Home » It Sure Seems Like There Are More Expensive Electric Cars Than Expensive Electric Car Buyers Right Now

It Sure Seems Like There Are More Expensive Electric Cars Than Expensive Electric Car Buyers Right Now

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Tesla’s strategy of building an upmarket luxury sports sedan while it figured out how to actually mass-produce cars was pretty smart, huh? Think of all those Mercedes S-Class, Audi A7, and BMW M5 owners that ended up in a Model S. I bring this up because Lucid is dropping prices on its very good Air sedans and it’s a reminder that, in a higher interest rate environment, it’s gonna be tough for new entrants into the EV market.

In related news, Rivian’s about to announce Q2 earnings and investors/analysts have some important questions about how that’s all going to work. Almost every major automaker is dramatically increasing the number of electric vehicles its producing, but in the interim these companies still make their actual money from gas cars and so, ahem, they’re not exactly pumped about the impending fuel economy regulations.

Vidframe Min Top
Vidframe Min Bottom

And speaking of pumps, let’s have a recall! Because it’s been a while since we’ve had a good recall.

Lucid Drops Prices On The Air By As Much As $12,400

Lucid Pricing

If you go to the Lucid Motors offers page, like I do every morning, you’ll see some interesting price drops. The base Air Pure AWD is now just $82,400 before a $1,500 destination charge, down $5,000 from before. The Air Touring is down to $95,000, and the Air Grand Touring, like the one I just drove, now starts at $125,600, which is a $12,400 improvement (thanks, Saudi Arabia!).

It’s here that I need to be careful. Lucid has, like other companies, variously raised and lowered prices throughout its short existence. It has adjusted its big Grand Touring model so it doesn’t have to have all of the fancy optional features, which allowed for a lower price at one point. This seems to be a special offer and it’s not clear how long it’ll last.

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While Tesla has seemingly dramatically altered the prices of its vehicles on a whim, traditional automakers also do this. The difference is that traditional automakers have dealerships, so they can keep the price of your Wrangler at $54k and then offer ’employee pricing’ at the dealership level and essentially knock $5-6k off a vehicle overnight. Direct-to-consumer companies don’t have that option.

All that being said, I do think there’s an inherent softness in the startup luxury EV market. For a while, all Tesla Model S sales were conquests (i.e., taking a buyer from another brand). Now automakers are fighting back with their own versions of luxury EVs and, while you may think the Lucid Air is better than the EQS (it is), some people want a Mercedes. Brand loyalty still exists.

Here’s an important series of words from a Reuters report on the price drop:

But rising interest rates to curb inflation and fears of recession have dampened consumer demand, prompting market leader Tesla to slash prices this year.

That has sent ripples through the industry, making it difficult for money-losing startups such as Lucid, which also face competition from traditional automakers launching electric models, to grab market share.

Helping some lower-priced models woo customers is a $7,500 federal tax credit under the Inflation Reduction Act, but more expensive cars such as Lucid’s Air are not eligible.

BMW, Audi, Ford, GM, et cetera are not going away. They will be here for a lot longer and have pickup trucks/crossovers to keep the balance sheet healthy. The big question is: Can startups like Lucid and Faraday Future last long enough to build enough manufacturing capacity to eventually offer a more mainstream and affordable EV?

(Editor’s Note: I’ve said this before and I’ll say it again: the next great EV is a cheap one. I understand the realities of the Tesla Playbook by going upmarket first, but the market has moved on. The first automaker in the U.S. than can make a truly great, modern EV starting around $25,000-$30,000 will have a genuine hit on its hands. —PG)

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What Can We Expect From Rivian’s Q2 Earnings Report?

Rivian R1t 2022 1600 18

Hey, funny that, in addition to Lucid, we should be getting a Q2 earnings report from EV truck/suv/vanmaker Rivian tomorrow. The company had a great Q2, delivering 12,640 vehicles and building nearly 14,000 vehicles, both records.

Here’s what everyone wants to know, via Automotive News:

But competition is picking up in the EV pickup market, with Ford cutting prices on the F-150 Lightning last month and Tesla set to launch its Cybertruck pickup by year’s end. Rising EV inventories are pushing sales incentives higher.

