Happy 5th of July, America! For those of you unlucky enough to live elsewhere, please excuse us for choosing to incinerate small portions of our great land instead of, you know, blogging yesterday. But it’s ok, we’ve got some great news, America’s Strategic Jeep Renegade Supply is coming back down to normal. Hooray!
We’re getting sales reports in from various places and so I thought it would be a good time to review where the car market stands. Things appear to improving for consumers, with inventory going up, but it’s going to depend dramatically on what cars you want. Plus, bad times for startup EV automakers continue.
Now Seems Like A Great Time To Buy A Jeep
Stellantis (the artist formerly known as Fiat Chrysler) reported quarterly U.S. sales up by 6% year-over-year in the second quarter, with Dodge up 37% (thanks, Hornet!). Here are some of the highlights:
“We saw increased demand this quarter as market conditions continue to improve and our dealer network makes the necessary adjustments to drive sales growth across our brand portfolios,” said U.S. Head of Sales Jeff Kommor. “The Jeep® Wrangler 4xe recorded its best quarter to date and retains its ranking as the best-selling plug-in hybrid in the U.S., with the Grand Cherokee 4xe at No. 2 and the Chrysler Pacifica Hybrid at No. 4.”
The company is building basically zero electric cars in the United States at the moment but sells three out of the four most popular plug-in hybrids. And the deals are good.
Check that invoice out above. That’s a brand new $62,000 Wrangler 4XE, on lease, for no money down and a $460 a month payment (thanks in part to federal EV credits). That’s a good deal. I wrote last week that you shouldn’t expect car prices everywhere to suddenly implode, with the caveat that certain automakers with inventory will have better offers as the summer selling season begins.
Jeep is clearly one of those brands. I previously wrote about the huge supply of Renegade crossovers on dealer lots, which reflected both the stable production of the vehicle and the general lack of desirability. That number, which came from online car sales assistance service Car Edge, takes the amount of Renegades they find for sale and the total sold in the last 45 days and determines supply.
Would you believe there are more Jeep Renegades for sale? The good news, for Jeep at least, is that sales more than doubled recently, which means the supply is down. How’d they do that? Car Edge CEO Zach Shefska said they’ve seen “lots of support to get them moving” with dealer discounts up to 9% off of MSRP on the Renegade. They’ve also seen a $4,500 in capitalized cost reduction (i.e. an upfront discount) on a lease of one through lender Ally Financial.
But here’s the flipside of this:
There’s plenty of stuff that’s still in high demand and low supply. The Kia Telluride is one of those vehicles I feel like everyone owns but no one can buy. There are a lot of CR-Vs on the market but, guess what, everyone wants CR-Vs. And the Maverick? Ugh. Amazingly, this is an improvement for the little Ford truck we dearly love. Remember, folks, there’s no new normal in the car market.
Car Sales Are Up Almost Everywhere
Fleet sales are back. Inventory is (slowly) coming back. Interest rates are up, but people clearly want to get back into the market and seem to be able to stomach them. What does this mean? Carmakers are starting to report big sales.
The year-over-year monthly sales, in particular, are absurd:
Those are some random brands, but it shows that things are improving when Mazda is up big. On a quarterly basis, even brands like Infiniti are seeing increases (56.5% quarter-over-quarter).
The only brands that aren’t selling that have reported quarterly sales are ones like Jeep (-2.9%), Alfa (-25.0%), and Fiat (-42.2%). In a way, it’s kind of amazing people are buying Fiats at all.
It’s Not A Great Time To Be An EV Startup
Patrick has a great post from earlier this year asking: Who will survive the EV Startup Wars? There was a bleak report from Reuters on Monday that walks through the reasons why both British vanmaker Arrival SA and American truckmaker Nikola Corp might not make it to the next round.
Arrival had in April bet that the second reverse merger would release $283 million of cash held in trust before redemptions. In early 2021, the company had merged with CIIG Merger Corp.
The EV startup in May reported a 37% slump in cash and cash equivalent at the end of the first three months of the year, from the preceding quarter.
The startup warned in November it would run out of cash before the end of 2023. The company has cut staff almost 75% to 750 employees in a bid to conserve cash.
Not great, though the company still has 10,000 orders from UPS. What about Nikola? It’s in the process of liquidating the assets of Romeo Power, the EV battery maker it just bought. And those companies are not alone, resident bleeding heart Patrick George has a piece on the Lordstown troubles in The New Republic:
These issues weren’t helped by the fact that the Endurance itself was riddled with production problems. The vehicle was theoretically aimed at commercial work-truck buyers, but its value proposition became even more unclear as more electric trucks from real car companies like Ford and GM started entering the market. And commercial or not, it always seemed to lack the hype and engineering cachet of other E.V. newcomers. Its range of just 174 miles put it in the bottom tier of modern E.V.s, and critics balked at its $65,000 price tag. The savior of Ohio’s automotive sector just didn’t seem all that up to the job.
I drove by the Foxconn/Lordstown facility this week en route to Chicago and it didn’t seem like a particularly active place.
Ex-Employees Call VinFast’s Vehicle Development ‘Frightening’
If you’re going to read one thing from Britain today, read Alex Goy’s review of the 2024 Aston Martin DB12. If you read two things today, read this deep dive from The Financial Times about VinFast. Obviously, we tried the company’s debut U.S. model and it broke during the test drive, so our expectations are low. But multiple former VinFast folks say speed is taking priority over anything else, and that’s why we’re seeing the issues we are.
Most of the FT piece delves into CEO Le Thi Thu Thuy’s plan for VinFast and the company’s dramatic shift into electric vehicles. It talks about the company’s challenges in launching an IPO in a difficult overall capital market.
The reporters also talked to three former employees, and, well:
Three former employees who worked in product testing, engineering or homologation on an earlier model said they saw instances of what they considered to be insufficient safety or durability testing to shave time from a vehicle’s development. Another former employee, who has worked at a number of carmakers, said the speed of vehicle development was “frightening”.
VinFast denies the allegations, but it conforms with most of the experiences reviewers seem to have had with the vehicles.
We know a lot of you have said you’re holding off on a new car purchase for now, and we certainly can’t blame you given how weird and expensive this market is. What would it take to change your mind and get back into the market like all those happy Acura buyers?
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