Average New Car Price Tops $45,000, Used Car Price Over $25,000

Average New Car Price Tops $45,000, Used Car Price Over $25,000

Automotive Weekly

Average New Car Price Tops $45,000, Used Car Price Over $25,000


The transaction price of the average new vehicle, a measure of how much people actually pay, has been over $40,000 all this year and reached $45,031 in September, according to data from Kelley Blue Book. That’s an increase of $4,872 or 12.1% in the past year. Used-vehicle retail prices, too, are “insanely high,” averaging more than $25,000 retail since June, up more than $5,000 vs. a year ago, Charlie Chesbrough, senior economist for Cox Automotive, said in a webinar hosted by the American International Automobile Dealers Association.

Source: Forbes


Says Research Firm We Predict

The average cost of repairs and maintenance for electric vehicles for three years of ownership is about 30% lower than vehicles with internal-combustion engines, according to data from research and consulting firm We Predict. That’s good news, considering the auto industry’s eventual switch to battery-powered electric vehicles. “We’ve got an optimistic and positive point of view, to have this technology out in the marketplace,” said We Predict Founder and CEO James Davies, in a phone interview.

Specifically, according to We Predict data, total electric vehicle service costs for 36 months on the road average $514, vs. $749 for internal-combustion vehicles, or about 31% lower.

That’s important, considering automakers are committed to greatly increase EV share, from low single digits today, to as much as 50% by 2030. In relative terms, that’s right around the corner.

We Predict, based in Ann Arbor, Mich., adds up the total money spent by manufacturers and vehicle owners on repairs and maintenance. That includes items covered by factory warranties, but does not include collision repairs. The dollar figures include, but are not limited to, consumer out-of-pocket costs.

The combined manufacturer-consumer results are significant for consumers. Including manufacturer costs gives a truer picture of how much it actually costs to keep a vehicle in top condition, Davies said. We Predict also works with manufacturers behind the scenes, using repair and maintenance data to help manufacturers spot potential problems faster.

The company published its Deepview True Cost study for 36 months of ownership on Oct. 28. The study is based on 65 million orders for maintenance or repairs, for 13 million vehicles of all kinds, not just electric vehicles. We Predict calls the 36-month study its “Second Owner Study,” because most leases are 36 months long. Millions of off-lease vehicles head for a second owner at the 36-month point. Electric vehicles are also very commonly leased.

Included in the We Predict cost calculations are maintenance, unplanned repairs, warranty and recalls, service campaigns, diagnostics, software updates, and warranty costs on factory-installed options, the company said. Other routine costs of ownership, such as gas, or recharging EV batteries, local and state inspections, seasonal tire changes, and insurance are not included. Including all models, not just EVs, the Kia and Hyundai brands ranked No. 1 and No. 2 among non-premium brands, for the lowest average 36-month costs per vehicle, at $369 and $381, respectively. Dodge was No. 3, at $420. Among premium brands, the Acura brand had the lowest average 36-month costs, at $600. Lincoln was No. 2, at $879; Genesis No. 3, at $1,181. The Kia, Hyundai and Genesis brands are all part of the Hyundai Group.

For electric vehicles, We Predict ranked the Honda Clarity, the Chevrolet Bolt, and the Volkswagen e-Golf as the Top 3, respectively, for the lowest 36-month costs.

The latest study also confirms the widely held expectation that EVs logically should cost less to maintain, since EVs are mechanically simpler than vehicles with internal-combustion engines, and EVs have fewer moving parts.

An earlier We Predict study, published in May 2021 and based exclusively on the first 90 days of ownership, caused a bit of a stir within the auto industry, because it showed higher costs for EVs, vs. internal-combustion vehicles. Davies said in the interview that still holds true for the first 90 days, but over 36 months, EVs average out lower. In addition, he said the 36-month costs are “highly indicative” of the costs consumers would likely face beyond the 36-month point.

Source: Forbes


If U.S. supply-chain problems seem bad now, just wait until we try to mass-produce electric cars. That might sound like an overstatement considering the money automakers are throwing at battery production. General Motors Co. kicked things off in 2019 with a joint venture with LG Chem for a battery factory in Ohio, then another in Tennessee. It’s got two more in the works. Ford Motor Co. revealed an $11.4 billion investment last month — the biggest in its history. Toyota Motor Corp. and Jeep-owner Stellantis NV have been floating battery plans recently and Hyundai Motor Co. basically is waiting on Congress to pass an infrastructure bill that will support local EV production.

Carmakers are racing to make EVs after years of decrying them as unprofitable, and they’ve been caught off guard by their appeal with buyers (emissions rules forced their hand, too). BloombergNEF already has boosted its 2021 EV sales forecast for North America 20% since the start of the year to 690,000. That figure, which includes plug-in hybrids, would probably be higher if there were enough chips to go around. Soaring raw material prices are one obstacle. Tesla acknowledged as much when it said last week that it will switch all standard models to lithium-iron-phosphate batteries, a chemistry that’s more stable and affordable than nickel-based batteries, but less powerful. Nickel, which the industry relies on for power and range, is becoming too expensive, and the fire risks have not been fully solved, as the Chevy Bolt recall underscored.

