm even interested in is an Aptera. They're building a new class of vehicle that takes advantage of the affordances of full electric. I want a small efficient car that can go long distances and nobody else is building anything like that. Even US capital markets don't understand the appeal of this class of vehicle, but luckily they were able to fill their funding in global capital markets. I'm pretty pessimistic about US EVs, but Aptera gives me a little hope.
I love Aptera! I just don't think it's ever going to take off. There's just not enough investment and demand. It looks ridiculous but it's an awesome concept of aerodynamics.
Sorry to burst your bubble, but unless there is another solar option, the 100 kWh pack will take around 40 days to charge by solar at 700W from 20% to 80%. Otherwise, it seems like the solar part is greenwashing with a bit of '70's-style geodesic dome and Balans chair styling. I'm all for cheap(er) EVs that don't involve Tesla like Scout or BYD.
Something has to disconnect here. Everyone complains that everything costs so much, but the average Americans' paycheck is not rising the same way, so they can try all they want to sell $95k electric vehicles because of thin margins for cheaper products, but if purchasing power doesn't rise with inflation, then that market that "sucks" is going to be the only real market one day...
The problem IMHO is a variety of US policies have artificially taken out that cheap market in all kinds of domains through protectionist policies like rent seeking, monopolies, and tariffs. So, for example, tariffs hurt the emergence of a cheap EV market.
The solutions for this in general don't line up nicely with any of the major party platforms, at least in the US — major deregulation of certain areas in certain ways, aggressive antitrust enforcement, and dismantling of tariffs, possibly combined with government incentivizing of competition in certain areas, at least for awhile. It feels like candidates and parties demonize one or more of these things and overemphasize other things, or implement some of these things in the wrong ways, like they're all mutually exclusive.
I think the disconnect is maybe just in the title: Lucid is obviously just trying to be the next Mercedes. Duh, of course they don't make a cheap car (how much did Lucid pay for this ad in the WSJ?); but their competitors kind of do. Tesla literally told their shareholders during the most recent earnings call that "more affordable models are coming in the first half of 2025". Jim Farley has spoken on how one of the reasons Ford's EVs are still rather expensive is because they clean-roomed much of the assembly for them to better compete with Tesla, so while ICE cars have a century of process optimization behind them, their EVs aren't at that same level... yet.
Its just clickbait paid by Lucid to make their $90,000 cars seem reasonable because, well geeze, no one is making cheap EVs anyone. Wrong: Everyone is trying to, and its very obvious that this is direction the market needs to go in (just look at the depreciation on modern Teslas, new cars cannot compete with what is happening in the used market).
Tesla has kind of been lying about "more affordable models are coming" for about as long as they've been in business, though.
I wouldn't pay for anyone to write this, if I were Lucid...
Mercedes sold their cars by having better engineering (perceived by customers). Does Lucid have better batteries? Almost certainly not.
I'm pretty sure they do, though. Lucid owns Atieva, the company supplying the batteries for Formula E. What they've learned through the many seasons directly goes back into the vehicle's battery.
https://lucidmotors.com/media-room/atieva-powers-season-6-fo...
Increasingly expensive products are afforded through innovations in financing.
Yeah, I think the pendulum swings back and forth. My recollection of the 2007-2009 recession, with $4 gas and the failure of GM, was that it spurred a lot of interest and innovation in smaller, more efficient, economy cars after many years of the automakers pushing (and people buying) larger and less efficient trucks and SUVs. I think we're at an extreme point in the cycle again now with American automakers all but abandoning the compact and midsize economy car segments. At some point, things will dry up and they'll need to compete with the Toyota Corolla and Honda Civic again.
I think you're right about pendulums here, but we might be about to see a US auto maker vs China auto maker inflection point like I read about in the 1980s with US vs Japan.
I watching this video which lays out some fundamental diffs between US companies, like GM and Chinese companies, like BYD: https://www.youtube.com/watch?v=PXvcwM977D0 * Short term vs long term focus * .gov subsidies stronger in key markets in CN * CN companies extremely rapid in development (as low as 1.5 yr vs 6 yr in the US) * Lower wages and input costs
Things will probably have to get worse before they get worse. Corporate people know the machine (public traded US auto makers) keeps lumbering forward without change until it can't, and all handouts, bailouts, and other tricks have been played.
There's only one reason why US cars are more expensive than CN cars: People will pay it. All that other stuff is window dressing. The US is way, way better at financial engineering than China; we can sell an $80,000 Tahoe to a single mom between jobs on zero down and 10% APR, somehow she'll take that deal, and somehow the system doesn't explode into a fiery deathball; so you get $80,000 Tahoes. That's it.
