Electric cars aren't affordable because America's workforce is underpaid

https://jalopnik.com/electric-cars-arent-affordable-because-americas-workfor-1850695943

by stalfosknight • 3 years ago

74 115 3 years ago

tracker14• 3 years ago

Maybe something to do with the dealers dramatically inflating prices beyond list? Or maybe the mfg going along with it, increasing base prices so they get a bigger cut of the inflated pricing?

I mean, electrics are more expensive to produce, but I really don't buy that they aren't overpriced.

w0mbat4• 3 years ago

Electric cars are not intrinsically more expensive. Because EVs are simpler mechanically they will be cheaper to make than ICE cars once the battery packs get cheap enough. It is an ever-descending cost as the technology improves and the volume goes up.

I agree that greedy Ford dealers helped cause this problem. I looked at the Ford Mach-E but was turned off by dealer markup, got a Tesla instead.

antisthenes• 3 years ago

Electric cars are not intrinsically more expensive. Because EVs are simpler mechanically they will be cheaper to make than ICE cars once the battery packs get cheap enough.

This is nonsense, because the battery packs are already cheap enough. The value of savings from cheap battery packs is simply not being passed on to the end consumer, because the car companies and dealerships can get away with not doing so.

It doesn't matter if Ford or Tesla builds battery packs for $90/KWh and the engine is 2x cheaper than the ICE car, if later on it is marked up appropriately to be sold as a luxury good.

NONE of the battery packs in current EVs cost more than $10000 to make, for ANY manufacturer. Which means they are pricing the econoboxes that contain the batteries at $30,000, which is ridiculous.

martin84123• 3 years ago

Ah yes, the battery which is the most expensive part that also determines range doesn't make the car more expensive. Let's the poors have a 1kWh battery.

antisyzygy5• 3 years ago

Screw Ford dealers.

Ford should go direct. Lobby for changing the law to get rid of these parasites.

I just bought a ford less than a year ago. One of those Maverick trucks since the gas mileage is really good. It's a good suburban truck for hauling or camping that still lets you commute to the city and navigate tight spaces.

The hybrids were actually marked up the worst, often 10k rather than 5k, and couldn't have AWD which was one of my requirements.

tracker14• 3 years ago

I don't think adding a massive Lithium-Ion battery pack is less expensive than an ICE engine. Not even considering the scarcity and environmental cost of said battery packs at current production levels, which would only increase at scale.

rybosworld3• 3 years ago

If you want to discuss car affordability, the dealers are mostly to blame.

The car dealership model has been a disaster for the consumer and is nothing short of a racket.

quantified• 3 years ago

If dealerships were removed, would the scammy culture be transferred to the manufacturers, or would the culture become any better?

mcguire• 3 years ago

Tesla, notably, has no dealers.

https://www.extremetech.com/cars/tesla-accused-of-secretly-c...

rybosworld3• 3 years ago

In other countries you can order the exact car you want. In the U.S., dealers make that incredibly difficult unless you agree to pay a huge premium. That alone is worth the abolishment of dealerships. Not to mention the time you waste haggling on price.

A car salesman in the U.S. will try to sell you a trim you didn't want. They'll sell you a color you didn't want. They'll sell features you didn't want. All because that's what their current inventory dictates.

Here's a question for all the free-market enthusiasts: If the car dealer model is supposedly so great for both sides, then why didn't it spawn organically? Why did it require special regulation to bring it into existence? Wouldn't the free market forces have done this on their own?

The current model in the U.S. is insanity and I can't understand how anyone whose job doesn't depend on it, defends it.

delfinom3• 3 years ago

Tesla maintains a 30% profit margin vs the 5% profit margin of other automakers.

The car dealership model of course inserts another middleman markup and other bullshit, but direct to consumer doesn't prevent profitinflation, and we saw just that in other sectors with the mass profitinlation the last 2 years.

rybosworld3• 3 years ago

Tesla maintains a 30% profit margin vs the 5% profit margin of other automakers.

Do you have sources for these figures? Because they look made up to me.

