←back to thread

The withering dream of a cheap American electric car

(www.wsj.com)
152 points voisin | 3 comments | 17 Nov 24 23:52 UTC | HN request time: 0.001s | source
Show context
bartvk ◴[18 Nov 24 00:05 UTC] No.42168473[source]▶
https://archive.ph/9oIT4

I wish it would have adjusted for inflation. One quote: "The average transaction price for a new vehicle sold in the U.S. last month was $48,623, according to Kelley Blue Book, roughly $10,000 higher than in 2019, before the pandemic." However, about 9200 euros of that is due to inflation according to this calculator: https://www.usinflationcalculator.com/

That's a nitpick though. All in all, an interesting article, which can be summarized as: the EV car market is lacking demand, and car makers definitely don't want to make cheap EVs since it's already so hard.

replies(6): >>42168514 #>>42168570 #>>42168574 #>>42168580 #>>42174015 #>>42174403 #
navane ◴[18 Nov 24 00:22 UTC] No.42168574[source]▶
Is the car 10k more expensive because of inflation or is the inflation so high because the car costs 10k more?
replies(5): >>42168671 #>>42169238 #>>42173259 #>>42173459 #>>42174633 #
1. jerf ◴[18 Nov 24 15:45 UTC] No.42173459[source]▶
One of the best understandings of inflation is to use the mathematical concept of "equality" on those. They're two ways of phrasing the same thing.

A lot of people do a lot of bad thinking when they say "oh, well, inflation is umptybumpkins percent, so the fact that cars are that much more expensive is 'just' inflation, and thus isn't anything".

But inflation is prices going up. When the various sources release "how large inflation is", they are telling you "this is how much prices went up". Ignoring prices going up because "oh, the prices went up because of inflation" is basically using the thing's own existence to argue that it doesn't exist, which, while abstractly sort of impressive, is not strong thinking.

There are some arguments about what causes prices to go up, but that's a separate question.

replies(1): >>42174517 #
2. Majromax ◴[18 Nov 24 17:14 UTC] No.42174517[source]▶
> One of the best understandings of inflation is to use the mathematical concept of "equality" on those. They're two ways of phrasing the same thing.

They're not quite the same thing. All other things equal, if a price increase is "just" inflation then it takes the same number of hours of work to buy the car (or equivalently, the car is worth the same number of loaves of bread).

The alternative is that car prices have increased relative to other goods. This could happen through higher-quality/more featureful/bigger cars (which would be removed from the inflation calculation), or it could come because of some idiosyncratic feature of the industry like the car-chip shortage during covid.

replies(1): >>42183848 #
3. jerf ◴[19 Nov 24 14:34 UTC] No.42183848[source]▶
First, there's a reason I said "One of the best".

Second, if you wrap inflation into your salary like that you are obscuring some important aspects of inflation, most especially the various lag effects that result in your salary being the last thing to update.

While understanding "purchasing power" (the term for what you are trying to describe) is important, it doesn't mean inflation is non-existent. It still has effects on savings, effects on assets, effects due to the aforementioned delays as it flows through the economy, and is in general not something you should view as any sort of "cancelling" like that, or, if you do, only as a final result, not an excuse to just wave it away like it's all just an artifact.