Demand dropping / asking price dropping?

[dbsb3233]

The car business is going to be hammered by interest rates and there will be a lot of casualties in the EV business in the next decade... Lordstown, Fisker, Nikola, Workhorse, others.... possibly Rivian and Lucid... In the world of 2023, the idiotic capitalization levels of most of these companies is difficult to justify.

Despite this, I don't think that capital will completely dry up for EV companies because the hammer of not being able to sell ICE cars in lots of places within 7 years changes a lot of things.

EVs are ~doubling in sales every year... at the expense of ICE sales. Where will the car business go?

• Legacy auto?
• Chinese imports?
• Startups?

Most of the EV growth wasn't going to come from those EV-only makers anyway (except Tesla). It was going to come from legacy makers like Ford, GM, VW, Hyundai, etc.

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[mfbrown]

It is easy to conflate EV adoption with economic factors. Yes, the Fed is working pretty hard to slow the economy which means slowing sales of EVERYTHING including EVs. Gas prices are down and of course that will also affect decisions to by ICE vs. EV. But EVs have already reached the tipping point (certainly in CA); people no longer suffer from irrational range anxiety and will continue to transition - especially as new models with longer ranges come out. The industry is committed to moving in that direction and a slowing economy will merely be a bump in the road (and for some smaller EV makers - bankruptcy). Make no mistake though, sales volumes of EVs will continue to rise which will bring ICE/EV pricing closer to parity.

Meanwhile, the Fed will keep interest rates high until unemployment starts to tick up which will slow the economy and in turn slow inflation. Yes, it doesn't feel like it now, but dealers will be offering $1000 rebates to buy all kinds of cars. Added competition and desire for market share will be fierce. Tesla's days of being the only show in town is over and he has only one way to go when it comes to market share - down.

That said, overall pricing may not get much lower than it is. The ugly truth about inflation is that 2% is slower inflation, but it is still inflation!

As much as I love my Mach-e, I'm probably going to let my new order go. It is my way of supporting the Fed's goal of slowing the demand. I'll come back later and get an Ioniq 5 for my wife; she doesn't care as much as I do about the feature differences and it costs significantly less.

 

[RickMachE]

Lightnings...

Prices will drop by 2024 sometime IMO. I agree with them being too high now. Not buying a Lightning for that reason, combined with loss of tax credit.

I would rebuy the Mach-E for what we paid (A-Plan). But with the two hikes since then ('21 prices), I would definitely think about it. Prior to this purchase, our most expensive vehicle was around $32k for our 2013 F-150.

 

[Blue highway]

I agree price is a big problem... this is why we are not going to see mainstream EV's with significantly more than 300 miles of range. Batteries cost too much.

 

[dbsb3233]

They may state "materials cost" as the excuse, and with 7-8% inflation costs are definitely going up, but... My guess is a big chunk of the increases is clawing back a lot of the money they've been leaving on the table and letting dealers cash in instead. There's been such an excessive demand vs supply that Ford ended up setting MSRPs well under actual market value. Dealers have been cashing that extra. Now Ford wants it, so they're setting MSRP closer to actual market value.

There's also good reason to set MSRP above market value (as is traditional), but then use discounts/incentives to adjust on a month-to-month basis as the market shifts.

 

[Rob S]

Rates go up, demand goes down. Same is true for EVs, ICE, Bicycles, Tricycles, and.... motorcycles.

My dealer had two Mach-E's on the lot, one Lightning in the showroom.... and a row of Explorers and Edges in the lot. So what.

the economy is the economy.

 

[tuminatr]

Market is in decline for cars in general and orders are not closed anymore

Exactly I read a report that the largest car auction house has seen a 15% decrease in wholesale used car prices. And yes you can order a new one and get a $7500 tax credit

https://www.axios.com/2022/11/08/used-car-prices-dropping

 

[ElectrifyCLT]

I’m keeping a close eye on used Tesla prices. With my Mach E dead w/ a HVBJB issue I rented a Model 3 with ~30k miles on it and it was surprisingly good. None of the build quality/rattling issues.

It looks like LRs with similar mileage are going in the mid $40k range. Heck of a deal IMO. It also seems like there are TONS of used Tesla’s on their site right now.

Another unrelated data point, but I’ve been very close to pulling the trigger on a lightning. Mainly due to the fact that I’ve actually been able to negotiate a dealer down off ADM by HALF, while being able to take delivery in 2022 and get the 7500 credit.

Things seem to be softening, quickly.

 

[tuminatr]

I’m keeping a close eye on used Tesla prices. With my Mach E dead w/ a HVBJB issue I rented a Model 3 with ~30k miles on it and it was surprisingly good. None of the build quality/rattling issues.

It looks like LRs with similar mileage are going in the mid $40k range. Heck of a deal IMO. It also seems like there are TONS of used Tesla’s on their site right now.

Another unrelated data point, but I’ve been very close to pulling the trigger on a lightning. Mainly due to the fact that I’ve actually been able to negotiate a dealer down off ADM by HALF, while being able to take delivery in 2022 and get the 7500 credit.

Things seem to be softening, quickly.

I just got back from a trip to Chicago rented a Model Y performance. IMHO not much faster than my Premium but suspension was much smoother

I did not like to no instrument cluster and there is a large silver panel in front of the steering wheel that caused a reflection on the windshield and side window making it difficult to see

 

[DonnieJ]

Well now that used car prices are dropping do you think it's better to jist buy a used '22 especially since they still atleast have the self-parking option. And i might save 10k..... thoughts?????

 

[phil]

In addition and this is my opinion the EV mania is coming to an end.

There was never an EV mania - EVs account for 5 or 10% of new car sales. EVs are a cool luxury good, that is heavily subsidized by many governments. And non-luxury competitors (ICEV) are being outlawed by a few governments.

EV sales volumes will rise or fall based on evolving economics, technology and government diktats.

 

[louc757]

There was never an EV mania - EVs account for 5 or 10% of new car sales. EVs are a cool luxury good, that is heavily subsidized by many governments. And non-luxury competitors (ICEV) are being outlawed by a few governments.

EV sales volumes will rise or fall based on evolving economics, technology and government diktats.

Another reason for lackluster EV demand is the price of gas has fallen. I filled up at Costco here in Louisville Fri for $2.55/gal. With the price of gas back reasonable, and the reduction or loss of EV tax credit for 2023, there is no incentive to buy an EV. Of course, gas will go back up, due to economic or environmental issues (hurricanes, etc), and then there will be another rush. Until then, prices will continue to fall.

I was lucky and ordered a GTPE on 9/1, took delivery yesterday. My interest rate was locked @ 4.49%, and I got the EV tax credit, which I am not eligible for next year. I'm not sure what current interest rates are, but I heard as high as 6.9%. Those factors will certainly dampen new orders.

 

[mjs020294]

Well now that used car prices are dropping do you think it's better to jist buy a used '22 especially since they still atleast have the self-parking option. And i might save 10k..... thoughts?????

Right now I wouldn't buy a car new or used unless if was an absolute necessity. Wait a few months and prices will be significantly lower plus interest rates will fall.

 

[nvabill]

I looked at the prices for used Mach E GT PE recently and for a 2022, they are now going for 65-70k on auto trader. Back when I bought mine (April), they were asking 90k for the same used. Is this already the decline of the Mach e overall value with so many other EVs coming out?

Of course it is, all 3 of my local dealers have said that the market is softening. I mean seriously, how long will people continue to pay over msrp for vehicles that will soon be flooding the market. The covid shortage is winding down and all the dealers now have more inventory of all types of cars.

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