Honda and Toyota are averaging 20% and 17.5% gross margins: https://ycharts.com/companies/HMC/gross_profit_margin https://ycharts.com/companies/TM/gross_profit_margin

Tesla is averaging 21.5%: https://ycharts.com/companies/TSLA/gross_profit_margin

Regardless, Tesla is a unique case in nearly every way so using them as the counter argument against dealerships seems disingenuous.

Pet_Ant2• 3 years ago

that the only way to cater to American tastes

I think that is the crux of many tragedies to come. Our tastes, standards, and expectations are unsustainable. Single family dwellings. Non-local foods out of season. Things will have to adjust.

gjsman-1000• 3 years ago

Sounds like a great idea to get reactionary leaders elected from people who don't want change.

Change works much better with carrots than sticks.

Pet_Ant2• 3 years ago

I'm not saying it as a campaign promise, I'm saying it as an uncomfortable truth for us who think about these things. How to sell it to the public is PR's job.

mrguyorama5• 3 years ago

There's not always a happy option when you've ignored a problem for a hundred years.

Sometimes the option is a self induced stick, or a way bigger stick from something else that you don't get to choose.

It's rank entitlement to believe you personally should never have to change anything to make the world a better place. IMO this is a huge reason why the younger generations have been worthless at doing government things. The Bud Light and Dylan Mulvaney situation proved that average consumers can absolutely still affect big businesses in a way that leads to uncomfortable discussions with shareholders, you just have to be willing to settle for a different product.

Meanwhile plenty of gay people and people who believe gay people deserve equal rights still buy a fucking chicken sandwhich from a fast food place that donates to organizations that explicitly exist to fight gay rights, rather than deprive themselves of, once again, a medium quality fried chicken sandwich that you can get from ten other establishments or literally any pub.

stalfosknight2• 3 years ago

That line is particularly frustrating to me because I'm an American who has never liked or wanted an SUV or crossover. I don't have anything against people who want those kinds of vehicles but I've always been more of a fun coupe kind of guy.

There's already an endless array of electric SUVs and crossovers to choose from. Why can't there be other classes and sizes of vehicles for other needs and tastes?

mrguyorama5• 3 years ago

Because a big company cannot afford to cater to every little taste, because the shareholders will be upset that they didn't just get to pocket that money.

If you want more variety, break up large companies. Hard to do when Toyota, Honda, etc aren't american companies though.

I too hate large vehicles and prefer my tiny hatchback. It's fun, cheap, efficient, easy to drive, easy to park. Why would I ever get something gigantic? If I need to move something big, something that somehow doesn't fit in my car with the seats folded down (people have fit entire bedroom sets in there somehow) I can go rent a truck from home depot FFS.

joe_the_user• 3 years ago

Moreover, the array of choices in cars (and houses and similar things) is limited by oligopolies able to impose the most profitable form of a commodity rather than catering to a moderate range of tastes. A notable example was when quotas were imposed on Japanese cars, giving the Japanese a strong incentive to increase costs and profits per car - and thus allowing American companies to go back to this approach also. And the size requirements that zoning imposes on houses naturally has to be considered.

Yeah, "it's what 'we' want..." /s

Mindless2112• 3 years ago

As an American who drives a subcompact, I kinda do have something against people who buy an unnecessarily big SUV/truck -- when they hit me, I die and they walk away -- so they feel safer and drive less cautiously than they should.

PopAlongKid• 3 years ago

Why can't there be other classes and sizes of vehicles for other needs and tastes?

Because U.S. tax incentives for business strongly favor bigger, heavier vehicles.[0] This includes people who use a vehicle less than 100% for business.

[0]https://en.wikipedia.org/wiki/Section_179_depreciation_deduc...

https://en.wikipedia.org/wiki/MACRS#Special_allowances_and_b...

jareklupinski• 3 years ago

I don't have anything against people who want those kinds of vehicles

Well you should! Makes life more fun :)

-Hugh Laurie (https://youtu.be/c-WO73Dh7rY?t=141 @2:21)

ar_lan2• 3 years ago

Single family dwellings.

