Not to toot-my-own-flute, but I did call 2024 “the year of the hybrid,” and it’s nice to suddenly have some data to back that up. When people who currently own gas-powered cars are going into the market, some of them are buying EVs, but way more are buying hybrids of all varieties. Hybrids offer a lot of advantages, and I’m guessing the biggest one might actually surprise you.
Speaking of surprises, Ford was surprised that their own survey shows that a lot of people would take a 20% pay cut for a little more work/life balance. You know who might want that 20%? People with college loans to pay, which is about to be an issue both in the upcoming election and for people in the business of selling cars.
And, finally, The Morning Dump will end with one of the greatest firings of all time by an F1 team, and I ain’t talking about Guenther Steiner. He’s still alive. Another F1 team literally pulled the plug on one of its employees and trust me, it’s deeply amusing.
The Stat About Hybrids That Surprised Me This Morning
Hybrids have made quite the transition in the last few years in the eyes of consumers and enthusiasts. There was a time when many of us derided the miserly, hair-shirt nature of Prius ownership. Then something happened. I’m not sure if it was the rise of electric cars or the vast improvement in hybrid technology, but enthusiasts are starting to wake up to the idea of hybrid ownership.
My next car, I think, will be a hybrid. Plenty of enthusiasts I know are enamored with the idea of the new, sleeker Toyota Prius.
I said that 2024 was going to be the Year Of The Hybrid for a number of reasons, including the fact that the electrification adoption curve was beginning to slow. Choice, also, was a big reason. Both in that consumers have great choices like the Toyota Corolla Cross and, at the same time, don’t have a choice when it comes to the new 2025 Toyota Camry (which is going all hybrid). There are also some exciting cars on the horizon like the upcoming Honda Prelude Hybrid.
So, here are some good reasons why people buy hybrids:
- They want to be green.
- They are unsure about committing to an EV or unable to
- Hybrids, especially Plug-In Hybrids, are better than they’ve ever been
- The car they want might only come in hybrid form (like the Sienna)
- They want to spend less on gas.
All of these reasons have led to quite an important moment in history: ICE households are switching to hybrids at a record rate of 9.9%, compared to just 5.7% for pure electric vehicles according to this S&P Global Mobility report that looks at purchases between January and October of last year. That’s an interesting stat, but that’s not the one that caught me off guard this morning and I think explains a lot of what’s going on here:
Year to date, gasoline households who acquired another gas model have an average monthly payment of $675 on their new vehicle, according to AutoCreditInsight by S&P Global Mobility and Transunion. Those who bought a full hybrid pay $670, slightly less than their gasoline counterparts. However, households who opted for PHEVs have a higher average monthly payment of $798, and those who chose an EV pay the highest at $828. The data suggest that cost considerations could be a significant factor driving the preference for hybrids over other EVs.
That’s a huge deal. The sense was growing that price parity between hybrids and gas-powered cars was coming, but now it’s clearly here. Look at this little graphic:
If you’re going from a gas-powered car to a non-PHEV hybrid you’re probably paying less per month than if you went with a gas-powered car. You’re paying more for a PHEV and a lot more for an electric car.
This may sound unlikely, but it makes sense when you start to consider what people might otherwise purchase. The cheapest version of the Ford Maverick, for instance, was a hybrid for a while and even if it costs a little more now, I can imagine people buying a Maverick Hybrid instead of a new, more expensive Ford Ranger.
The two most popular non-PHEV hybrids among owners of gas-powered cars are the Honda CR-V Hybrid and the RAV4 Hybrid, both of which start within 5-10% of the non-hybrid models. If you’re stepping down from a Honda Pilot or a Toyota Highlander and choosing then you’re not losing that much space and gaining a lot of efficiency.
Looking at the chart, it’s clear where the trend is going. It’ll be interesting to see how long that trend holds.
Ford: 52% Of People Would Take A 20% Pay Cut For More Work-Life Balance
Ford, in its attempt to understand humans, did a global survey of about 16,000 people to find out what they care about. It turns out that they care about having a work-life balance.