“As pricing becomes more and more important because of rising interest rates, because of more competition, this is going to be something that everybody’s going to want to keep an eye on,” said Travis Hoium, an analyst at The Motley Fool, a stock-focused website.

“There’s a limited amount of demand right now for electric vehicles, so every increase in supply means that companies are fighting for the same customers,” Hoium said in a video.

At $74,800, the R1T, as they note, is way more expensive than a base F-150 Lightning, but I’m not entirely convinced those are aggressively cross-shopped. If you want a Rivian I think you want a Rivian. The same is true for an F-150.

As for the bolded point above, I do think that the $70k+ EV market probably has a real hard cap in this borrowing environment, but there’s probably a decent amount of demand for EVs in the $30-60k range… if more companies can actually build vehicles at that price.

Automakers Don’t Think They Can Reach Goal Of 67% EV Sales In A Decade

Toyota Ev Concepts 1 1560182440For all this talk of automakers aggressively switching over to EVs, the best way to understand what their real projections are is to look at how they’re reacting to upcoming EPA fuel economy regulations.

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The Associated Press has a well-reported feature that sums up the various issues involved and you should read all of it. I think climate change is real and I think we’re running out of time to address it, so I’m sympathetic to this administration’s plan to finally address it. I also think it’s going to be extremely hard.

Here’s how the EPA, in that article, frames it:

The EPA says the industry could meet the [new strict emissions limits] if 67% of new-vehicle sales are electric by 2032, a pace the auto industry calls unrealistic. However, the new rule would not require automakers to boost electric vehicle sales directly. Instead, it sets emissions limits and allows automakers to choose how to meet them.

The AP goes on to note that even if 67% of new sales are EVs by 2032, it might not actually be enough to lower emissions since so many gas- or diesel-burning cars will still be on the road then—or still in production. Green groups agree, and several are demanding even stricter emissions rules. And what do automakers say?

The Alliance for Automotive Innovation, a trade group that represents companies such as General Motors, Ford and Toyota that make most new vehicles sold in the United States, argues the EPA standards are “neither reasonable nor achievable in the time frame covered.”

The alliance says the agency is underestimating the cost and difficulty of making EV batteries, including short supplies of critical minerals that also are used in laptops, cellphones and other items. Sizable gaps in the charging network for long-distance travel and for people living in apartments pose another obstacle.

This is one place where Chinese automakers, consumers, and policymakers are ahead of us. Not only is China the world’s best mass builder of car batteries, it also has a populace that’s ok with smaller vehicles and automakers willing to sell them things like the BYD Seagull.

Hyundai-Kia Recalling Vehicles Over Fire Risk, Ask Owners To Park Outside

2024 Seltos

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Both Hyundai and Kia are having to recall vehicles over a faulty oil pump assembly that could cause the pump controller to overheat and melt. This recall impacts certain 2023-2024 Palisade, 2023 Tucson, Sonata, Elantra, and Kona models. For Kia, the models include certain 2023 Soul, Sportage, and 2023-2024 Seltos vehicles.

Here’s the description from the National Highway Traffic Safety Administration’s report:

The Multi-Layer Ceramic Capacitor (MLCC) located on the printed circuit board in the controller of the Idle Stop & Go (ISG) electric oil pump assembly for the transmission may have been damaged by the supplier during the
manufacturing process. A damaged capacitor can cause an electrical short
circuit while driving and may result in thermal damage isolated to the ISG
electric oil pump circuit board, electrical connector and wiring harness.
Thermal damage at the electric oil pump increases the risk of a fire.

It’s estimated that 1% or fewer of vehicles actually have the defect, but just to be safe maybe don’t park close to your house if you have one of the impacted cars until a dealer can look at your Kia.

The Big Question

What percentage of the U.S. auto market will EVs make up by 2032? I’m looking for a number here. The number was about 5.6% last year. Through the first half of 2023, we’re at about 7.2%. What does the next decade look like?