Is this... uncommon in the rest of the world? The rest of your comment I understand, and agree with, but a single family home seems pretty reasonable to me - or am I just out of touch?

I know most folks in my neighborhood harbor multi-generations under a single roof, but they are also significantly Indian homes. I always thought that was more likely to be an Indian cultural attribute more-so than a global normality.

Also - does this include apartments/condos? Where does the line get drawn? A small family residing in an 800 sq ft house surely is reasonable (well, surely to me, but I'm fascinated by this comment), but a McMansion is not necessary in any capacity.

xboxnolifes2• 3 years ago

I interpret they mean single-family, detached house, with significant front and back yard, with the current sizes of suburban houses (2000+ sqft).

falcolas5• 3 years ago

Going to need more used stock for people who can’t afford new, more specifically those who can’t afford the value cliff associated with a new car.

The used market will naturally grow, but it will delay adoption.

wpietri• 3 years ago

The trouble with this approach is that people with less money then only get the things that got made for rich people and then set aside.

When I got my first car, the thing many of my peers ended up with is the land yacht: https://en.wikipedia.org/wiki/Land_yacht_(automobile)

I was very lucky to get a hand-me-down Japanese economy car. It was efficient and reliable. But my peers had to spend a lot more on gas and deal with more frequent repairs. The land yachts were expensive to operate because they were made for rich people but cheap to buy because they were out of fashion and not a great deal in the long term.

I'd much rather see us producing low end models that people of modest means can buy new, ones designed for that market.

mrguyorama5• 3 years ago

Indeed, poor people don't need a secondhand Escalade, they need a Geo Metro.

But your average american seems to be willing to pay twice as much for gas and buy a truck for whatever reason.

falcolas5• 3 years ago

It’s how the car market operates for most of the US today. Dealers make more off used sales than they do new.

nickthegreek• 3 years ago

Will it grow? If the battery packs are trash, there wont be an affordable used car market, as no one is going to drop $10k to replace the pack in a used car.

elil17• 3 years ago

People might accept a reduced range. I have no use for a range over ~150 miles and I could easily make do with 50 if I had to, so I would gladly buy a car with a "trashed" battery.

falcolas5• 3 years ago

Well, battery packs generally have about the same lifespan as an engine, give or take.

And with used cars will come used/refurbished battery packs for less than new ones.

WorldMaker8• 3 years ago

Battery packs don't seem to be the problem at all in the used market. The number of used EVs that have entered the market that needed a battery pack replacement is statistically insignificant for most models. In fact, the current argument is that battery packs are "too good": The used market doesn't seem to be growing at the same rate of ICE turnover because of fewer maintenance costs over car lifetime. The median EV owner is keeping their car for 7+ years, which is an incredible jump compared to the historic 3- year first owner lifecycle of ICE.

We are just about past the "early adopters naturally have higher attachment rates" line and there are some interesting questions if the used EV market will always look weirder than the used ICE market.

gonehome• 3 years ago

55k on average is ignoring the entry cost of a model 3 (especially with incentives) - also average is just a bad metric for affordability.

An extreme example: https://electrek.co/2023/07/24/brand-new-tesla-model-3-less-...

That's also an outlier, but less than 30k isn't which makes this post somewhat misleading (at best).

The Model Y was also the top selling vehicle globally across all categories for Q1 2023: https://www.theverge.com/2023/5/26/23738581/tesla-model-y-ev... and in 2022 was the best selling car in the US: https://www.teslarati.com/tesla-model-y-2022-best-selling-to...

Ford's cars are probably too expensive because they ignored the EV market for a decade and it takes time to scale up production and reduce costs.

"The big problem for EVs from a price standpoint is that the whole industry has decided that the only way to cater to American tastes is to make their EV fleet out of trucks and SUVs, eliminating the economical sedans that might be affordable."

I'd guess this is because Ford can't profitably make an affordable sedan (they can't do so without losing a lot of money) so they need to make a more expensive vehicle with better margins, Tesla did this too of course - they just had a decade head start while the legacy manufacturers did nothing.

