Car affordability in 2022 and beyond

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Bob Wilson

 

Absolutely!

The average going up doesn’t mean less expensive options don’t exist. It just means there are more high expense items.

Likewise, you can find EVs far less than the average EV cost.

 

What is the average EV cost now? I read somewhere it is up in $60Ks.

EDIT: found this Electric Vehicles Could Match Gasoline Cars on Price This Year - The New York Times

 

I believe it is.
And, there are EVs available in the low $20s (after rebate).

As you mentioned, average doesn’t preclude low cost options.

 

Unfortunately, those choices are far too short for a new BEV. Currently, only two. Bolt and Leaf, and will be none for low $20Ks soon after the battery requirements for the full tax credit get implemented.

 

The question wasn’t if one of the less expensive fits your needs, it was if they exist.
Those $15k ICE vehicles don’t meet my requirements. That has no bearing on the fact that they are available. Nor their affect on the average price if ICE vehicles.

 

No, the question is when there are only a few (two to be exact), will it be available to purchase for everyone who can only spend that much on a new car? I have been looking around for a barebone Bolt EV for a few months now. There aren't any available. I have no problem finding an ICE car with a low $20K price tag because there are many choices I can choose from.

 

There are more choices of ICE cars than EV ones, even among the expensive ones. Which might be as hard to find as the inexpensive ones.

 

Yes. But I don't get your point. A person who can't afford anything more than say $25K is not going to be looking for a more expensive car EV or ICE. The point is, for someone trying to buy a new car with a limited budget of $25K, most of them will end up buying an ICE car, simply because there aren't EVs available for that price range.

 

If they had a budget of $50k, they still might not be able to find a plug in. The greater numbers of model choices and production volume for ICE cars means there is simply going to be more of them on a dealer lot. So finding a new ICE car at any price will be easier than an EV.

The question isn't when will affordable EVs be available, but when will any be readily available to the point that they regularly sit on a dealer's lot waiting for a buyer. Tesla is the only company making them in numbers close to what ICE models are made in for the US market. It will likely take longer for affordable models to be as available as the pricier ones, but there are at least some. The Leaf was one of the first BEVs out. It was like ten years between first car for sale and the Model T.

 

After viewing many of those who have posted here, it is readily apparent that the general populace has been conditioned to enter in relationships of indentured servitude to purchase things that the corporate world of financing has convince them that they really need to survive in the world.

Whatever the manufacturers offer and whatever it cost have no meaning to a majority of consumers.

During the Great Depression of the 1930's it was more difficult to become and indentured financial slave and many of the greedy manufacturers did not survive.

My dad didn't have a credit card until he was 26 years old. He couldn't indenture his future earnings.

If people did not pay the exorbitant cost of these profit making not absolutely options to cars, they would not be around and basically mots all consumers would be better off.

 

Yes? I am not saying you are wrong. But I still don't get what you are getting at. For anyone looking for an affordable car below the $25K budget, there are simply no EVs available. For someone who has a $50K budget, yes, it is easier to find an ICE car in that price range. But that person has a much greater chance of finding an EV he/she can buy than someone with a $25k budget. Heck, If I want to spend $50K on an EV, I can just walk to a local Subaru dealer and pick up Solterra at MSRP today.

 

There are cheaper ones from China, as mentioned in other threads. But they're effectively locked out of the US by US government policy, so you're not going to get them.

On top of that, even in the ICE sector, a lot of non-Chinese foreign companies don't seem to sell their smaller, cheaper cars in the US. This demonstrates it....

Are those your cheapest Toyotas? In Australia, the smaller Yaris is about A$4000 cheaper than the Corolla. In Britain, the Aygo (which they don't sell in Australia) is £4000 cheaper than the Yaris. (That said, a lot of cars are ridiculously expensive in Britain - an Aygo in the UK costs more than what you're saying a Corolla starts from in the US; a Corolla in the UK starts at around US$38,000.) And then of course in Japan there are the Kei cars.

On the EV thread, I heard that VW sells the ID.4 in the US but not the ID.3.

I'm guessing that the manufacturers have decided that too few people in the US will buy the smaller, cheaper cars. It would be interesting to see whether that changes, if there really is demand for smaller, cheaper cars. Still, on the plus side at least you're not paying what the British are paying.

 

That is most likely the reason. And it s not likely to change. Toyota dropped the Yaris years ago. Likewise, they finished Prius-C. The manufacturers sell only profitable cars. Smaller, cheaper cars have smaller profit margins. Americans don't want small cars. Now, most cheap cars are small. Thus they stop selling them.