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Freelivin2713
Freelivin2713
10 months ago

Hyundai/Kia’s are all absolute junk, always have been, always will…no matter what anyone says
Also, hope there are 0 EV’S (all belong in junkyard/destroyed/blown up) and 100% ICE real cars
GAS FOREVER!

Last edited 10 months ago by Freelivin2713
Bongo Friendee Harvey Park
Bongo Friendee Harvey Park
10 months ago

By 2032, I expect Stellantis will have finally gone through most of the 2024 MY Jeep inventory.

HOT_HATCH
HOT_HATCH
10 months ago

There’s a small Ford dealership by my house that has maybe 40 new vehicles on it’s lot. 20+ of them are Mach E’s.

Manwich Sandwich
Manwich Sandwich
10 months ago

“What percentage of the U.S. auto market will EVs make up by 2032? “

I’m going to peg it at 60%… with most of the rest being gas or diesel hybrids. And a small percentage of remaining pure ICE vehicles will be specialty vehicles.

More Fog
More Fog
10 months ago

% of EVs by 2032?

Eliminate anyone who lives in an apartment, which is almost everyone in a major city.

Eliminate anyone who lives in a rural area with no charging network and long distances to get to stuff.

Eliminate anyone who lives in a house more than 20-years old as they will require a very expensive upgrade to the power flowing into their home, complete replacement of their circuit breaker box, new wiring to their garage and the EV charger.

Eliminate anyone who already has an EV as their second car will continue to be ICE.

Eliminate anyone who is a Republican.

Eliminate anyone that a few times a year takes long trips.

Eliminate anyone that lives in a section of the country where there is winter.

Eliminate anyone that can’t afford an EV.

Eliminate anyone that’s retired or retirement age.

Eliminate anyone in an area with a sub-standard electrical grid.

I could go on but it’s late and I’m tired.

Where ‘anyone’ = a large majority of consumers, roughly 80-90%.

Government could force consumers to buy EVs, but that will bump the average age of ICE cars to a highly polluting 20 years.

Tesla is profitable, everyone else loses money on EVs. Ford recently announced they lose $60,000 on every EV they sell. This won’t change as we simply don’t mine sufficient resources globally to support such a rapid increase of production.

As more and more OEMs ramp up EV production they will cannibalize each other resulting in ever decreasing sales per model and declining efficiencies of scale. EVs will sit on dealer lots as production races ahead of demand. OEM bankruptcies coming to a dealer near you.

The largest EV market in the world is China where expensive OEMs including Tesla are seeing rapid declines in volume as local brands such as BYD corner the market.

As gasoline use declines, gasoline gets cheaper. As EVs and renewables increase, electric bills get larger. The idea that EVs are cheaper to fuel is true today. Will it be true in 2032? I expect not.

Government mandates never produce a desirable economic result. Tax credits flow directly to our annual deficit, which will eventually force higher taxes and flip elections. See ‘anyone’ above.

On a tax-credit-free level playing field I’d say EV penetration might reach 15% by 2032, but all things are not equal. Government is placing it’s thumb on the scale. The consumer will suffer. I don’t expect voters to stand for it. Eventually battery tech will make a great leap forward making EVs viable, but today is not that day.

Framed
Framed
10 months ago
Reply to  More Fog

It does help to realize that government has had its thumb on the scale in favor of fossil fuels for a long time…

ElmerTheAmish
ElmerTheAmish
10 months ago
Reply to  More Fog

The idea that EVs are cheaper to fuel is true today. Will it be true in 2032? I expect not.

This is the whole point right here, and you only make it in regard to this one idea. Looking at the market/country/world as it is today, I think you’re over stating many points, but there is truth to them. You’re not thinking about what can be done in the next 10 years to help all of this.

If we wanted to, we could treat the environment like a moon shot, and get ourselves well on the way in the next ~30 years. It’s not impossible to take everyone off that “elimination list” you have at hand.

Government mandates never produce a desirable economic result. Tax credits flow directly to our annual deficit, which will eventually force higher taxes and flip elections.

The government has, essentially, mandated that fossil fuels are the go-to source for our energy needs, and has subsidized them for much longer than you or I have been around. Either BEVs and their infrastructure need subsidized to compete, or the government needs to allow for the full cost of fossil fuels to be realized. You can’t rail against BEV subsidies without acknowledging both sides.

