The best advice for new car buyers I’ve had over the last couple of years, presuming they needed a car right now, is to buy what they can actually find. Inventory was extremely tight and, depending on what you wanted, there was no guarantee you’d be able to locate a similar car again. That’s finally changing and it’s mostly good news.
The Cars Are Back! The Cars Are Back!
You know what’s cool about going to a dealership in 2023? They have cars! Cars are fun. We like cars. We are, I think it’s not too controversial to say, pro-car.
There’s a concept in the automotive space (and other similar businesses) called SAAR. This stands for the Seasonally Adjusted Annual Rate. If you sell sandwiches your expectation is, with some slight variances for geography and other factors (i.e., you’re located on a boardwalk in a beach town), that you’ll sell about as many sandwiches in March as you will in October. Cars are not sandwiches.
For instance, in 2019 (the last normal-ish year), carmakers in the United States sold about 1.3 million cars in both February and September, but more than 1.6 million cars in May and August (the first and last months of the summer selling season). Having a SAAR allows you to look at the sales data from the first quarter and estimate what the annual rate of sales will be for the year.
Car sales dropped significantly in 2020, 2021, and 2022 as automakers hit multiple supply chain issues as an after-effect of COVID, the War in Ukraine, and the cancellation of Good Girls. In the United States, about 13.8 million cars were sold in the U.S., down from over 17 million in 2019. It’s not that people didn’t want cars, it’s that there weren’t as many of them to be sold.
**Trumpets play in the distance**
Hear ye, hear ye, the automotive market experts at Edmunds have sent a scroll from California bearing good news:
The car shopping experts from Edmunds forecast that 3,502,324 new cars and trucks will be sold in the U.S. in the first quarter of 2023, which will be a 5.2% increase from the first quarter of 2022 but a 1.8% decrease compared to the fourth quarter of 2022.
“The auto industry’s wild rollercoaster ride the past few years has finally begun the transition to a smoother, more predictable one as inventory continued to improve in the first quarter,” said Jessica Caldwell, Edmunds’ executive director of insights. “Although the market is nowhere close to the bargain-heavy landscape that consumers came to expect prior to the pandemic, car shoppers should be happy to see that some incentives are cropping up after more than a yearlong drought as inventory levels continue to rise.”
Alas!
Jessica Caldwell is, in my mind, the best analyst out there, so heed her words closely. Incentives, for some people, might be coming back. Cars are sitting on lots a little longer. Cox Automotive, for their part, estimates SAAR was 15.0 million cars in Q1. If we finished the year that way we’d end up with an extra million+ cars sold in the U.S. this year.
Of course, it depends greatly on the automaker. If you want a Toyota, you may be waiting a bit, if you want a Honda or a Nissan product, the news is probably better.
Tesla Sales Up, But Not By Enough To Make Everyone Happy
Building cars is hard. Selling cars isn’t that easy, either, but Tesla has gone from a company repackaging Lotuses to a real deal automaker selling 1.3 million vehicles globally last year. That is remarkable.
This streak is continuing with a first-quarter record of 422,875 vehicles. That’s an increase of 36% y-o-y and 4% from Q4 of 2022. And all it took was a massive price drop.
All good news, yes? Well…
Here comes a Reuters report to rain a little on that parade:
In January, Tesla slashed prices globally by as much as 20%, unleashing a price war after missing Wall Street delivery estimates for 2022. The basic Model Y that used to sell for $65,990 now costs $54,990.
“If they wouldn’t have done the price cut, it would have been ugly. I think what it tells you is the economy is getting tough,” Gene Munster, managing partner at Deepwater Asset Management, said on Sunday.
It gets worse, maybe, because no one can agree how many cars Tesla was supposed to sell for Q1. Was it 420,000 vehicles, which they beat? Or 432,000? Which they did not.
Tesla said a consensus of more than 20 analysts called for 421,500 vehicles delivered, Tesla investor Gary Black said in a tweet. Reuters could not independently confirm that figure.
The consensus is “all over the place,” Munster said.
I guess we’ll have to see what the company can do to get people to buy cars in Q2. Free Twitter verification?
