You raise some solid points, to which I offer examples like the Fiat 500e, Chevrolet Bolt, Nissan Leaf, and to a lesser degree the Model 3, all operate in the lower end of the market, all designed for the mass populace and ever popular ride share folks, all depreciate heavily and struggle to sell except the Model 3 until recently. There are complexities and perceived running costs that cost conscious consumers overvalue, hence why complicated luxury cars tend to depreciate far worse than simple Toyotas for example, but even in the luxury space there are cars that hold their value- Lexus LX. What separates the LX from the others is the perceived acceptance that they are rock solid and problem free. The big white EV elephant in the room is that no matter how careful you are, the big expensive boogy man battery will need to be addressed within 100k, absolutely by 150k. ICE engines/transmissions these days are expected to last 150k miles with proper maintenance.

The reason EVs are marketed on the higher end is because there is no getting around the battery cost, weight, and size footprint, which when all are factored in creates a form factor that resembles a luxury vehicle. By adding in some high margin (aka cheap) options like a full electronic suite and leather seats, you can then justify the higher cost. Tesla has historically cut prices, but if you pay attention to how it actually played out, they essentially allowed consumers to get more options for less money without actually lowering the price point on their sales data sheets. Sorta like if Honda said we're cutting Civic prices by 3k, but then making the LX impossible to get, pushing people into EXs which people will stomach because of the value they're getting.

Because if you want 300 miles of real world, ICE equivalent range, you're going to paying big bucks for it. You don't need that sort of range if you can charge at home, and if you have a garage space to do so, that sort of consumer isn't shopping bargain based cars, and the ones that don't are probably more anxious about range because they have to pass by several gas stations to then sit in their car for 20+ minutes to get a charge paying a 200-400% premium on that electricity vs at home too.

The battery requires a certain sized footprint, the materials require a certain cost making the inevitable form factor more conducive to be positioned as a luxury vehicle than an entry level econo box. Luxury options are high margin, aka not expensive to really add. Really, how much more does it cost to add leather, a stereo with all the features, heated/cooled seats, adaptive cruise, power everything, etc etc. Almost everything I mentioned can be found in a Civic these days, so luxury is more equated with design and space vs. amenities. Case and point, Carplay being an option in today's world is ludicrous, literally costs nothing from a hardware standpoint, it'll cost far more to add a tape deck.

I do believe that the technology will come where batteries get smaller, cheaper, and faster to charge, but the "break throughs" we're observing in reality are just incremental improvements.

The Slate may indeed break the mold somewhat, and is a step in the right direction. They're closing in on solid state batteries, and have a low price, although both of those points are being tempered. The Slate was supposed to be 20k, but now they're saying over 25k, and yes this matters because you're not getting a stereo, power windows, generally stuff that comes in a Maverick. This is not going to be a Model 3 customizable cool pick up truck for 20k that people were initially excited about.

Overseas, the Slate isn't as revolutionary, because they already have competition at that price point.

Slate is clever in essentially giving you a bare bones car and called it customizable, it's like Porsche giving you straps for a door latch and calling it weight reduction, and then having the nerve to charge you more for it.

The average car price is just that, average. Think about what a single million dollar car sale does to that average. I think that's the difference, 20 years ago cars didn't routinely cost as much as the average house value but now every super car is priced beyond that, and if you got a couple million burning a hole in your pocket there are more options now than ever before. Go to a Honda dealer and ask them which trim of Civic is the easiest and hardest trims to sell, and the answer is the same, no discounts on LXs but let's deal on the EX/EX-L. The car collector seemed to be a very niche yet these days seems like anyone who's made any sort of money has a collection, hence there now being so many options within that space.

We also just came out of a market blip as well, there was a time people were paying 2x MSRP for a Prius back in the aughts, but you could get discounts pre-pandemic. People keep talking about politics but ignore factors like interest rates being higher than they were 5 years ago, and also the perception of things keep increasing in price.

It's all based on perception, or more specifically, speculation. A few years ago people thought that the new normal was empty dealer lots, so paying MSRP or <gasp> ADM was normal. The one we should be paying attention to is how confident people are with all these enthusiast cars continuing the march upward in value. All those Skylines being imported, many of them paying Ferrari money... with no dealer support, no parts catalog, etc. Now take away cheap credit, changing tastes, and trend fatigue, maybe the videos now getting all the clicks and views are on people's boat collection and cars are seen as boomer energy, watch cars get sold off.

Good cars will always be good, but people talking about the E36M as if it's some air cooled Porsche is just stupid. Don't get me wrong, Iove those cars, but some of the prices people are paying for these things is just ludicrous, especially when you can buy an M2 for similar money in some cases.