ThatGeoGuy• 3 years ago

That's also an outlier, but less than 30k isn't which makes this post somewhat misleading (at best).

I don't disagree that this _isn't_ misleading in a way but it's also important to consider that most EVs are subject to what you said right after:

Ford's cars are probably too expensive because they ignored the EV market for a decade and it takes time to scale up production and reduce costs.

Notably that Tesla still isn't at a scale of production where walking off the lot with a < $30k vehicle is possible! There usually isn't a lot to walk off of, but its rare that the base model will be available at all!

Most of the cars they are producing are not the base package, and likely will never be. The thing about supply chains here is that the "base model" is a much smaller percentage of actual manufacturing. Most of the time if a manufacturer were to produce 1M units a year, less than 30% will be the very base model. I'm not sure there are clear numbers published anywhere, but you can bet that while the "base model" might seem affordable you're unlikely to find it due to the same supply chain constraints — Tesla would much rather up-sell you to some package above the base model and availability is restricted as-is, so which customers do you think they'll prioritize? Tesla isn't even producing millions of units yet (I think last year was just over 600k?), and this is just a drop in the bucket in the number of cars purchased each year.

I'd guess this is because Ford can't profitably make an affordable sedan (they can't do so without losing a lot of money) so they need to make a more expensive vehicle with better margins, Tesla did this too of course - they just had a decade head start while the legacy manufacturers did nothing.

They don't "need" to make larger vehicles with better margins, they just prefer to have better margins. A lot of this is a downstream effect of CAFE exemptions on "light trucks," which applies to both SUVs and modern pick-up trucks. I guess my disagreement here isn't that they "can't" make sedans unless you're defining "can't" in terms of "what the shareholders said." We can absolutely regulate these things and it would probably be beneficial to do so.

As for why Tesla isn't making massive trucks? EV physics (weight of batteries vs. amount of energy to move said weight) somewhat preclude this, but counterpoint there is that Tesla is making a truck and wants to be on top of that market. Sedans are in a weird space with EVs since the added weight kind of puts you in a range<->weight arms race. While most people probably don't need as much range as they think they do, you end up picking between the atrocious Hummer EV or a Model 3 (which is still very large for most of the trips you'd take with a sedan!!!).

foobarian2• 3 years ago

Well, prices aside, there currently is no Ford SUV. I've been shopping for an EV but the current offerings still don't replace my ancient Ford Escape. Still waiting for the electric version...

bryanlarsen• 3 years ago

You can't walk off the lot with any Tesla, so Tesla has much less influence on what percentage of its cars are the base model than other brands. You order online so there's no salesman standing over you talking you into unneeded upgrades.

For high-demand products Tesla will offer a better expected delivery date for more expensive vehicles, but Tesla's supply and demand are in balance now and you can get base model deliveries within a couple of weeks.

_ea1k7• 3 years ago

There usually isn't a lot to walk off of, but its rare that the base model will be available at all!

That isn't true for much of the US. The base model 3 is readily available, even in inventory. At the end of the quarter, it is available with discounts as well.

Not only that, but because of the way the battery supply chain works, there are advantages to Tesla for you to buy the base model. The base uses LFP cells, whereas higher trims use 2170s from either NV or imports. Selling the base model in its current config frees up higher energy density cells for higher trims.

delfinom3• 3 years ago

Notably that Tesla still isn't at a scale of production where walking off the lot with a < $30k vehicle is possible!

It's estimated Tesla has a 30% profit margin on the Model 3 meanwhile automakers traditionally were at 5%.

There's alot of overpricing there.

Qwertious• 3 years ago

but counterpoint there is that Tesla is making a truck and wants to be on top of that market.

Is this actually true? I know Tesla say they're trying to compete in the truck market, but they also said that full self-driving was less than a year away in 2014, and then again in basically every year since.