More Fog
More Fog
10 months ago
Reply to  ElmerTheAmish

“I think you’re over stating many points, but there is truth to them. You’re not thinking about what can be done in the next 10 years to help all of this…It’s not impossible to take everyone off that “elimination list” you have at hand.”

My over stating was intentional hyperbole, but I think you understand that. Manwich below, not so much. Removing all the EV objectors in 10-years would require either some major technological leap or an obscene amount of investment. Could it happen? Sure. Will it? I don’t believe that likely. EVs need time to mature, the infrastructure needs time to catch up, the supply chain has to be created. I don’t like being told what I can and cannot buy.

“Either BEVs and their infrastructure need subsidized to compete, or the government needs to allow for the full cost of fossil fuels to be realized. You can’t rail against BEV subsidies without acknowledging both sides.”

In my world the market would decide which was the better technology and subsidies would not be government funded. Making the US energy independent was a goal worthy of investment. I don’t feel those investments need to continue. Are EVs worthy of investment? Sure, EVs offer many advantages. But government investment should go to upgrading our electric grid which is woefully inadequate, not to subsidize wealthy consumers.

Manwich Sandwich
Manwich Sandwich
10 months ago
Reply to  More Fog

Eliminate anyone who lives in an apartment, which is almost everyone in a major city.”

Nope. Plenty of apartment complexes are already starting to offer BEV charging. That will only increase substantially by 2032.

“Eliminate anyone who lives in a house more than 20-years old”

Nope. And I say that as someone who lives in a house that is 101 years old. If you’re in a house that still has fuses and old crap like knob and tube wiring, doing an ‘expensive’ upgrade to modern 200 amp service is something that should be done regardless.

Now having said that, for most people’s daily commute, charging at 12amps/120V provides enough range.

Eliminate anyone who already has an EV as their second car will continue to be ICE.”

How can you be so sure about that? You can’t. If 2 people need to commute in a household, then what is likely to happen at some point is there will be two BEVs in the household eventually.

Eliminate anyone who is a Republican.”

Calling BS on that given that Texas is now #3 for Tesla sales in the USA. Only the most irrational nutcases won’t ever get a BEV. But that same SMALL group are probably the same nutcases that will argue that a carb is every bit as good as fuel injection.

Eliminate anyone that a few times a year takes long trips.”

Calling BS on that. People take BEVs on long road trips already.

“Eliminate anyone that lives in a section of the country where there is winter.”

Calling BS on that given that plenty of BEVs are selling well in places like Canada and Norway.

“Eliminate anyone that can’t afford an EV.”

Irrelevant. People who can’t afford new EVs are the same people who can’t afford new vehicles in general. Those people will do what they have always done… buy used.

And eventually, that will include used BEVs.

“Eliminate anyone that’s retired or retirement age.”

Calling BS on that. Plenty of retirees buy BEVs. One of the most notable retirees is Ed Begley Jr.. who is 73 years old.
https://cleantechnica.com/2021/05/29/ed-begley-jr-walks-us-through-his-electric-vehicles-with-you-1970-onward/

Eliminate anyone in an area with a sub-standard electrical grid.”

People in areas like that might specifically go for a BEV to use for backup power for the times the power is out. And in areas that are in the middle of nowhere, you know what else is unavailable?

Gas stations.

In places like that, it’s actually cheaper and easier to set up a battery bank and back it with a combo of solar and wind power generation. I know of people who have done exactly that and even had surplus power.

Tesla is profitable, everyone else loses money on EVs. “

That’s only because Tesla has been at it the longest and has had more time to refine their designs AND amortize their investments in the tech.

Other car makers will get there too. And FYI… there are other car makers that make money on BEVs… such as Porsche.

“EVs will sit on dealer lots as production races ahead of demand”

That will change once dealers stop charging excessive markups.

As gasoline use declines, gasoline gets cheaper”

That’s not a good assumption to make because much of the cost of gasoline is in the form of tax and as production declines, the cost per gallon will likely creep up.

The idea that EVs are cheaper to fuel is true today. Will it be true in 2032?