 

I was torn between Model 3 and M340i for the last purchase and spent much more to keep the ICE engine. I am glad I did, love the car. As good as the model 3 is, for car guys they make a good appliance car but not what you really want to enjoy. They are tech wrapped around wheels and hard to get passionate about. My wife thinks I spent an extra $25k for exhaust noise but it is more than that.

Another thing that will make the EV transition harder is the depreciation curve. Fastest depreciating cars on the market. I don't know what Doug Demuro's Youtube blog channel is called, but one of his participants was lamenting the fact he bought a new Model Y and it depreciated 60% in two years.

I still need a utility buggy and plan to get an EV for that purpose in a couple years. The new ix3 looks to be a real winner and I like the updated Model Y. They will both be had for 50% off sticker in three years with low miles. That will probably be the plan.

 

This is part of the reason I keep buying used Toyotas for all the daily drivers. The last vehicle I bought (last year) was a 2017 Tundra. I dont even like a lot of the new offerings, do not want an EV and the prices continue to skyrocket on anything new.

 

I'm gonna keep happily burning recycled dinosaurs and primordial goo. Plus, I'm not willing to take a massive depreciation hit on a new vehicle purchase.
darcy

 

There is nothing to brag or front about with a 500e, Bolt, or Leaf because those are sensical models and buyers and people who lease are in general, nonsensical. None of those are image buys or vehicles to compete with neighbors, colleagues, their fake friends, family they hate, strangers, etc. People can front and brag on their social medias “We got a Tesla!” It’s McSame mentality. They aren’t going to the same with a Bolt or Leaf. That’s why. Teslas are image buys or leases for many, en vogue, much like a Members Only jacket 40 years ago. You’d think they’d hold value better due to the “Popularity” factor but they don’t either. I don’t know maybe if the Bolt or Leaf was a Toyota or Honda model, instead of Chevy or Nissan, that would be enough for these people to be sensical about a purchase or lease? Either way you look at it these are the same people who buy a new phone, or lease it actually, every single year. Even though the new phone really doesn’t do anything the previous one didn’t, they have to get that “new new”. Well that same nonsensical behavior is why they keep a vehicle 2-3 years and then get new new. That kind of churn is going to lead to depreciation. I’d have to run the math but a newer iPhone probably holds its value better (via carrier trade in) better than all the EV’s at this point. That’s actually pathetic IMO. But the phones are carrier subsidized and that isn’t true for an EV. Perhaps if the manus subsidized the EV’s like carriers do phones, this could change, IE guaranteed trade in value.

Either way none of this is new information. I just hit year 12 and counting, on my Leaf. Even over a decade ago I knew to lease it first, then buy it from Nissan at lease turn in and let the manu eat all the depreciation, which I did. So if I knew that 12 years ago, and leased it first, well nothing has changed in this space in over a decade so this information is nothing new at all. In fact it’s over a decade old information. And range anxiety is a thing for people who have no experience with an electric vehicle. When mine was new the range was 84 miles on a full charge. Even 12 years ago I was able to go all around my metro which is 60 miles or so from one side to the other. Look up Chademo chargers prior to departure. That’d take a whole 3 minutes tops, from the comfort of my home. I mean you could do it on the road but I’d be sensical, find one along the route, or find one closest to my destination prior. Before arriving at said destination top off for 15 minutes, or do it prior to the return drive home after. 15 whole minutes to charge, oh the horror! I don’t east fast food but people take longer to eat that swill than it would to top off an EV. It’s just not a thing. I heard all that noise back then as I ran it for a couple years without a gas counterpart in the garage or driveway as I was spending tens of thousands on remodeling/maintenance on the house and buying expensive aftermarket parts for multiple sportbikes at the same time such as Ohlins, Brembos, etc. People were aghast with the range. I never brought up anything. It would be colleagues spotting me/it in our parking garage. They say’d things like “What do you do if you have to go out of town?” IE road trip or whatever. I’d say “rent a car” and their responses were priceless. “That’s a hassle!” I’d simply respond “oh the horror, go online, and take 5 minutes to book a rental car with your credit card. Then they even pick you up from your home to get it”. I’d get blank stares and zero responses. Many people just aren’t that bright. Same people will buy a vehicle for something they do 2-3 days a year which is why this is truck country with $80k+ trucks sitting in bumper to bumper traffic everyday with hitches and balls without a mark on them, and beds that are so clean and unused it looks like it just came off the assembly line at the production plant. Many buyers are just completely nonsensical and the manus know this which is why even a Civic is $30k+ now. Manus pad in every ounce of profit they can to where even a Civic has all these trims and modcons people “think” they need. Has to be really rough for parents buying their kid their first vehicle. In the 90’s a parents could go buy a new Civic LX or whatever, and not have it break the bank, or an Isuzu/Nissan compact pickup. These days that stuff doesn’t exist. Depreciation is heavily influenced by people just not keeping anything anymore. Social medias, well people are addicted to it, and the need to compete or one up. It’s a very complex subject, depreciation.