Get Ready To See Lithium Processing Facilities Everywhere
Lithium! It’s good for bipolar disorder. You can put it in batteries. Sometimes they’ll play Incubus and Weezer back-to-back. There’s actually a lot of it in the earth in a lot of places, though most of it is mined and produced in just three countries: Australia, Chile, and China.
That’s about to change. Tesla’s building a lithium refinery in Corpus Christi, Texas (go Hooks!). And Europe, which has one single little refinery on the outskirts of London, is about to get a lot more facilities as well. This Bloomberg story summarizes it quite well. There is, per the report:
- A refinery coming in Brandenburg, Germany
- Another one down the way in Bitterfield, Germany
- Two more coming in the northeast of the UK
- A $616 million facility in Finland
There’s even more planned, largely because both the United States and the European Union are making companies source lithium from places that are not China, Russia, Iran, Venezuela, or other no-no countries. The article does make a good point:
Ultimately, the plants will need more than government backing to thrive, and the focus in Europe’s embryonic lithium industry is on shoring up supplies to feed the plants and striking deals with automakers who were caught short by last year’s supply squeeze. Tesla Inc. CEO Elon Musk said during last year’s boom that lithium refining is a “license to print money,” but the steep decline in prices seen since then offers a reminder of the commercial risks involved.
Still, I’m not gonna bet against lithium until I see EV sales go down quarter-over-quarter.
E-Bikes Could Get Cheaper, Too
Pro-car as we are, we recognize they’re not always the best way to get around in every situation and people deserve options. You know what’s a good way to get cars off the road? Bikes! You know what’s not always a good replacement for the range and cargo capacity of a car? Bikes.
Somewhere in the middle is the motorized bike, a.k.a. the e-bike, which offers some added benefits and range (and often cargo). Denver has been the leader in e-bike promotion after a successful program to offer rebates to income-qualified people who want to buy one of the bikes.
Now, per Axios, Congress is looking to replicate that program nationwide:
The big picture: The bill, called the Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act, follows Denver’s successful e-bike rebate program.
- Under that initiative, income-qualified residents get up to $1,400 toward an e-bike, while others get up to $500.
By the numbers: Denver’s e-bike rebate program “was estimated to have cut 2,040 metric tons of carbon dioxide in 2022 and saved nearly $1 million in avoided fuel and electricity costs,” Axios’ Alayna Alvarez recently reported.
This is just a proposed bill, not a passed one, and it doesn’t look big enough to get everyone to ditch their CR-Vs for a VanMoof Cowboy 4, but it could be a start.
The Big Question
Are you in the market for a new car? Are you waiting?
Photos: Tesla, Lithia, Honda, VanMoof
I am in the new car market and I am waiting, but not because of prices. It’s mainly because the cars I want are not currently sold in the US.
My best bet will probably be the Fiat 500e coming to the US in 2024.
Waiting on one to get built and the other to show at the dealer (it got through customs). It’s been 9 months for the built one and going on 7 months for the “get on with it” one.
I’m in the market for a new car as a daily driver because my current daily has an automatic tranny and I recently realized it is sucking the life out of me. I needed something with a manual, back seats big enough for my 6’ tall boys and adjustable lumbar support for the drivers seat and settled on a new BMW M3 w/ manual. I placed an order at MSRP two weeks ago and will be getting a further $1500 discount from USAA membership.
I call BS. Maybe dealers have dropped the “Market Adjustment” line item to say that they’re selling at MSRP, but they’re all still adding $2-4k for the “mandatory” Tru-Coat and nitrogen-filled tires.
A couple dealers near me have started offering money off MSRP on a few vehicles. Not a lot, but the situation is changing now. Maybe it varies significantly by region.
It’ll be interesting to see how they transition. They’ll (hopefully) be going from having the upper hand due to lack of inventory and having the ability to hold cars hostage for thousands of dollars of pure profit to back towards the times when just about every new car had some sort of discount. I’m sure some will hold on to selling the idea of “scarcity” as long as they can and try to convince buyers they should still pay for TruCoat.