You can go to the microsite to see all of their discoveries, but the biggest fact that stood out is that 52% of workers would be willing to take a 20% pay cut to “achieve a lifestyle that prioritized my quality of life.” Without getting into too much detail, that’s sort of what I did to come work here! No regrets.
Unsurprisingly, there’s a generational aspect to this. Here’s the breakdown of responses to that question from American respondents:
- Gen Z: 56%
- Millennials: 60%
- GenX: 43%
- Boomers: 33%
There is a bit of me that feels like Jodie Foster and I want to scream: THE KIDS ARE SOFT. But I’ve burned myself out and seen my friends burned out over a job that, frankly, didn’t care about them. Also, it’s not a surprise that Millennials feel this the most, as many are at a point in the middle/upper management part of their careers where the striving is highest and the responsibilities match. I have friends who have to take care of themselves, their kids, and their parents all at the same time and balance is something they seriously lack.
My guess is that many GenXers are filling up retirement accounts and reached a professional level where the work might be hard, but they already either balanced it out or died trying. Boomers, obviously, are maybe retired so it’s not as relevant a question.
Also, 51% of people are afraid of AI according to this survey.
It’ll be interesting to see how Ford uses this data, but here’s a clue from a Detroit Free Press report on the survey:
“It shocked us. I’ll be honest,” said Jen Brace, chief futurist at Ford who coordinated the 2024 Trend Report and its findings. “A 20% pay cut is a big deal. I didn’t think we’d get the level of response in terms of number of people; 52% is huge. If you look generationally, and if you look in the U.S. in particular, you saw our younger generations being even more willing to give up money for a better quality of life.”
So if you work for the company and want to work less, maybe offer to trade one day for 20%.
Of course, there’s a real privilege built into this. If you’re working minimum wage the reality is you probably don’t have a great work-life balance and there’s no way to achieve more balance by having less money.
36% Of Consumers With A Student Loan Took An Automotive Loan While Repayments Were Paused
As part of this country’s response to the pandemic, federal student loan repayments were paused. During that time, about a third of consumers with federal student loans took out an automotive loan.
That’s not a big deal except, with car prices hitting record highs during that period, those buyers likely still have those car payments.
The combination of overall increased costs and debt is straining young consumers, said Travis Bowie, general manager of auto finance at insurance company Jerry. In a December survey using Pollfish, Jerry found 28 percent of 1,268 Gen Z respondents said they were more than 30 days late on a debt or rent payment because of the cost of car ownership.
“I don’t really see an option where this gets any easier, at least until the car prices start to come down,” Bowie said. “I think we are probably going to still see elevated delinquencies and defaults in the months ahead.”
As of May, 40.6 million people had student loans totaling $1.6 trillion, according to TransUnion. The average student borrower has about $35,000 in debt, and some consumers have monthly payments of over $500.
I’ve talked before about loan vintages and how there’s a particular set of vintages from the pandemic that people in the industry are worried about because of the bad combination of super high prices, increasing interest rates, and the sudden depreciation of vehicle value. Well, just toss student loans on the pile of reasons why even a soft-landing-style recession might not be great for the auto industry.
Additionally, this could further damper car purchases in 2024.
Mahindra Kills Its Global AI Ambassador
In what has to be one of the most amusing and quick own-goals in racing history, Mahindra has killed its just-launched AI influencer. It all started a few days ago when Mahindra Racing, which competes in Formula E (the traveling business conference dressed up as a racing series), decided that it needed an influencer to talk about “positive change” and be the company’s “Sustainable Tech Champ.”
How using a computer brings about sustainability and helps save energy is… uncertain. There’s a sense that everyone needs to be an AI company and use AI because, frankly, many of the people who work in the C-Suites at major companies are just as dumb as we all are and their whole job is not to create any value but seem like they’re creating value for equally dumb venture capitalists and so nonsense like this prevails. [Ed Note: Jeez, Matt, tell us how you really feel! -DT]
Should Mahindra get credit for killing its AI influencer? Nah, that credit probably goes to our old pal Devin Altieri, a motorsports PR professional who pointed out the obvious in a tweet:
Mahindra creating an AI team ambassador that is a woman instead of simply hiring one real, actual woman to fill that role is so incredibly messed up.
