Cars Under $25,000 Sell 48 Times Faster Than The Average Car

In reviewing all the trends from 2025, the one standout factor is affordability. The one predictable factor in an unpredictable year is that the so-called K-shaped economy is playing out as you’d expect, with the wealthiest Americans mostly unaffected by new car costs and financing. The not-wealthiest Americans? It’s a slightly different story.

Data is grist for The Morning Dump’s hamster-powered mill, and a new bit of data about how fast cheap cars are selling is yet another reminder of the opportunity that exists for brands that can serve this market.

The affordable EVs that are popular in Europe and China haven’t quite made it here, and the projected slowdown in the electric car market is one reason that Ford and its battery partner SK On are splitting up their plants. Hybrids are likely coming, and Europe is considering letting hybrids pass as a gap technology towards eventual electrification.

Let’s end on a weird one, eh? An American company bought Italdesign, and it’s not the American company you’re probably thinking.

Cheap Cars Are Moving Fast, But There Aren’t Enough Of Them

For all the talk of people wanting affordable cars, what’s been lacking in the universe are great cheap cars. Even though there are plenty of automakers that build affordable cars, those aren’t necessarily easy to find on dealer lots, which is one reason why the average transaction price rose above $50,000 this year.

Do you want some proof of this? Courtesy of Automotive News comes this wild stat:

New-vehicle inventory in the U.S. fell 1.6 percent in November to 3.09 million at month’s end, with vehicles priced less than $25,000 spending just 1.5 days on dealership lots.

But supplies rose to 73 days’ worth from 70 the previous month, according to an estimate by Lotlinx.

A year earlier, new-vehicle inventory was 3.17 million, representing a 69-day supply, Lotlinx said.

Sales days can be looked at in two ways. If something has an extremely low number (anything under, say, 40 is low), it can be because it’s extremely popular. It can also mean that there just aren’t enough of them in dealer inventory. In the case of affordable used cars, it’s probably both. There are cheap cars out there if you want them, but keeping them cheap is going to be a challenge, as 92% of cars under $30,000 are built in foreign countries. With tariffs up, that’s putting pressure on prices.

Looking at what’s available from Cars.com, many of the cheapest cars are sedans and hatchbacks from Nissan and Mitsubishi, with many of them 2024 or 2023 models that have been stuck on lots. This is not just an MSRP problem; it’s a financing problem. If you find a $24,000 car you like and have even average credit, you could be looking at paying more than $400 a month for 72 months with a $1,000 down payment. That’s rough.

I still think this is an incredible opportunity for automakers with plants in the United States to make the math work and pick up volume with something good and affordable. Is there a way to get the Toyota Corolla Cross down to a better price? According to Cars.com, there are exactly three Corolla Crosses and two Corolla hatchbacks for sale in the United States. More!

SK On And Ford Break Up Their Partnership

Ford has been somewhat aggressively rethinking its partnerships this year as it tries to pivot into whatever the future will bring. The latest move impacts Korean battery partner SK On, which planned to operate three battery plants jointly with Ford under the BlueOval SK umbrella.

Instead, SK On will take over full ownership of the Tennessee plant under construction, while Ford takes the two Kentucky plants (one of which is operational). Why is this happening?

The Korea Herald has some insight here:

Industry officials say the split may ultimately work in SK On’s favor. Ford has slowed elements of its electrification road map, delaying several next-generation battery models and adjusting production plans. BlueOval originally projected that both the Kentucky and Tennessee plants would begin operations in 2025, but only the first Kentucky site has come online.

“Ford has steadily scaled back its EV rollout and is showing increased interest in internalizing battery technologies,” an industry source said. “For SK On, the separation provides flexibility to direct capacity toward clearer demand — whether EV or ESS.”

Relying on an American automaker to be your main client for batteries doesn’t seem like a safe bet right now, and if SK On can redirect some production towards energy storage systems (the ESS referenced above), that might be the easiest way to go.

The Tennessee plant is still a part of Ford’s campus in Tennessee, so it’s not a complete breakup.

The EU Is Considering Becoming Super Pro-Hybrid, But There’s A Catch

The European Union has slowly realized that its plan to ban all combustion-powered cars by 2035 probably isn’t going to work, especially if it wants to keep Germany as a going concern. It’s why the European Commission is reportedly planning to add plug-in hybrids and EREVs to an extension, sort of.

From Bloomberg:

The commission’s strategy is to allow a five-year extension of the use of the combustion engine until 2040 in plug-in hybrids and range-extended vehicles. That will be based on the condition that they will run on advanced biofuels and so-called e-fuels — made using captured CO2 and renewable electricity — as well as use green steel in their manufacturing, according to people familiar with the matter.

Such a design will enable the EU to still aim for zero emissions in new passenger cars by 2035, depending on the exact parameters of the proposal, the people said. It will also address the concerns of several car and parts producing nations, which called for clean technologies other than pure electric vehicles to be used after that date.

Having spent the last years trying to make hydrogen happen, a lot of companies are switching focus to eFuels.

Wait, Who Bought Italdesign?

Famed Italian design firm Italdesign (great name!) was purchased by Audi during its last spending spree, but now Audi is short on cash. It’s been known for some time that Italdesign was on the list of assets up for sale, and now there’s confirmation that the company has been sold to a United States firm called UST.

Do I know or understand what UST does? I do not. The company’s homepage claims that it does technology consulting services, and there’s a lot of AI talk. Why did it buy Italdesign? From the company’s press release:

The majority takeover of Italdesign by UST creates a strong partnership that combines UST’s expertise in automotive engineering, artificial intelligence, software-defined vehicle development, and digital ecosystem design with Italdesign’s deep knowledge in vehicle and product design, engineering, prototyping, small series production, and automotive electronics. Together, the companies will be able to offer a comprehensive and integrated range of services – from early concept and design to hardware and software development through to production systems. This combined capability is designed to support the development of fully modern, digitally enabled vehicles.

In addition, UST and Italdesign intend to extend this integrated approach to a global scale. UST will enable Italdesign to expand their international presence across UST’s global footprint in over 30 countries. As the new majority owner, UST will assume operational responsibility while honoring and building on Italdesign’s Italian heritage, design culture, and the talent of its employees.

So long as this means we’re getting another Italdesign Columbus, I’m cool with it.

What I’m Listening To While Writing TMD

It would be too sad dad of me to play Yo La Tengo’s “Autumn Sweater” right? Here’s Palehound’s excellent cover from 2022.

The Big Question

Go on your favorite new car sales site and tell me what you’d buy under $25,000. Show me the link to the exact car.

Top graphic images: Toyota; DepositPhotos.com