Yes it will.

In a nutshell… most of your points are bullshit and you clearly haven’t done any real research and you have no idea of what you are talking about.

Freelivin2713
Freelivin2713
10 months ago

“Only the most irrational nutcases will get a BEV”

Fixed it for ya, ya damn fool

You’re so full of it it’s not even funny, and you “have no idea what you’re talking about”

Last edited 10 months ago by Freelivin2713
Freelivin2713
Freelivin2713
10 months ago
Reply to  More Fog

Exactly!

MDMK
MDMK
10 months ago

If luxury EV depreciation matches that of less desirable ICE marquees, I’ll look forward to picking up my ten year old Lucid for around $23K

WOV
WOV
10 months ago
Reply to  MDMK

Related: Polestar 2s are the absolute insane deal of the used car market right now.

Space
Space
10 months ago

I would love an EV to replace one of my fleet but it’s too pricy on a household income of 50k/yr, also I really don’t like all the new tech in New EV’s. Maybe someday a drop in EV swap will become available for an OK price.

WOV
WOV
10 months ago

Man, the punditry got some MILEAGE out of that one dealer inventory piece, huh!

Aaaaaanyway, in other news, 68% annual year over year growth in US registrations for full-electric vehicles. (Experian, reported by Automotive News, slightly ripped off by Inside EVs. https://insideevs.com/news/676580/us-bev-registrations-may-2023/)

7% market share doesn’t need to CAGR very hard at all to get to 50 – 60% by 2030. That’s a 20 – 35% CAGR, feels like solar growth in the 2000s. At which point, no, I agree, the adoption curve will tend to boomer out. People with specific numbers of cylinders in their usernames still won’t be buying ’em. But…y’all are doing a lot of mesearch here, you’re not real representative of the buying public.

86-GL
86-GL
10 months ago

While the average new car price creeps ever closer to $50,000, manufacturers are forgetting that for many median income households, (~ $70,000) this is a monumental purchase.

Now, obviously not all of these household are buying new vehicles, but some are. And of those, some of them are definitely purchasing new vehicles for at least the average new price. How are they doing it? How can they justify spending so much of their income on a single vehicle?

Answer: That new $50,000 vehicle must account for EVERY use case. Commuter, family hauler, road trips, camping, towing, funerals, graduation, date night, dump runs, on and on. We are talking about SUVs, crossovers and pickup trucks.

This is clearly not the best or only way to outfit a family with automotive transportation, but that’s where we seem to be at, for better or worse.

For this substantial group of buyers to consider purchasing a vehicle that does not meet their every need, (Like a EV currently) they will need access to alternative transport options. That means this new vehicle (potentially an EV) needs to be cheap enough that the rest of their needs can be met with the remainder of their budget, and this vehicle needs to be nice enough that the aforementioned large single vehicle solution is not more attractive.

There are lots of things that may help to sway this balance, but it is not unprecedented. After the 1970s fuel crisis, Americans gave up their V8 family sedans, wagons and personal luxury cars for smaller, more efficient equivalents. That was a crisis of affordability, with fuel savings as a carrot. Clearly those large vehicles crept back into our lives via fuel efficiency loop holes for light trucks. The new crisis is emissions, and those loop holes will be closed via regulation- Which is why automakers are losing their shit. A return to smaller vehicles can and will happen, but these new electric vehicles need to be good, and the infrastructure to support them needs to get built and function properly.

Last edited 10 months ago by 86-GL
ScottyB
ScottyB
10 months ago

Obviously a goal of 67% isn’t realistic as long as the marketing plan for EVs in North America continues to primary target the wealthy.

Ron888
Ron888
10 months ago

So i have to ask: Does the USA yet have solid plans for increasing renewable power generation? Because without that, swapping over to BEVs is only an incremental improvement.
I know my country (australia) is really lagging behind on this.In fact i think we’re even further behind than the US

ScottyB
ScottyB
10 months ago
Reply to  Ron888

Actually the US is such a backward country with 50% of it’s politicians so beholden to Big Oil many areas are working feverishly to restrict solar and wind.