Short-term vs long-term focus means nothing. Government subsidies run out. Rapid development is easy when its a first generation product with no customers. Lower wages means fewer of your own people can afford it (though it does help with export pricing to richer first world countries... what's that word I'm looking for... it starts with a T, I heard an orange man say it recently. eh probably nothing)
The 2008-2023 US economy was basically the strongest national economy in the history of humanity; but, obviously, that's changing. And no, I'm not doomering about a mother-of-all-crashes. The world is just getting more realistic, as it should.
In general, I’m not an anti-regulation person. But American regulations on cars add cost compared to other countries.
One specific example: mandatory back up cameras (and a monitor to watch them on).
> Short-term vs long-term focus means nothing.
Manufacturing, generally? Solar? Batteries? Semiconductors? Cyber espionage/warfare? I think those are more than nothing that China has had a demonstrable long term strategy in which benefits them at our expense.
Also, great point about financialization in the US. Do you think if that dam breaks, US auto makers come back to planet Earth instead of chasing what seems to be exclusively high-margin cars only affordable by credit?
The Chinese are going to clean this market up.
The British made the same mistake back in the day with motorcycles. "Who cares about the market for 125 cc machines?" they said.
The Japanese did, and now they have the market, the British used to have, for luxury and high powered motor cycles. As well as most of the 125cc market
> The Chinese are going to clean this market up.
Not if our governments start putting tariffs on everything.
I am Canadian, but it also applies to other governments (including the US). The politicians know that it's not going to be easy to do the actual right thing and build up a competitive industry. Instead, it's much easier to just slap some tariffs and make lagging productivity the next generation's problem.
Yes, the lack of discussion of tariffs in the article and even in these threads is a bit odd to me. The US has tariffs on Chinese electric vehicles in part specifically to keep cheap Chinese EVs off the market.
The complexities of this are outside my wheelhouse, but it's easy to see how keeping cheaper EVs out of the market would carve out a major source of cheaper vehicles period, leaving other manufacturers able to push higher priced cars. My guess is the tariffs are directly contributing to the process described in the article. Even if manufacturers were to "leave that market to China", eventually it would come to bite them as a certain proportion of people would start buying those cars instead.
Monopolies, monopsonies, and tariffs are playing a huge role throughout the US economy and it gets such little attention. Or at least it seems that way to me.
That would only apply to markets with tariffs, and not the rest of the world. China can sell their EVs to Central Asia, Russia, Africa, south east Asia, Australia, and still dominate the world wide market. America, Canada, Japan, Western Europe, and Korea can protect their markets, but they can’t really protect their market share.
There are some externalities that may prevent that, such as large tariffs. Countries are wary of the effects on employment.
Honestly that analogy feels like a stretch. I like my Nortons, BSAs and Triumphs, but the Japanese honestly just built better bikes at the end of the day (que joke about Lucas electrics and all of the other shit that seems to go wrong on British vehicles of that era). The British built really beautiful bikes and sports cars, but their reliability and general aggravation of ownership was kind of abhorrent. A good Yamaha, Suzuki, Honda, etc. even from that era, I've come to expect will be cheaper to maintain, not come with half a dozen headaches out of the box, and will "Just Run" when you turn the key.
I've yet to see good evidence that the Chinese cars are actually built in a way that they're more reliable or a better value than counterparts from other countries, they're just cheaper.
"There’s not a lot of movies made about the heroes who got 20% of the cost out of a car, but let me tell you, there should be.”
Of course. You start by designing a car to be cheap, not slimming down an expensive one.
People who can afford to buy brand new, does it matter if there is a 25k EV?
People that buy used, can get a cheap electric car like a 2023 Tesla M3 with approx. 50k miles going for 20-24k on Hertz Rental Car sales site.
If you want a better price, just wait until 2026, when the 250k leases come due. There will be a flood of used electric cars on the market.
> “I think having a regular $25,000 model is pointless,” Musk said a few weeks ago. “It would be silly.”
ROTFLMAO!
Says the richest person in existence. What an entitled nasty person.
That lacks context*
Obviously it might be pointless for a company like Tesla, as it might not favour their financial numbers.
It is actually a phenomenon going on specially with European brands. They have abandoned low margin cars, it is, cheapest segments, to improve their financial performance numbers (ROIC...)
* That was mentioned during Tesla's earnings call in October this year, in the context of the shift of strategy towards FSD and the Robotaxi.
While he did say that, its worth pointing out that Tesla also said that more affordable options will be available in 2025H1 [1]. Given Musk's statement, what I think Tesla means by this is more affordable trims of existing models.
I don't think its reasonable to read Musk's statement as "the Model 2 isn't happening". Its more accurate to read it as "it might cost more than $25,000".
[1] https://fortune.com/2024/10/24/tesla-model-2-affordable-car-...