Meanwhile, the cybertruck was slated for release in 2021. Ditto the trucks, IIRC.

manuelabeledo• 3 years ago

... also average is just a bad metric for affordability

It is definitely better than the outlier you provided as an example. I don't drive a Mercedes-Benz because, on average, any of their models are more expensive than the one I own.

The Model Y numbers are misleading. If we consult the source material [0], it clearly states:

... the Tesla Model Y was the most registered new passenger car of March and Q1 2023

Which is not the same as units sold, but units delivered, i.e. one cannot register a car before receiving it. Tesla has built up a massive order backlog until quite recently [1], so it wouldn't surprise me if these deliveries are for orders placed back in 2022.

[0] https://www.jato.com/tesla-model-y-becomes-europes-best-sell...

[1] https://cleantechnica.com/2023/06/27/teslas-order-backlog-ha...

_ea1k7• 3 years ago

I agree with you. TBH, 55k is likely also less than the current average selling price of a new F-150. And the F-150 is the best selling vehicle in the US, and has been for a long time.

I read an article (you can probably guess the major media source) that said EVs were expensive because the ASP of a new EV is >$55k, while a compact ICE is only ~25k. Of course comparing the average across all EVs, including $80k trucks to the price of Civic-class vehicles makes no sense.

WorldMaker8• 3 years ago

Also, let's not forget that this situation is what American shareholders "say" they want: neither GM nor Ford today has a "compact ICE" on sale for ~$25k (nor anywhere near that). The two examples commonly given right now, Civic and Corolla, are both Japanese imports.

A lot of these "EVs are not affordable" posts really under the surface are just as much "American car companies are too expensive" and blaming that on EVs is missing what's really going on. (Jalopnik here makes an okay case for one of the reasons why this is happening that American car companies are pricing themselves out of their own market.)

It's why I think the US market is ripe for disruption (thanks, short-sighted GM and Ford shareholders) and one of the importers is going to capitalize it. In my understanding it may be a race between the Korean and Chinese companies on who will be the fastest to market a bunch of cheap EV sedan models in the US.

(It is sad that I can't imagine right now GM or Ford making a "hail mary pass" around their own "activist" shareholders. GM proved with the Bolt that they have a lot of the raw components to do a cheap sedan, and likely when the Bolt restarts it will be their cheapest car across their portfolio, just still not a "compact" sedan. Both have to keep answering to their shareholders and a lot of their shareholders are dealers that like high margins and hate sedans.)

localplume• 3 years ago

First, the argument that electric vehicles are more expensive than comparable combustion cars is somewhat exaggerated. The issue large stems from the decision to electrify only the most profitable and physically largest models. For Ford, that would be the F-150 Lightning and the Mustang Mach-E.

so the argument is correct, in that they are more expensive? so they should make cheaper, smaller electric cars would be the logical next step. electric cars at this point are a luxury item, and saying people cant afford luxury items because they aren't being paid enough is _technically true_ but that is misleading.

maybe they should start blaming poor fiscal policy of the federal government given the govt is meant to look after its people, not automanufacturers.

vparikh5• 3 years ago

Electric cars are still a luxury good. I can afford to buy a Tesla Model that equipped with AWD, and auto pilot (for me the marquee feature on the Tesla) comes in at 67,000 before any state & federal incentives.

To put it into perspective - A Toyota 2023 Corolla Hybrid SE Infrared full loaded with AWD will cost me 30K. A Toyota 2024 Camry XSE Hybrid costs $3750 all in with all of the upgrades.

Hard to justify 30K+ more for an electric vehicle - unless that is what you want an are willing to pay for it. But at this point - you can't justify the expenditure at all.

MisterBastahrd2• 3 years ago

I won't pay 30K for a vehicle in the first place. I drove a Nissan Rogue Select for 6 years before it was totaled on the highway in a rear end collision. For the past two, I've driven a Mitsubishi Outlander Sport.

I paid $32K total because I bought them both with 2 years on them.... and I received $13.5K back from insurance for the Rogue Select that I paid $14K for because of how wild the market was during the height of COVID.