WOV
WOV
10 months ago
Reply to  Ron888

Yes; the Inflation Reduction Act was a pretty massive kick in the pants for a renewable sector that had already been doubling in size every ~36 months for 10 years. Currently 20% of all generation (with another ~20% from nuclear). Grid carbon emissions in the US peaked in 2007 and have been steadily down since – the question is how quickly. Permitting reform will be the issue.

Ron888
Ron888
10 months ago
Reply to  WOV

Good to hear!

Silent But Deadly
Silent But Deadly
10 months ago

“Not only is China the world’s best mass builder of car batteries, it also has a populace that’s ok with smaller vehicles and automakers willing to sell them things like the BYD Seagull.”

A populace that is OK with small cars is not a feature of just China. I would argue that it’s very nearly a universal attribute of everywhere outside North America.

ScottyB
ScottyB
10 months ago

Sadly we are starting to infect Europe’s thinking though. Ford’s is dropping small cars left and right and and Volvo just announced no more saloons or estates for the UK.

GreatFallsGreen
GreatFallsGreen
10 months ago
Reply to  ScottyB

IIRC the sendoff video Ford made when they dropped the Fiesta hinted at a future electric replacement – which for the small car segments and in those markets, does make sense. Whether we see those here is another thing, but doubtful at least initially given the mixed results at selling the same cars in both markets in the past (and that goes beyond Ford and any damage they did to their rep in the small segment).

As far as the crossover push, that was well in effect at least as long as it was here, Nissan I’d say was the first when they cut models from the small/medium segments for the Qashqai (aka Rogue Sport) and since added more crossovers and others have been doing the same, many have crossovers in their top 10 sellers just as we do.

Things and stuff
Things and stuff
10 months ago

25%

EXL500
EXL500
10 months ago

Unless I’ve overlooked this in the comments, many, many of us have nowhere to charge these thing. Most of my friends live in condos or apartments with no chargers. Should we leave our cars a 10 minute walk away by city hall while fighting over the 3 chargers there?

I’m retired. 5k of my annual 8K miles are a big trip. Can I charge in 10 minutes? Range isn’t so much an issue, but who wants to sit around and wait to be charged. And then again.

Oh, and well over $30K for most EVs? No.

Rob
Rob
10 months ago

Interest rates contribute a lot to this. The car market lost its damn mind with the dealer markups for ages, and now those are going away in favor of interest rates.

Fuzzyweis
Fuzzyweis
10 months ago

For EV adoption by 2032, I’m thinking like 20% as it’s gonna take a few years or more to dig out of the current hole the economy is in, actually dig is a good term as don’t think we’ve hit bottom yet. So think 20% is fairly optimistic. The rest of the world like Europe and China may be up near 50% by then, but US is definitely gonna take a long while.

Not seeing much in the pipeline for America for cheap EVs, GM’s going to redo the Bolt so maybe that’ll help, but not seeing much else from anyone. Where’s the Fiesta EV? The Neon EV? The Yaris EV?

What happened to the old ‘get them in the cheap car for brand loyalty’ train of thought? Now it’s just, quick get their $60k cause we may not sell them something again for 12 years!

Cable jockey
Cable jockey
10 months ago
Reply to  Fuzzyweis

I keep seeing that the economy is in a bad way in the comments, and I have to wonder what metric you all are using? Job market is strong, inflation is down to 3% (as of July), which isn’t ideal, but wage gains are now outpacing it (5.6% as of June), interest rates are high, but they’ve been historically low for the past 15 years, so there’s some recency bias there, and GDP is still growing at 2.4%.

I agree with most of what you said, I’m just trying to figure out why people here are sounding so gloomy about the economy overall when, by most metrics, it’s doing just fine.

Toecutter
Toecutter
10 months ago
Reply to  Cable jockey

The official numbers have a disparity to the observable reality. This is what “less than 4% unemployment” looks like:

https://i.imgur.com/0uyALPF.jpg

https://i.imgur.com/RJyYqna.jpg

https://i.imgur.com/wcBnhgu.jpg

https://i.imgur.com/fAlGQzB.jpg

Almost everyone I know who lives within a 10 mile radius of there doesn’t have a job and wants one or is severely under-employed. Lots of working homeless people priced out of rent, as well.