Buyers will also have to be savvy enough to realize the same car is available across town again, and accept being ripped off on the one with TruCoat put on at the factory.
In my area it depends on the brand and model. Discounts can be had, but probably not on anything you actually want.
If the consensus is “all over the place” there isn’t a consensus! A consensus is when everyone agrees!
The Big Question: Yes, I have become convinced of the case for a PHEV. I “want” a Volvo XC60 to replace my Xc70 with 175k miles but geez, the money! And the complexity of its ICE! Seems like a car to lease not buy. Ran across “Recurrentauto” which purports to aggregate battery data and predict battery health in used EVs. (Tracy could’ve used it to eval his i3.) If data from Recurrentauto is reliable it could give me confidence shopping used PHEVs. Anybody know about them?
I’ve had my bolt on recurrent for a few years, since it seemed like it might be useful. It only appears to monitor distance driven vs. state of charge though, and does not appear to actually give kWh of battery capacity remaining data. It’s silly to see it oscillate with its evaluation with the seasons, basically- wow, you drove 300 miles on a charge in nice weather in October, you have a battery that is better than new! – then in January with below 0F temperatures – your battery is severely degraded, and you have lost a large chunk of range. Not the most useful.
Thanks for your comment. Just what I was wondering.
That volvo is so tasty though. The Sorento PHEV might be a less deluxe alternative? $40K
Right. That’s why I would buy a used Volvo PHEV if I thought its battery wasn’t slowly crapping out. But yes, the Kia, probably so.
I just purchased a Mazda CX-50 2.5T a few weeks ago. I had to travel an extra hundred miles to a dealer that took $1100 off list, plus Mazda had $500 rebate and financing incentives. The closer dealer is tacking on $3700 additional markup plus “ceramic finish” and “cold weather package” for total markup of around $5100.
I was in the market. I just placed an order for an M240. According to an email I got this weekend it went into production today.
I was in the new car market from December 2021 until February this year, when I was finally able to get a car!
TLDR; the top 8 cars on my list were either always above MSRP (Toyota hybrids), unobtanium (Maverick hybrid) or blocked by low dealer allocations in my area (Bolt, ID.4). I ended up with a Tesla Model 3 after the price drop and IRA tax credit applied again.
I’m still fishing for the sweet unobtanium that is the Maverick Hybrid. Both my Touareg and my wife’s C300 are still running strong so I’m in no real hurry to buy and I have to admit, I kind of like that Ford sends me an email every six weeks to let me know they still don’t have a clue when my order will actually enter production. I like an automaker who at least pretends to care. I figure another year or two and I’ll finally be able to take delivery and in the meantime the cash I have set aside to pay for it can just keep earning me interest to help cover the inevitable price increases.
We got ours Mav in February. So far, we like it. It’s my wife’s daily. Mileage is real. Interior is budget, but not cheap feeling. Some nice touches, drives nice on the highway. We got the Hybrid Lariat.
I was thrilled to see a base Maverick XL on my local dealer’s lot last week. I was less thrilled with the $42,999 price. That’s about a $20K mark up. And they wonder why people hate them?
I don’t get who buys those. If you can afford $43k, you can afford something nicer. The whole point is that the base Maverick is a good value at its sticker price. Jack it up too far and its no longer worth considering.
We are, although we are forced to wait. We have a reservation for an order for a Chevy Bolt EUV. Hopefully we’ll see some progress on this by mid-May.
Oof – not to be a total pedant, but Cowboy sells the Cowboy4. Vanmoof is one of their main competitors and the new models are the A5 and S5. If you’re just trying to troll the e-bike nerds, job well done.
My fiance got a gladiator in August of 2020, when she hit the mileage limit of her wrangler only halfway through the lease. But, new cars weren’t moving well yet, and used cars were high. But thank God we went with a 4 year lease this time. Hoping that the market is better next fall when it’s new car time- because we won’t buy this one for 3 reasons. 1- new jeep off warranty. 2- northeast, rusty jeep country. And 3- I have 3 project vehicles. She needs something I don’t need to work on.