After that death blow, which went viral around the racing scene, Mahindra had no choice but to end Ava’s life, stating: “Your comments hold tremendous value. We have listened, understood and decided to discontinue the project.”
Don’t feel too bad. Ava isn’t a real person. Her death means nothing other than Mahindra listened to people, apologized, and moved on, which is about all you can ask.
What I’m Listening To While Writing TMD
“New Blue Sun” the weird, wonderful debut solo album from Andre 3000 that’s just him playing the flute. I’m serious.
The Big Question
In reference to Ford’s study: Would you take a 20% drop in pay to have more work-life balance?
As noted in the article, I have to think that the emergence of EV options is helping drive the rise in hybrid purchases. Anecdotally, when my Ram 1500 lease came up and I acknowledged my personal reality that I did not need a truck every day, I felt obligated to at least consider an EV. I was tired of getting 16 MPG. I ended up getting an EV (even I was surprised), because it fit my lifestyle. If it didn’t, I would have considered a hybrid for the first time ever, because I was already in a mindset of “let’s save money on gas.”
If 50% of people took a 20% pay cut it would be a pretty quick path to financial doom I reckon. I also don’t think 50% of people could genuinely afford it. You have 3x days off you spend more money on doing stuff to fill the time, and I’d think rarely that’s saving money. If you’re doing another job, it’s still work…
But reality is, 20% equals a day, the question is set up to mitigate the 80/100/100 4 day week argument. It should work about the same as that scheme, but for 20% less cost.
That said, it’s likely more than 20% reduction in income tax revenue due to income tax sliding scales a lot of countries have. I don’t think most countries could afford the reduced income…
I’m an engineer. Time off from designing and building doodads and widgets for money is spent designing and building other doodads and widgets for free.
If paid work was less enjoyable I’d definitely want less of it.
However 15 years ago I was working three jobs just to scrape by, so my saving are terrible.
So while I’d respond yes to a 20% cut in a survey, I wouldn’t do it in real life.
I did just turn down 10% extra cash for an additional hour and a half commuting. So I guess I’m already near my sweet spot.
I’m GenX and I’ve taken a pay cut several times in my life when I just had to rebalance my life. I’ve got it more or less balanced these days, but I’m also part of the Precariat, never knowing when that will change.
Im a gen Z and wouldn’t take a pay cut but I’d say I already have an ok work life balance. I only have to work 5 days a week. Besides the occasional on-call week (which adds a good chunk to the next paycheck) im lucky to work for smaller company that cares about it’s employees. At the end of the day there’s downsides to any job so I’m content.
already took that hit, when we decided to start a family..
about a 25% pay cut. Stayed there, since any better paid job would have required 60 hour weeks, either via travelling or long hours of coding.
That was never worth it.
And re: the work-life balance thing, I feel this. I’ve had a deep ambivalence about my career and job for some years now, feelings I’ll be working through for a while, with an unknown resolution. But one thing I’ve always appreciated about it is that it gives me a very good work-life balance. I have an easy work week and never, ever take work home with me, literally or metaphorically. It leaves me psychically free to devote the rest of my time to what I want.The pay is not bad, but I could easily make 25% more in a different engineering job. But if that came with 25% more stress, I wouldn’t take it.
Funny to me that I see your mention of Andre 3000’s flute album – I had never heard of it until a few hours, ago, when at lunch I was reading an article in the NYT about the phenomenal Shabaka Hutchings, who is putting down the tenor sax to, in a sense, become an amateur again and focus on the flute. That prompted me to listen to this recording of his from August, which is just rapturous:
https://www.youtube.com/watch?v=IzsDvUHRSuA
Would you take a 20% drop in pay to have more work-life balance?
Would and did. Not entirely voluntarily, but when I lost a high-pay, high-stress job in 2005, I intentionally took a step back to get into a job that had way better balance. It was around a 30% cut in pay. But now I’ve been there almost 17 years and it hasn’t been perfect, overall I still think the right call for my career. Pay now exceeds old peak pay by a decent amount, but nowhere near what the old job should pay now.