Not sure exactly what buying a $60K vehicle is supposed to do for me. The cars had Airplay, cruise control, and AC. What else am I supposed to want?

DaveExeter• 3 years ago

It's called signaling.

You buy a $60K car to signal your wealth. It's why women buy $6K handbags.

Tagbert3• 3 years ago

You bought them used. That is a different market and price structure. Most cars lose value drastically in the first year of ownership.

seanmcdirmid2• 3 years ago

A Toyota 2024 Camry XSE Hybrid costs $3750 all in

I think you missed a zero.

Is there a reason you aren't considering the Leaf or the Bolt?

CameronNemo4• 3 years ago

Leaf and Bolt cannot be used for road trips with similar convenience to an ICE vehicle or Tesla Model 3.

ar_lan2• 3 years ago

A Toyota 2024 Camry XSE Hybrid costs $3750 all in with all of the upgrades.

Was this a typo? There is no way this is true.

vparikh5• 3 years ago

Yes - I meant $37,500

enlyth• 3 years ago

New cars in general are a luxury. Lots of people rely on their 2k beater to get to work, shop for groceries and drop off kids at school.

Should they be priced out of the economy completely?

racl101• 3 years ago

Heck I make six figures and drive a $5000 Honda from 2010. I just can't justify spending so much money on a. electric car.

_ea1k7• 3 years ago

Where are you that an AWD Tesla costs $67k? Both the 3 and the Y offer a $48k AWD version with AP included.

wizofaus3• 3 years ago

I gather the auto pilot option costs another 15k.

vparikh5• 3 years ago

The full auto pilot option is $15,000 additional

wizofaus3• 3 years ago

Ooh, where can I get a 2024 Camry for $3750?

(Actually it's interesting to see car prices in the US seem quite high when converted to AUD - e.g. the base Tesla price in the US is supposedly 48k, equivalent to 72.5K AUD, but they're advertised for 66.5K here. In years past I'm fairly sure that wasn't the case, though it's still true that on a PPP basis they're more expensive here.)

vparikh5• 3 years ago

Sorry meant to say $37,500

w0mbat4• 3 years ago

Forget auto pilot, I have full self-driving, but only because I bought a secondhand Tesla in a private sale and it was already enabled.

Although FSD is technically impressive, it is not a must-have feature. I have played with it a few times, but to be honest, the car is so much fun to drive that I WANT to do it myself.

Just get a regular 3 or Y, both are great value with the tax rebates floating around now. The money saved on gas, oil changes and dealer servicing soon makes up the difference in cost.

vparikh5• 3 years ago

Sorry for the confusion everyone - I meant to say $37,500

Rapzid• 3 years ago

Woooahhhh 50k average? It's never crossed my mind to pay that much. Most of my friends don't own vehicles they paid more than 30k for and that includes a bunch of well-off software engineers.

What's the median or if they exclude top 10% of earners?

Edit:

For a few years now the Chevy Bolt would be the EV I would get if in the market. Ford has nothing comparable but they are, supposedly, thinking about bringing back the Fiesta as an EV. A brand new Bolt can be had for mid 20s.

inconceivable• 3 years ago

this really should be split among people who have kids vs. not.

once people have kids the budget goes up for a lot of different reasons.

_ea1k7• 3 years ago

Not long ago, the price crossed $30k. I was surprised. It seems that it has moved past $50k only in the past few years. TBH, I'm shocked that the average is so high.

KallDrexx• 3 years ago

The average is rising because dealers are pushing auto loans much longer than the previously usual 5 years. They are feeding people's lack of financial literacy with 7-8 year loans under the idea that you can buy a more expensive car while only focusing on the monthly payment.

martin84123• 3 years ago

EVs are a luxury good. The most popular affordable car is around 13k EUR in the EU from new. There are no comparable EVs in the same price range.

_nhynes2• 3 years ago

Is that the Dacia Sandero? The VW Up! (not Golf, my mistake) is ~15k EUR. My knowledge cutoff transitively only goes up to 2021, so I can't be sure which one you mean, but I am curious.

bakje• 3 years ago

Where is the VW Golf 15k EUR?