But metal prices aren’t the only issue. Labor, logistics, and the sheer ambition of standing up a new industry from basically zero mean there are going to be plenty of bumps along the way. Mark Newman, a former battery analyst at Sanford Bernstein who’s now advising startups, thinks battery manufacturers are overcommitting to automakers in a bid to secure business. Some new plants in Europe are behind schedule because they’re having trouble ramping up, he said. “In the next decade, you’re going to see bottlenecks that are going to make this semiconductor supply chain bottleneck seem like a non-issue,” Newman told me. “Battery supply cannot keep up.”

Lest you discount Newman as a pessimist, Scott Keogh, the chief executive officer of Volkswagen’s Americas business and a perennially positive salesman, said something similar at a Reuters automotive conference last week. Semiconductors are “the ‘now’ challenge,” but batteries will be “the ‘now’ challenge in the coming years,” he said. So what will that look like? Car companies are doing what they can to hedge their bets by signing long-term contracts for raw materials, extending their investments into new chemistries and technologies, and getting into the business of cell making and battery pack design to control as much of the supply as possible. But the supply-demand imbalance may still whipsaw them with costs that could hamper production and stymie the pace of EV adoption.

The U.S. government is aware of this risk — the Department of Energy just announced a new public-private alliance to come up with ways to protect against the looming supply-chain crunches. At the same time, football quarterback Tom Brady is on TV pitching Americans on renting a Tesla from Hertz. If demand keeps growing, the feds and the automakers will need to come up with other solutions fast.

Source: Bloomberg


Cadillac is headed for its best year ever despite the shortage of semiconductors and despite lower U.S. sales, according to Rory Harvey, the General Motors vice president in charge of the brand around the world. During a virtual briefing with reporters, Harvey declines to say how many reservations or firm orders it has for the initial batch of Cadillac’s first battery-electric vehicle, the Lyriq, but he says they sold out in 10 minutes. Production will be limited because Cadillac wants to make sure it can deliver the vehicles.

Source: Automotive News


Both Ford Motor and General Motors beat Wall Street’s expectations for the third quarter but shares of GM are flat as Ford’s stock surged to a new 52-week high during trading Thursday morning. On the surface, results for both automakers were similar. They easily beat the earnings consensus from analysts and slightly topped revenue expectations. They also both partially raised 2021 guidance. But looking deeper into the results and comments from executives, Ford made better progress and painted a more optimistic outlook than GM, according to analysts.

Source: CNBC


Responding to Biden’s Push for $4,500 Tax Credit for U.S.-Made Vehicles

BMW pledged on Wednesday to award an electric vehicle model to its Spartanburg plant in South Carolina, underscoring the growing U.S. demand for zero-emission cars. The issue of where EVs are produced has taken on increased importance in recent weeks, now that the Biden administration is campaigning for a provision in its budget bill that will grant an extra $4,500 federal tax credit to union-built EVs manufactured in the U.S.

Source: Fortune


Ford Motor Co. is aiming to cut its borrowing costs by more than half as it repurchases $5 billion in junk-rated debt and seeks to set a path to return to an investment-grade credit rating. The automaker said in a Thursday statement that it’s initiating a $5 billion cash tender offer to repurchase a significant chunk of the $8 billion in junk bonds it issued to bolster its balance sheet as it shut down factories at the onset of the pandemic in April 2020. As auto sales collapsed, Ford issued what it calls “Covid bonds” a month after becoming the largest fallen angel when its debt was cut to non-investment grade by S&P Global Ratings.

Source: Bloomberg


Volvo Car AB’s vehicle sales plunged by more than a fifth in October as the company struggled with supply-chain snarls, adding to signs that 2021 could become another disastrous year for automakers. Shipments in China fell by about a third while sales in Europe declined 21.5% amid a “lack of available cars,” the Swedish company said in a statement Wednesday. Volvo Cars declined 1.7% as of 11:23 a.m. in Stockholm. The company had surged in its trading debut last week.

Source: Bloomberg


BMW AG earnings jumped to beat expectations after higher vehicle prices and prioritizing money-spinning models like the $75,000 X7 SUV helped the company offset output reductions due to the dearth of chips. Group earnings before tax surged 50% to 2.9 billion euros ($3.4 billion) in the third quarter, BMW said Wednesday, compared with an average analysts’ estimate of 2.5 billion euros. The chip supply woes that have hampered the entire industry will remain an issue beyond this year, it said.

Source: Bloomberg 

Subscribe to our Automotive Weekly newsletter

Get the latest report on trends, market conditions, and the most current information in the industry.