Best of all, I’m not on call anymore.
Planetary e-CVTs are way more reliable than modern automatic transmissions and many new manual transmissions (looking at you Ford Bronco and Jeep Wrangler). That combined with relatively under-stressed indirect injection atkinson cycle naturally aspirated engines makes for a relatively extremely reliable and durable drivetrain and it comes with high MPG numbers. Why wouldn’t you want to buy it?
Just wanted to say that this is one of your best dumps yet. Keep that plunger handy!
I would not take a pay cut, I am X though and I guess I am of the opposite spectrum and feel like we really need a 20% pay hike to offset the past 3 years of inflation versus COL Raises.
A 4 day work week for less pay is something I intend to pursue when I am within spitting distance of retirement. At the moment I’m fortunate to have good work-life balance for my current salary so I probably wouldn’t take that right now (rather put that 20% toward early retirement), but that will definitely change at some point. Coast FIRE holds a lot of appeal.
I’m not too surprised by the breakdown of the age ranges either. Boomers who are still working are likely saving as much as they can so they can stop working. Gen X aren’t quite to retirement age yet, but they can see it on the horizon and are likely realizing they haven’t saved enough (the statistics on how little retirement savings older people have are shocking). Millenials are old enough now that they’re well through the upward mobility phase of their career and are likely feeling more financially secure than anyone else (retirement is still a ways off, and they’re making more money than they ever have).
Gen Z is the one that I can’t completely explain because at that point in my career I don’t think I could have afforded to take a 20% pay cut. I have a few less than complimentary theories on why this would be true, but I suspect it comes down to a general lack of financial literacy. Early in your career is when it’s most important to start saving. A dollar saved in your 20s is worth drastically more than a dollar saved in your 50s. That is not the time to give up money for time.
They are all living at home, simply put. Either that or you have paid your junk off, and can afford the trade.
Regarding hybrid sales spiking up… it could also be partly due to supply finally catching up to the backorder log and people who have been waiting are finally getting their vehicles.
There’s not really any stepping down that needs to happen, when Toyota has hybrids of the Highlander and Grand Highlander. Those hybrids get 20+ percent better combined MPG than a nonhybrid RAV4, so even if you move up a size, you’re getting a good improvement in economy too.
I think a lot of buyers are open to hybrids but aren’t going to set out to get one unless it’s a small leap, which is why the cost difference (or lack of it) is so key. The upcoming Camry is hybrid-only but Honda all but forces you to go hybrid now if you want a sport trim on the Accord and CR-V, and that type of trim/appearance package is always popular on any car so naturally that’s going to be a draw, hybrid is a bonus. But that does help shed the frumpy image of hybrids past. Any review of a hybrid in the 2000s was quick to point out how many years it would take to recoup the cost of the hybrid variant over a cheaper trim or lesser, more economical vehicle.
Not mentioned is the Civic hybrid that should roll out this year for MY2025 which will be interesting to see how it’s positioned – Civics run pricier than Corollas, so it might end up closer to the Prius in price, but also is a more spacious vehicle.
As for pay – I took less pay early in the pandemic, but it came after a layoff and I networked into a job with past coworkers. Stability and health insurance were a bigger priority for me in the uncertainty of the time. I’m doing better now than I was then so it’s worked out well but I won’t pretend I loved the journey along the way building back up. Would I do it again willingly outside of that circumstance? Don’t know. Most of the people I know that have taken a cut for more of a personal life balance balance have had the advantage of a dual-income household too.
I think historically the hybrid options have always had to cover the cost of a battery and an additional motor. so to kind of hide this they had to make the hybrids more of a high option vehicle, and I imagine this meant lower profits. Certainly it is harder these days to find anything but hybrids and as long as they pull off the maverick shuffle and mean lower up front cost for the higher MPG Hybrids, then I can see more acceptance. There will always be a few that point out the regen brake systems cost over time versus regular old brakes, and the cost of a replacement battery after 8 yeas or so, but this too shall pass.