Either way the bubble is going to burst at some point. I’ve never seen stealers so overflowed with vehicles on the lot. It’s not going to be the 2008 housing crisis with the vehicle market bursting but it’s the same mentality. Back then people couldn’t afford the home so they ARM loaned the thing, balloon payments, just crazy financing that was not sustainable. It’s eerily similar to all these people leasing vehicles they really can’t afford now and 8-10 year loans on vehicles. The banks are finally hitting deny on applicants and denying these crazy loans for vehicles people don’t need and can’t afford. They’ve had enough. Lots of repos. I mean you have brand new 2024 expensive vehicles, especially domestic brands, rotting on lots. Stealers still trying to use the Covid business sales model and people aren’t going for it anymore. They aren’t going for ADM, or $20k+ of dealer add on bs. Depreciation is a multifaceted or multiple-headed beast. It’s not simple at all. The current administration has intervened in this space in terms of emissions/CAFE requirements but it’s just a move at this point, a lot of other legislation would have to be signed off. I’ve read these articles that state this will save consumers $2500 on each model, etc. That’s just speculation at best. If there is one thing you can count on, more than any other in this space, and that is greed. I haven’t seen pricing go back down on anything. We had the C19 excuse for inflated prices. Then the supply shortage/disruption. Remember “chips”, as in they didn’t buy the chips normally and plan, and a business decision by the bean counters, is now the consumers problem? Now it’s “inflation”. Price never comes down on anything due to greed. And wages remain stagnant. May end up being a good situation for enthusiasts with stable employment to enter into a buyers market for once. It’s been a sellers market for 6 years straight and counting. The market needs bull and bear. It’s a pendulum I’ve seen, like a seesaw, between sellers and a buyers market for my entire car buying life until the past 6 years. Even after this many years, to today, we are only seeing very slight discounts on new vehicles, but say with Toyota and Honda, you are still paying MSRP and having to deal with the thug dealer add ons. They still artificially keep supply low to pad their coffers and it’s going to burst on them, this strategy. It’s already creating a mess with them, to your point, with depreciation as most are leasing now. I’m still dailying my 12 year old Leaf for now so there is no reason why people couldn’t do the same with a Tesla or any EV. The reality is most just don’t keep anything and never acquire a title.

 

I am a Fiat 500 apologist. Even the E. They are wayyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyy yyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyy yyyyyyyy overpriced for the electric model, but they are nerdy-cool and very stylish little cars. Probably totally wrong for the US market, but Fiat 500s are awesome.

 

Give me the China EV's. I don't care that they will decimate the US automakers. They haven't done the public any flavors after they were bail out in 2008.

 

You know they paid that all back right? But great idea, usher in cars that are highly subsidized by a communist government. That won't decimate an industry that employs hundreds of thousands of US workers. But as long as you can save $10,000 who cares right?

How illiterate can someone like this be?

 

Being totally subjective here on the first point... but Fiat does not make a thing I think is cool lol. The only thing I have ever seen them make I remotely thought looked cool was the X1/9. I cant get into the whole pregnant rollerskate 500 things. And add in sub par reliability and the fact that their cars have no fun factor for me, it is hard to see how I would ever own one. The 124 is a fun car because well ... it is a Miata... but they managed to make a version of the MX-5 I think is hideous and put a stellantis product in it for a motor, so ruined it there too for me. It is at least more reliable I think than other Fiat powertrains but I will take an MX-5 all day long over it and would even if you gave me 50% off the Fiata

 

You are entitled to your opinion but the loans were mostly paid back but taxpayers still lost 9.3 billion from my Google search. The automakers demise would be unfortunate for a lot of people but the 100% tariffs is just delaying the inevitable. China EVs dominate due to their pricing and product offerings whether if they are being propped up by the Chinese government initially. From my reading, they no longer support the industry due to the market maturity. Alot of the smaller players are closing down due to the intense competition in their domestic market. Bringing the China EVs here will force the American manufacturers to complete on price or close down their EV business. This is how a capitalist market should be.