The withering dream of a cheap American electric car

(www.wsj.com)

152 points voisin | 4 comments | 17 Nov 24 23:52 UTC | HN request time: 0.001s | source

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bartvk ◴[18 Nov 24 00:05 UTC] No.42168473[source]▶

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.

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1. torginus ◴[18 Nov 24 16:32 UTC] No.42174015[source]▶

>>42168473 #

I honestly don't get it - the median income in the US is like $35k - assuming people don't want to drive vehicles older than a decade, do people really spend a sixth of their total income on cars?

In Europe the numbers are even worse. I'm fairly convinced only rich people and businesses buy new cars

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2. epistasis ◴[18 Nov 24 16:38 UTC] No.42174078[source]▶

>>42174015 (TP) #

A lot of people buy used cars rather than new cars. The wealthiest buy the new cars, eat the cost of most of the depreciation, then sell them.

If we had a functioning housing market, you'd see something pretty similar there too. The wealthiest would be the ones paying for nearly all the new construction, instead of driving up the cost of housing for everyone else.

3. vel0city ◴[18 Nov 24 16:39 UTC] No.42174088[source]▶

>>42174015 (TP) #

Median incomes of single earners get pretty skewed from people willingly working part-time or low-income jobs as secondary income instead of primary income. I usually prefer analyzing things on household income for this reason. Think a grandpa working a part-time gig as a greeter at Walmart while going back to a multi-generational household or a stay-at-home parent working a part-time remote call center job while the kids are in school or a teenager working a part-time job. All of these positions would pull pretty small amounts of overall yearly income but chances are they're not the sole source of wealth/income they have access to.

The median household income is ~$75k. There's ~131M households in the US. This means there are 65M households making more than $75k/yr.

But yes, generally speaking wealthier people are the ones buying new cars with a lot of people buying used models.

4. hansvm ◴[18 Nov 24 16:53 UTC] No.42174252[source]▶

>>42174015 (TP) #

> do people really spend a sixth of their total income on cars

Yes. It's a huge expense for a lot of Americans. Either the primary expense, or just behind housing.

> assuming people don't want to drive vehicles older than a decade

That's not a great assumption, especially if you're looking at people with less money. The normal lifespan of a car is 15-25yrs, and _somebody_ is driving those cars.

As you suspect though, the flow of new vehicles largely goes into wealthier people (average incomes in the $100k range), and after 6-10yrs the used cars trickle down to everyone else and live ~20yrs in total. There exist a number of exceptions (e.g., people getting a new car for reliability and not realizing that you could replace the engine and transmission three times over for the extra premium they're paying -- trying to do the right thing and make a fiscally responsible decision but accidentally doing something more expensive), but those aren't the norm.

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