I’m waiting. Waiting for the market to make a car I actually want at a price I can afford, or for Subaru to bring back the WRX hatch, whichever comes first.
I loved the Good Girls reference lol if I could only make money like these girls haha
That’s great that more places have cars, but my local Toyota dealership is a ghost town, and it’s not some little small town dealership.
Also, a friend of mine just gave up on the Lincoln MKC Hybrid he ordered over a year ago, and bought a CRV.
Supply is definitely opening up, but some vehicles/brands are still quite log-jammed.
I noticed that at the Ford-Toyota dealership in town (one of the largest in a small state, for both brands). The Ford side of the lot is almost to “before times” level of inventory while the Toyota side is empty except for a sandwich board “NO TOW DROP-OFFS” sign.
I have the itch starting, but don’t necessarily want to be in the market yet. I still have a year left of factory warranty, but also depends on the timing of when consumables will be due and if I decide I have different vehicle needs, or wants. But a new car doesn’t need to be a priority for me right now.
I have several friends who are casually browsing, or ready to car shop, but have been holding out because of the market and/or because they aren’t in dire need. Some would buy used but that’s even nuttier for prices. Only I think 2 people have bought, one because their vehicle was totaled, the other just for more space and a better family vehicle than the Wrangler Unlimited (which already had strong resale).
You know what’s even better than ebikes? Building an enclosed microcar using a velomobile as a starting point. If a 150-200 lb vehicle were built with the CdA value of a Bulk velomobile(somewhere around 0.04 m^2, or less than 1/10th the drag of a new Prius), and the bicycle drivetrain removed and replaced with electric hub motors, with DOT rated wheels/brakes/tires/suspension, with increased ground clearance to 6 or 7″, you’d have a vehicle that was safer than a motorcycle and safer than most cars made prior to the 1980s in a wreck, but would be comparable in performance to most modern cars using cheap Chinese ebike parts, would be extremely easy to repair and replace parts with, and would even have trunk space.
You’d only need about 15 peak horsepower or so to match a modern 4-cylinder ICE car regarding acceleration and top speed, and sold as a 3-wheeler, it could be marketed as a “motorcycle” to get around regulations. It would take roughly the same amount of road footprint as an ebike, and offer the rider weather protection. Without having to pedal it, it would even make sense to design creature comforts specific for this micro vehicle such as air conditioning and heated seats.
You wouldn’t need anything larger than a 4 kWh battery pack to get range comparable to the 200+ mile range EVs on the market, which would make it very inexpensive to replace. The fueling cost would be as close to free as you could get on a per mile basis, and it would even make sense to cover the vehicle in solar panels because it wouldn’t require much expense to do so given its small surface area, which in turn could alow the sun to give it 50+ miles range a day without needing to plug it in.
In mass production, it is not inconceivable that such a “car” would be comparable to a moped in price, but offer greatly more value for the money than a moped, or even a motorcycle that costs 2-3x as much.
And if one built this thing with an ebike motor in each wheel, there are controllers on the market that could give such a thing performance comparable to a supercar, except it could still be priced like a moped. 100 horsepower in such a thing with AWD would be batshit fucking nuts. You could go trolling for Koenigseggs, if you could find one to troll at a stop light or a drag strip. Albeit, given such a small, light, slippery vehicle, downforce would be an issue and the fastest stable speed you could probably expect to have would be somewhere around 120-130 mph without compromising the aero, assuming it was designed to avoid net lift.
Not to be a smart ass here, but sometimes wonder what color the sky is in your world? While we all wish for better things, and change, the things proposed have no real connection to the real world. (Yet?)
The things I proposed are physically possible, and there do exist prototype vehicles that have elements of what I proposed.
I’m an engineer. I live in a world of numbers.
The GM Lean machine is an early example along the lines of what I proposed, if not using antiquated material technology plus an internal combustion engine, making its weight much higher than a similar vehicle could be built as today. That, and it’s designed to eat two people, which requires greatly more added weight to accommodate the weight of an extra passenger.
A more modern example of this idea, albeit still a 2-seater, would be the VW 1L concept from 2002.
