On today’s Morning Dump we’ve got BYD up 350%, used car prices down 1%, EU carbon emissions down 55%, and BMW’s H dreams up 1,000%.
Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.
Prices Are Down 1% Off Of Their Highs But…
Most experts are saying used car prices are coming down, with Manheim saying wholesale prices are down 0.1% year-over-year and Edmunds showing a 1% decrease off their May highs, according to this story from the Associated Press. That’s all well-and-good, but what if you need a car now?
From the same AP story:
Ivan Drury, director of insights at Edmunds cautioned that it will take years for used prices to fall close to their pre-pandemic levels. Since 2020, automakers haven’t been leasing as many cars, thereby choking off one key source of late-model used vehicles.
Similarly, rental companies haven’t been able to buy many new vehicles. So eventually, they are selling fewer autos into the used market. That’s crimped another source of vehicles. And because used cars aren’t sitting long on dealer lots, demand remains strong enough to prop up prices.
It’s so bad that people are out here trying to salvage Chevy HHRs even if it kills them. It’s worth noting that there are still decent options for people who want something cheap, as we discussed with Kevin Williams on our latest podcast.
BYD Saw A 350% Increase In Q3 Profits
Q3 numbers have been mixed as no two automakers have had identical reactions to two years of supply chain disruptions, inflation, fed-rate adjustments, and the latest season of Great British Bake Off. It’s rough out there. Unless you’re BYD.
The company’s Q3 report is out and, per Reuters, BYD made $789 million, up 350% from a year ago. That’s not just a fluke, profits are up 281% for the first nine months.
How’d BYD do this? Well, it’s now the biggest EV company in all of China and they’ve been spanking Tesla lately. As the South China Morning Post points out, this is at least partially due to their pricing strategy:
“BYD’s cars have become increasingly popular in China because more low- and middle-income drivers are opting for EVs,” said Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai. “The customer base is huge in China, and BYD vehicles are turning out to be dominant in the segment.”
Unlike Tesla and its Chinese rivals – smart EV builders like Nio and Xpeng – which assemble and sell premium cars priced above 300,000 yuan, most of BYD’s models are priced between 100,000 yuan and 200,000 yuan.
BMW Is Still About That H, ‘Bout That H, ‘Bout That H, NO Hybrid
I continue to be skeptical about hydrogen in regular passenger cars, though I’ll be happy to be wrong about their prospects. Certainly there are real possibilities for trucking and aviation, but it’s not where I would be as an automaker. BMW, though, is still super into it.
Our pal Hannah Elliott at Bloomberg chatted with BMW’s chairman Oliver Zipse at Goodwood and he doubled down on hydrogen:
“After the electric car, which has been going on for about 10 years and scaling up rapidly, the next trend will be hydrogen,” he says. “When it’s more scalable, hydrogen will be the hippest thing to drive.”
Hippest? ORLY? He continued:
“To say in the UK about 2030 or the UK and in Europe in 2035, there’s only one drivetrain, that is a dangerous thing,” he says. “For the customers, for the industry, for employment, for the climate, from every angle you look at, that is a dangerous path to go to.”
I definitely buy the argument that being wholly dependent on one type of drivetrain creates problems (much like Germany being addicted to Russian gas) but I’m not sure that hydrogen is going to do better than hybrids.
EU Bans New Combustion Cars From 2035 But F’Real This Time
It seems that the EU has maybe overcome Germany’s intransigence over a full-gas ban by 2035, if I’m reading this Bloomberg article on Automotive News story correctly. Germany was going to reject the move, but I guess they’re not, now? The deal pushes for 0% emissions by 2035 and a 55% drop by 2030 compared to 2021 levels.
Oh, hey, it’s good ol’ Oliver Zipse again:
Sure. I think the “framework conditions” might include a lot of money to subsidize hydrogen? Just a guess. My favorite part of the article is this:
“With today’s agreement, a ‘Havana effect’ is becoming more realistic,” Jens Gieseke, a lawmaker and negotiator from the conservative European People’s Party, said in a statement. “After 2035, our streets might become full of vintage cars, because new cars are not available or not affordable. Today’s deal slammed shut the door to new technological developments and put all the eggs in one basket. This is a mistake.”
Don’t threaten us with a good time! It’s a fair point, with car prices staying high for a while, but electric cars also work and the issue isn’t so much the vehicles as the consistent source of power for them.
The Flush
It’s pretty obvious by now to some that Bloomberg Opinion contributor Matt Levine’s style is highly influential on what I’ve been doing here. It’s good! Read him! In particularly, I’m slowly working my way through his 40,000-word epic on crypto currency. It makes me wonder: Do you expect to ever buy or sell a car using crpyto? Have you? Do you have any BTC or ETH?
Photos: Nissan, Chrysler, BYD, BMW, EU Commission