I wonder if manufacturers can make larger cheap cars, would that sell in the US? IDK... but a big demand for Ford Mavaric seems to suggest that cheaper pick-up form factor cars do sell well. I am fine with a small car for my commuter if I need it again. But if Toyota starts making larger cars cheaper, I will definitely prefer at least a Prius-size car over a Yaris-size car if they cost the same.

 

This is highly relevant to a thread about cars not being affordable. If people won't buy the cheaper cars available globally to the point that foreign manufacturers stop exporting them to America, then the unaffordability of cars is something people have brought upon themselves to a degree.

"Why are there no cheap cars?"
"Here's a cheap car."
"I don't want that one. It's too small. I want a bigger one."
"OK. Here's another one. It's a bit bigger, so it's a bit more expensive."
"But that costs more than I want to pay."

----

I see the Kia Rio is still available in the US. That's a similar size to a Yaris.

Google says it's US$16,450 in the US, plus a $1,055 destination charge.

I rented once recently, and it was good. Simple, comfortable, well-made, decently-equipped, and generally fine.

 

This time around, government is helping the greedy companies.

The point is that EVs are a limited market right now. You'll have better luck finding a more expensive, but only because most of the car companies that do offer one only have the more expensive model. Lower price and fewer models is going to mean those EVs will be harder to find.

You might also think to broaden your search area. These are with 100 miles of me. The Maverick sold its first year or two quick. Ford's site says there is 47 available. Not counting the in transit cars, there is 40 to 45 Bolt EVs. 60 of the under $30k Leafs.

If the Solterra was more competitive in performance to the others in its price range, you may not have such ease in getting one.

Reminded me of a comment I once read about the smart fortwo. "It's half a car, why not half the price?" Cars basically have the same number of parts regardless of size, and the cost is more than just the material going into those parts.

Now more material does increase the cost Then the way supply chains and manufacturing are set up means decontenting doesn't save as much. So cheap large cars aren't likely. Plus, they likely don't want to sell them. Only 5 of the bunch from above were the cheap Maverick XL. The rest were in the Escape price range.

Looks like there is 3 times as many Bolts for me to choose from than Rios.

There is also the Mitsubishi Mirage in the US.

 

So you are saying the same thing as what I have been saying all along. And In addition, you are looking at a bigger picture of the EV market and commenting on the EV market situation including the higher expensive segment of EVs. But again, that makes absolutely no difference for someone whose budget is limited to $25k. There aren't any new EVs that can be purchased at or below $25K (before credit or incentives). Period. There are plenty of new ICE cars that can be purchased at or below $25K.

OK, I just did an inventory search on Chevy site using central Maine as the location and using the maximum distance of 2,000miles and maximum price of $30,500 for Bolt EV inventory.

Well, there is a total of 346 Bolt EVs that came back. BUT, yes big BUT, there is currently only ONE yes, 1 Bolt EV 1LT base model that is in transit to the state of Maine. I have a feeling it is already sold to someone. The rest of the 345 Bolts are sold out of state. If I increase the max price to $33,000, then two additional Bolt upper trim 2LT are available in ME. One is in transit, and another is available. I am going to contact those three dealers tomorrow, but none of them are my local dealers. They are over 200 miles away. If I am buying a BEV, then I will have to purchase it in Maine from authorized dealers that are registered with the state for the incentive program (not all dealers are registered for the incentive program) to qualify for the potential maximum $7500 rebate. Yes, this is separate from the $7500 fed tax credit. So, Bolt at $30K can be purchased at the $15K final price if I do a bit of tax preparation this year again.

I also checked local Subaru dealers just now. I found 5 Solterra in stock available for sale right now. All at MSRP above $48K. Yeah, if they are priced at $40K, maybe they sell quicker. I really don't care about EV range or charge speed. So, having a more competitive performance would not make the car any more attractive to me. But without the fed tax credit, even a $40K price tag on a BEV is too high. The only reason I could afford to purchase 22 Escape PHEV priced at $38K was that I could use the fed tax credit and state incentives to make the final price at $28K.

 

I wouldn't count on Mirage and Sonata continuing on the production lines forever.

The graph below is taken from the free page on Statista. I don't have a paid account, so I can't see the underlying data and the graph shows a big green box in the middle. But it does give you an idea of which segment of new cars are sold in the US. Basically, in 2022, ~2/3 of all the new cars sold in the US were SUVs or Pickup Trucks. By just eyeballing it, the small car segment is maybe ~4% of the total sales?

Passenger Cars - United States | Statista Market Forecast