There ARE lots of “NOW HIRING!” signs everywhere there is any signs of life and have been so for years. I applied to many of those jobs when I was jobless, and they told me the position was filled or that they didn’t need anyone, if they responded to my application at all. The “NOW HIRING!” signs remained. I was willing to take crappy low-paying jobs just so I wouldn’t starve, and after more than a year of searching, got a position as a dishwasher at a local COVID den(restaurant). Thousands of applications later since initially being jobless, I’m employed as an electrical engineer again. Some of the people I went to university with are qualified to work, willing to work, and are(or were at one point) homeless.

Last edited 10 months ago by Toecutter
V10omous
V10omous
10 months ago
Reply to  Cable jockey

Don’t bother bringing data, some people here are so invested in vibes and misery as a permanent condition of life that they can’t see good news when it’s all around them.

Generally these same people would be the first ones to be up in arms if someone used anecdotes in place of data or said the government numbers couldn’t be trusted in any other context.

Frankencamry
Frankencamry
10 months ago
Reply to  Cable jockey

A lot of it is premonitions of upcoming hardship. The resumption of student loans, accrued savings turning negative for several months as people dealt with inflationary pressure, things like that. A sizable cash crunch shows up first as a reduction in inflation, which is part of why the Fed hasn’t been willing to say inflation is truly reducing.

On the whole things aren’t bad, but you can find enough data to support most any outlook.

Fuzzyweis
Fuzzyweis
10 months ago
Reply to  Cable jockey

It’s not just interest rates but total cost of living, everything is still high from the Covid bump and of course won’t come down if businesses can help it. Fast food for 2 is now almost $20 when it was $10 5 years ago, groceries are up, power costs are up. In theory my bills should be less than they were 5 years go when we rented for $200 more a month than our mortage is now, and we had 2 car payments instead of 1 now, but somehow I’ve still not got throwing around money. So there’s the data, and then there’s the reality, and as other folks have said the student loans are about kick back in so that should help.

Robert L
Robert L
10 months ago
Reply to  Fuzzyweis

California as a whole is already at 25% and the core Bay Area counties are ~40%.

Strangek
Strangek
10 months ago

42. The answer to life, the universe, and percentage of the US auto market that EVs will make up in 2032.

Last edited 10 months ago by Strangek
Toecutter
Toecutter
10 months ago

Prediction: What does the next decade look like? I predict in the USA, new vehicle sales will be close to 1/3 of what they are currently. There will be a comeback of cheap cars that cost less than $20k in today’s dollars, mostly electric or if ICE getting 60+ mpg, but most people will be priced out of buying them. The Big 3 in the US may not even exist, or if they do, it will be the result of government bail-outs plus aggressively keeping out foreign competition from China/India/ect, as perhaps at some point in the 2020s, the dealership lots were full of unsold new and used cars and most ended up sent to the crusher. Tesla will be the dominant US automaker, but it too may see greatly reduced sales volume vs today.

90sBuicksAreUnderrated
90sBuicksAreUnderrated
10 months ago
Reply to  Toecutter

Well, that’s a hot take if I’ve ever seen one. The U.S. is far too car dependent for new auto sales to fall that low, especially considering our rapidly aging existing fleet. Even after the Global Financial Crisis, annual sales fell from 16M in 2007 to a low of 10.5M in 2009. So even in the depths of a global credit crunch and the worst recession since The Great Depression, auto sales only fell by about 1/3 and had completely rebounded within five years.

I’m not sure what your basis for that statement is. If consumers start demanding more affordable vehicles and trims, the companies will adapt (we’re already starting to see this happen). If the government mandates become too onerous in too short of a timeframe and hurt affordability and sales, any Presidential administration (Democrat or Republican) will quietly or not-so-quietly roll them back or push the implementation horizon further out. If you’re predicting a massive recession greater than 2008, well, it’s impossible with certainty to say that you’re wrong. However, there are few indicators actually pointing to that being plausible and I personally don’t think you have some kind of special knowledge and insight into the situation (no offense).

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