Then of course there are many examples of human powered vehicles that follow the low mass, low drag formula in order to maximize efficiency. Efficiency means you go faster with a given horsepower. And you really don’t need much to go fast, considering that there exist human powered vehicles that can do 60 mph on half of a horsepower.
With modern GFRP construction as a monocoque with an integrated safety cell as the F1 cars use, and designed to only need to accommodate the mass of one person, it is conceivable that such a vehicle ready to ride with DOT brakes/wheels/tires/hubs, using ebike parts for the powertrain, could be significantly under 200 lbs, yet reliable at interstate-appropriate speeds, and would be occupant survivable in most collisions with much heavier vehicles even at such speeds.
Considering that companies like Tata can mass produce a car and sell it at a profit for under $3,000USD, the Nano being a car that entails greatly more design time, raw material costs, and labor costs than what I’m proposing, this idea is not without real world connection. All of the required pieces to make it happen already exist in the real world. It’s just a matter of putting them together. The ability to mass produce it is key, because hand-built, this will easily be a $20,000+ vehicle, instead of a $2,000 vehicle.
And I do have my own real-world connection to this concept. I built a prototype, that while it falls well short of what I outlined above in terms of safety and performance, it does prove that the sort of efficiency and usability I propose is possible and it can be inexpensively put together with off-the-shelf parts.
Wasn’t this something like Elios motors tried, or some other 3 wheeled company? I almost built a velomobile for myself until I realized that nobody would see me in my low slung suppository-cycle creation and I’d get dead in a hurry in traffic.
This is almost exact what Elio Motors tried. Although, the original ICE Elio Motors thing was supposed to sell for around $8000, which is way more expensive than a moped. It appears Elio is still trying to build a vehicle, although their website now says it is going to be an EV and start at $15,000. I doubt it will ever be built, and I don’t think they will be a sales success if it is. I don’t know who would pay $15,000 for a 1.5 seat limited range EV. Vehicles like the Elio (and the thing described above) seem like a good idea, but they end up being almost expensive as a nice used car and far less useful.
Elio tried something like this, but without it being a glass fiber monocoque, seating for two instead of one(requires much more mass to accommodate two people), and without the extensive attention to aerodynamics. Changing these things can make a massive difference, to where an 80 mpg car becomes an 800 mpg car.
There is Arcimoto, out of Eugene, Oregon. Arcimoto – Ultra Efficient Electric Vehicles
What you describe already more or less exists… it’s called the Twike:
https://twike.com/en/twike5/
I’m familiar with the Twike. The Twike is hand built and expensive, it is heavy because it is built to accommodate 2 people, it has a large frontal area and its drag isn’t all that great, plus what I was proposing was an actual one-seater microcar without a bicycle drivetrain whatsoever, optimized not for sociability or largesse(as far as microvehicles go), but for both performance and efficiency.
A racecar built using the shape of and roughly the dimensions of a Bulk or Milan velomobile would be an entirely different animal than a Twike, and roughly an order of magnitude more energy efficient.
The differences matter greatly.
The money equation on new cars has gone completely out the window. A Craigslist car that costs 5 grand and has 100k, plus another 5 grand set aside for repairs, will probably make it another 200k. A $40,000 new car might make it to 400k, but only with another ten or twenty grand in repairs, mostly because there is more stuff to break.
I think this is largely because the 5 grand Craiglist cars right now are generally 1995-2010 models and were built after the “built to last” era but before the “expensive stuff inside the grille” era.
Sure, you lose features, and you don’t get that new-car “headiness”. But when it comes to the actual task at hand- racking up miles- a new car just doesn’t make financial sense. I guess I’m just not an emotionally-driven purchaser.
Just invest a couple bucks in a new car smell air freshener.
I’m not sold on that. While in some ways cars are being built better than ever, they’re not necessarily being built for extreme longevity. There are a lot of non-serviceable parts and stupidity like “lifetime” transmission fluids. I have a feeling a lot of cars being built in 2020+ are going to have shorter lifespans than ones built 10-20 years ago because when your infotainment unit dies and there are no new replacements and the used ones are obscenely expensive people will just junk the car.
