Featured No Demand For EVs-Says Toyota

Wow! I just noticed that. Is that including any tax rebate that you need to owe some $7,500 in order to take advantage of?

One thing I did forget to mention in favor of an EV is that fuel and maintenance can be less. So maybe setting 10% of income for car payments isn't fair. You could put what you save in fuel and maintenance towards the car payment and still get away with 20% or less total cost.

On the other hand, KBB changed the trade-in value for my Avalon from $10,000 not that long ago, to about $6,000. Since I still owe about $2,000 I'd have about $4,000 left. So, for a 5 year loan I calculate my monthly payments for a brand new base Bolt (including taxes, destination fee and no more and no less than MSRP value) to be around $460. Assuming my insurance premium stayed the same, I'm spending now $180 (loan) + $100 (fuel) + $120 (savings for tires, repairs and maintenance) = $406 total. Tread wear limits are strict here where I live so it'll be at least $1,000 every 3 years or so for tires, or about $27 per month savings for tires. Assuming I'd spend around 1/3 on electricity on what I do now on fuel that would be $33 per month.

So a new Bolt for me would be
$460 + $27 + $33 = $530 per month, which is still more than the $406 I have budgeted right now, but not by too much.
Assuming insurance at $70 per month, a person making $3,000 per month (after taxes) would be spending 20% on their Bolt for 5 years.

Tempting...

 

That does not include any rebates. However, GM doesn't get any rebates until Jan 1st. At that point, I am not sure if they will qualify.
As of Jan 1st, there is also a $4k rebate on used EVs under a certain price.

The EV market is young, changes happen quickly, so make sure to double check any assumptions you may have.

Apologies to others for the naked reply, I was replying to Isaac's post, who is in the USA.

 

correct, it's not really free money, but in effect it is because you get a credit on your taxes. but you have to owe the taxes to get the credit.
not owe at the end of the year, but total tax liability has to be $7,500.+

 

Ya. Going back to @Simon Miron McGraw 's comment, from what I can find, the median household income is around $70,000 and the median tax percentage is just 3.4%, or about $2,380 tax liability (which if I'm getting my info correct, also includes state and local income taxes). So again, the majority of Americans probably wouldn't benefit from the tax credit, at least not near it's entirety.

 

agreed. but it's just an incentive to try and promote ev's, like any other government tax incentive.

is it fair? see the new college tuition forgiveness plan.

we used to get a tax incentive to buy a house, but not everyone could afford one. there was even one for vacation homes

 

I think it can be very fair. I got my Leaf for a fraction of it's original price, partialy because EV buyers tend to hand down that tax credit to the second buyer. If used car prices return to normal that could happen on EV's in general. But it's up to those that make more than a median wage to create the demand for new EV's.

 

I think the new credit has a mechanic to transfer it to the selling dealer, so the buyer can get the full amount at time of the sale.

 

Nice read. Makes you wonder if any vehicle will qualify next year?????????????????

 

Nope. Construction won't start until 2025. Not too big a deal because the content and material requirements doesn't start next year. What is keeping Toyota plug ins from getting the credits now is that the cars aren't assembled here. Moving Rav4 Prime production to a Rav4 plant in NA should be easy, as it goes. Same with Lexus plug in versions of models made here. Maybe the Prius Prime can be done on a Corolla line. The BEVs will take more effort.

The initial investment for the new factory was enough production for 800k cars. Tripling will mean 2.4mil. Sounds great, but that number includes non-plug hybrids. A Prius Prime sized pack can supply 8 Prii using Li-ion; Rav4p can do 18, and a bZ4X almost 70. Without knowing kWh capacity, which Toyota hasn't released, we don't know how many plug ins this factory can support making. The vehicle number can be all for hybrids.
https://evglobe.com/2021/12/06/toyota-new-battery-plant-north-carolina/

 

It seems like as if my next car will not be a Toyota if they continue like this. My 3rd Prius, and probably the last one.
We need to stop selling and buying ICE vehicles. A Hybrid still emits CO2. We need to stop emitting CO2. ICE vehicles are definitely out. Toyota seems to be turning into the new Nokia. Will it disappear in a blip like they did?
And what about the solid state battery tech I read they were researching? with stellar ranges of 700mi? is that all dead or are they coming out with something soon?
Or they want to leave the non-Chinese markets to Korean, European and USA manufacturers?
They already lost the EV truck market in the USA. Ford cannot make enough of the Lighting.

 

I disagree with most of this. Not that richer people are more likely to buy, but that poorer...or middle class aren't going crazy buying new cars. The desire for people to buy new cars is so high. When I was in college, it was ridiculous the number of kids that were buying new cars or the people that would buy a new car right out of college.

Also, I agree with the financial advisors. That being said, most of the country lives paycheck to paycheck. Many people are financially illiterate. There's a reason why you see families making well over 6 figures and struggling to pay bills. Or, people just paying the minimum on a credit card when they could easily pay it off. I agree that many people really can't "afford", but that's where financing comes in. People finance their freaking cell phones. I believe car loans are up to 80 months now. Most people only look at the monthly payment. Trust me, if they could finance to 120 months, people would do that just to get their payment lower instead of purchasing a car they could actually afford.

When I worked at a car dealership, it was sad the number of people that tried to buy the expensive car when in reality they should have been buying something about half that price. Usually we could find someone to finance it depending on down payment.

The prices of cars will just keep going up. No reason not to until demand drops. That won't happen with financing. In a perfect world, I agree with you. In the real world, it doesn't work that way.

 

Better to look at overall stats than personal experience and anecdotes

Automotive Trends: New Car Buyer Demographics 2022

It is reported that Baby Boomers purchase 62% of new cars in the US.

Research published by the Federal Reserve shows the age of a new car or truck buyer has grown older over the past decade. It is now around 53 years old. They also note that among new vehicles buyers, the 55+ age group has a 15 percentage point increase since 2000.

64% of new car buyers rated affordability as “important.” Late 2018 is the most recent data from this particular study and the topic wasn’t included in the 2020 edition, which focused more on process and satisfaction. About half—53%—consider the total purchase price. 20% instead consider the monthly payment. The remainder, 27% consider the total purchase price along with the monthly payment. The percentages only varied by a point for new car buyers vs. used car buyers.

Mike

 

Auto Loan Debt Reaches a Record-High $1.43 Trillion - Experian

Debt Bomb: America's Next Generation Faces A Fiscal Nightmare - 19FortyFive

Auto loan debt doubled in the last decade, more than any other debt (yahoo.com)

The Used Car Bubble Is Bursting (yahoo.com)

 

The younger car buyers have to consider their student loans.

 

Maybe not. Just get your student loan canceled and replace it with a brand new car loan!!!

Mike