Agreed, the first Camry Hybrid in 2007 was like $6k more than a base automatic Camry, but the equipment level was more like an XLE and less than $1500 extra. Then over the years they’ve expanded the hybrid trims to have more parity with the ‘regular’ ones.
Also possible that the cost of all the other tricks on an ICE vehicle for economy/emissions nowadays have narrowed the cost to build.
I wanted to like New Blue Sun, but it was just a bit much for me. Maybe if it had been an EP or something shorter. I got bored half way through.
In a country with no socialized medicine and no affordable housing, it’s a little rich for a giant employer to float the idea of paying people less in exchange for giving them time off from a job that treats them so shitty they need to take a pay cut to feel human
It certainly seems like they might be working up to pay cut excuse. that is for sure. I am seeing trucking companies already doing this and construction companies involved in the Electrification push laying off as well. So it would seem that the fed’s prime interest rate hikes are doing the job of slowing inflation, just don’t want to be on the end of the people getting shafted by it.
I’ve already taken the “less pay for a better life” road, but not quite to this extreme. I made it into management but realized the fatter check did not make up for the thinner hair. I had to cut back on some extraneous spending, but that just had the side benefit of making me appreciate the things I kept even more. It was definitely worth it to have a job that I don’t think about when I’m not clocked in.
I wish everyone could do that. Unfortunately, a lot of people whose physical and mental health would greatly benefit are unable to, because every dime they make is necessary to just make ends meet.
Wow, a 20% pay cut in trade for a better work/life balance! It’s a wonder Ford didn’t employ this amazing finding during their recent union negotiations.
Ava ! Gone before I knew you existed! Great image, reminded of Let it Ride (fun flick)
(Millennial) I wouldn’t lose the 20% even though I could handle it. I already have a decent W-L balance and that extra dough going into savings is a large part of how I made that balance. That extra 20% also means checking out of the rat race that much faster.
With my current situation, yes, I’d lose a day’s pay for an extra day off every week. Assuming other benefits stayed the same, that is. But I’m 51, have a pretty good nest egg already, and never feel like I have enough time.
Twenty years ago, it would have been impossible for me. Buy now? Hell yes. Even better, I’ll just keep working the same number of hours, and just retire 20% sooner. How’s that?
That Honda hybrid looks like a 90s Mazda MX6. Hopefully it won’t rust like one 😛
That’s not a Honda, it’s the GR Prius Coupe’.
There is a whole lot difference in 20% between the boardroom and the mailroom. Myself, I’m comfortable in my middle class existence. I made it further up the social ladder then, frankly I was expecting. And I’ve come to terms that I won’t leave this Earth a wealthy man. If my job was like “Hey, you could just like not show up 20% of time and we will compensate you accordingly”. I’d say yes. I like my job, nothing against them. I feel like my work is meaningful. But I’m in my thirties, and I realizing that somethings in life are going to become impossible/ or significantly more challenging in future. Likely due to knee failure, or blow a back strut, or some other body CEL. However, I’ve got years of good office work ahead of me. Given the option, I wouldn’t mind a little extra living now, while I can. The kicker though, is that 20% wouldn’t really negatively impact me. I would own less stuff, which fine. I’m a long way from wondering were my next meal is, making the answer much easier. IDK, maybe I’m lucky enough to lose interest in making money for someone else. We all end up at that same destination, might as well enjoy it.
Now do this questionnaire at a place were the employees are just trying to survive. Like an Amazon distribution center.
Well said. Especially this part:
this
As someone who has in the past worked in various areas of the construction industry, taking the survey at face value I can get more than the 20% pay cut out of an extra day to work for myself/family.
Yes you need something of a passable income to make this work but I can’t afford to pay someone to do what I can accomplish with what the extra day a week with loss of income factored in. Over time I can fix my deck, reno my house ,fix broken appliances do automotive maintence meal prep, cook nice to stay out of restaurants, hell if its the cut of your jib making your own beer is not that hard, but it is certainly time consuming (and requires quite an array of equipment).
I’m still working in the old agrarian sense, it just doesn’t come with a pay stub