Featured Very few EVs qualify for the federal tax credit as of 2024

This is fascinating.
So critics complain of high prices for EVs. Now companies, especially those with more experience making them, lower prices. This action automatically ‘increases’ depreciation.

For people keeping their cars long term, this is a non-issue.
According to the links provided, depreciation for EVs is 10% worse than for ICE cars, 49.1% vs 38.8%. Substantial, yes, earth shattering, no.

 

More evidence that incentives work.
Not only do they lower new car prices, but also used.

 

depreciation should be measured from prices paid, not msrp. with a major incentive like $7,500., of course depreciation values are skewed, and this is is proof of the old saying that 'figures lie, and liars figure'.

 

Tesla could have theoretically reduced the impact of price reductions by doing what other companies do and change 50 cents of plastic pieces and some other unimportant decorations and badges and sell the same car as a new less expensive model.

Badge engineering wasn’t done for no reason

 

Toyota versus Lexus ? Nissan versus infinity? When we bought our Lexus SUV hybrid I noticed we could get the same exact features/accessories as the Highlander hybrid for a very few bucks less (but the Lexus Hybrid came out first).
Isn't that kind of unscrupulous? So that means Tesla did the wrong thing because they showed some scruples?
.

 

Tesla is all about streamlining the manufacturing process. Adding bloat simply increases the cost of all cars.

Yes, buying a car, especially for a fleet, and the having the car price get cut sucks. I understand Hertz’s position. Investing in new tech has risks, but it also has rewards. Hopefully Hertz will see more of those rewards with their remaining EV fleet.

 

Did Sony do that for their LCD and Plasma TVs when the tech was new and production costs were starting to come down?

ICE cars have been in mass production for a century. The cost reductions that come from securing supply chains and building out large scale manufacturing happened decades ago. That is just going on for EVs. Even for models build on ICE platforms, there is the supply and production of motors and batteries that needs to happen.

Hetz made the mistake of thinking EVs were like ICE when figuring depreciation when they are still in the new tech stage.

They probably also ignored the possibility of changes to incentives. Tesla no longer, or was close to, qualifying for the old incentives when they started buying them. Then nearly every Tesla was getting something for consumers under IRA when Hertz made this report. Most Teslas now lost the credit in 2024, which is probably why the deals reported for used Hertz ones are no longer there.

 

While that would be an ideal calculation of the "individual" case for the depriciation. For the market analysis, I don't think there is any easy way to collect data on what all the buyers paid for the cars purchased. With pre 2023 tax credit rules, not every one got the same credit. Some full credit, some partial credit, and some no credit. State incentives varied. And even for the same model of the car, "price paid" can vary vastly. It would be almost impossible to collect meaningful data that can be analyzed and compared.

 

MSRP is your starting point for depreciation.
Many of the articles and post here point out that government intervention/interference (Tax Liability breaks, discounts) is the problem.
You will always end up paying the piper, whether it is up front at initial purchase or on the back end with decreased value.
There is no a free ride, if a car MSRP is $50,000 and that is what the Dealer paid for it that is eventually what will be paid - someone has to pay that price - if the Government intervenes/interferes and makes up the difference you will pay in higher taxes. The Government only has money it has taken away from yourself and other citizens. They are not Santa Claus or keepers of Gesse that lay golden eggs.

If you like an EV, great buy it and enjoy it- they are great cars. I will enjoy mine when I eventually buy one.

 

then we should be rid of all government incentives and go to a flat tax

 

Yes they could operate as old line car companies and pull a gm. Create divisions that sell around the same car at different price points, but that actually slows down production and hurts long run profitability. Or they could do the thing where they discount at "truck month", I don't know anyone that bought a tundra that wasn't discounted at least $5K.

Tesla historically has had much lower depreciation than similar vehicles. If some years costs go down so much that depreciation is higher, then by all means they should do it to sell more new vehicles and make older ones more affordable in the secondary markets.

 

you mean like putting chevy engines in buicks?

 

Note, many of the brands that relied on badge engineering are now gone.

 

Just a question, because I have not experience on that side of thhe coin.
Dealers actually pay less than MSRP, don’t they?
I have heard they also get manufacturer incentives?

 

How to Calculate a New Car Fair Profit Offer - Auto Cheat Sheet
"The formula for finding a dealer’s actual net new car cost:
Invoice Price – (Dealer Holdback + Factory to Dealer Incentive) = Dealer’s True New Car Cost"
"An offer of 3-5% over a dealer’s actual new car cost is acceptable when purchasing a new car."

Dealer Invoice Cost is probably more appropriate than MSRP when speaking of Dealer Vehicle Cost.

Unless you are part of a Auto Manufacturer Employee Buying Program MSRP is a more realistic measure of what we should expect to pay.

When I worked for an Auto Manufacturer their Employee Vehicle Purchase Program was Dealer Invoice Cost +$500. When you went to buy a car you got a certificate that listed the invoice cost of the vehicle the Dealer paid. You got the Certificate from the Employee Car Purchase Program Administration Department. Each vehicle had its own particular Dealer Invoice Price from the Manufacturer.

 

My last two Toyotas were bought $3,500 under MSRP. And I assure you the dealer made a profit, the sales manager made some money and the salesperson made some money.

MSRP is a fiction to make dealers money ... lots of it. Note the meaning of the S.

Of course supply and demand come in to play in every transaction.

 

"An offer of 3-5% over a dealer’s actual new car cost is acceptable when purchasing a new car."

 

How does a non employee go about getting a dealers actual new car cost?

 

For the Automotive Company I worked for that was considered Confidential Information.

Edmonds is considered by many to be an excellent pricing information source for the public and will tell you what the Car Model you are interested in is selling for in your area based on public sales information and would help the consumer know what people are paying for that car in your geographical area.

 

that was probably helpful when everything wasn't selling at msrp+