Why No One Wants To Sell You A $25,000 EV
Why No One Wants To Sell You A $25,000 EV
There is a fundamental truth you have to understand about car companies:They do not exist to make cars. They exist to make money. That distinction, analyst Kevin Tynan tells me, is why they’re not really interested in making affordable electric vehicles.
Perhaps that’s an oversimplification. Tynan is the director of research at an auto-dealer-focused investment bank, the Presidio Group, with decades of experience as an analyst at firms like Bloomberg Intelligence. What he means isn’t that automakers have no interest in affordable products. It’s that their interest begins and ends with winning customers who will eventually buy more expensive, higher-margin products.
One of the auto industry’s dirtiest secrets is that at scale, it doesn’t cost that much more to make a bigger, more expensive than a smaller and cheaper one. But they can charge you a lot more for the former, which makes this a game of profit margins and not just profits. In recent years especially, that’s a big part of why your new car choices have skewed so heavily toward bigger crossovers, SUVs and trucks.
Getting rid of the gas tax and switching to a mileage tax that factors in vehicle weight would help with this. If it costs you more every year to drive a bigger, heavier car, you’re going to want something smaller.
I like the idea of a size tax.
I also like the idea of extended driver's license requirements to drive some of these monsters vs a sedan.
California is basically doing tax trials based on total mileage travelled per year, but not size.
My understanding from people I know in the CA Govt. legislature is that they have to tax based on what is known and one could easily have modifications on vehicles that would go unnoticed (truck lift kits, rice burners, hack jobs, etc). Mileage otoh is submitted during tax season already.
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As long as they do it by checking the odometer once a year and not with some kind of ridiculous privacy-destroying GPS-based scheme, I'm all for it.
(There are some dipshits who try to justify the latter by claiming they need to know where you drive to send the revenue to the right jurisdiction. Bullshit! They can just measure traffic volumes on each road segment -- which they already do -- and allocate proportional to that instead.)
Agreed you don't need the mileage aspect just weight and VAT. However your insurance company app is likely already pulling GPS shenanigans and if your OnStar or whatever "roadside assistance" GPS box and cellular modem are enabled a lot more than just your location are being shared with anyone willing to pay for it.
The problem with that is that EVs are heavier, meaning that smaller EVs would be taxed at the same level as SUVs or trucks. But it might at least incentivise people to go for smaller ICEs, and switching to mileage tax might be necessary anyway.
But that would disproportionately hit poor people. Generally they have to live farther out, where rents are cheaper, and in much of the US public transit is a pile of shit.
Hell, even in places where it isn’t it’s still painfully inconvenient. I live in a fairly transit-friendly city, and it takes my husband 45 minutes to an hour to get to work by transit, or 10-12 minutes by car.
How far is he from work? If your city has the right transit chops, an ebike might actually put both a car and transit to shame. Drives that take an hour by bus or 35 minutes by car take 26 minutes or less in my city, due to godawful traffic. But the bike lanes have no traffic lights and cut straight through massive areas, instead of block by block streetlights.
Busting all the out of state registrations would also net a boat load of money.
You realize that electrics are heavier than similar sized and shaped gas vehicles, right? So this would be an incentive to keep buying gas cars.
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I think you're right, but I also think it's insane that we think of 25000 dollar vehicles as the budget models. An affordable car is something a middle-class income could afford out of pocket in my opinion. Who can spare 25k nowadays?
In our stage of capitalism, these arent even exceptions. 16k for a Versa. Is probably the best deal I've seen in forever, because almost no one makes sub $20,000 cars now. The last New cars I saw for that were economy cars (Sonic/fiesta/fit etc)
Weird, Nissan doesn't have a problem selling Versas for $16k? Chevy doesn't have a problem selling a Malibu for $25k? Honda doesn't have a problem selling a Civic for $25k or an Accord for 28k?
Malibu used to be sub $20,000 new. (2008) Civics were $13-15,000 in 2005 brand new. These prices are outrageous for the amount of car you get by comparison. $25000 for a civic? It's small and goes vroom. For 3,000 more you have an Accord! Compared to an Accord Civics have no storage, small legroom, an engine that makes them zippy for sure, but it's not as if the Accord is a slouch. At this stage mpg is comparable.
And what happens to the customers who literally can't afford the expensive models? There's a lost sale for every one of them.
If you're not interested in playing the game of taking on massive debt Then that's fine - in their eyes you can keep buying used cars. For this type of person, they've fought so hard to make every car so unfixable to the average person. Parts and service departments are free to make a killing if you can't fix it yourself.
For those that insist on buying dates models you CAN fix - You can forever own hand me downs with ghosts under the hood, gremlins in the electrical lines and odometers with 6 digits. It's just a numbers game where eventually you will buy one that shits out way sooner than you can afford before your mentality suggests "maybe reaching deep on a CC and getting something with warranties wouldn't be so bad?"
Your prices are way off. The only car that can be bought brand new for less than $20k in the USA is the Mitsubishi Mirage, and from experience it sucks to drive. A Malibu and a Civic are both like $29k, but actually Chevy just quit making Malibu's this year.
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Wouldn't CAFE standards push them to smaller more efficient cars, or am I misunderstanding what CAFE standards are?
As for affordable cars, I think it's fairly easy for the auto industry to just raise prices while extending financing terms longer and longer and advertise $299/mo (with 180 mo financing, $6k down, at 8% interest excluding taxes and fees).
The car companies went huge, they made their standard vehicles so big and heavy they qualified for EPA standards meant for work trucks.
Just blatant fuck you to regulations and people's health.
it doesn’t cost that much more to make a bigger, more expensive than a smaller and cheaper one. But they can charge you a lot more for the former, which makes this a game of profit margins and not just profits.
This is also why cars are loaded with electronics now. They're high margin add-ons to inflate the value of the car with little cost.
Also they break and are almost impossible to fix, so basically throw the car out after the lease is done and get a new one.
they're not really interested in making affordable electric vehicles
Huh, that's strange. I'm not really interested in a $25,000+ EV. Turns out that a $1,200 ebike is faster than my car (due to traffic) and costs orders of magnitude less to maintain and charge. I've basically just stopped driving.
Perhaps my interest will be piqued when they can develop a sub $25k EV, without half the "smart" features like subscriptions for Bluetooth audio and heated seats. Until then, I'll use my old car like...a dozen times a year.
I commute 1.5 hours each way. I wish I could ebike it.
Yeah, it really fucking sucks when there's only one form of transportation and virtually no alternatives. I've lived in places like that, and it's always infuriating when your car won't start and you are already running late for work. And the nearest bus is really slow and on a half-hour basis. My old city didn't even have bus stops for awhile, you just had to flag the bus down and hope they saw you.
Yeah. I just want a basic electric pickup.
Damn, I guess the nissan leaf needs a recall, it's top cheap. How unfortunate that car manufacturers ignore a sizable chunk of their market
Dacia Spring. Small, light, 300km city range. 19000€ from dealer. I bought mine used with 2000km driven and two doors needed painting for 6000€. Half year old. I drive about 100km every day in the city so far so good.
Yeah. The "affordable" ones are just there too start the sale.
They are already have the lot dressing manufacturing lines built, and won't build EV loss leaders until they are needed to bring in customers.
They're not even loss leaders though.