I was in the market recently, but increased interest rates and lower trade values mean I probably won’t be now. Until recently, interest rates were so low that my money made more just sitting than the interest I would be charged. I actually still have a little bit left to pay on my car now, but I am paying slowly because the interest is less than I earn on my accounts.
That said, there are a lot of things much cooler than my Niro, so I’m still a little in the market. But electric commutes and ~50 mpg travel make it hard to justify spending more money to get something cooler.
I’ve been ready to buy since 2020, but put it off. Don’t need to explain here why I’ve also continued to wait with the market the way it is. Our cars are ultimately fine. I don’t need a new one, so I’m not dealing with dealer shenanigans if I can help it.
Unfortunately for a replacement, two rides keeps coming up. A Sienna or a Highlander Hybrid. I really don’t want to buy another 20 mpg vehicle to keep for the next 7-8 years. A full EV won’t work for this vehicle. We need to be able to refuel in the middle of nowhere.
Unfortunately there is very little competition in this segment for above average fuel economy. I don’t think I’m willing to buy a Stellantis vehicle or else the Pacifica PHEV might get a look. I could spend more and get something like an XC90 PHEV, but I’d really rather not spend $75k on a vehicle. Spending $20k more also kind of defeats the whole “economy” part of seeking out a fuel efficient vehicle.
The situation to get those Toyotas does not appear to be improving any time soon. A local dealer has $10k markups on Siennas. So we’ll keep watching I guess.
Built my own E-Bike and made my own battery out of cells I pulled from tool packs that were put in recycling bins. So much fun, and I commute 18 miles each way days it won’t rain.
I built my own e-trike as well. Probably one of the best decisions I ever made.
I feel like Congress spends more time dreaming up the acronyms for bills than they do on the actual bills themselves.
I bought a new car about a year ago and am not in the market/won’t be for a while. While I do have the dreaded enthusiast tendency to want to switch cars often, I now understand how dumb of a decision it can be financially. About a year ago I was drunk on my good credit and the fact that my pain in the ass GTI had actually appreciated since I drove it off the lot in 2020.
So I ditched it for a good deal on a Kona N and used the 9 grand in equity I had on it as a downpayment…the car was an upgrade for sure but all the trouble and hidden costs related to making a premature (i.e. getting out of a car that isn’t fully paid off) move were such a hassle that I don’t think it’s going to be worth it to do so again.
The TL:DR version is I’m not making a move for me until the Kona N is paid off and I’m in a financial position where I can come closer to just outright paying cash for my next car if I really want to. Based on the glowing reviews so far a new M2 will definitely be on my radar in a few years, but not anytime soon.
My wife is another story though. Her car is 7 or 8 years old and has 60k miles. Granted it’s a Honda CRV and we stay on top of the maintenance so it’ll run forever, but she’s in more need of an upgrade than I am. As of now we’re waiting on it until the franchise expands. I won’t overshare in this setting but I will say that if all goes according to plan our family will be growing beyond us and the doggo over the next few years.
Once we need more space the Mazda CX-90 will be at the top of our list. I love the driving centric qualities it has, she loves the premium vibe, and we both think it’s gorgeous. We’ll cross shop the Pilot and Palisade/Telluride twins but I’d be shocked if the Mazda doesn’t win out for us. It’s a unique and compelling product.
We have been blessed the last 30 years with being able to pay cash for our last half dozen cars. Of course we buy used rather than new though. But if I was looking for a new, unused vehicle I believe that MAZDA is a great choice. Agree 100 percent.
I don’t see how a CRV at 60k miles is in need of replacement.
Do these e-bike rebates require you to buy a certain model or otherwise prove you are using it to off-set car use? I’d love an e-mountain bike, but if anything it would only increase my carbon footprint
I am in the market, and have been waiting since August for my name to reach the top of the Blackwing ordering list.
Yet even that wait seems miniscule compared to the Z06 lists I tried (and mostly failed) to get on in early 2022.
But anecdotally, new car lots are as full as they’ve been in years around here. Financing deals and incentives are being advertised during sporting events again. We may not be “normal” yet, but we are awfully close.