I bought an 8 year old Golf with over 100k km over 2 years ago and paid around 12k EUR for it, new it was around 32k.

For context this is in the Netherlands, I do believe cars are a bit more expensive here but I can't believe a new Golf would cost 15k anywhere.

To be clear I'm not calling you a liar or anything, I'm genuinely curious if there are such major discrepancies between countries.

martin84123• 3 years ago

Dacia Sandero indeed. Golf starts at around 30k.

WorldMaker8• 3 years ago

Doesn't the Dacia Spring prove that they can do a "non-luxury" EV? It's not that much more expensive than the Sandero.

CameronNemo4• 3 years ago

Cars in general are a luxury.

xboxnolifes2• 3 years ago

Maybe one day that'll be true in the majority of the US.

wmf• 3 years ago

Original source: https://prospect.org/economy/2023-07-31-ford-electric-cars-a...

westcort• 3 years ago

Copper reserves are insufficient to manufacture even the first generation of EVs.[0] The decarbonized economy will require horses and bicycles (both net zero emissions).

The good news is that reducing solar intensity by 2% would compensate for a doubling in CO2 levels, however (see Manabe and Wetherald 1975).[1,2] I hope governments will not wait too long to act. If a solar shield is not implemented within the next 20 to 30 years, the opportunity to do so may close as a result of generalized collapse.

[0] https://press.spglobal.com/2022-07-14-Looming-Copper-Supply-...

[1] http://faculty.eas.ualberta.ca/jdwilson/EAS372_13/manabe75.p...

[2] https://www.researchgate.net/profile/Syukuro-Manabe-2/public...

TradingPlaces• 3 years ago

This is backwards. Vehicle quality has gotten much better, and that means used vehicle quality has gotten much better. Since about 2012, used vehicles have taken over the low end of sales, and now manufacturers in the US are beginning to cede that market to used. For the price of a subcompact, you can get a pickup or SUV with low miles, and Americans prefer larger cars. That’s why average new car price is so high.

https://fred.stlouisfed.org/graph/fredgraph.png?g=17uXw

https://seekingalpha.com/instablog/49663329-trading-places-r...

jscipione• 3 years ago

CEO Henry Ford was sued by his shareholders for paying his employees a dividend to be able to afford a vehicle. The shareholders won.

https://corpgov.law.harvard.edu/2021/12/01/dodge-v-ford-what...

johnea• 3 years ago

This is a beautiful example of history repeating itself.

In the 1960's Japanese cars started to replace the overpriced, low reliability US "Big-3" automakers. Now, after dacades in theUS, the Japanese makers are also slaves to the LUXURY product. They can't imaging selling a vehicle for less than $50K.

In China, an EV "city car" can be bought for < $10K, fully equiped EVs are < $30K.

The US is rpie for these lower cost, higher reliability vehicles, but it seems this time it won't be Japan thats inovating.

After decades of using the cheap Chinese labor force now US industrialists are afraid of the monster they've created, thus the cold war...

WheelsAtLarge• 3 years ago

If the premise was right then it would mean that the workforce wouldn't even be able to afford gas powered cars either. We know they can afford gas powered cars. Increasing incomes will only make it harder for people to afford EVs. It's a self defeating process. The reason EV's aren't affordable is because batteries and the overall EV manufacturing process has not yet achieved economies of scale. Gas powered cars have many more parts and require more labor to create. The reason they are less expensive is that manufacturers have squeezed out most inefficiencies out of the system including outsize profits. Give EVs time and we'll see them stabilize at a price that most workers can afford. The last thing Ford and such companies want is to make a product only the rich can afford. As vital patents expire and more competitors become part of the manufacturing process we'll see prices come down to a price that's reasonable versus people's income. We have seen it with Tesla. 20 years ago only the very rich could afford Tesla's first car. Recently they introduce a somewhat affordable car. Affordability will continue. Believe in the process, it's just a matter of time.

Electric cars aren't affordable because America's workforce is underpaid

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